Ekennis Software Service Ltd Management Discussions

Directors Report

MANAGEMENT DISCUSSION AND ANALYSIS

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The IT software training and consultancy industry is an integral part of the technology sector. It primarily focuses on providing training and consulting services to individuals and organizations in various aspects of software development, implementation, and utilization. This industry plays a crucial role in helping businesses adopt new technologies, enhance their software capabilities, and improve overall efficiency.

The printing, designing, and packaging industry encompasses a range of activities related to creating and producing printed materials and packaging for various products. This industry plays a crucial role in marketing, branding, and delivering products to consumers.

We always want to look ahead and push ourselves to reinvent and re-innovate. Your company is engaged in developing and maintaining adequate standard in delivering IT Software training & consultancy service and Printing, Designing and Packaging service. Ekennis is running its business of Printing & Packaging by its brand name Myperfectpack. The Trademark application for its registration is in process with Registrar of Trademark. In the opinion of the Board, the growth in the business activities as above stated is fairly good and the demand for space is expected to remain at the same level.

Ekennis s business model is optimistic that focuses on positive outcomes, growth, and sustainability. It embodies a forward-thinking and proactive approach to business, aiming to create value for all stakeholders involved, including customers, employees, investors, and the wider community.

2. OPPORTUNITIES AND THREATS

For the IT & Consultancy business, there are several opportunities that can be leveraged. The growing reliance on technology and digital solutions presents a vast market for IT services, including software development, cybersecurity, cloud computing, and data analytics. Additionally, businesses are increasingly seeking consultancy services to optimize their operations, improve efficiency, and implement digital transformation strategies. However, there are also threats and concerns to consider. The IT industry is highly competitive, with new players constantly entering the market so to stay ahead, the company needs to continually innovate and provide cutting-edge solutions. Cybersecurity is another major concern, as the risk of data breaches and cyber-attacks is ever-present. The company must invest in robust security measures to protect client data and maintain trust.

Similarly, in the Designing, printing, and packaging business, there are opportunities to explore. The demand for visually appealing and innovative packaging solutions remains strong, driven by the growth of e-commerce and consumer expectations. The company can capitalize on this by offering creative designs, eco-friendly materials, and customizable options. Moreover, collaborations with businesses in various industries can provide a steady stream of clients. However, there are also threats and concerns. Intense competition in the printing and packaging industry requires the company to differentiate itself through quality, efficiency, and customer service. Additionally, environmental concerns are becoming more prominent, with a growing emphasis on sustainable practices and materials. The company must adapt by adopting eco-friendly production methods and offering greener alternatives. Compliance with regulations and maintaining a strong supply chain are also crucial factors to consider. Overall, navigating these opportunities, threats, and concerns will require strategic planning and continuous adaptation to the evolving market dynamics.

3. OUTLOOK

Our commitment is to offer quality services to our clients and meet their expectations, The Company is namely involved in two processes:

a) Business of software IT Consulting Services, IT Product / Software development, Software Training which involves several challenges and risk, such as: -

- Meeting customer expectations in terms of completion of projects, or providing quality software services can harm reputation if not done properly.

- Keeping customer data and confidential information secure is critical in this industry. Failing to maintain the security of customer data, such as through a data breach, can have dire consequences.

- Keeping up-to-date of the ever-changing developments in the IT and software industry is essential to remain competitive in the industry. Failing to do so can result in missed opportunities, lower profits, and a loss of clientele.

b) Business of printing on packaging involves several risks namely:

The printing on packaging business faces diverse risks, including supply chain disruptions impacting material availability, regulatory compliance challenges leading to fines, design and color inconsistencies affecting brand image, evolving technology making equipment obsolete, and intellectual property infringements resulting in legal issues. Market demand fluctuations, environmental concerns over packaging waste, and intense competition further compound these risks, necessitating adaptable strategies for sustainable growth and risk mitigation.

We at Ekennis believe that what drives our success is our commitment to providing high-quality services and expertise to our clients. We are committed to investing in training, innovation, and modernizing our processes to ensure that our clients get the best quality products and services available. As a company, we strive for continuous growth and improvement and are confident that our dedication to our customers will lead to an increase of customer satisfaction and loyalty. Our goal is to become the leading provider of services and products in our industry and to have a lasting impact for our clients.

4. VALUE CREATION

Net worth of the company increased by Rs. 63.71 lacs (Standalone) and Rs. 64.40 Lacs (Consolidated) to Rs. 500.89 lacs (Standalone) & Rs. 501.58 Lacs (Consolidated) as at March 31, 2023 from Rs.437.18 Lacs as at March 31, 2022.

5. EKENNISS FINANCIAL PERFORMANCE a) Analysis of Statement of Profit and Loss

Total income: Total income of the Company stood at INR 648.46 Lakhs (both Consolidated & Standalone) during the year under review, increasing by 36.63% compared to INR 474.61 Lakhs in previous year.

Operating profit: Operating profit or EBITDA stood at INR 128.84 Lakhs (Consolidated) and INR 129.53 (Standalone) during the year under review as compared to INR 130.22 Lakhs in previous year.

Depreciation: Depreciation for the year under review stood at INR 14.18 Lakhs (both Consolidated & Standalone) as compared to INR 7.44 Lakhs in the previous year, up by INR 6.74 Lakhs.

Finance costs: Finance costs for the year under review stood at INR 3.02 Lakhs (both Consolidated & Standalone) as compared to INR 2.95 Lakhs in the previous year.

Other Income: Other Income for the year under review stood at INR 15.59 Lakhs (both Consolidated & Standalone) as against INR 7.42 Lakhs in previous year.

Net profit: Net profit for the year under review stood at INR 77.70 Lakhs (Consolidated) & 78.39 Lakhs (Standalone) compared to INR 108.74 Lakhs in previous year.

b) Analysis of Balance Sheet

Net worth: The net worth of the Company stood at INR 500.89 Lakhs (Consolidated) & Rs. 501.58 Lakhs (Standalone) as on 31 March, 2023, compared to INR 437.18 Lakhs as on 31 March, 2022. The net worth comprised paid-up equity share capital amounting to INR 140 Lakhs as on 31 March, 2023, (14,00,000 Equity shares of INR 10, each fully paid up) and other Equity being INR 360.89 Lakhs (Consolidated) & INR 361.58 Lakhs (Standalone).

Loan profile: The total Long term Borrowings of the Company stood INR 7.08 Lakhs for the year under review and for the previous year it stood at INR 13.78 Lakhs .

Total assets: Total assets of the Company during the year under review stood at INR 612.97 Lakhs (both Standalone & Consolidated) & INR 555.92 Lakhs in FY 2021-22 .

Inventories: Inventories stood at INR 24.02 lakhs during the year under review as compared to INR 6.00 Lakhs in FY 2021-22. Inventories comprised raw materials and consumables.

Current liabilities: Current liabilities stood at INR 84.57 Lakhs (Consolidated) comprising short-term borrowings of INR 6.70 Lakhs and trade payables of INR 9.16 Lakhs and Other current Liabilities Rs. 41.78 Lakhs and Short-Term Provisions of INR 26.93 Lakhs and INR 84.45 Lakhs (Standalone) comprising short-term borrowings of INR 6.70 Lakhs and trade payables of INR 9.16 Lakhs and Other current Liabilities Rs. 41.66 Lakhs and Short-Term Provisions of INR 26.93 Lakhs.

6. SEGMENT WISE PERFORMANCE

As on March 2023, Company has made reporting for its two business segment, the Consolidated details of same is tabulated below:-

	Year to date figures for the year
	ended on 31/03/2023
Particulars
	(Standalone & Consolidated)
	Audited
Segment Revenue
(a) Manpower Supply Services	610.95
(b) Printing & Packaging	21.92
Segment Results
(a) Manpower Supply Services	189.03
(b) Printing & Packaging	-39.88
Less:
Unallocable Income	0.00
Unallocable Expenses	37.51
Profit Before Tax	111.64
Less: Tax Expenses	33.93
Profit for the Period	77.70
Segment Assets
(a) Manpower Supply Services	29.18
(b) Printing & Packaging	109.79
(C) Unallocated	473.44
Total Segment Assets	612.40
Segment Liabilities
(a) Manpower Supply Services	84.19
(b) Printing & Packaging	5.41
(C) Unallocated	21.93
Total Segment Liabilities	111.52

7. HUMAN RESOURCES/ INDUSTRIAL RELATIONS

The Company maintains a cordial relationship with its employees by creating a positive work environment, with focus on improving productivity and efficiency. The Company has a team of qualified and dedicated personnel contributing to the better performance of the operations and processes of the Company. Constant training continues to be the focus for developing and honing the skill sets and competency levels of employees in the organization in line with the business standards and requirement. The Company firmly believes that well trained man power at every level provides the true competitive advantage in its business and hence the Company invests resources in training. The Companys endeavor is to offer fair and reasonable compensation to its employees based on the market benchmarks.

8. QUALITY MANAGEMENT SYSTEM

Your Company is certified for Quality management system. The Company is MSME Sustainable (ZED) Certified. It ensures Zero Defect Zero Effect (ZED) practices. Your Company is making continuous efforts for improvement in the processes, Quality Management Systems (QMS) and skill building.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an extensive system of internal controls which ensures optimal utilization and protection of resources, accurate reporting of financial transactions and compliance with applicable laws and regulations and internal policies and procedures. The internal control system is regularly reviewed by the Audit Committee and has well documented policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data.

10. DETAILS OF SIGNIFICANT CHANGES IN KEY RATIOS

In Accordance with SEBI (Listing obligation and disclosure requirement regulations), 2018, The Company is required to give details of significant Changes:

S. No.		Numerator
			March 31,	March 31,
	Particular				Reason for Movements
			2022	2021
		Denominator
		Current			Reason for Movement is
		Assets			not required to be disclosed
(a)	Current Ratio		4.83	4.95
		Current
		Liabilities
		Debt			Reason for Movement is
(b)	Debt-Equity Ratio		0.03	0.04	not required to be disclosed
		Equity
		Profit After			This Ratio is decreased due
		Tax			to decrease in profit after
(c)	Return on Equity				tax
			16.70	39.14
	Ratio
		Average
		Shareholders
		Equity

 

		Net Credit			This Ratio is decreased due
	Trade
		Sales			to decrease in trade
	Receivables
(e)		Average	13.81	9.38	receivable with higher
	turnover ratio (in
		Trade			Sales
	times
		Receivables
		Purchase of			This Ratio is increased due
		Services &			to increase in Average
		Other			Creditors
		Expenses
	Trade payables
		Average
(f)	turnover ratio (in		15.56	2.43
		Trade
	times)
		payables
		Turnover			This Ratio is increased due
	Net capital
		Working			to higher turnover with
(f)	turnover ratio (in		1.96	1.30
		Capital			almost same level of
	times)
					working capital
		Profit After			This Ratio is decreased due
(g)	Net profit ratio	Tax	12.39	23.28	to lower profits during the
		Total Sales			year
		Operating			Reason for Movement is
	Return on Capital	Profit			not required to be disclosed
(h)		Total Capital	22.53	27.23
	employed
		Employed
		Net Operating			This Ratio is improved due
		Income			to repayment of Debts.
	Debt Service
(i)			22.31	-20.36
	Coverage Ratio
		Total Debt
		Service
		EBIT			This Ratio is decreased due
	Interest Service
(k)		Interest	37.98	62.08	to lower EBIT.
	Coverage Ratio
		Expenses

11. CAUTIONARY STATEMENT

Statements in this report describing the Companys objectives, expectations or forecasting may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and also international markets, changes in the Government regulations, tax laws, other statutes and also many exogenous variables. The Company assumes no responsibility to publicly amend, modify and revise any forward-looking statements, on the basis of any subsequent development, information or events or otherwise.

12. DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed the same accounting treatment as prescribed in the relevant Accounting Standards while preparing the Financial Statements.