One Point One Solutions Ltd Management Discussions

One Point One Solutions Limited (NSE: ONEPOINT; ISIN: INE840Y01029), a domestic focused Process Management and Outsourcing Services provider using advanced analytical solutions to drive responsible evolution. With a PAN India team across 5 locations with 7 centers, 5,500+ IT experts, we offer complete solutions across verticals in B-B, B-C, New age digital business and Market place.

The following discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto. The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values.

1. INDUSTRY OVERVIEW

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 accounted for 7.4% of Indias GDP in FY22, and it is expected to contribute 10% to Indias GDP by 2025. As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and some cheapest Internet rates, with 76 crore citizens now having access to the internet. The current emphasis is on the production of significant economic value and citizen empowerment, thanks to a solid foundation of digital infrastructure and enhanced digital access provided by the Digital India Programme. India is one of the countries with the quickest pace of digital adoption. This was accomplished through a mix of government action, commercial innovation and investment, and new digital applications that are already improving and permeating a variety of activities and different forms of work, thus having a positive impact on the daily lives of citizens. Indias rankings improved six places to the 40th position in the 2022 edition of the Global Innovation Index (GII).

According to National Association of Software and Service Companies (Nasscom), the Indian IT industrys revenue touched US$ 227 billion in FY22, a 15.5% YoY growth and is estimated to have touched US$ 245 billion in FY23. Indian software product industry is expected to reach US$ 100 billion by 2025. Indian companies are focusing on investing internationally to expand their global footprint and enhance their global delivery centres. The data annotation market in India stood at US$ 250 million in FY20, of which the US market contributed 60% to the overall value. The market is expected to reach US$ 7 billion by 2030 due to accelerated domestic demand for AI. As an estimate, Indias IT export revenue rose by 11.4% in constant currency terms to US$ 194 billion in FY23. Exports from the Indian IT industry stood at US$ 178 billion in FY22. Export of IT services has been the major contributor, accounting for more than 51% of total IT export (including hardware). The IT industry added 2.9 lakh new jobs taking the industrys workforce tally to 5.4 million people in FY23.

Indian IT firms have delivery centres all across the world. IT & BPM industry is well diversified across verticals such as BFSI, telecom and retail. Increasing strategic alliance between domestic and international players to deliver solutions across the globe. In FY21, India ranked third worldwide with 608,000 cloud experts across all verticals, including technology. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 94.92 billion between April, 2000-March, 2023. Indias IT and business services market is projected to reach US$ 19.93 billion by 2025.

2. BUSINESS PERFORMANCE Financial Markets

India has a diversified financial sector undergoing rapid expansion both in terms of strong growth of existing financial services firms and new entities entering the market. Fintech companies are now playing a larger role in the financial system and are continuously redefining the financial services paradigm. With products like Buy Now Pay Later (BNPL) that allow a consumer to split up large payments without using credit cards, Fintech companies have been able to establish themselves in the payments sector, and are now aggressively pursuing other banking products like remittances, deposits, and lending (mortgage, student, SME, and consumer). Banks and Financial Institutions are also trying to stack their technology landscape to adapt to this new trend. For incumbent banks, investment themes will be focused around digital sales and service, involving re-configuration of the branch network and alternative delivery models such as doorstep banking and contactless payments. This will lead to a rise in bank-Fintech companies collaborations, building robust omnichannel solutions that reduce friction in banking interactions and customer journeys. One Point One focuses across several segments, including Retail banking (customer experience, transaction processing), Mortgages (loan processing, servicing, title and valuations), Complaints and Remediation (complaints handling, fraud management), Credit cards and Fintech companies (collections) and Commercial finance (invoice factoring, risk management)

At One Point One, we enable clients to experience their next by delivering business value through deep domain expertise and technology prowess, leveraging our delivery model to offer services to clients. We have augmented and amplified our growth through our innovative operating, pricing, and talent models - based on scalable and predicable delivery platforms. Through our unique approach of integrating employees with business domain expertise and technology, we continue to co-create business value and enhance experience for our clients and our employees.

Digital

Today, businesses want BPM service providers to become their strategic / consulting partners and help streamline their business processes end-to-end. We are committed to helping our clients reimagine their businesses, with our best in class, next generation digital services across a wide range of industries (verticals) and service lines (horizontals). Our customers are increasingly using multiple digital channels and technologies to interact with each other, thereby exponentially increasing the digital touchpoints and complexities service providers need to take care of. In digital business, the Company continued to grow its relationships with emerging clients, while also piloting selected new engagements with larger strategic clients. Analytics services and creative production were two areas where the Company found the most traction with its clients. With engaging new business partners have helped us expand service offering to encompass a larger part of the digital lifecycle for the clients.

Customer Operations

Our approach towards industry specific client requirements has led us to tie up and collaborate with various associations. Customers have found great value in Companys unique end-to-end value proposition. This includes use of predictive analysis, operational audits, and providing incisive feedback on how to make process more effective while improving the overall experience of clients.

Our industry has witnessed a drastic change in terms of business value delivery models and enhanced customer experiences. This change has further been triggered due to a global-level digital disruption that is now at its peak across processes and domains. Companies have been increasingly focusing on transforming their end-to-end processes with more accurate outcomes, more so for repetitive tasks.

This digital disruption has encouraged us to move further ahead on the journey of digitalization, automation, and artificial intelligence by increasingly taking on projects that enable transformation not just for our clients, but for us as well. To thrive on these huge shifts, One Point One has highly skilled and experienced domain professionals who can execute and deliver on high-impact client imperatives, leveraging our niche, customized solutions. Integrated solutions incorporating internal technologies and external partners, including cloud-based technology platform solutions as well as analytics tools and technologies, will increasingly be the way forward. Renewed business process management will be about augmented focus on enhanced business value delivery to ensure superior stakeholder experience.

Infrastructure

OPOSL operates out of five cities, Mumbai, Bangalore, Gurgaon, Indore and Chennai where Mumbai location held for head office and vital business operations. Currently, we are operating through 7 service centers with PAN India presence, having capacity of 5,500 seats.

Harnessing Talent

Recognizing people development as a key strategic differentiator, the Company continuously invests in enhancing the skills of our workforce. To encourage managers to think differently, industry experts are invited for guest talks. It is believed that exposing managers to industry best practices, trends, and perspectives will yield dividends in the long term.

Furthermore, internal job transfers are a critical aspect of people development and in the year under review, the policy for internal transfers was re-designed to encourage internal movement and meet the talent pipeline needs of the Company.

Analytics being a focus area, the Company continues deploying senior managers for post graduate analytics program. Also, all analytics teams are consistently up skilled on a proprietary framework for generating actionable business insights. Further, during the year, the central knowledge management team set up a fortnightly newsletter with insights curate from the horizontals and verticals, with the goal of enabling frontline managers to deliver actionable insights and not merely analysis.

3. BUSINESS OUTLOOK

We started the new fiscal year with a strong pipeline of work, reflecting our clients trust in our capabilities. BPM demand continues to increase across our clients as they face challenges running their businesses under significant volume pressures and resource constraints. The pressure felt across many lines of our clients business creates opportunities for us to expand laterally. Our pipeline of new client opportunities has begun to bear fruit after weathering drawn-out sales processes and will have a meaningful impact in FY2024.

We have a PAN India presence, the scale, breadth and capabilities to compete more effectively in the marketplace. As digital becomes more pervasive and deeply embedded across the value chain for most industries we are modernizing our solutions and offerings to serve the contemporary needs of the enterprises better. As a rapidly growing player in the ITBPM arena, OPOSL is building competencies and making investments across several areas to sustain our growth journey.

As we move through 2023-24 fiscal year, we will continue to diversify our opportunities and attract new logos. We will expand on key relationships in our existing portfolio with additional upside potential. We will continue to tighten our value proposition and capitalize on late FY22-23 wins in the Field Technical Operations unit to secure growth. In addition, we anticipate that leveraging our robust technology and automation offerings, customer operations performance, and consultative approach to customer experience optimization will help us break into other verticals such as retail, hospitality, financial services, and insurance. Early results from FY23-24 indicate this strategy is paying off with wins in new clients.

With our capabilities and ability to navigate vertically and horizontally across ecosystems help our clients achieve differentiation and competitive advantage. Our focus is to maximize business outcomes by converging themes across industry domains, products, services, and partners as we develop and deliver tailored business solutions for our clients. Finally, OPOSL is continuously scanning the globe for partnerships and alliances with specialists, niche players and platforms to develop a more holistic service offering for clients.

As we embark on this journey we see immense opportunities for us in the future. As an organization, we will strive towards our aspirations without compromising on our core values. Our outlook for FY23-24 continues to remain strong. We are confident of a strong performance through the year.

4. OPPORTUNITIES, THREATS, RISK AND CONCERNS

Risk management is an integral part of the business. We have outlined the principal risks and uncertainties that could adversely impact the functioning of the Company through their effect on operating performance, financial performance, management performance and overall sustainability. These include, but are not limited to:

Risk Description	Risk Impact	Risk Mitigation
Macro - economic risk	The Company derived substantial portion of its revenues during FY 2022-23 from its business operation which is directly exposed to market risk. Challenging business and economic conditions in these markets and continued policy changes could enhance cost pressure on clients and thus may affect the Company adversely in a number of ways. The Company may witness a reduction in prices, or the loss of key projects and customers, in turn affecting the financial performance.	Broad-based and well diversified business mix across Geographies allow us to minimize the impact on our business.
Cost pressures	Many of the Companys contracts are long-term in nature and consequently, the pricing is negotiated, based on prevailing conditions at the time the contract was agreed upon. With the rising trend of salaries, the Company may find it difficult to serve the client at the negotiated price in the future. Increase in employee costs, without corresponding increases in pricing or productivity related improvements would adversely affect the profitability	There is a continuous focus on increasing productivity and employee utilization. The Company addresses this risk through various methods including managing the employee pyramid through voluntary and involuntary attritions, automating many processes and leveraging technology. Keeping abreast of market conditions to study the impact on client businesses and analysis of technology advancements that impact consumer behavior are some of the measures that help to improve and favorably position the services provided by the Company to mitigate pricing risks to an extent.
Competition risk	The company operates in an industry prone to frequent changes and rapid evolution. Companys inability to adapt, upskill and develop newer capabilities can result in loss of market share to competition.	We are investing in developing and acquiring newer capabilities to cater to the evolving needs of our clients. The company has invested in curated programs to incentive its existing workforce to up skill. We have acquired niche companies in recent years to scale up in the areas of Cloud, Engineering, Network Services, etc.
Legal risks	The Company has long term contracts with its customers and services under these contracts are delivered from several offices across Indore, Bangalore, Haryana and Maharashtra geographies. In addition, to deliver on the various service level commitments, the Company also needs to ensure compliance with applicable laws and regulations in those geographies, including but not limited to employment, tax and environmental laws. Additionally, the Company needs to safeguard its own Intellectual Properties against infringement and ensure compliance with third party licenses which are used in its day-to-day business.	The Company has a legal team in place which apart from a d vi si n g a n d e n s u ri n g documentary safeguards, closely works with business and support functions to enable compliance with contractual and/or regulatory requirements.
Key People risk	The BPM industry relies heavily on knowledge management and skilled talent supply. The number of opportunities available in the market, changing needs of a multi-generational workforce and limited supply of employable talent pose a great challenge to retain talented workforce and maintain consistency in performance. The Company strives to continuously strengthen its internal processes to retain critical people and create a war-chest of talent.	The company is Enhancing and developing skills of the middle management, Focusing on capability building by providing and developing effective training academies and supporting employee development programs, Carving structured and strong career paths and providing opportunities for growth by way of job enlargements, enrichment of responsibilities and internal job movements; and Carving structured and strong career paths and providing opportunities for growth by way of job enlargements, enrichment of responsibilities and internal job movements and providing effective reward and recognition programs that celebrate success and efforts.
Data privacy and cyber security	In a connected world, businesses are extremely vulnerable to cyber-attacks, leading to loss of data and damage to reputation. Business disruption following a major outage event or a failure of our IT systems could cause a disruption in the Companys services, thereby reducing client confidence.	The Company has a stringent Cyber Security policy which ensures timely resolution of incidents. The Company also has in place firewalls, data encryption, data backup mechanism, patches etc.
Compliance risks	Being a national company, we are exposed to laws and regulations of multiple states. This results in an increase of compliance checks required for the consolidated business, failure of which could result in penalties, reputational damage and possible business disruptions.	The Company has an in-house compliance team which monitors global compliances. The team receives updates on changes in regulations from specialist consultants and circulates the same internally.
Technological risk	The overall business environment continues to witness emerging disruptive technologies. However, clients are seeking to cut additional back-office costs due to continued budget pressures, while suppliers are trying to create additional services and the associated revenues. Technologies such as Cloud Computing, Robotics, Artificial Intelligence, Data Analytics software, Social Media platforms and Process Automation software are being used in the BPM industry to enable businesses to lower costs and be more effective	The Company has developed a wide suite of Business Transformation offerings across areas of Robotics Process Automation, Digital and Analytics as part of its productization initiatives. A combination of domain and process expertise with best- inbreed technology is helping the Company in pursuing significant opportunities.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Our Company believes that values are vital for the overall success of business. Thus our companys values are clearly defined, constantly reinforced and reviewed as they are essential for the long term growth of the company. The Company has in place an adequate system of Internal Controls which commensurate with the nature of business and size of its operations. The system is designed to adequately ensure that financial and other records are reliable for preparing financial statements and for maintaining accountability of assets. The Company has a strong and independent internal audit function which carries out regular internal audits to test the design, operations, adequacy and effectiveness of its internal control processes and also to suggest improvements and upgrades to the management.

M/s. K. Venkatachalam & Associates, Chartered Accountants, have carried out the internal audit for the financial year 2022-23 based on an internal audit plan, which is reviewed each year in consultation with the statutory auditors (Vinod Kumar Jain & Co.) and the Audit Committee. The internal audit process is designed to review the adequacy of internal control checks and covers all significant areas of the Companys operations.

The Company has an Audit Committee of the Board of Directors, the details of which have been provided in the corporate governance report. The Audit Committee reviews audit reports submitted by the internal auditors. Suggestions for improvement are considered and the audit committee follows up on the implementation of corrective actions. The committee also meets the Companys statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems in the Company and keeps the board of directors informed of its key observations from time to time.

Protune KS Aiyar Consultants Pvt. Ltd. Chartered Accountants, have also independently audited the internal financial controls over financial reporting as on March 31,2023 and have opined that adequate internal controls over financial reporting exists and that such controls were operating effectively.

6. CONSOLIDATED FINANCIAL PERFORMANCE

The financial statements of your Company are prepared in compliance with the Companies Act, 2013 and Indian Account Standards (Ind AS). The Groups consolidated financial statements have been prepared in accordance with the principles and procedures for the preparation and presentation of consolidated accounts as set out in the Ind AS 110 on Consolidated Financial Statements. The following discussion and analysis should be read together with the consolidated financial statements of the Company for the financial year ended 31st March, 2023.

Analysis:

RESULTS OF OPERATIONS

The following table gives an overview of consolidated financial results of the Company:

(Amount in Rs. Lakh)

Particulars	Year Ended 31st March 2023 (Amount)	Year Ended 31st March 2022 (Amount)	Variations in %
Revenue from Operations	14025.47	13,168.74	7%
Other Income	398.51	701.08	-43%
Total	14423.98	13,869.82	4%
Less: Operating Expenses	12623.97	12,568.77	-
Operating Profit	1800.04	1,301.05	38%
Less: Other Expenses	517.88	763.11	-32%
Profit Before Tax	1282.16	537.94	138%
Less: Tax	403.20	196.55	105%
Net Profit After Tax	878.96	341.38	157%

Revenue

Revenue from operations increased to Rs. 14,025.47 lakh in the year under review from Rs. 13,168.74 lakh in the previous year registering a growth of 7%.

This growth was driven by the new client additions along with expansion in business from existing customers. The demand for BPM services is increasing as every sector in the economy is focusing on winning new customers and making their existing customers experience delightful. We would be the biggest beneficiaries of the fastest growing Indian economy as the demand for our services is directly proportionate to growth in the service sector.

Industry type	Percentage of Revenue generated
Airlines	6.42%
BFS	35.85%
Consumer Durables	17.62%
E-Commerce	9.86%
Fintech	5.24%
Insurance	16.45%
Others diverse industries	8.56%

Other Income

Other income for FY 2022-23 was at Rs. 398.51 lakh as compared to Rs. 701.08 lakh in FY 2021-22.

Operating Profit

Operating Profit during year under review is Rs. 1,800.04 lakh which has increased as compared to Rs. 1,301.05 lakh in previous year. We have been able to improve margins by increasing efficiency and improved seat occupancy across locations.

Expenditure:

Detailed analysis of expenses is as follows.

(Amount in Rs. Lakh)

Particulars	Year Ended 31stMarch, 2023 (Amount)	Year Ended 31stMarch, 2022 (Amount)	Variations in %
Operating Expenses :-
1) Employee Benefits Expense	8,616.82	8,132.21	6%
2) Administration Expenses	2,095.64	2,216.78	-5%
3) Depreciation & Amortization	1,911.48	2,219.78	-14%
Total Operating Expenses (A)	12,623.94	12,568.77	-
Other Expenses :-
1) Finance Cost	517.88	763.11	-32%
2) Other Expenses	-	-	-
Total Other Expenses (B)	517.88	763.11	-32%
Total Expenses (A)+(B)	13,141.82	13,331.88	-1%
Profit Before Tax	1,282.16	537.94	138%
Less: Tax	403.20	196.55	105%
Net Profit After Tax	878.96	341.38	157%

Operating expense

Operating expense comprises of Employee Cost, Administration Expenses and Depreciation & Amortization. The total operating expenses increased to Rs. 12,623.94 lakh in the year under review from Rs. 12,568.77 lakh in the previous year.

Employee benefits expense

Employee benefits expense includes salaries which have fixed and variable components, contribution to retirement and other funds and staff welfare expenses. Employee costs increased to Rs. 8,616.82 lakh in the year under review from Rs. 8,132.21 lakh in the previous year, primarily due to increase in head count, annual increment in salaries and higher sales linked incentives.

Administration expenses

Administration expenses include Rent paid, Transport and Conveyance expenses, Repairs and Maintenance expense, Electricity charges, Printing and Stationery expense and such other office related expenses.

In year under review, Administration Expenses have reduced by 5% to Rs. 2,095.64 lakh compared to last years figure of Rs. 2,216.78 lakh.

Effective cost management strategies such as process optimization, resource management and technology adoption were used in order to reduce expenses. Also, we have strived to maintain the quality of service and to ensure that cost cutting measures are sustainable in the long run. Thus, regular evaluation and adaptation will help to maintain a healthy balance cost savings and operational effectiveness.

Depreciation and Amortization expense

Depreciation & Amortization Cost have decreased to Rs. 1,911.48 lakh from previous years amount of Rs. 2,219.78 lakh.

Other Expenses

Other Expenses include Finance Cost as major component cost to the company at Rs. 517.88 lakh which has reduced as compared to last years cost of Rs. 763.11 lakh.

The Consolidated Total Expenses decreased by 1% from Rs. 13,331.88 lakh in the previous year to Rs. 13,141.82 lakh in the year under review.

Profit before Tax

Profit before tax increased to Rs. 1,282.16 lakh in FY 2022-23 from a profit before tax of Rs. 537.94 lakh in FY 2021-22. Profit before tax in FY 2022-23 was 8.9% of the income, as compared to 3.9% of the income in FY 2021-22.

Income Tax Expense

Income tax expense comprises of current tax, net change in the deferred tax assets and liabilities in the applicable FY period and minimum alternate tax credit. The Companys consolidated tax expense (including deferred taxes) increased to Rs. 403.20 lakh in the year under review from Rs. 196.55 lakh in the previous year which is largely due to reduction in deferred tax asset in current year.

There was a deferred tax charge of Rs. 359.83 lakh in FY2022-23 compared to a deferred tax charge of Rs. 194.98 lakh in FY2021-22.

Profit after Tax

As a result of the foregoing, the company has marked Profit after tax of Rs. 878.96 lakh in FY 2022-23 as compared to Rs. 341.38 lakh in FY 2021-22.

ii. FINANCIAL CONDITION

a. Share Capital

The company has only one class of shares - equity shares of par value of Rs. 2 each. The Authorized share capital of the Company was 25,00,00,000 equity shares of Rs. 2 each as on March 31, 2023. The issued, subscribed and paid up capital was Rs. 18,80,59,505 equity shares of Rs. 2 each in the year under review.

Category of Shareholder	As at 31st March, 2023		As at 31st March, 2022
	Number of shares held	% holding in that class of shares	Number of shares held	% holding in that class of shares
Promoter and Promoter Group Individual :
Akshay Chhabra	7,49,02,710	39.383%	7,49,02,710	39.83%
Neyhaa Akshay Chhabra	7,28,625	0.39%	7,28,625	0.39%
Any Other (Specify): Body Corporate
Tech World wide Support (P) Ltd.	5,62,50,000	29.91%	5,62,50,000	29.91%
Total Shareholding of Promoter and Promoter Group (A)	13,18,81,335	70.13%	13,18,81,335	70.13%
Public (B)	5,61,78,170	29.87%	5,61,78,170	29.87%
Total (A+B)	18,80,59,505	100.00%	18,80,59,505	100.00%

Details of shares held by each shareholder holding more than 5% shares:

Category of Shareholder	As at 31st March, 2023		As at 31st March, 2022
	Number of shares held	% holding in that class of shares	Number of shares held	% holding in that class of shares
Equity shares:-
Tech World wide Support (P) Ltd.	5,62,50,000	29.91%	5,62,50,000	29.91%
Mr. Akshay Chhabra	7,49,02,710	39.83%	7,49,02,710	39.83%

Note: 2.4. For the period of 5 years immediately preceding the date as at which the Balance Sheet is prepared:

i. There are no shares issued pursuant to contract(s) without payment being received in cash.

ii. The company has issued total 7,10,44,009, bonus shares which includes bonus issue of 6,26,85,759 shares against 12,53,73,750 on 21.01.2022 in ratio of 1:2 and bonus issue of 83,58,250 shares against 1,67,16,500 on 26.04.2019 in ratio of 1:2.

iii. There are no shares bought back.

Reserves and Surplus

The reserves and surplus of the Company increased to Rs. 1,758.72 lakh in the year under review from Rs. 902.60 lakh in the previous year.

b. Other non-current liabilities and current liabilities:

(Amount in Rs. lakh)

Particulars	Year ended 31st March 2023	Year ended 31st March 2022
Non-current liabilities
(a) Financial Liabilities
- Borrowings	70.71	177.49
- Other financial liabilities	72.33	65.85
- Lease Liability	2,825.42	2,646.20
(b) Provisions	86.27	66.74
(c) Deferred tax liabilities	-	-
(d) Other non-current liabilities	8.19	14.33
Total Non Current Liabilities	3,062.93	2,970.61
Current liabilities
(a) Financial Liabilities
- Borrowings	1,750.86	1,297.12
- Trade Payable	438.28	368.46
- Other Current Financial Liabilities	752.53	725.73
- Lease Liability	1,212.10	1,201.29
(b) Other Current Liabilities	809.97	688.52
(c ) Provision	54.27	29.81
Total Current Liabilities	5,017.96	4,310.92

Above table summarizes the consolidated liability side of Balance Sheet, which can be further elaborated as follows:-

Borrowings

The Non-Current borrowings decreased from Rs. 177.49 lakh as at 31st March, 2022 to Rs. 70.71 lakh as at 31st March, 2023.

The Current borrowings increased from Rs. 1,297.12 lakh as at 31st March, 2022 to Rs. 1,750.86 lakh as at 31st March, 2023.

These funds have been utilized for acquisitions made during the year and other working capital requirements.

Trade payables

Trade payables consist of payables towards purchase of goods and services and stood at Rs. 438.28 lakh as at 31st March, 2023 which has increased from Rs. 368.46 lakh as at 31st March, 2022.

Lease Liability

The Non-Current Lease liability has increased to Rs. 2,825.42 lakh as at 31st March, 2023 from Rs. 2,646.20 lakh as at 31st March, 2022.

The Current Lease liability has increased to Rs. 1,212.10 lakh as at 31st March, 2023 from Rs. 1,201.29 lakh as at 31st March, 2022 in compliance with Ind AS 116 Leases effective from 01.04.2019.

Provisions

Non-Current Provision has increased by Rs. 19.54 lakh which belongs completely to provision made for gratuity liability.

Current provision has increased by Rs. 24.47 lakh which belongs to provision made for gratuity liability payable within 1 year.

c. Non-current assets:

(Amount in Rs. lakh)

Particulars	Year Ended 31st March 2023	Year Ended 31st March 2022
Non-current assets
(a) Property, Plant and Equipment	1,776.16	2,098.39
(b) A Right To Use	3,932.16	3,521.63
(c) Goodwill on consolidation	14.33	14.33
(d) Intangible Assets	1,141.28	593.71
(e) Financial Assets
- Investments	0.25	0.25
- Other Financial Assets	761.96	557.08
(f) Deferred Tax Assets	731.17	1,082.20
Total	8,357.32	7,867.59

Above table pertains to Non-Current Assets which can be further elaborated as follows:-

Property, Plant and Equipment

The net block of tangible assets amounting to Rs. 1,776.16 lakh as of 31st March, 2023 as compared to Rs. 2,098.39 lakh of 31st March, 2022, resulted in a net decrease of the assets to the extent of Rs. 322.23 lakh. This is due to addition of Rs. 174.46 lakh offset by depreciation charge for the year amounting to Rs. 478.35 lakh and net amount of disposal of Rs. 18.34 lakh.

A Right To Use

The company has adopted and implemented Ind AS 116 Lease, which has resulted in recognizing Right to use which includes present value of Leased asset and security deposits as reduced by the amount of depreciation/ amortization.

Intangible Assets

The net block of Intangible assets amounting to Rs. 1,141.28 lakh as of 31st March, 2023 as compared to

Rs. 593.71 lakh of 31st March, 2022, resulted in net increase of Rs. 547.57 lakh. This increase is due to addition of Rs. 858.30 lakh offset by amortization charges for the year amounting to Rs. 310.73 lakh.

Deferred Tax Asset

In the year under review company has recognized deferred tax asset of Rs. 731.17 lakh which comprises of deferred tax asset of Rs. 709.26 lakh recognized by One Point One Solutions Ltd. and deferred tax asset of Rs.21.91 lakh recognized by Subsidiary Silicon Softech India Ltd.

Goodwill

Goodwill represents the excess of purchase consideration over net assets of acquired subsidiaries. Goodwill on consolidation continues at Rs. 14.33 lakh.

d. Current Assets:

(Amount in Rs. lakh)

Particulars	Year Ended 31st March 2023	Year Ended 31st March 2022
Current assets
(a) Inventories	-	-
(b) Financial Assets
- Trade receivables	3,882.13	2,534.44
- Cash and Cash equivalents	35.68	45.04
- Bank balances other than (iii) above	210.46	144.54
- Other finanical asset	29.81	57.76
(c ) Other Current assets	1,085.44	1,295.94
Total	5,243.50	4,077.73

Trade Receivables

The trade receivables have increased from Rs. 2,534.44 lakh as at 31st March, 2022 to Rs. 3,882.13 lakh as at 31st March, 2023. These debtors are considered good and realizable.

The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors which could affect the Companys ability to settle claims. Provisions are generally made for all debtors outstanding for more than 180 days as also for others, depending on the managements perception of the risk.

The Company constantly focuses on reducing its receivables period by improving its collection efforts.

Other Current Assets

Other Current assets have decreased from Rs. 1,295.94 lakh as at 31st March, 2022 to Rs. 1,085.44 lakh as at 31st March, 2023, majorly includes prepaid expenses, advance paid to suppliers, balance with revenue authorities, etc.

Cash and Bank Balance

Cash balance represents balance in cash with the Company to meet its petty cash expenditures. The bank balances include balance maintained in current accounts with various banks. The cash and bank balance as of 31st March, 2023 was Rs. 246.14 lakh as compared to Rs. 189.58 lakh as of 31st March, 2022.

a. Liquidity and Capital Resources

The Company needs cash to fund the technology and infrastructure requirements in its operation centers, to fund its working capital needs, to pay interest and taxes, to fund acquisitions and for other general corporate purposes. The Company funds these capital requirements through variety of sources, including cash from operations, short and long-term lines of credit and issuance of share capital. As of 31st March, 2023, the Company had cash and cash equivalents of Rs. 246.14 lakh.

The Companys summarized statement of consolidated cash flow is set forth below:

(Amount in Rs. Lakh)

Particulars	Year Ended 31st March 2023	Year Ended 31st March 2022
Net Cash flow from Operating activities	2,221.65	2,683.11
Net Cash flow from/ (used in)Investing activities	-807.01	-323.45
Net Cash flow (used in)/ from Financing activities	-1,358.08	-2353.48
Cash and cash equivalents at the beginning of the year	189.58	183.40
Cash and cash equivalents at the end of the year	246.14	189.58

Operating Activities

Net cash generated from the Companys operating activities in FY2022-23 amounted to Rs. 2,221.65 lakh. This consisted of net profit before tax of Rs. 1,282.16 lakh and a net upward adjustment of Rs. 2,078.57 lakh relating to various non-cash items and non-operating items including depreciation of Rs. 1,911.48 lakh; net decrease in working capital of Rs. 1,095.71 lakh; and income taxes paid of Rs. 43.37 lakh. The working capital change was due to net increase in operating assets by Rs. 1,314.10 lakh and increase in operating liabilities by Rs. 218.39 lakh.

Investing Activities

In FY2022-23, the Company expended Rs. 807.01 lakh for its investing activities. These investing activities included capital expenditure of Rs. 885.60 lakh, including tangible and intangible fixed assets purchased and replaced in connection with the Companys operation centers in India and also right to use recognized in current year.

Financing Activities

In FY2022-23, net cash used in financing activities amounted to Rs. 1,358.08 lakh. This comprised of repayment of long term borrowings of Rs. 106.78 lakh, payment of interest amounting to Rs. 184.08 lakh, proceeds from short term borrowings of Rs. 453.75 lakh and repayment of lease liability of Rs. 1,520.97 lakh.

Cash Position

The Company funds its short-term working capital requirements through cash flow from operations, working capital overdraft facilities with commercial banks, medium-term borrowings from banks and other commercial financial institutions. As of 31st March, 2023, the Company had cash and bank balances of Rs. 246.14 lakh as compared to Rs. 189.58 lakh as of 31st March, 2022.

F. Financial Ratios

Following are ratios for the current financial year and their comparison with preceding financial year:

Sr. No. Ratio Description	31st March, 2023	31st March, 2022
1. Debtors Turnover (times)	4.37	5.05
2. Interest Coverage Ratio	3.55	1.71
3. Current ratio	1.04	1.31
4. Debt Equity ratio	1.06	1.14
5. Operating margin (%)	12.83%	9.88%
6. Net profit margin (%)	6.10%	2.46%
7. Return on Equity (%)	15.92%	7.32%

Analysis:

• Debtors Turnover ratio indicates the companys efficiency to collect its trade receivables. The debtors turnover ratio has been decreased from 5.05 at 31st March, 2022 to 4.37 as on 31st March, 2023.

• Interest Coverage ratio is a financial ratio which determines how well company can pay interest on outstanding debts. The interest coverage ratio is 3.55 as on 31st March, 2023, this indicates interest payments on outstanding debts are completely covered by EBITDA and company is financial secured.

• Current ratio is a useful test of short term debt paying ability of business. The current ratio as on 31st March, 2023 is 1.04, which indicates that company has sufficient short term funds for repaying short term liabilities.

• Debt equity ratio is a financial ratio that compares companys total debts to total equity. A lower debt to equity ratio usually implies more financially stable business. Thus, a debt equity ratio of 1.06 as on 31st March, 2023 indicates that the company is financial stable.

• Operating Margin ratio is a profitability ratio for measuring revenue left after all operational expense. It indicates the efficiency of the company in utilizing its resources. This ratio has increased to 12.83% which is a positive sign of operational efficiency and effective cost management.

• Net Profit margin indicates the net income made by the company with total sales achieved. During the year the company has made profits and marked a net profit margin of 6.10% which signifies strong overall profitability and efficient management of both operating and non-operating expenses.

• Return on equity represents the total return on equity capital and shows the firms ability to turn equity investments into profit. An ROE of 15.92% suggests that the company is using its shareholders equity more efficiently to generate profits.

7. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company believes that employees are the core key to our success. A fundamental tenet of our management philosophy is to invest in our employees, and enable them to develop new skills and capabilities which benefits them as well as the Company.

The organization grew to more than 5,000 employees during FY 2022-23. To promote employee welfare, we organized camps for blood donation, eye check-up and health check-up. These initiatives received an overwhelming response from employees across locations.

We believe that we are heading in the right direction on our journey to become a work place where employees trust who they work for, take pride in what they do and enjoy the company of the people they work with. In FY 2023-24, we will continue to look for ways to best harness the potential of our resources through various people management interventions including skilling people on digital, robotics and machine learning.

8. MANAGEMENT PROJECTION, ESTIMATION AND POINT OF VIEWS:

Cautionary Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be forward-looking statements; within the meaning of applicable securities laws and regulations. Actual results could defer materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country demand and supply conditions in the industry, changes in Government regulations, tax laws and other factors such as litigation and labor relations. Readers are advised to exercise their own judgment in assessing risks associated with the Company, inter-alia, in view of discussion on risk factors herein and disclosures in regulatory filings, as applicable.