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Sonata Software Ltd. Annual Report 2022
60845_rns_2022-04-29_23c663b0-2b3e-4a34-b0e5-062e437d8aac.pdf
Annual Report
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29th April, 2022
National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Mumbai Kind Attn: Manager, Listing Department Email Id: [email protected] Stock Code – SONATSOFTW
BSE Limited P.J. Towers, Dalal Street Mumbai Kind Attn: Manager, Listing Department Email Id: [email protected] Stock Code - 532221
Dear Sirs,
SUB: Outcome of Board Meeting
REF: Disclosures under Regulations 30 & 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
We wish to inform you that at the meeting of the Board of Directors of the Company held today i.e. 29th April, 2022, the Board, inter alia, has-
- a) Approved the Audited Financial results (Standalone and Consolidated) for the quarter and year ended 31st March, 2022. The said results in the prescribed format along with Independent Auditors' Report are enclosed herewith. A copy of the press release is also enclosed for your reference.
- b) The Independent Auditors' Report on the Audited Financial Results of the Company (Standalone and Consolidated) for the financial year ended on 31st March, 2022 is with unmodified opinion and the declaration in this regard is enclosed.
Further, the Board of Directors have also:
- c) Recommended a Final Dividend of Rs. 13/- per Equity share (1300 % on par value Re. 1/-) for the financial year ended 31st March, 2022 and the Final Dividend is payable subject to the approval of shareholders at the ensuing Annual General Meeting. The dividend, subject to the approval of shareholders, will be dispatched /credited within 30 days from the date of ensuing AGM.
- d) We shall inform you in due course the date on which the 27th Annual General Meeting of the Company will be held.
Further, we wish to inform you on the following update :
The term of M/s Deloitte Haskins & Sells LLP, Chartered Accountants shall end upon conclusion of the 27th Annual General Meeting. Accordingly, the Board of Directors of the Company have approved the appointment of M/s B S R & Co. LLP, Chartered Accountants, Bengaluru, (Firm Registration No. 101248W/W-100022) as Statutory Auditor of the Company to hold office from conclusion of the 27th AGM till the conclusion of the 32nd AGM, subject to approval of the shareholders at the ensuing AGM. The communication in this regard was intimated to stock exchanges on January 18, 2022.
The meeting commenced at 2.30 p.m. and concluded at 5.30 p.m. Also note that the aforesaid information will be available on our website www.sonata-software.com.
This is for your information and records.
Thanking you,
Yours faithfully,
For Sonata Software Limited Mangal Kulkarni MANGAL KRISHNARAO KULKARNI Digitally signed by MANGAL KRISHNARAO KULKARNI Date: 2022.04.29 17:39:03 +05'30'
Company Secretary, Compliance Officer and Head Legal
Chartered Accountants Prestige Trade Tower, Level 19 46, Palace Road, High Grounds Bengaluru - 560 001 Karnataka, India
Tel: +91 80 6188 6000 Fax: +91 80 6188 6011
INDEPENDENT AUDITOR'S REPORT ON AUDIT OF THE STANDALONE FINANCIAL RESULTS AND REVIEW OF QUARTERLY FINANCIAL RESULTS
TO THE BOARD OF DIRECTORS OF SONATA SOFTWARE LIMITED
Opinion and Conclusion
We have (a) audited the Standalone Financial Results for the year ended March 31, 2022 and (b) reviewed the Standalone Financial Results for the quarter ended March 31, 2022, which were subject to limited review by us. both included in the accompanying "Statement of Standalone Financial Results for the Ouarter and Year Ended March 31, 2022" of SONATA SOFTWARE LIMITED (the "Company"), (the "Statement"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the "Listing Regulations").
(a) Opinion on Annual Standalone Financial Results
In our opinion and to the best of our information and according to the explanations given to us, the Standalone Financial Results for the year ended March 31, 2022:
- i. is presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended; and
- gives a true and fair view in conformity with the recognition and measurement principles laid down in the $ii$ Indian Accounting Standards and other accounting principles generally accepted in India of the net profit and total comprehensive income and other financial information of the Company for the year then ended.
(b) Conclusion on Unaudited Standalone Financial Results for the quarter ended March 31, 2022
With respect to the Standalone Financial Results for the quarter ended March 31, 2022, based on our review conducted as stated in paragraph (b) of Auditor's Responsibilities section below, nothing has come to our attention that causes us to believe that the Standalone Financial Results for the quarter ended March 31, 2022. prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standards and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.
Basis for Opinion on the Audited Standalone Financial Results for the year ended March 31, 2022
We conducted our audit in accordance with the Standards on Auditing ("SA"s) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Results section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Results for the year ended March 31, 2022 under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion.
Management's Responsibilities for the Standalone Financial Results
This Statement, which includes the Standalone financial results is the responsibility of the Company's Board of Directors, and has been approved by them for the issuance. The Standalone Financial Results has been compiled from the related audited standalone financial statements for the year ended March 31, 2022. This responsibility includes the preparation and presentation of the Standalone Financial Results for the quarter and year ended March 31, 2022 that give a true and fair view of the net profit and other comprehensive income and other financial information in accordance with the recognition and measurement principles laid down in Ind AS, prescribed under Section 133 of the Act, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Results that give a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Results, the Board of Directors is responsible for assessing the Company's ability, to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the financial reporting process of the Company.
Auditor's Responsibilities
(a) Audit of the Standalone Financial Results for the year ended March 31, 2022
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Results for the year ended March 31, 2022 as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Standalone Financial Results.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the Annual Standalone Financial Results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors.
- Evaluate the appropriateness and reasonableness of disclosures made by the Board of Directors in terms of the requirements specified under Regulation 33 of the Listing Regulations.
- Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the Annual Standalone Financial Results. $\ddot{\phantom{a}}$ including the disclosures, and whether the Standalone Financial Results represent the underlying transactions and events in a manner that achieves fair presentation.
- $\bullet$ Obtain sufficient appropriate audit evidence regarding the Annual Standalone Financial Results of the Company to express an opinion on the Annual Standalone Financial Results.
Materiality is the magnitude of misstatements in the Annual Standalone Financial Results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Annual Standalone Financial Results may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Annual Standalone Financial Results.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
(b) Review of the Standalone Financial Results for the quarter ended March 31, 2022
We conducted our review of the Standalone Financial Results for the quarter ended March 31, 2022 in accordance with the Standard on Review Engagements ("SRE") 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the ICAI. A review of interim financial information consists of making inquiries, primarily of the Company's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with SAs specified under section 143(10) of the Act and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)
Gurvinder Singh Partner (Membership No.110128) UDIN: 22110128AICMMS4430
Place: Bengaluru Date: April 29, 2022
Registered Office: 208, T.V. Industrial Estate, S.K. Ahire Marg, Worli, Mumbai - 400 030
Corporate Office: 1/4, A.P.S Trust Building, Bull Temple Road, N.R. Colony, Bangalore - 560 019
CIN - L72200MH1994PLC082110
www.sonata-software.com, Tel : +91-080-67781999 Fax : +91-080-26601387, [email protected]
| Part I |
|---|
| -------- |
Statement of standalone financial results for the quarter and year ended March 31, 2022
₹ in lakhs, except per share data
| Sl No. Particulars March 31, December 31, March 31, March 31, 2022 2021 2021 2022 (Refer Note 11) (Unaudited) (Refer Note 11) (Audited) 1 Revenue from operations 19,437 18,587 19,703 75,814 2 Other income 1,410 4,393 1,096 16,424 3 Total Revenue (1 + 2) 20,847 22,980 20,799 92,238 4 Expenses (a) Purchases of Stock-in-Trade 1,795 2,248 1,597 9,468 (b) Employee benefits expense 11,487 10,412 11,203 41,499 (c) Finance costs 196 217 238 878 (d) Depreciation and amortization expense 437 431 462 1,755 (e) Other expenses 2,822 3,097 2,068 10,615 Total expenses 16,737 16,405 15,568 64,215 5 Profit before tax (3 - 4) 4,110 6,575 5,231 28,023 6 Tax expense (1) Current tax 1,057 859 1,278 4,197 (2) Provision for tax relating to prior years - - (79) - (3) Deferred tax (110) 91 117 307 7 Profit for the period (5 - 6) 3,163 5,625 3,915 23,519 8 Other comprehensive income 1 (a) Items that will not be reclassified to profit or (loss) (434) (131) (1,017) (933) (b) Income tax relating to items that will not be reclassified to profit or (loss) 76 20 219 149 2 Items that will be reclassified to profit or (loss) (a) Exchange differences in translating the financial statements of foreign operations (17) 14 1 (14) (b) Exchange differences on forward cover (150) 352 (190) 201 (c) Income tax relating to items that will be reclassified to |
March 31, 2021 |
|---|---|
| (Audited) | |
| 78,141 | |
| 4,480 | |
| 82,621 | |
| 6,074 | |
| 41,333 | |
| 972 | |
| 1,890 | |
| 7,323 | |
| 57,592 | |
| 25,029 | |
| 5,904 1,485 (263) 17,903 |
|
| (66) 15 |
|
| profit or (loss) 24 (53) 13 (30) Total (501) 202 (974) (627) |
131 2,423 (576) 1,927 |
| 9 Total Comprehensive Income for the period (7 + 8) 2,662 5,827 2,941 22,892 |
19,830 |
| Paid-up equity share capital (Face Value ₹ 1/-) 10 1,039 1,039 1,039 1,039 |
1,039 |
| 11 Other equity (Refer Note 8) 56,136 51,913 51,913 56,136 Earnings per equity share (of ₹ 1/- each) (Refer Note 9) 12 |
51,913 |
| (a) Basic 3.04 5.42 3.77 22.63 (b) Diluted 3.04 5.41 3.77 22.62 See accompanying notes to the financial results |
17.23 17.23 |
Registered Office: 208, T.V. Industrial Estate, S.K. Ahire Marg, Worli, Mumbai - 400 030
Corporate Office: 1/4, A.P.S Trust Building, Bull Temple Road, N.R. Colony, Bangalore - 560 019 CIN - L72200MH1994PLC082110
www.sonata-software.com, Tel : +91-080-67781999 Fax : +91-080-26601387, [email protected]
| Standalone Balance Sheet | ( ₹ in lakhs) | ||
|---|---|---|---|
| As at | As at | ||
| Sl No. | Particulars | March 31, 2022 | March 31, 2021 |
| ASSETS | |||
| 1 | NON-CURRENT ASSETS | ||
| (a) Property, Plant and Equipment | 1,010 | 1,074 | |
| (b) Right-of-use assets | 5,734 | 7,049 | |
| (c) Capital work-in-progress | 1 | 11 | |
| (d) Goodwill | 282 | 282 | |
| (e) Financial assets | |||
| (i) Investments | 6,389 | 5,285 | |
| (ii) Other Financial Assets | 1,761 | 1,813 | |
| (f) Deferred tax assets (net) | 1,512 | 1,699 | |
| (g) Other non-current assets | 5,152 | 4,703 | |
| 21,841 | 21,916 | ||
| 2 | CURRENT ASSETS | ||
| (a) Financial assets | |||
| (i) Investments | 7,900 | 4,507 | |
| (ii) Trade receivables | 15,283 | 19,158 | |
| (iii) Cash and cash equivalents | 27,848 | 26,040 | |
| (iv) Bank balances other than (iii) above | 2,272 | 2,047 | |
| (v) Loans | - | 180 | |
| (vi) Other financial assets | 4,108 | 3,429 | |
| (b) Other current assets | 1,077 | 977 | |
| 58,488 | 56,338 | ||
| TOTAL - ASSETS | 80,329 | 78,254 | |
| EQUITY AND LIABILITIES | |||
| 3 | EQUITY | ||
| (a) Equity share capital | 1,039 | 1,039 | |
| (b) Other equity | 56,136 | 51,913 | |
| 57,175 | 52,952 | ||
| LIABILITIES | |||
| 4 | NON-CURRENT LIABILITIES | ||
| (a) Financial liabilities | |||
| Lease liabilities | 5,283 | 6,423 | |
| 5,283 | 6,423 | ||
| 5 | CURRENT LIABILITIES | ||
| (a) Financial liabilities | |||
| (i) Lease liabilities | 1,862 | 1,788 | |
| (ii) Trade payables | |||
| Total outstanding dues of micro enterprises and small enterprises | 39 | 37 | |
| Total outstanding dues of creditors other than micro enterprises and small enterprises | 10,013 | 9,283 | |
| (iii) Other financial liabilities | 978 | 817 | |
| (b) Other current liabilities | 1,679 | 3,426 | |
| (c) Provisions | 1,228 | 1,433 | |
| (d) Current tax liabilities (net) | 2,072 | 2,095 | |
| 17,871 | 18,879 | ||
| TOTAL - EQUITY AND LIABILITIES | 80,329 | 78,254 |
The disclosure is an extract of the standalone Balance Sheet as at March 31, 2022 and March 31, 2021 in compliance with Indian Accounting Standards ("Ind AS")" Notes :
- 1 These quaterly and year ended audited standalone financial results prepared in accordance with Indian Accounting Standards applicable as per Sec 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and amendments thereafter have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on April 29,2022
- 2 The Board of Directors recommended a final dividend of ₹ 13 (1,300% on par value of Rs 1/-) per equity share for the financial year ended March 31, 2022. The
- 3 The term of M/s Deloitte Haskins & Sells LLP, Chartered Accountants shall end upon conclusion of the 27th AGM. Accordingly, the Board of Directors have approved the appointment of M/s B S R & Co. LLP, Chartered Accountants Bengaluru, (Firm Registration No. 101248W/W-100022) as Statutory Auditor of the Company to hold office from conclusion of the 27th AGM till the conclusion of the 32nd AGM, subject to approval of the shareholders at the ensuing AGM. payment is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.
- 4 Mr. Samir Dhir has been appointed as CEO of Sonata Software Limited with effect from April 8, 2022. CEO transition is part of the Sonata Software Board's succession plan. Mr. Srikar Reddy will continue as MD and will transition to Mr. Samir Dhir over the next 9 to 12 months.
- 5 The company has obtained control of Encore IT Services Solutions Private Limited, a Chennai based Company ( "Encore") on August 1, 2021 for a total consideration of USD 1.2 Mn (₹ 890.76 Lakhs)
- 6 During the year Sonata Software Intercontinental Limited ( "SSIL") has been incorporated in Ireland as a Wholly owned subsidiary with effect from 8th September, 2021.
- 7 The Company also publishes consolidated financial results in addition to standalone financial results. In accordance with Ind AS 108 Operating Segments, the Company has disclosed the segment information in the consolidated financial results.
8 The other equity with respect to each quarter and year ended represents balance as per the audited Balance Sheet of the previous year as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015
9 EPS for quarterly periods is not annualised.
10 The management has considered the possible effects of the pandemic relating to COVID-19 on the carrying amounts of receivables, investments and other financial assets as at March 31, 2022. In developing the assumptions relating to the recoverability of these assets, the management has considered the global economic conditions prevailing at the date of approval of these financial results and has used internal and external sources of Information including credit reports to the extent determined by it. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial results.
11 The figures for the quarter ended March 31, 2022 and March 31, 2021, are balancing figures arrived based on audited results of the full financial year and published year to date unaudited figures for nine months ended December 31, 2021 and December 31, 2020 respectively. The statutory auditors have performed a limited review on the results for the quarter ended March 31, 2022.
| Standalone Cash Flow Statement | ||
|---|---|---|
| (₹ in Lakhs) | ||
| Particulars | For the year ended | |
| March 31, 2022 | March 31, 2021 | |
| A. CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net profit before tax | 28,023 | 25,029 |
| Adjustments for : | ||
| Depreciation and amortization expense | 1,755 | 1,890 |
| Finance costs | 864 | 972 |
| Provision for doubtful trade receivables | (302) | 389 |
| Lease payment concessions | (138) | (124) |
| Interest on financial assets at amortized cost | (42) | (57) |
| Interest from fixed deposits/margin money with banks | (1,347) | (794) |
| Interest from inter-corporate deposits | (41) | (13) |
| Dividend income from long-term investments in subsidiaries (Gain) / loss on sale of fixed assets / scrapped |
(10,808) - |
(2,894) 22 |
| Net (gain) on valuation of current investments | (309) | (205) |
| Expenses on employee stock based compensation | 34 | (53) |
| Exchange (gain)/loss on revaluation of investments | 31 | (178) |
| Unrealized foreign exchange gain (net) | (21) | (1,016) |
| Operating profit before changes in operating assets and liabilities | 17,699 | 22,968 |
| Adjustments for : | ||
| Decrease/(increase) in trade receivables | 4,552 | 3,335 |
| Decrease/(increase) in other financial assets-current | (192) | 185 |
| Decrease/(increase) in other financial assets non-current | 27 | 25 |
| Decrease/(increase) in other non-current assets | 307 | (230) |
| Decrease/(increase) in other current assets | (99) | (88) |
| (Decrease)/increase in other financial liabilities non-current (Decrease)/increase in trade payables |
(893) 664 |
(924) 1,602 |
| (Decrease)/increase in other financial liabilities | 155 | 270 |
| (Decrease)/increase in other current liabilities | (2,680) | (23) |
| (Decrease)/increase in provisions | (206) | (165) |
| Net cash flow from / (used in) operating activities before taxes | 19,334 | 26,955 |
| Inccome taxes paid, net of refunds Net cash flow from / (used in) operating activities (A) |
(4,977) 14,357 |
(8,158) 18,797 |
| B. CASH FLOW FROM INVESTING ACTIVITIES | ||
| Purchase of fixed assets, including intangible assets, capital work-in | ||
| progress and capital advances Proceeds from sale of fixed assets |
(373) - |
(92) 4 |
| Purchase of Non-current investments | (356) | |
| Purchase of investments | (41,041) | (21,999) |
| Proceeds from sale of investments | 38,071 | 18,180 |
| Bank balances not considered as Cash and cash equivalents | (224) | (191) |
| Interest received | 798 | 415 |
| Dividend received from subsidiary Inter corporate deposit to subsidiary (net) |
10,808 180 |
2,894 41 |
| Net cash flow from / (used in) investing activities (B) | 7,863 | (748) |
| C. CASH FLOW FROM FINANCING ACTIVITIES Payment on lease liabilities |
(1,689) | (1,621) |
| Dividends paid on equity shares | (18,693) | (4,065) |
| Finance costs paid | (37) | (15) |
| Net cash flow from / (used in) financing activities (C) | (20,419) | (5,701) |
| Net increase/(decrease) in Cash and cash equivalents (A+B+C) | 1,801 | 12,348 |
| Opening Cash and cash equivalents | 26,040 | 13,762 |
| Exchange difference on translation of foreign currency Cash and cash equivalents | 7 | (70) |
| Closing Cash and cash equivalents | 27,848 - |
26,040 - |
| Cash and cash equivalents at the end of the year comprises: | ||
| In current accounts | 702 | 1,000 |
| In EEFC accounts | 995 | 350 |
| In demand deposit accounts | 26,151 | 24,690 |
| 27,848 | 26,040 |
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Place: Bengaluru P SRIKAR REDDY Date: April 29 2022 MANAGING DIRECTOR
Chartered Accountants Prestige Trade Tower, Level 19 46, Palace Road, High Grounds Bengaluru - 560 001 Karnataka, India
Tel: +91 80 6188 6000 Fax: +91 80 6188 6011
INDEPENDENT AUDITOR'S REPORT ON AUDIT OF ANNUAL CONSOLIDATED FINANCIAL RESULTS AND REVIEW OF OUARTERLY FINANCIAL RESULTS
TO THE BOARD OF DIRECTORS OF SONATA SOFTWARE LIMITED
Opinion and Conclusion
We have (a) audited the Consolidated Financial Results for the year ended March 31, 2022 and (b) reviewed the Consolidated Financial Results for the quarter ended March 31, 2022, which were subject to limited review by us, both included in the accompanying "Statement of Consolidated Financial Results for the Quarter and Year Ended March 31, 2022" of SONATA SOFTWARE LIMITED (the "Company") and its subsidiaries (the Company and its subsidiaries together referred to as the "Group"), (the "Statement"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the "Listing Regulations").
$(a)$ Opinion on Annual Consolidated Financial Results
In our opinion and to the best of our information and according to the explanations given to us, the Consolidated Financial Results for the year ended March 31, 2022:
- includes the results of the subsidiaries as given in the Annexure to this report; $(i)$
- is presented in accordance with the requirements of Regulation 33 of the Listing Regulations; and $(ii)$
- (iii) gives a true and fair view in conformity with the recognition and measurement principles laid down in the Indian Accounting Standards ("Ind AS") and other accounting principles generally accepted in India of the consolidated net profit and consolidated total comprehensive income and other financial information of the Group for the year ended March 31, 2022.
Conclusion on Unaudited Consolidated Financial Results for the quarter ended March 31, 2022 $(b)$
With respect to the Consolidated Financial Results for the quarter ended March 31, 2022, based on our review conducted and procedures performed as stated in paragraph (b) of Auditor's Responsibilities section below, nothing has come to our attention that causes us to believe that the Consolidated Financial Results for the quarter ended March 31, 2022, prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standards and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.
Basis for Opinion on the Audited Consolidated Financial Results for the year ended March 31, 2022
We conducted our audit in accordance with the Standards on Auditing ("SA"s) specified under Section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Results section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (the "ICAI") together with the ethical requirements that are relevant to our audit of the Consolidated Financial Results for the year ended March 31, 2022 under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion.
Management's Responsibilities for the Consolidated Financial Results
This Statement which includes Consolidated financial results is the responsibility of the Company's Board of Directors and has been approved by them for the issuance. The Consolidated Financial Results for the year ended March 31, 2022 has been compiled from the related audited financial statements. This responsibility includes preparation and presentation of the Consolidated Financial Results for the quarter and year ended March 31, 2022 that give a true and fair view of the consolidated net profit and consolidated other comprehensive income and other financial information of the Group in accordance with the recognition and measurement principles laid down in Ind AS, prescribed under Section 133 of the Act, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations.
The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the respective financial results that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of this Consolidated Financial Results by the Directors of the Company, as aforesaid.
In preparing the Consolidated Financial Results, the respective Boards of Directors of the companies included in the Group are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Boards of Directors either intend to liquidate their respective entities or to cease operations, or have no realistic alternative but to do so.
The respective Boards of Directors of the companies included in the Group are responsible for overseeing the financial reporting process of the Group.
Auditor's Responsibilities:
a) For the Audit of the Consolidated Financial Results for the year ended March 31, 2022
Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Results for the year ended March 31, 2022 as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Consolidated Financial Results.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the Annual Consolidated Financial Results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
- Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors.
- Evaluate the appropriateness and reasonableness of disclosures made by the Board of Directors in terms of the requirements specified under Regulation 33 of the Listing Regulations.
- Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Consolidated Financial Results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the Annual Consolidated Financial Results, $\bullet$ including the disclosures, and whether the Annual Consolidated Financial Results represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities within the Group to express an opinion on the Annual Consolidated Financial Results. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the Annual Consolidated Financial Results of which we are the independent auditors.
Materiality is the magnitude of misstatements in the Annual Consolidated Financial Results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Annual Consolidated Financial Results may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Annual Consolidated Financial Results.
We communicate with those charged with governance of the Company and such other entities included in the Consolidated Financial Results of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
b) Review of the Consolidated Financial Results for the quarter ended March 31, 2022
We conducted our review of the Consolidated Financial Results for the quarter ended March 31, 2022 in accordance with the Standard on Review Engagements (SRE) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the ICAI. A review of interim financial information consists of making inquiries, primarily of the Company's personnel responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with SAs specified under section 143(10) of the Act and consequently
does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
The Statement includes the results of the entities as listed in the Annexure to this report.
Other Matters
We did not audit the financial statements of two subsidiaries included in the consolidated financial results whose financial statements reflect total assets of Rs. 14,525 lakhs as at March 31, 2022 and total revenues of Rs. 5.157 lakhs and Rs. 16.635 lakhs for the quarter and year ended March 31, 2022 respectively, total net profit of Rs. 382 lakhs and Rs. 2.169 lakhs for the quarter and year ended March 31, 2022 respectively and total comprehensive income of Rs. 382 lakhs and Rs. 2,169 lakhs for the quarter and year ended March 31, 2022 respectively and net cash inflows of Rs. 180 lakhs for the year ended March 31, 2022 as considered in the statement. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion and conclusion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries is based solely on the reports of the other auditors and the procedures performed by us as stated under Auditor's Responsibilities section above.
Our report on the Statement is not modified in respect of the above matter with respect to our reliance on the work done and the reports of the other auditors.
The consolidated financial results includes the unaudited financial statements of eleven subsidiaries whose financial statements reflect total assets of Rs. 3,370 lakhs as at March 31, 2022 and total revenues of Rs. 2.019 lakhs and Rs. 8.478 lakhs for the quarter and year ended March 31, 2022 respectively and total net loss after tax of Rs. 60 lakhs for the quarter and total net profit of Rs. 289 lakhs for the year ended March 31. 2022 respectively and total comprehensive loss of Rs. 53 lakhs for the quarter and total comprehensive income of Rs. 293 lakhs year ended March 31, 2022 respectively and net cash outflows of Rs 510 lakhs for the year ended March 31, 2022, as considered in the Statement. These financial statements are unaudited and have been furnished to us by the Management and our opinion and conclusion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries is based solely on such unaudited financial statements. In our opinion and according to the information and explanations given to us by the Board of Directors, these financial statements are not material to the Group.
Our report on the Statement is not modified in respect of the above matter with respect to our reliance on the financial statements certified by the Board of Directors.
For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration 36. 117366W/W-100018)
Gurvinder Singh Partner (Membership No.110128) UDIN: 22110128AICLSK6571
Place: Bengaluru Date: April 29, 2022
Annexure to Auditors' Report
List of Entities:
Î.
- Sonata Information Technology Limited $\mathbf{1}$
- $\overline{2}$ . Sonata Software Solutions Limited
- Sonata Software North America Inc. $\overline{3}$
- Interactive Business Information Systems Inc. $\overline{4}$ .
- $51$ Sonata Software FZ LLC
-
- Sonata Software (Qatar) LLC
- $7.$ Sonata Europe Limited
- 8 Sonata Software GmbH
- Scalable Data Systems Pty Ltd 9
- $10.$ Sopris Systems LLC
-
- GAPbuster China Co. Ltd
- GAPbuster Europe Limited 12.
-
- GAPbuster Inc.
-
- Gapbuster Limited
- GAPbuster Worldwide Malaysia Sdn Bhd 15.
- GAPbuster worldwide Pty Limited 16.
- Kabushiki Kaisha GAPbuster Japan 17.
- Sonata Software Intercontinental Limited (incorporated on September 08, 2021) 18.
- Encore Software Services Inc (acquired on August 01, 2021) 19.
- Encore IT Services Solutions Private Limited (acquired on August 01, 2021) 20.
- Sonata Software Canada Limited (incorporated on December 03, 2021) 21.
$\sqrt{2}$
Registered Office: 208, T.V. Industrial Estate, S.K. Ahire Marg, Worli, Mumbai - 400 030
Corporate Office: 1/4, A.P.S Trust Building, Bull Temple Road, N.R. Colony, Bangalore - 560 019 CIN - L72200MH1994PLC082110
www.sonata-software.com, Tel : +91-080-67781999 Fax : +91-080-26601387, [email protected]
| Part I | ₹ in lakhs, except per share data | |||||
|---|---|---|---|---|---|---|
| Statement of consolidated financial results for the quarter and year ended March 31, 2022 | ||||||
| Quarter ended | Year ended | |||||
| Sl No. | Particulars | March 31, 2022 |
December 31, 2021 |
March 31, 2021 |
March 31, 2022 |
March 31, 2021 |
| (Refer Note 14) | (Unaudited) | (Refer Note 14) | (Audited) | (Audited) | ||
| 1 | Revenue from operations | 146,363 | 185,802 | 107,571 | 555,337 | 422,808 |
| 2 3 |
Other income (Refer Note 10) Total Revenue (1 + 2) |
4,503 150,866 |
1,527 187,329 |
1,892 109,463 |
10,198 565,535 |
2,775 425,583 |
| 4 | Expenses (a) Purchases of Stock-in-Trade |
103,607 | 145,682 | 74,337 | 402,307 | 299,158 |
| (b) Employee benefits expense | 20,532 | 18,895 | 16,800 | 73,702 | 62,548 | |
| (c) Finance costs | 423 | 467 | 355 | 1,805 | 1,539 | |
| (d) Depreciation and amortization expense | 1,307 | 1,268 | 938 | 4,732 | 3,957 | |
| (e) Other expenses (Refer Note 11) | 11,414 | 8,058 | 6,126 | 32,953 | 23,167 | |
| Total expenses | 137, 283 |
174,370 | 98,556 | 515,499 | 390,369 | |
| 5 | Profit before exceptional items and tax (3 - 4) | 13,583 | 12,959 | 10,907 | 50,036 | 35,214 |
| 6 | Tax expense | |||||
| (1) Current tax (2) provision for tax relating to prior years |
4,692 - |
3,627 - |
2,606 (83) |
14,547 - |
10,203 2,099 |
|
| (2) Deferred tax | (1,199) | (435) | 78 | (2,154) | (1,484) | |
| 7 | Profit for the period (7 - 8) | 10,090 | 9,767 | 8,306 | 37,643 | 24,396 |
| 8 | Other comprehensive income | |||||
| 1 (a) Items that will not be reclassified to profit or (loss) | (475) | (64) | (985) | (1,111) | (69) | |
| (b) Income tax relating to items that will not be reclassified | ||||||
| to profit or (loss) | 122 | 16 | 245 | 278 | 17 | |
| 2 Items that will be reclassified to profit or (loss) | ||||||
| (a) Exchange differences in translating the financial statements | ||||||
| of foreign operations | 570 | 196 | 216 | 478 | 1,040 | |
| (b) Exchange differences on forward cover (c) Income tax relating to Items that will be |
(144) | 732 | (450) | 1,166 | 3,535 | |
| reclassified to profit or (loss) | (114) | (227) | 60 | (411) | (1,134) | |
| Total | (41) | 653 | (914) | 400 | 3,389 | |
| 9 | Total Comprehensive Income for the period (9 + 10) | 10,049 | 10,420 | 7,392 | 38,043 | 27,785 |
| Of the Total Comprehensive Income above, total comprehensive income | ||||||
| attributable to: | ||||||
| 10,049 | 10,420 | 7,392 | 38,043 | 27,785 | ||
| Non - controlling interest | - | - | - | - | ||
| Of the Total Comprehensive Income above, Profit for the period | 10,049 | 10,420 | 7,392 | 38,043 | 27,785 | |
| attributable to: | ||||||
| Owners of the parent | 10,090 | 9,767 | 8,306 | 37,643 | 24,396 | |
| Non - controlling interest | - | - | - | - | ||
| 10,090 | 9,767 | 8,306 | 37,643 | 24,396 | ||
| Of the Total Comprehensive Income above, Other Comprehensive Income for the period attributable to: |
||||||
| Owners of the parent | (41) | 653 | (914) | 400 | 3,389 | |
| Non - controlling interest | - | - | - | - | - | |
| (41) | 653 | (914) | 400 | 3,389 | ||
| 10 | Paid-up equity share capital (Face Value ₹ 1/-) | 1,039 | 1,039 | 1,039 | 1,039 | 1,039 |
| 11 | Other equity (Refer Note 13) | 108,881 | 89,508 | 89,508 | 108,881 | 89,508 |
| 12 | Earnings per equity share (of ₹ 1/- each) (Refer Note 12) | |||||
| (a) Basic (b) Diluted |
9.71 9.70 |
9.40 9.39 |
7.99 7.99 |
36.23 36.21 |
23.48 23.48 |
|
| See accompanying notes to the consolidated financial results |
Registered Office: 208, T.V. Industrial Estate, S.K. Ahire Marg, Worli, Mumbai - 400 030
Corporate Office: 1/4, A.P.S Trust Building, Bull Temple Road, N.R. Colony, Bangalore - 560 019
CIN - L72200MH1994PLC082110
www.sonata-software.com, Tel : +91-080-67781999 Fax : +91-080-26601387, [email protected]
| Part II | (₹ in lakhs) | ||
|---|---|---|---|
| Consolidated Balance Sheet | |||
| Sl No. | Particulars | As at March 31, 2022 |
As at March 31, 2021 |
| ASSETS | |||
| 1 | NON-CURRENT ASSETS | ||
| (a) Property, Plant and Equipment | 1,770 | 1,512 | |
| (b) Right-of-use assets | 10,560 | 8,491 | |
| (c) Capital work-in-progress (d) Goodwill |
1 22,072 |
12 17,591 |
|
| (e) Other intangible assets | 8,290 | 4,769 | |
| (f) Financial assets | |||
| (i) Investments | 1,385 | 1,055 | |
| (ii) Other Financial Assets | 3,795 | 3,586 | |
| (g) Deferred tax assets (net) | 2,613 | 1,894 | |
| (h) Other non-current assets | 11,005 | 8,863 | |
| Total | 61,491 | 47,773 | |
| 2 | CURRENT ASSETS | ||
| (a) Financial assets | |||
| (i) Investments | 14,476 | 6,542 | |
| (ii) Trade receivables | 89,256 | 61,579 | |
| (iii) Cash and cash equivalents | 73,369 | 64,066 | |
| (iv) Bank balances other than (iii) above | 3,594 | 3,643 | |
| (v) Other Financial Assets (b) Other current assets |
10,370 2,963 |
7,261 3,828 |
|
| Total current assets | 194,028 | 146,919 | |
| TOTAL ASSETS | 255,519 | 194,692 | |
| EQUITY AND LIABILITIES | |||
| 3 | EQUITY | ||
| (a) Equity Share capital (b) Other equity |
1,039 108,881 |
1,039 89,508 |
|
| Total | 109,920 | 90,547 | |
| LIABILITIES | |||
| 4 | NON-CURRENT LIABILITIES | ||
| (a) Financial liabilities | |||
| Lease Liabilites Other financial liabilities |
9,173 7,427 |
7,189 3,018 |
|
| (b) Other non-current liabilities | - | ||
| 16,600 | 10,207 | ||
| 5 | |||
| (a) Financial liabilities | |||
| (i) Borrowings | 3,800 | 8,973 | |
| (ii) Lease Liabilites | 2,968 | 2,339 | |
| (iii) Trade payables | 105,473 | 65,097 | |
| (iv) Other Financial Liabilities (b) Other current liabilities |
488 7,595 |
482 9,902 |
|
| (c) Provisions | 2,850 | 2,715 | |
| (d) Current tax liabilities (net) | 5,825 | 4,430 | |
| Total current liabilities | 128,999 | 93,938 | |
| TOTAL EQUITY AND LIABILITIES | 255,519 | 194,692 |
The disclosure is an extract of the consolidated Balance Sheet as at March 31, 2022 and March 31, 2021 in compliance with Indian Accounting Standards ("Ind AS")"
| Consolidated Cash Flow Statement | ||
|---|---|---|
| For the year ended | (₹ in Lakhs) | |
| Particulars | March 31, 2022 | March 31, 2021 |
| A. CASH FLOW FROM OPERATING ACTIVITIES: | ||
| Net profit before tax | 50,036 | 35,214 |
| Adjustments for : | ||
| Depreciation and amortization expense | 4,732 | 3,957 |
| Goodwill impairment | 2,293 | - |
| Finance costs | 1,714 | 1,463 |
| Impairment loss recognised on trade receivables and bad debts written off | (733) | 1,034 |
| Interest from unwinding of rent deposits discounted | (14) | (27) |
| Lease payments concessions Interest from fixed deposits/margin money with banks |
(142) (2,849) |
(128) (1,645) |
| Net (gain) / loss on sale of property, plant and equipment / scrapped | - | 26 |
| Interest from PSU bonds | (10) | - |
| Net gain on investments carried at fair value through profit and loss | (553) | (340) |
| Expenses on employee stock based compensation | 34 | (53) |
| Net unrealized foreign exchange (gain) / loss | (380) | (316) |
| Operating profit before working capital changes | 54,128 | 39,185 |
| Adjustments for: | ||
| Decrease/(Increase) in trade receivables | (26,275) | 3,852 |
| Decrease/(increase) in other financial assets non-current | 28 | 143 |
| Decrease/(increase) in other financial assets-current Decrease/(increase) in other non-current assets |
(1,530) 83 |
461 (238) |
| Decrease/(increase) in other current assets | 866 | 680 |
| (Decrease)/Increase in trade payables | 40,809 | 10,734 |
| (Decrease)/increase in other financial liabilities non-current | (664) | (646) |
| (Decrease)/increase in other current liabilities | (3,410) | 2,991 |
| (Decrease)/increase in provisions | 135 | 422 |
| Cash generated from operations | 64,170 | 57,584 |
| Income taxes paid, net of refunds | (15,592) | (13,321) |
| Net cash flow from operating activities (A) | 48,578 | 44,263 |
| B. CASH FLOW FROM INVESTING ACTIVITIES | ||
| Expenditure on property, plant and equipment | (963) | (188) |
| Proceeds from disposal of property, plant and equipment | (1) | 4 |
| Purchase of current investments | (258,945) | (95,295) |
| Purchase of non-current investments | (290) | (188) |
| Cash outflow on acquisition of subsidiary Proceeds from sale of current investments |
(4,976) 251,563 |
(5,047) 89,573 |
| Bank balances not considered as Cash and cash equivalents | 48 | (1,218) |
| Interest received | 1,671 | 949 |
| Net cash flow used in investing activities (B) | (11,893) | (11,410) |
| C. CASH FLOW FROM FINANCING ACTIVITIES | ||
| Payment of lease liabilities | (2,921) | (2,178) |
| Proceeds from short-term borrowings | 6,858 | 9,199 |
| Repayment of short-term borrowings Payment of dividend |
(12,031) (18,693) |
(8,826) (4,065) |
| Finance costs | (273) | (340) |
| Net cash flow used in financing activities (C) | (27,060) | (6,210) |
| Net increase/(decrease) in cash and cash equivalents (A+B+C) | 9,625 | 26,643 |
| Opening cash and cash equivalents | 64,066 | 37,221 |
| Exchange difference on translation of foreign currency cash and cash equivalents | (322) | 202 |
| Closing Cash and cash equivalents | 73,369 | 64,066 |
| Cash and cash equivalents at the end of the year comprises: | ||
| Cash on hand | 1 | 1 |
| Balances with banks | ||
| In Current accounts | 8,729 | 9,505 |
| In EEFC accounts | 1,100 | 603 |
| In demand deposit accounts | 63,539 73,369 |
53,957 64,066 |
Notes :Notes:
- 1 These quaterly and year ended consolidated financials results prepared in accordance with Indian accounting standards applicable as per Sec 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and amendments thereafter have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on April 29, 2022
- 2 Audited consolidated financial results include financial results of subsidiaries i.e, Sonata Information Technology Limited, Sonata Software North America Inc., Interactive Business Information Systems Inc., Sonata Software GmbH, Sonata Europe Limited, Sonata Software FZ-LLC, Sonata Software (Qatar) LLC, Sonata Australia Pty Ltd (formarly known as Scalable Data Systems Pty Ltd), Sopris Systems LLC, Sonata Software Solutions Limited, GAPbuster China Co. Ltd, GAPbuster Europe Limited, GAPbuster Inc., Gapbuster Limited, GAPbuster Worldwide Malaysia Sdn Bhd, GAPbuster worldwide Pty Limited, Kabushiki Kaisha GAPbuster Japan, Encore Software Services, Inc., Encore IT Services Solutions Private Limited, Sonata Software Intercontinental Limited and Sonata Software Canada Limited.
- 3 The Board of Directors recommended a final dividend of ₹ 13 (1,300 % on par value of ₹ 1/-) per equity share for the financial year ended March 31, 2022. The payment is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.
- 4 The term of M/s Deloitte Haskins & Sells LLP, Chartered Accountants shall end upon conclusion of the 27th AGM. Accordingly, the Board of Directors have approved the appointment of M/s B S R & Co. LLP, Chartered Accountants Bengaluru, (Firm Registration No. 101248W/W-100022) as Statutory Auditor of the Company to hold office from conclusion of the 27th AGM till the conclusion of the 32nd AGM, subject to approval of the shareholders at the ensuing AGM.
- 5 Mr. Samir Dhir has been appointed as CEO of Sonata Software Limited with effect from April 8, 2022. CEO transition is part of the Sonata Software Board's succession plan. Mr. Srikar Reddy will continue as MD and will transition to Mr. Samir Dhir over the next 9 to 12 months.
- 6 The name of Scalable Data Systems Pty Ltd, a wholly owned subsidiary of Sonata Software Limited, is changed to Sonata Australia Pty Ltd, with effect from 16th March 2022
- 7 During the year Sonata Software Canada Limited ("SSCL") has been incorporated in Canada as a Wholly owned subsidiary of Sonata Software North America ("SSNA") with effect from 3rd December, 2021.
- 8 Sonata Software North America Inc., (SSNA) a wholly-owned subsidiary of Sonata Software Limited, has acquired 100% stake in Encore Software Services, Inc. a California Corporation ("Encore US") on August 1, 2021 for a total consideration of USD 14.94 Mn (₹ 11,131.53 Lakhs) which comprises of upfront cash consideration of USD 5.83 Mn (₹ 4,336.12 Lakhs) and contingent consideration of USD 9.11 Mn (₹ 6,795.41 lakhs) payable over 3 years.
- Additionally, Sonata Software Limited , has also obtained control of Encore IT Services Solutions Private Limited, a Chennai based Company ( "Encore") on August 1, 2021 for a total consideration of USD 1.2 Mn (₹ 890.76 Lakhs)
- 9 During the year Sonata Software Intercontinental Limited ( "SSIL") has been incorporated in Ireland as a Wholly owned subsidiary of Sonata Software Limited with effect from 8th September, 2021.
- 10 Other income includes liabilities written back of ₹ 2,663 lakhs relating to earn out payments no longer payable to sellers of Sopris Sytems LLC
- 11 Other expense includes ₹ 2,293 Lakhs of impairment of goodwill pertaining to Sopris Systems, LLC
- 12 EPS for quarterly periods is not annualised.
- 13 The other equity with respect to each quarter and year ended represents balance as per the audited Balance Sheet of the previous year as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015.
- 14 The figures for the quarter ended March 31, 2022 and March 31, 2021, are balancing figures arrived based on audited results of the full financial year and published year to date unaudited figures for nine months ended December 31, 2021 and December 31, 2020 respectively. The statutory auditors have performed a limited review on the results for the quarter ended March 31, 2022.
- 15 The management has considered the possible effects of the pandemic relating to COVID-19 on the carrying amounts of receivables, investments and other financial assets as at March 31, 2022. In developing the assumptions relating to the recoverability of these assets, the management has considered the global economic conditions prevailing at the date of approval of these financial results and has used internal and external sources of Information including credit reports to the extent determined by it. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial results.
| 16 The consolidated segment wise revenue and results are as follows : |
(₹ in lakhs) | |||||
|---|---|---|---|---|---|---|
| Particulars | Quarter ended | Year ended | ||||
| March 31, | December 31, | March 31, | March 31, | March 31, | ||
| 2022 | 2021 | 2021 | 2022 | 2021 | ||
| (Refer Note 14) | (Unaudited) | (Refer Note 14) | (Audited) | (Audited) | ||
| 1. Segment revenue | ||||||
| a. India | 94,428 | 126,244 | 65,899 | 352,234 | 257,614 | |
| b. Other than India | 52,060 | 59,694 | 42,152 | 203,838 | 167,331 | |
| Total | 146,488 | 185,938 | 108,051 | 556,072 | 424,945 | |
| Less : Inter segment revenue | (125) | (136) | (480) | (735) | (2,137) | |
| Revenue from operations | 146,363 | 185,802 | 107,571 | 555,337 | 422,808 | |
| 2. Segment results | ||||||
| Profit before tax and interest | ||||||
| a. India | 4,156 | 3,406 | 2,899 | 14,113 | 8,303 | |
| b. Other than India | 6,181 | 8,684 | 7,485 | 28,981 | 25,986 | |
| Total | 10,337 | 12,090 | 10,384 | 43,094 | 34,289 | |
| Less: Finance costs | (423) | (467) | (355) | (1,805) | (1,539) | |
| Add: Unallocable income net of unallocable expenditure | 3,669 | 1,336 | 878 | 8,747 | 2,464 | |
| 3. Profit before tax | 13,583 | 12,959 | 10,907 | 50,036 | 35,214 |
| (₹ in lakhs) | |||
|---|---|---|---|
| Particulars | March 31, 2022 |
December 31, 2021 |
March 31, 2021 |
| 4. Segment assets | |||
| a. India | 106,325 | 102,908 | 75,727 |
| b. Other than India | 99,151 | 101,350 | 84,745 |
| c. Unallocable | 50,043 | 44,083 | 34,220 |
| Total Assets | 255,519 | 248,341 | 194,692 |
| 5. Segment liabilities | |||
| a. India | 91,814 | 90,759 | 56,652 |
| b. Other than India | 44,158 | 45,878 | 34,091 |
| c. Unallocable | 9,627 | 11,838 | 13,402 |
| Total Liabilities | 145,599 | 148,475 | 104,145 |
| 6. Capital Employed (4-5) | 109,920 | 99,866 | 90,547 |
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Place : Bengaluru P SRIKAR REDDY Date : April 29, 2022 MANAGING DIRECTOR
Sonata Software - Consolidated FY 2022 WdĂƚ༤376 Crores; 54% YoY growth; Board has recommended final dividend of ༤ 13 giving total dividend for year at ༤ 21 per share today.
Bengaluru, 29 April, 2022
Sonata Software, a global IT services and technology solutions company, today reported its audited financial results for its 4th quarter and year ended 31st March 2022.
| in ༤ Crores | ||||||||
|---|---|---|---|---|---|---|---|---|
| Description | For the Quarter ended | For the Year ended | ||||||
| 31-Mar-22 | 31-Dec-21 | QoQ | 31-Mar-21 | YoY | 31-Mar-22 | 31-Mar-21 | YoY | |
| Revenues | ||||||||
| International IT Services | 413.9 | 395.2 | 5% | 319.0 | 30% | 1,493.8 | 1,183.9 | 26% |
| Domestic- Products & Services | 1,051.0 | 1,464.2 | -28% | 761.5 | 38% | 4,066.9 | 3,065.6 | 33% |
| Consolidated | 1,463.6 | 1,858.0 | -21% | 1,075.7 | 36% | 5,553.4 | 4,228.1 | 31% |
| EBITDA | ||||||||
| International IT Services | 113.8 | 110.5 | 3% | 90.5 | 26% | 425.0 | 312.8 | 36% |
| Domestic- Products & Services | 39.5 | 36.9 | 7% | 31.8 | 24% | 142.4 | 95.6 | 49% |
| Consolidated | 153.1 | 146.9 | 4% | 122.0 | 25% | 565.7 | 407.1 | 39% |
| PAT | ||||||||
| International IT Services | 72.4 | 71.2 | 2% | 60.5 | 20% | 274.5 | 183.8 | 49% |
| Domestic- Products & Services | 28.5 | 26.4 | 8% | 22.6 | 26% | 101.8 | 60.2 | 69% |
| Consolidated | 100.9 | 97.6 | 3% | 83.1 | 21% | 376.4 | 244.0 | 54% |
Commenting on the results Mr. Srikar Reddy, Managing Director of the Company said:
The results show that we continue to execute well on our goal of enabling our clients to build world class digital enterprises through our unique PlatformationTM methodology.
Over the financial year we have continued to invest in and build world class competencies in platform engineering, cloud transformation, data analytics and Microsoft digital platform and aligning them to PlatformationTM.
To serve our international clients better we have set up global delivery centers in Canada and Ireland.
Our India business has continued to show robust growth with increasing percentage of cloud and digital infrastructure contracts.
We have a comprehensive approach to our human capital. We have initiated a number of initiatives to improve employee training and development, engagement and retention, building up capacity for future growth through
new hires and upgrading of existing capabilities. We have increased our near shore delivery presence for different geographical regions.
We are excited to announce the appointment of Samir Dhir as new CEO of the company. Samir joined us in April 2022 and is based in the USA. Board has appointed Samir as Whole-time Director today w.e.f 9th May 2022. He has a very impressive record of scaling up organizations in international services. In addition to Samir, we have invested significantly in attracting senior talent globally in Marketing, Business Development and Delivery, to be announced shortly and during the current year.
Performance Highlights for the quarter:
x Consolidated:
- ¾ Revenues at ༤ 1,463.6 crores;
- ¾ EBITDA at ༤ 153.1 crores; QoQ growth of 4%
- ¾ PAT at ༤ 100.9 crores; QoQ growth of 3%
- ¾ DSO days at 39.
- ¾ Cash and equivalents of approximately ༤866 Crores (net of borrowings).
x International IT Services:
- ¾ Revenues at ༤ 413.9 crores; QoQ growth of 5%
- ¾ Revenue in USD at 55.7 Million, QoQ revenue growth of 4.3% in USD terms.
- ¾ EBITDA at ༤ 113.8 crores; QoQ growth of 3%
- ¾ PAT at ༤ 72.4 crores; QoQ growth of 2%
- ¾ Addition of 12 new customers.
- ¾ International services DSO improved from 43 days to 40 days.
- ¾ Overall strategy of creating digital enterprises by creating platform through our unique PlatformationTM methodology are yielding results.
- ¾ Strong growth from digital based competencies like Managed cloud services and Digital PlatformationTM Services (Microsoft & Open source) and focused verticals like ISV, Retail (Essential), Distribution and Manufacturing and Commodity Business & Service Industry.
- ¾ Strong cash and liquidity positions maintained. Improvement in DSO to 40 days from 43 days.
- ¾ Our pipeline continues to be healthy and strong through multiple new digital wins from existing and new customers.
x Domestic Products & Services:
- ¾ Revenues at ༤ 1,051.0 crores;
- ¾ DSO days at 38 days
- ¾ EBITDA at ༤ 39.5 crores; QoQ growth of 7%
- ¾ PAT at ༤ 28.5 crores; QoQ growth of 8%
About Sonata Software
Sonata is a global technology company, that enables successful platform based digital transformation initiatives for enterprises, to create businesses that are connected, open, intelligent and scalable. Sonata's Platformation™ methodology brings together industry expertise, platform technology excellence, design thinking-led innovation and strategic engagement models to deliver sustained long term value to customers. A trusted partner of world leaders in the Retail, Manufacturing & Distribution, Travel and Software industries, Sonata's solution portfolio includes its own digital platform such as Brick & Click Retail Platform©, Modern Distribution Platform©, Rezopia Digital Travel Platform©, RAPID DevOps Platform©, Kartopia E-commerce Platform© , Halosys Mobility Platform©, and Commodity CTRM Platform©, best-in-class capabilities on ISV digital technology platforms such as Microsoft Dynamics 365, Microsoft Azure, SAP Hybris, Cloud Engineering and Managed Services, as well as new digital applications like IoT, Artificial Intelligence, Machine Learning, Robotic Process Automation, Chatbots, Block Chain and Cyber Security. Sonata's people and systems are nurtured to bring together the depth of thought leadership, customer commitment and execution excellence to make a difference to business with technology.
For further information, please contact:
Nandita Venkatesh Sonata Software Limited CIN- L72200MH1994PLC082110 A.P.S. Trust Building, Bull Temple Road, N.R. Colony Bangalore 560019, India Tel: +91 80 67781999 [email protected]
29th April, 2022
National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Mumbai Kind Attn: Manager, Listing Department Email Id: [email protected] Stock Code - SONATSOFTW
BSE Limited P.J. Towers, Dalal Street Mumbai Kind Attn: Manager, Listing Department Email Id: [email protected] Stock Code - 532221
Dear Sirs,
SUB: Declaration on Independent Audit Reports with unmodified opinion pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
This is to confirm that Deloitte Haskins & Sells, LLP, (FRN 117366W/W-100018), Statutory Auditors of the Company, have issued Independent Audit Reports with unmodified opinion on the Standalone and Consolidated Audited financial results for the quarter and financial year ended March 31, 2022.
This declaration is provided pursuant to Regulation 33 (3) (d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
We request you to kindly take the same on record.
Thanking you,
Yours faithfully, For Sonata Software Limited
Jagannathan C N Chief Financial Officer