Uniinfo Telecom Services Ltd Management Discussions

FORWARD LOOKING STATEMENT

In this Report, we have disclosed some forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. All statements that address expectations or projections about the future, but not limited to the Companys strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realised. The Companys actual results, performance or achievements could thus differ from those projected in any forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements based on subsequent developments, information, or events. The Company disclaims any obligation to update these forward-looking statements, except as may be required by law.

The following discussions on our financial condition and result of operations should be read together with our audited financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all references herein to "we", "us", "our", "the Company", "Uniinfo", "UTSL" are to Uniinfo Telecom Services Ltd.

INDIA ECONOMIC GROWTH OVERVIEW FY 2022-23

In FY22/23, Indias real GDP expanded at an estimated 6.9 percent. Growth was underpinned by robust domestic demand, strong investment activity bolstered by the governments push for investment in infrastructure, and buoyant private consumption, particularly among higher income earners. The composition of domestic demand also changed, with government consumption being lower due to fiscal consolidation.

Since Q3 FY22/23, however, there have been signs of moderation, although the overall growth momentum remains robust. The persisting headwinds - rising borrowing costs, tightening financial conditions and ongoing inflationary pressures - are expected to weigh on Indias growth in FY23/24. Real GDP growth is likely to moderate to 6.3 percent in FY23/24 from the estimated 6.9 percent in FY22/23.

Both the general government fiscal deficit and public debt to GDP ratio increased sharply in FY20/21 and have been declining gradually since then, with the fiscal deficit falling from over 13 percent in FY20/21 to an estimated 9.4 percent in FY22/23. Public debt has fallen from over 87 percent of GDP to around 83 percent over the same period. The consolidation has largely been driven by an increase in revenues and a gradual withdrawal of pandemic-related stimulus measures. At the same time, the government has remained committed to increasing capital spending, particularly on infrastructure, to boost growth and competitiveness.

(Source: https://www.worldbank.org/en/country/india/overview)

INDIAN TELECOM INFRASTRUCTURE INDUSTRY OVERVIEW

Currently, India is the worlds second-largest telecommunications market with a subscriber base of 1,170.38 million in December 2022 and has registered strong growth in the last decade. The Indian mobile economy is growing rapidly and will contribute substantially to Indias Gross Domestic Product (GDP) according to a report prepared by GSM Association (GSMA) in collaboration with Boston Consulting Group (BCG).

The liberal and reformist policies of the Government of India have been instrumental along with strong consumer demand in the rapid growth of the Indian telecom sector. The Government has enabled easy market access to telecom equipment and a fair and proactive regulatory framework, that has ensured the availability of telecom services to consumers at affordable prices. The deregulation of Foreign Direct Investment (FDI) norms have made the sector one of the fastest-growing and the top five employment opportunity generator in the country.

(Source:https://www.ibef.org/industry/telecommunications )

ABOUT UNIINFO TELECOM SERVICES LIMITED

UTSL works on various solutions to assist the telecom service providers, network operators and OEMS to maximize the value of technology investments and deliver the highest service levels to their customers. In our constant Endeavour to develop our business in the Telecom market, we are continuously pushing the boundaries to provide enhanced value to our telecom projects. Since the inception of the company in 2010, we have managed to build an excellent track record by exceeding the expectations of our clients. Our track record is testimony to our capabilities of adapting to new technologies and its speedy deployment in India / Overseas.

OPPORTUNITIES AND THREATS Opportunities

Continued densification opportunity driven by 5G: Since its launch in 2014-15, 4G data volumes have continued to rise year after year driven by a combination of more users and higher average consumption per user. The year 2020, witnessed 4G payload increase by another 40% YoY (Source: Nokia MBiT 2021). We believe this growth will lead to continued densification of networks in the country, especially as consumption moves more to video content including live video streaming which requires more capacity and lower latency. Also, with introduction of low cost 4G smartphones, migration from 2G/3G is likely to further intensify 4G traffic growth which could add a further boost to the overall demand in the coming years.

Next Generation Technologies: One of the three missions of the National Digital Communications Policy (NDCP) 2018, was to propel India by enabling next generation technologies and services through investments, innovation and IPR generation. It includes creating a roadmap for emerging technologies and its use in the communications sector, such as 5G, Artificial Intelligence, Robotics, Internet of Things, Cloud Computing and M2M. With the Government focus on these and impending 5G auctions, we believe the coming years present a wide range of opportunities for businesses to provide future ready products/services and create use cases that we believe, will require high throughput and an ultra-reliable low latency network, which will ride on robust digital communications infrastructure, facilitated by companies like ours.

Threats

Financial Health of Operators: In the last few years, intense price competition, regulatory payouts including the dues following the SC AGR Judgement, spectrum related payments, etc. have affected the financial health of operators. Our largest end customers Bharti Airtel, Nokia and Reliance are raising or have raised substantial amounts to strengthen their balance sheets. However, since our business and growth prospects mainly depend on demand from these providers in India, any deterioration in their financial health due to increased competition leading to loss of market share and/or deterioration of cash flows, inability to raise further funds, adverse regulatory regime, general economic conditions, policy changes etc. can affect their ability to pay for infrastructure services, which in turn could adversely affect UTSL revenues, cash flows and overall financial condition.

Increase in Competitive Intensity: As a B2B company, we see limited price elasticity i.e., increase in demand due to price cuts as we believe co-location demand is not interchangeable. Operators typically demand a certain location based on their radio planning and specific latitude/longitude requirements. However, one cannot rule out increase in competitive intensity especially as newly formed tower companies may seek to enhance market share/revenues and TSP consolidation has led to many tower companies witnessing sharp drop-in co-locations leading to material financial impact for such companies. Additionally, TSPs have witnessed pressures on their financial health in the last few years driven by heightened competitive intensity, regulatory payouts, etc. Thus, their ability to pay prevailing rates for use of passive infrastructure may also decline over time.

Pricing risk due to renewals: Any unfavourable terms such as lower pricing upon renewal of agreements with customers are a risk to the Company, this could adversely impact the financial health of the Company.

RISKS & CONCERNS

Uniinfo telecom Services Limited believes that risk management and internal control are fundamental to effective corporate governance and development of a sustainable business. The Company has a robust process to identify key risks across its operations and prioritize relevant action plans that can mitigate these risks. Key risks that may impact the Companys business include:

Changes in Regulatory Environment & Natural Disasters Damaging Telecom Networks: Despite huge improvements, the regulatory environment in India continues to be challenging. Regulatory developments will have significant implications on the future of telephony as well as Indias global competitiveness. Any adverse regulatory changes, changes in taxation and policies may affect the profitability outlook of the Company.

The Companys telecom networks are subject to risks from natural disasters or other external factors. The Company maintains insurance for its assets, equal to the replacement value of its existing telecommunications network, which provides cover for damage caused by fire and special perils. Such failures and natural disasters even when covered by insurance may cause disruption, though temporary, to the Companys operations. Please note that the risk related information outlined here is not exhaustive and is for information purpose only.

DETAILS OF SIGNIFICANT CHANGES IN KEY RATIOS AND NUMBERS

PARTICULARS	2022-23	2021-22	Variance	Comments for Variation in ratio above 25%
Debtors Turnover	3.11	4.00	-22%	N.A.
Inventory Turnover	1.96	2.00	-2%	N.A.
Interest Coverage Ratio	1.22	-4.27	129%	Reduction in overall loss has improved the ratio.
Current Ratio	3.44	5.27	-35%	Reduction is due to increase in current liabilities
Debt Equity Ratio	0.19	0.11	81%	Increase due to working capital requirements
Operating Profit Margin	0.01	-0.06	120%	Increased due to higher Earnings Before Interest and Tax as compared to previous year.
Net Profit Margin	0.004	-0.03	113%	Reduction in overall loss due to higher control on costs has improved this ratio as compare to previous year.
Return on Net Worth	0.002	-0.04	94%	Improved bottom line with respect to previous year has improved this ratio.

CONSOLIDATED FINANCIAL OVERVIEW

The consolidated performance of the Company for the financial year ended 31st March, 2023, is as follows:

a. Total revenue -

i) Revenue from Sale of Services & Goods at Rs. 3578.98 Lakhs for the year ended 31st March, 2023, as against Rs. 4158.83 Lakhs for the corresponding previous period, a decrease of 13.94%.

ii) Revenue from Other Income at Rs. 15.02 Lakhs for the year ended 31st March, 2023, as against Rs. 6.87 Lakhs for the corresponding previous period, a Increase of 118.62%.

b. The Employee benefit expenses for the financial year ended 31st March, 2023 were Rs. 1418.73 Lakhs as against Rs. 1467.20 Lakhs for the corresponding previous period, an decrease of 3.30%

c. The depreciation for the financial year ended 31st March, 2023 was Rs. 97.60 Lakhs, as against Rs. 98.09 Lakhs for the corresponding previous period, a decrease of 0.50%.

d. The interest cost for the financial year ended 31st March, 2023 was Rs. 38.87 Lakhs as against Rs. 58.47 Lakhs for the corresponding previous period, a decrease of 33.53%.

e. The total expenses for the financial year ended 31st March, 2023 were Rs. 3517.38 Lakhs as against Rs. 4590.89 Lakhs for the corresponding previous period, a decrease of23.38%.

f. The Company has incurred a Net Profit of Rs. 60.83 Lakhs for the year ended March 31,2022, as against Loss of Rs. 284.78 Lakhs for the corresponding previous period

g. The EPS (Earning per Share) for the financial year ended 31st March, 2023 was Rs. 0.57 for a face value of Rs. 10 per share, as against Rs. (2.66) for the corresponding previous period.

RESOURCES AND LIQUIDITY

a. As on 31st March, 2023, the consolidated net worth stood at Rs. 3248.04 Lakhs and the consolidated debt was at Rs. 657.07 Lakhs.

b. The cash and cash equivalents at the end of 31st March, 2023 were Rs. 322.23 Lakhs.

c. The net debt to equity ratio of the Company stood at 0.20:1 as on 31st March, 2023.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Managing Director and Chief Financial Officer (CFO) are accountable for financial controls, measured by objective metrics on accounting hygiene and audit scores. The Company has deployed a robust system of internal controls that facilitates the accurate and timely compilation of financial statements and management reports, ensures regulatory and statutory compliance, and safeguards investor interest by ensuring the highest level of governance and periodic communication with investors. The Audit Committee reviews the effectiveness of the internal control system across the Company.

A Certificate signed by the Managing Director & Chief Financial Officer, is included in the Corporate Governance Report which confirms the existence of effective internal control systems and procedures in the Company.

Continuous measures are aligned by the Company to strengthen its internal control system. Various background verification process of new joiners, whistle blower policy and strengthening the process of risk management of our multiple projects. The companys internal control system are always renewed with high degree of assurances regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations.

HUMAN RESOURCES

We believe that our employees are key contributors to our business success. 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 our business. Many initiatives were taken to support business through organizational efficiency, process change support and various employee engagement programs which has helped the organization to achieve higher productivity level. A significant effort has also been undertaken to develop leadership as well as technical/functional capabilities in order to meet future talent requirement.

As on March 31, 2023 we have 571 employees on payroll. Company is committed to provide necessary training / conducts development programmes to imbibe necessary skills required within the employees. The management of the Company enjoys cordial relations with its employees at all levels.

At UTSL, we believe that our employees are the key to the success of our business. It is the commitment and dedication of our employees that help us to address challenges and remain motivated to overcome every obstacle on our way. Our human capital has, therefore, played a pivotal role in shaping UTSL into what we are today.

FUTURE OUTLOOK

UTSL is well-poised to deliver sustained growth and profitability over the foreseeable future. Strong industry tailwinds create a positive environment for robust business performance. We continue to invest in technological advancement of our company and manpower, to ensure that we are able to address evolving requirements of the telecom sector. Our continuous efforts in building strong relationship with our customers to gain more familiarity with their evolving network plans, so that we can identify and exercise relevant opportunities. We hope to get good volume transactions in EV charging stations also.

COMPLIANCE WITH INDIAN ACCOUNTING STANDARDS

In the preparation of the financial statements, the Company has followed the Indian Accounting Standards as notified. The significant accounting policies which are consistently applied have been set out in the Notes to the Financial Statements.

CAUTIONARY STATEMENT

Statements in this report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement because of many factors like economic condition, availability of labour, price conditions, domestic and international market, changes in Government policies, tax regime, etc. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information and event.

	BY ORDER OF THE BOARD OF DIRECTORS
	UNIINFO TELECOM SERVICES LIMITED
Date: 04.09.2023	Kishore Kumar Bhuradia
Place: Indore	Chairman & Managing Director
	DIN: 03257728