TANLA PLATFORMS LIMITED — Interim / Quarterly Report 2022

Oct 21, 2021

Tanla Platforms Limited T: +91-40-40099999 (Formerly known as Tanla Solutions Limited) info@tanla.com Tanla Technology Center www.tanla.com Hi-tech city Road, Madhapur, Hyderabad, India - 500081 CIN: L72200TG1995PLC021262

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October 21, 2021

To,

	BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 ScripCode:532790	National Stock Exchange of India Ltd. “Exchange Plaza” Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 Symbol:TANLA

Dear Madam/Sir,

Sub: Investors Updates for the quarter and half year ended September 30, 2021

With reference to the subject cited, we are enclosing herewith the following for the quarter and half year ended September 30, 2021;

1. Investor Presentation.

2. Half Yearly Report.

Yours faithfully,

For Tanla Platforms Limited

(Formerly known as Tanla Solutions Limited)

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Seshanuradha Chava General Counsel and Chief Regulatory Officer ACS-15519

The world’s leading brands trust Tanla

Q2 21-22 Investor Update

October 21, 2021

Safe Harbor

The CPaaS business is evolving at a fast pace in India with very little information available in the public domain on the overall market. The financial community has always sought a response on the total market size, key drivers of the industry and the competitive landscape in this space. In order to provide more transparency and to help understand our business better, we are providing indicative data around the market size and our relative share (assuming the indicative data). This indicative data has been arrived at basis our detailed internal analysis. This is being done with an intent to provide an indicative picture of the industry and address queries about the CPaaS space. This must not be seen as a positioning statement of the company, and one should not rely on the company’s disclosure for their assessment of the market size.

This presentation contains statements that include information concerning our possible or assumed strategy, future operations, financing plans, operating model, financial position, future revenues, projected costs, competitive position, industry environment, potential growth opportunities, potential market opportunities, plans and objectives of management, as well as assumptions relating to the foregoing that involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward-looking in nature. Such statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, although not all forward‐looking statements contain these identifying words, you can identify forward-looking statements by terminology such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. It is advisable not to place excessive reliance on any of the forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Additionally, these forward-looking statements, involve risk, uncertainties and assumptions based on information available to us as of 20/10/21, including those related to the continued impacts of COVID-19 on our business, future financial performance and global economic conditions. Many of these assumptions relate to matters that are beyond our control and changing rapidly, including, but not limited to, the timeframes for and severity of social distancing and other mitigation requirements, the timing of headwinds from COVID-19, the availability of vaccinations, the continued impact of COVID-19 on new or existing customers, business decisions and the length of our sales cycles, renewal timing or billings terms, particularly for customers in certain industries highly affected by COVID-19.

If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. We assume no obligation and do not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations, except as required by law.

This presentation contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information wherever possible, as well as other information based on our internal sources. This information involves many assumptions and limitations, and you are cautioned not to place excessive weightage to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information, wherever referred. Certain statements that might or might not be forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation. Accordingly, we make no representations as to the accuracy or completeness of that data nor do we undertake to update such data after the date of this presentation.

By receiving this presentation you acknowledge that you will be solely responsible for your own assessment of the market and our market position and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of our business. Any logos or trademarks other than Tanla, Karix, Gamooga, Trubloq & Wisely included herein are the property of the owners thereof and are used for reference purposes only.

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2

State of the business: leading innovation, growth and value creation

High Growth Best in Class margins and free cash flow profile

4x 8x

EBITDA

Revenues

1004

9x

Gross Margin% Basis points increase

PAT

883

815

EBITDA%

PAT% Basis points increase

Basis points increase

in 5 years from FY2017-21

Accelerated Innovation

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TRUBLOQ

• 3 patents awarded

• • Co-sell partnership with Microsoft

• World’s first block chain enabled CPaaS stack

• Trusted by over 44,000

enterprises

• 63% volume market share

CPaaS Market leader in India

800B

Interactions/year

42%

63%

Revenue market share

DLT volume market share

41%

75%

NLD volume market share

ILD volume market share

Enterprise segment market leader

30%+

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Market share in India

Choice of leaders across industry

8/10

7/10

9/10

Healthcare Consumer goods Social Media Retail

Banking Financial services E-commerce Information Technology

60%+

1300

of total revenues contributed by 50 of our top 100 customers, retained for more than 5 years

Customers across segments

Powering digital communications for the world’s largest vaccination drive for covid-19 on CoWin platform though NIC & NHP, India with record-breaking performance of 30,000 TPS

Listed in Indices

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featured in Next top 100 companies in India

Gartner

recognizes Tanla In the latest CPaaS market guide as a key global solution provider in the developer market

This indicative data on market size has been arrived at basis our internal analysis. This is our assessment and merely indicative in nature and should not be relied upon.

Acceleration across all dimensions

Key financial metrics

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Revenue grew 44% EBITDA grew 83% PAT grew 67% EPS grew 72%
year-over-year to year-over-year to year-over-year to year-over-year to
8,416 million. ₹1,787 million. ₹1,362 million. ₹10.04.
₹ 9,200 ₹ 2,000
8,416 1,787
₹ 1,440 1,362 ₹ 12
₹ 8,200
10.04
₹ 1,600 ₹ 1,240
₹ 7,200
+44%
₹ 10
₹ 6,200 5,832 +83% ₹ 1,040 +67%
₹ 1,200
815
₹ 5,200 975 ₹ 840 ₹ 8 +72%
₹ 4,200
₹ 800 ₹ 640 5.85
₹ 6
₹ 3,200
₹ 440
₹ 2,200 ₹ 400 ₹ 4
₹ 240
₹ 1,200
₹ 200 ₹ 0 ₹ 40 ₹ 2
Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22
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Revenue grew 44% year-over-year to ₹8,416 million.

PLATFORM UPDATES

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CPaaS platform offering a digital marketplace for enterprises and suppliers, with a global edge-to-edge network delivering private, secure and trusted experiences

Closed two new partnerships on Wisely Platform.

3 major features have been released in the platform

• Enhanced behavioral marketing insights on campaigns triggered

• A new version of tools to enable businesses to seamlessly integrate into Wisely

• Integrated ERP and CRM system to provide better control and governance

On-boarded top international strategy consulting firm to help shape wisely GTM strategy

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TRUBLOQ

Largest blockchain platform in the world in-terms of scale, transactions, and capacity. Protecting billion+ mobile subscribers from unsolicited commercial communication including spam & fraud

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*Increase by 1% from last quarter

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30.0
No of transactions (bn per month)
25.0
20.0
15.0
10.0
5.0
-
Sep Oct Nov Dec Jan Feb Mar Apr May Jum Jul Aug Sep
Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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This indicative data on market size has been arrived at basis our internal analysis. This is our assessment and merely indicative in nature and should not be relied upon.

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CUSTOMER UPDATES

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• Automated complaint management for customers and field staff across India

• 5X operational efficiency in complaint logging & manual rework

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CDSL adopts scalable and omnichannel APIs to process large volume of SMS & Emails to deliver regulatory communication to its customers

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• Seamless processing of high volumes meeting stringent regulatory deadlines

• Simplified tracking & analytics with customized reporting panel as per CDSL’s internal mapping & tracking logics

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10

One of the fastest growing EdTech businesses in India deploys WhatsApp Business API to engage their audience

• Created user-to-brand engagement capsules

• 8x increase in number of users engaging with the brand

• 60% Reduction in block rates using hyper personalization, context and content

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11

Expanding existing customer relationships

(₹ million)

• Customers with revenue > ₹ 10M+ have grown 46% year-over-year

• Customers with revenue > ₹ 500M contributed 64% in Q2 21-22 as against 53% in Q2 20-21

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8,188
+46%
5,382
5,592
+73%
1,824
3,103
+5%
982
+31%
747 1,742
Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22
>₹10M- < ₹100M >₹100M - < ₹500M >₹500M For three segments
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Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four)

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12

Our large customers have grown even larger

(No of customers)

• 175 customers with annual revenue of > ₹ 10M+, up from 136 customers in Q2 20-21

• 19 customers with revenue > ₹ 500M, up from 10 in Q2 20-21

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175
+29%
127
136
+31%
97
29 29 19
+90%
10
Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22
>₹10M- < ₹100M >₹100M - < ₹500M >₹500M For three segments
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Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four)

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13

Average revenue for > ₹ 10M customers continues to grow

Average revenue from ₹ 10M+ customers at ₹ 47 million, growth of 14% YoY

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(₹ million)
47
+14%
41
Q2 20-21 Q2 21-22
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Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four)

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14

Healthy additions of new customers

(₹ million)

In H1 21-22, we added 160 new customers as against 153 additions in H1 20-21

Revenue from new customers for H1 21-22 at ₹ 170 million as against ₹ 168 million in H1 20-21

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160
+5%
153
H1 20-21 H1 21-22
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+0.9%
168 170
H1 20-21 H1 21-22
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New customers include every unique new contracting entity added during the quarter

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15

Diversification of customer base

(₹ million)

Revenue from our top 20 customers is increasing

Top 20 customer concentration as a % of revenue is decreasing

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5,504
+35%
4,090
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Q2 20-21 Q2 21-22
Revenue
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72%
70%
68%
66%
64%
60%
Q2 20-21 Q2 21-22
Percentage of revenue
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16

FINANCIAL UPDATE

Operating above Rule of 40

• SaaS companies target to operate at Rule of 40 (revenue growth + EBITDA%)

• Operated at Rule of 60 for second consecutive quarter- 65%

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60% 65%
32% 36% 41% 45%
44%
38%
24%
22%
21% 21% 21%
20%
19%
16%
16%
15%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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Revenue

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EBITDA

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18

Turbo charged revenue growth

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(₹ million)
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• Improving year-over-year growth trajectory every quarter for the past 6 quarters

• Growth driven by increase in volumes from existing customers, new customer addition and new use cases

• Growth led by BFSI, Retail, Social Media and Government.

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44%
38%
24%
20% 21%
15%
8,416
6,541 6,486
6,264
5,832
4,555
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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Revenue YoY growth

19

Gross profit growth accelerating every quarter

• Gross Profit growth of 71% YoY

• Gross margin % has improved 440 basis points year-over-year

• Platform business gross margin contribution to total at 25% in Q2 21-22 as against 23% in Q2 20-21

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(₹ million)
55% 58% 65% 71%
37% 36%
2,302
27.4%
1,769 1,735
1,611
27.3%
27.7%
1,343 24.6%
1,053 23.0%
23.1%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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Gross profit Gross margin % YoY growth

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20

Gross margin mix

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17% 23% 25% 31% 25%
28%
69%
83% 77% 72% 75% 75%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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• Platform business gross margin at ₹ 578 million in Q2 21-22, up 85% from Q2 20-21

• Platform business gross margin contribution to total at 25%, improved by 181 bps YoY

• Enterprise business gross margin at ₹ 1,724 million in Q2 21-22, up 67% from Q2 20-21

Note :

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Platform business refers to all non-usage based revenue generated from “Platform as a service offering” where only cloud and hosting charges is a direct charge on revenue Enterprise business refers to usage based revenue, where cost of services is incurred towards fee paid to service providers such as carriers and other network providers

21

Improving efficiency metrices

(₹ million)

• Driving strong operating leverage on indirect cost- reduction of 500 basis points year-over year as % of Gross profit

• Salary cost at 14% of gross margin in Q2 21-22, as against 17% in Q2 20-21

• Other indirect cost at 8% of gross margin in Q2 21-22, as against 10% in Q2 20-21

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79% 78% 78%
76%
73%
71%
2,302
1,769 1,735 1,787
1,611
1,343 1,340 1,345
1,269
1,053
975
750
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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Gross margin EBITDA
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22

Strong EBITDA growth

• EBITDA growth of 83% year-over-year

• EBITDA has improved 452 basis points year-over-year

• Salary cost has gone by ₹ 102 million YoY, driven by salary increases and new additions. We added net 142 employees over last twelve months, largely in niche technology to accelerate innovation on Wisely Platform

• Other indirect cost have largely gone up due to increase in provision for doubtful debts as per norm-based policy

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(₹ million)
210%
140% 129%
99% 79% 83%
1,787
21.2%
1,340 1,345
1,269
20.7% 21.5%
19.4%
975
750
16.7%
16.5%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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EBITDA EBITDA margin YoY growth

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23

EBIT grew by 92% YoY

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(₹ million)
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• EBIT has improved 497 basis points year-over-year

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1,683
20.0%
1,248 1,254
1,180
19.2% 20.0%
18.0%
876
15.0%
635
13.9%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
EBIT EBIT margin
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24

Best in class free cash flow profile

(₹ million)

• Free cash flow at ₹ 2,217 million in Q2 21-22, up 45% from Q2 20-21

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2,217
2,147
1,534
1,361
1,285
250
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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Free cash flow
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25

Cash & cash equivalents

(₹ million)

• 38% of our cash balance is in dollar account earning no interest

• Current account balance is high due to month end collections. To optimize the working capital management, we are moving to a sweep-in structure

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CCE
8,457
7,171
5,841
4,493
2,470 2,339
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
4,055
CCE composition 3,698
3,295
2,167
843
464 502 605
Restricted cash Current account- INR Current account- USD Fixed deposits
Q1 21-22 Q2 21-22
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26

Cash & cash equivalents break up

	In million, unless otherwise stated	Current accounts-INR	Current accounts-USD	Fixed Deposits	Restricted cash	Total
	HDFC Bank	483	88	2,682	351	3,604
	HDFC Limited	-	-	1,000	-	1,000
	LIC Housing Limited	-	-	200	-	200
	State Bank of India	4	-	168	3	175
	Axis Bank	20	-	1	-	21
	Kotak MahindraBank	15	-	-	94	109
	Citibank (Dubai)	-	467	-	-	467
	DBS Bank (Singapore)	-	2,740	-	27	2,767
	Others	83	-	4	27	114
	Total	605	3,295	4,055	502	8,457

27

Profit after tax grew by 67%

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(₹ million)
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• Profit after tax at ₹ 1,362 million in Q2 21-22, up 67% from Q2 20-21

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1,362
16.2%
1,025 1,045
935 16.7%
15.8%
815
786 14.3%
14.0%
17.3%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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28

(₹)

Double digit EPS

• Earnings per share at ₹ 10.04 in Q2 21-22, up 72% from Q2 20-21

• EPS accretion is on account of increase in profit after tax and benefited by buyback

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10.04
7.54 7.68
6.87
5.85
5.17
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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29

ROCE at 247%

(₹ million)

• ROCE at 247% excluding cash

ROCE (excluding CCE)

ROCE( including CCE)

• Reflects cloud focused innovation led business model

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H1 20-21 H1 21-22

54% 42% H1 20-21 H1 20-21

ROCE- Return on capital employed CCE- Cash & cash equivalents

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30

Strong balance sheet

₹ 10,421 million Strong equity and reserves

₹ 8,457 million

Robust build up of cash & cash equivalents

247% ROCE (excluding cash & cash equivalents)

Debt free

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31

ESG achievements in Q2 21-22

Environmental Social Governance

Steps towards creating a greener and cleaner tomorrow

Giving back to the society and developing our employees

Integrating ESG in our business and formally committing to ESG principles

Towards Net-zero

• Commenced Carbon Footprint Measurement in alliance with CII

• In active discussions with Govt of Telangana to identity land for planting saplings in urban and rural areas

Environmental advocacy

• Initiated “Green Baton” project by volunteering 1% of employee time to educate school children towards impact of climate change and environmental awareness

For our employees

• Inaugurated “Speak Up” – Employee Redressal Mechanism for Code Of Conduct & Code of Ethics

For the community

• Launched PILLARS initiative to educate students in rural areas

• Offering 1% of Tanla’s digital platform towards increasing awareness social causes & UN SDGs, in the process of finalising partnerships with national and global organisations of repute.

Transparency & Good Governance

• Partnered with PwC and CII for our ESG journey

• Launched Diversity & Inclusion policy towards greater inclusivity

• • Launched policy on Supplier Code of Conduct towards responsible sourcing

• • Launched Human Rights Statement towards becoming more sensitive

• • Launched EHS Policy and implementation mechanism

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32

ESG targets in Q3 21-22

Environmental Social Governance

Steps towards creating a greener and cleaner tomorrow

Giving back to the society and developing our employees

Integrating ESG in our business and formally committing to ESG principles

Towards Net-zero

• Baseline carbon footprint for offices

• Sign MoU with GHMC for tree plantation

• Plant 15000 trees by end Dev 2021

Environmental advocacy

• Reach 2 lakh children through “Green Baton” project by volunteering 1% of employee time to educate school children towards impact of climate change and environmental awareness

For our employees

• Capacity building of employees on ESG

• • Commence data collection for ESG reporting

For the community

• PILLARS initiative to educate students in rural areas

• 1% of Tanla’s digital platform towards increasing awareness towards cause aligned to UN SDGs

• • Identify youth eligible for skilling and employment project in FY22

Transparency & Good Governance

• ESG launch

• Establish stakeholder engagement mechanism – community to end users

• Supplier sensitization on SCoC

• Identification of critical suppliers & classification as per SCoC adherence

• • ESG updates to stakeholders

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33

The world’s leading brands trust Tanla

Appendix

Profit & Loss account: Second Quarter & H1 21-22

In₹million, unless otherwise stated	Q2 21-22	Q2 20-21	∆%	H1 21-22	H1 20-22	∆%
Revenue from operations	8,416	5,832	44	14,680	10,388	41
Cost of services	(6114)	(4,489)	36	(10,643)	(7,992)	33
Gross profit	2,302	1,343	71	4,037	2,396	68
Operating expenses	(516)	(368)	40	(905)	(658)	37
EBITDA	1,787	976	83	3,132	1,738	80
Depreciation & amortization	(104)	(99)	5	(196)	(213)	(9)
EBIT	1,683	876	92	2,936	1,524	93
Finance cost	(6)	(1)	-	(7)	(8)	-
Other income	31	47	(34)	74	180	(59)
Profit before taxes	1,708	923	85	3,003	1,683	78
Tax expense (including deferred tax)	(347)	(108)	219	(597)	82	626
Profit after tax	1,362	815	67	2,407	1,601	50
Earning per share	10.04	5.85	71	17.71	11.02	49
Weighted average shares outstanding	1,357	1,393	-	1,358	1,457	-

35

Balance sheet- September 30,2021

				In million, unless otherwise stated	Sep 30, 2021	Sep 30, 2021
	In₹million, unless otherwise stated	Sep 30, 2021	Sep 30, 2021		(Unaudited)	(Unaudited)
		(Unaudited)	(Unaudited)	EQUITY AND LIABILITIES
	~~ASSETS~~ ~~Non-current assets~~ Property, plant and equipment Platforms	317 587	310 102	Equity share capital Other equity Total equity	135 10,286 10,421	136 6,854 6,990
	Customer Relationships	319	444	Financial liabilities
	Brands	21	57	~~Lease liabilities~~	~~359~~	~~33~~
	~~Technology~~	~~25~~	~~58~~	~~Other financial liabilities~~	~~3~~	~~15~~
	Non Compete	33	40	Provisions	48	50
	Goodwill Intangible assets under development Right-of-use assets Financial assets	1,346 123 349 73	1,346 243 43 70	Other non-current liabilities Total Non Current Liabilities Current liabilities	5 415	39 137
	Deferred tax assets (net)	379	528	Tradepayables	6,950	2,716
	Other non-current assets	168	567	Lease liabilities	18	8
	Total non current assets	3,740	3,808	Other financial liabilities	2,390	1,931
	Trade receivables	4,429	3,729	Other current liabilities	271	49
	Cash and bank balances	8,457	2,339	Short term provisions	12	10
	~~Other Financial assets~~ ~~Other current assets~~ ~~Total current assets~~ ~~TOTAL ASSETS~~	~~3,386~~ ~~549~~ ~~16,821~~ ~~20,561~~	~~1,745~~ ~~222~~ ~~8,035~~ ~~11,843~~	Liabilities for current tax (net) Total Current liabilities TOTAL EQUITY AND LIABILITIES	84 9,725 20,561	2 4,716 11,843

36

Condensed Cash flow statement

	In₹million, unless otherwise stated	Q2 21-22	Q1 21-22
	Cash flow before changes in workingcapital	1,836	1,381
	Changes in working capital	846	137
	Cashgenerated from operations	2,682	1,518
	Taxes	(326)	(142)
	Cash flow from operatingactivities	2,355	1,375
	Net investments in tangible and intangible assets	(138)	(91)
	Interest and other income	31	43
	Cash flow from investingactivities	(107)	(48)
	Buyback of shares	(819)	-
	Dividendpaid	(135)	-
	Interestpaid on lease liabilities	(9)	2
	Cash flow from investingactivities	(963)	2
	Cash flow for theperiod	1,286	1,330
	Cash and cash equivalents at the beginning of period	7,171	5,841
	Cash and cash equivalents closing balance	8,457	7,171

37

Free cash flow up 45 %YoY

In₹million, unless otherwise stated	Q2 21-22	Q2 20-21	∆%
Operating cash flow	2,356	1,663	+38%
Capital expenditure	(139)	(129)	+7%
Free cash flow	2,217	1,534	+45%
Free cash flow in percent of total revenue	26%	26%	-
Free cash flow conversion rate	124%	157%	-

38

Key metrics: Second quarter 21-22

Gross Profit

EBITDA

+440bps +452 bps 27.4% 21.2% Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22

PAT

+221bps 16.2% Q2 20-21 Q2 21-22

Gross Profit to ROCE EBITDA conversion (excluding CCE) +501 bps +18374 bps 77.6% 247% Q2 20-21 Q2 21-22 Q2 20-21 Q2 21-22

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39

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Investor Contact:

Ritu Mehta Director- Investor relations ritu.mehta@tanla.com

40

Q2Q2

TANLA.COM

Half Yearly Report April - September 2021

July- September 2021

April- September 2021

• Revenue increased by 44% year-over-year to ₹8,416 million.

• Gross profit increased by 71% year-over-year to ₹2,302 million. Gross margin % at 27.4% and improved by 440 basis points year-over-year.

• EBITDA increased by 83% year-over-year to ₹1,787 million. EBITDA % at 21.2 % and improved by 452 basis points yearover-year.

• Profit after tax increased by 67% year-over-year to ₹1,362 million.

• Earnings per share increased by 72% to ₹10.04.

• Free cash flow at ₹2,217 million and Cash & Cash Equivalents at ₹8,457 million.

• Revenue increased by 41% year-over-year to ₹14,680 million.

• Gross profit increased by 68% year-over-year to ₹4,037 million. Gross margin % at 27.5% and improved by 443 basis points year-over-year.

• EBITDA increased by 83% year-over-year to ₹3,132 million. EBITDA % at 21.3% and improved by 473 basis points yearover-year.

• Profit after tax increased by 50% year-over-year to ₹2,407 million.

• Earnings per share increased by 61% to ₹17.71.

• Free cash flow at ₹3,502 million.

• “ Our stellar performance was contributed by higher wallet share from existing customers and additional market share expansion from newer clients.” - Uday Reddy, Founder Chairman & CEO

Significant events during the quarter

• Gartner recognizes Tanla In the latest CPaaS market guide as a key global solution provider in the Developer market. Only Asian Company to be recognized under Developer category.

• We celebrated the first anniversary of commercial launch of Trubloq, world’s first and largest block-chain use case and increased our market share to 63%.

• We closed two significant partnerships on Wisely platform, which will be announced during the quarter.

• The customer base has expanded with addition of 87 new customer. Revenues from >₹10Mn+ customers grew by 46% year-over-year.

• We hired 111 employees during the quarter. To date, 91% of employees have received first dose of vaccination. Our senior leadership team are back to office, and we plan to bring rest of employees back in a phased manner.

• Appointed PwC as our consultants to advise us on our ESG aspirations & roadmap. Under Social of ESG, Tanla Foundation signed an MoU with Education Dept, Govt of Telangana for PILLARS (Project for Improvement of Learning Levels through Academic support for Rural Schools).

• Completed buyback of equity shares. Total of 705,677 shares were bought back at an average price of ₹ 907 per equity share. ₹ 801 million was incurred towards buyback, out of which, ₹ 649.8 million was returned to shareholders, ₹ 151 million was paid as buyback tax@ 23.36% on distributed amount and ₹ 16 million was paid towards transaction cost. The buyback was closed on September 06, 2021.

• Final dividend was approved by the shareholders in the annual general meeting, and we have completed the payouts.

Invitation to conference

Tanla will host a conference call and live webcast to discuss the financial results on 22 October 2021 at 4.00 PM IST. Watch the presentation at investors.tanla.com/webcast or call and register.

India : +91 22 6280 1141 +91 22 7115 8042 United Kingdom : 08081011573 United States : 18667462133 Hong Kong : 800964448 Singapore : 8001012045

Message from Chairman

I am very happy to present our first Investor report for Q2 21-22. Governance has always been of utmost importance to us, and this is another step towards enhancing our disclosures to help the investors understand our business better.

Industry and Market – Let me give an overview of the Indian CPaaS market. We are seeing a very strong demand environment in India, as enterprises accelerate digital adoption. We are seeing growth in existing customers, driven by increase in volumes as well as new use cases. Entry of new age companies in areas of ad-tech, ed-tech, fintech and gaming is also adding to market growth. Growth is led by BFSI. We are also seeing strong traction in areas like retail, e-commerce and Government.

Performance - We have had a stellar performance in Q2 across all dimensions of our business. Revenue and EBITDA grew 44% and 83% year-over-year in Q2. Our EBITDA% is at 21.2 % and improved by 451 basis points year-over-year. Most SaaS companies aspire to be at Rule of 40 – we have been operating at an incredible Rule of 60 for two quarters in a row. We delivered 72% year-over-year growth in EPS.

We are growing significantly faster than the industry and gaining revenue market share. What gives me great pride is that we are driving profitable growth, while making significant investments on innovation and building products and platforms for the future and have done this with financial discipline – generating best in class free cash flows and maintaining a very strong balance sheet.

It would be worth asking what is driving the strong financial performance. I have a one-word answer – Customers. We have seen strong growth in our existing customers driven by volume increase and new use cases. For e.g., the regulatory change around auto-debit has resulted in a new use case for us. Our customers with revenue >₹10MN have grown 46% year-over-year. We have growth across channels with our customers - many of the use cases we have talked about in the last couple of quarters have been on Whatsapp. This is helping expand our wallet share and positioning with our customers. We continue to expand our client base with 87 new customers in the quarter. Our domain knowledge and customer obsession has helped achieve the trifecta of growth, retention, and satisfaction of our customers.

WISELY - I have talked earlier about Wisely, our “One platform” strategy. We are betting big on Wisely and we are making significant investments. We are investing and coming out with new features every quarter. Wisely is an example of innovation creating a new revenue stream and increasing our addressable market. We have closed two large partnerships on Wisely platform and will be announced in Q3.

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Expansion plans - Our approach is to showcase Wisely in India and demonstrate value before taking it global. One of the largest consulting firms in the world, is working with us on Wisely GTM strategy to serve global markets.

Capital Allocation - We will make disciplined investments. We do not believe in acquisitions for scale and numbers, but we will be focused on bolt-on acquisitions that provide niche capabilities. Our investments will be focused on Wisely platform and global expansions

We are building the Company for the long term. Our focus is beyond business- we are integrating ESG into our business and working towards a sustainable future. We have been focused for more than two decades building a company which has undisputed leadership in India CPaaS space. We are now ready to take this leadership to the global markets. Wisely will lead the way.

My team and I are very excited by the opportunities ahead of us. We are thinking big. We thank you for your continued support.

Uday Reddy Founder Chairman & CEO

Hyderabad, 21 October 2021

Q2 | 21-22 Shareholder Report

Content

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SECTION
01 TANLA OVERVIEW 04
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02 QUARTERLY TRENDS 05
SECTION
03 MANAGEMENT DISCUSSION & ANALYSIS 07
SECTION
04 CONDENSED INCOME STATEMENT 10
SECTION
05 CONDENSED BALANCE SHEET 11
SECTION
06 CONDENSED STATEMENT OF CASH FLOW 12
SECTION
07 KEY RATIOS 13
SECTION
08 KEY POLICIES 14
SECTION
09 DEFINITIONS 16
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Q2 | 21-22 Shareholder Report

Tanla Overview

For the list of definitions please refer to page 16

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Three months Ended Six months Ended
September 30 September 30
(In ₹ million, unless otherwise stated)
21-22 20-21 21-22 20-21 20-21 R12M
(Unaudited) (Unaudited) (Audited)
Revenue from operations 8,416 5,832 14,680 10,388 23,415 27,707
Gross profit 2,302 1,343 4,037 2,396 5,777 7,417
Gross margin 27.40% 23.00% 27.50% 23.10% 24.7% 26.80%
EBITDA 1,787 976 3,132 1,725 4,335 5,741
EBITDA margin 21.2% 16.7% 21.3% 16.6% 18.5% 20.7%
EBITDA/Gross profit 77.6% 72.6% 77.6% 72.0% 75.2% 77.6%
Adjusted EBITDA 1,787 976 3,132 1,737 4,346 5,741
Adjusted EBITDA margin 21.2% 16.7% 21.3% 16.7% 18.5% 20.7%
Adjusted EBITDA/Gross profit 77.6% 72.6% 77.6% 71.9% 74.6% 77.6%
EBIT 1,683 876 2,936 1,511 3,938 5,365
EBIT 20.0% 15.0% 20.0% 14.5% 16.8% 19.4%
Interest Income 31 15.5 54.7 35.8 6.75 867
Interest yield 3.4% 4.01% 3.26% 4.08% 3.65% 3.2%
Profit after tax 1,362 815 2,407 1,601 3,561 4,367
Profit after tax margin 16.2% 14.0% 16.40% 15.40% 15.20% 15.80%
Free cash flow 2,217 1,663 3,497 1,934 5,610 7,010
Earnings per share (In ₹) 10.04 5.85 17.71 11.02 25.27 32.13
EBITDA per share (In ₹) 13.15 5.14 23.04 11.93 31.11 42.24
Adjusted EBITDA per share (In ₹) 13.15 7.00 23.04 12 31.18 42.24
Cash and Cash equivalents 8,457 2,339 8,457 2,339 5,841 6,478
ROCE - (Including CCE) - - 54% 42% 46% 50%
ROCE - (Excluding CCE) - - 247% 63% 129% 175%
DSO days 48 59 56 59 58 58
Average number of employees 590 456 570 461 524 536
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Items affecting comparability

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(In ₹ million, unless otherwise stated) Q2 21-22 Q2 20-21 H1 21-22 H1 20-21 20-21 R12M
Buy back costs - - - 12 12 -
Employee stock purchase scheme - - - - - -
Provision towards MF investment - - - - - -
Marketing event - - - - - -
Total items affecting comparability in EBITDA - - - 12 12 -
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Adjusted EBITDA per share

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14.00 13.15
12.00
9.85 9.89
10.00 9.33
8.00 7.00
6.00 5.01
4.23 4.38 4.44
4.00
2.00
-
Q2 19-20 Q3 19-20 Q4 19-20 Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22
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Q2 | 21-22 Shareholder Report

4

Quarterly Trends

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Revenue Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
(In ₹ million) 19-20 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22
Platform 191 236 209 185 328 477 462 554 624
Enterprise 4,681 5,154 5,012 4,371 5,505 6,065 6,023 5,709 7,792
Total 4,872 5,390 5,221 4,555 5,832 6,541 6,486 6,264 8,416
Gross profit Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
(In ₹ million) 19-20 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22
Platform 186 230 200 176 313 451 437 533 578
Enterprise 800 810 920 877 1,030 1,161 1,332 1,201 1,724
Total 986 1,040 1,120 1,053 1,343 1,612 1,769 1,734 2,302
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Gross margin	Q2 19-20	Q3 19-20	Q4 19-20	Q1 20-21	Q2 20-21	Q3 20-21	Q4 20-21	Q1 21-22	Q2 21-22
Platform	97.5%	97.1%	95.7%	95.0%	95.6%	94.6%	94.5%	96.2%	92.7%
Enterprise	17.1%	15.7%	18.4%	20.1%	18.7%	19.1%	22.1%	21.0%	22.1%
Total	20.20%	19.30%	21.40%	23.10%	23.00%	24.60%	27.30%	27.70%	27.4%

Gross Margin for Platform are arrived after deducting cloud hosting charges

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EBITDA Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
(In ₹ million) 19-20 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22
EBITDA 315 637 586 750 975 1,269 1,340 1,345 1,787
Items effecting com- 293 - 63 12 - - - - -
parability
Adjusted EBITDA 608 637 648 762 975 1,269 1,340 1,345 1,787
EBITDA margin 6.5% 11.8% 11.2% 16.5% 16.7% 19.4% 20.7% 21.5% 21.2%
Adjusted EBITDA
12.5% 11.8% 12.4% 16.7% 16.7% 19.4% 20.7% 21.5% 21.2%
margin
EBITDA/Gross profit 31.9% 61.3% 52.3% 71.2% 72.6% 78.7% 75.8% 77.5% 77.6%
Adjusted EBITDA/
Gross profit 61.6% 61.3% 57.9% 72.3% 72.6% 78.7% 75.8% 77.5% 77.6%
EBITDA/per share 2.19 4.38 4.01 4.93 7.00 9.33 9.85 9.89 13.15
Adjusted EBITDA/
4.23 4.38 4.44 5.01 7.00 9.33 9.85 9.89 13.15
per share
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Items afecting comparability (In ₹ million)	Q2 19-20	Q3 19-20	Q4 19-20	Q1 20-21	Q2 20-21	Q3 20-21	Q4 20-21	Q1 21-22	Q2 21-22
Buy back costs	-	-	-	12	-	-	-	-	-
Employee stock purchase scheme	293	-	-	-	-	-	-	-	-
Provision towards MF investment	-	-	37	-	-	-	-	-	-
Marketing event	-	-	26	-	-	-	-	-	-
Total	293	-	63	12	-	-	-	-	-

Q2 | 21-22 Shareholder Report

5

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Profit/(loss) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
after tax
19-20 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22
(In ₹ million)
Profit/(loss) (470) 6.7 (891) 786 815 935 1,025 1,045 1,362
after tax
Profit after - - - 17.3% 14.0% 14.3% 15.8% 16.7% 16.2%
tax margin
Earnings per Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Share (In ₹) 19-20 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22
Profit after (3.27) 0.05 (6.11) 5.17 5.85 6.87 7.54 7.68 10.04
tax margin
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Rule of 40
19-20 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22
Revenue
123.0% 91.3% 64.2% 15.5% 19.7% 21.3% 24.2% 37.5% 44.3%
growth
EBITDA margin
6.5% 11.8% 11.2% 16.4% 16.7% 19.4% 20.7% 21.5% 21.2%
%
Rule of 40 129.5% 103.1% 75.4% 31.9% 36.4% 40.7% 44.9% 59.5% 65.5%
FY20 growth rates have the benefit of Karix acquisition
Free cash flow Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
(In ₹ million) 19-20 19-20 19-20 20-21 20-21 20-21 20-21 21-22 21-22
Free cash flow 892 773 (968) 250 1534 2147 1,361 1,285 2217
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Q2 | 21-22 Shareholder Report

6

Management Discussion & Analysis

July- September 21-22

Revenue

Revenue grew by 44% year-over-year to ₹ 8,416 million. Revenue growth is driven by a combination of increased volumes in existing business, new customers, change in price and new use cases. We have also benefited on year-over-year basis due to new revenue stream of Trubloq.

Existing customers grew on back of increased volume growth as well as new use cases. Growth was led by BFSI, Retail, Social Media and Government. Customers contributing annual revenue greater than ₹ 10 million increased to ₹ 8,188 million in Q2 21-22, a year-over-year growth of 46%. We added 87 new customers contributing ₹ 95 million during the quarter.

Platform revenue grew by 90% to ₹ 624 million, driven by our investments in platform. Enterprise revenue grew by 42% year-over-year to ₹ 7,792 million, driven by higher volumes and change in price.

Gross profit

Gross profit grew by 71% year-over-year to ₹ 2,302 million. Gross margin improved by 440 basis points to 27.4% year-over-year on the back of increased contribution of Platform business. Platform business gross profit grew by 85% and enterprise business gross profit grew by 67%. Platform business contribution to gross margin at 25% in Q2 21-22 compared to 23% in Q2 20-21.

EBITDA

EBITDA grew by 83% year-over-year at ₹ 1,784 million. EBITDA margin improved by 452 basis points to 21.2% year-over-year. EBITDA to gross profit conversion stood at 77.5% in Q2 21-22 as against 72.6% in Q2 20-21.

Operating Expenses (In ₹ million)	Q2 21-22	Q2 20-21	Change %	% of revenue
Sales and Marketing expense	74	57	29%	0.9%
General and Administrative expenses (G&A)	442	311	42%	5.3%
Total	516	368	40%	6.1%

Salary cost has gone up by ₹ 102 million year-over year, driven by salary increase and net additions of employees. We have added net 142 employees across the Company in last twelve months, largely in niche technology to accelerate innovation on Wisely Platform. G&A expenses has largely gone up due to ₹ 25 million increase in provision for doubtful debts as per norm-based policy and increase in professional expenses.

EBIT

EBIT grew by 92% year-over-year at ₹ 1,683 million. EBIT margin improved by 492 basis points to 20.0% year-over-year. Depreciation at ₹ 104 million in Q2 21-22 as against ₹ 99 million in Q2 20-21.

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Depreciation, amoritization
Q2 21-22 Q2 20-21 H1 21-22 H1 20-21 20-21
(In ₹ million)
Amortisation on Platforms 20 5 38 22 30
Amortisation on Customer
31 39 62 70 124
Relationship
Amortisation on Brands 9 9 18 18 35
Amortisation on Technology 6 16 11 22 44
Amortisation on Non-compete 1 6 3 7 9
Depreciation on tangible assets &
36 23 64 74 152
right of use assets
Total Depreciation 104 99 196 214 396
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Other income

Interest income (In ₹ million)	Q2 21-22	Q2 20-21	H1 21-22	H1 20-21
Average FD balance	3650	1550	3345	3500
Interest income	31	16	55	36
Interest yield	3.40%	4.01%	3.26%	4.08%

Q2 | 21-22 Shareholder Report

7

Average fixed deposit balance for the quarter was ₹ 3,650 million. We are generating average yield of 3.4% on fixed deposits with HDFC Bank, State Bank of India, HDFC Limited and LIC Housing Limited which is in line with our investment policy. Fixed deposits were placed in HDFC Limited and LIC Housing Limited in the middle of the quarter.

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Bank Accounts Yield %
HDFC Bank 3.10%
LIC Housing Limited 5.0%
HDFC Limited 5.25%
State Bank of India 3.10%
Kotak Mahindra Bank 5.75%
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Average cash balance available for the quarter was lower due to outflow for buyback (including buyback tax). Cash balance in current account (USD) is 38% of the cash balance and is higher due to better payment terms with global customers. Cash balance in current accounts (USD) earns no interest. Current account balances are high due to month end collections and we are moving to a sweep-in structure to optimize this for our current accounts(INR)

Cash & cash equivalents composition

Cash balances (In ₹ million)	Q2 21-22	Q1 21-22
Restricted cash	502	464
Current accounts - INR	605	843
Current accounts - USD	3,295	2,167
Fixed deposits	4,055	3,698
Cash and cash equivalents	8,457	7,171

Cash & cash equivalents (CCE)

Bank Accounts (In ₹ million)	Current accounts -INR	Current accounts - USD	Fixed deposits	Restricted cash	Total
HDFC Bank	483	88	2,682	351	3,604
HDFC Limited	-	-	1,000	-	1,000
LIC Housing Limited	-	-	200	-	200
State Bank of India	4	-	168	3	175
Axis Bank	20	-	1	-	21
Kotak Mahindra Bank	15	-	-	94	109
Citibank (Dubai)	-	467	-	-	467
DBS Bank (Singapore)	-	2,740	-	27	2,767
Others	83	-	4	28	114
Total	605	3,295	4,055	502	8,457

Profit after tax

Profit after tax grew by 67% at ₹ 1362 million year-over-year. Profit after tax margin at 16.2% in Q2 21-22, compared to 14.0% in Q2 20-21. Absolute increase in profit after tax is attributable to revenue growth and improvement in profitability, offset by increased tax effective rates. The effective tax rate was 20.3 % for Q2 21-22.

Tax contribution to exchequer in Q2 21-22 was ₹ 1,713 million. The contribution includes corporate income taxes and contributions by way of withholding taxes and indirect taxes such as GST in India.

Q2 | 21-22 Shareholder Report

8

Earnings per share

Earnings per share grew by 72% to ₹10.04 year-over-year. EPS accretion is on account of increase in profit after tax and benefited by buyback of shares during the period.

(In ₹ )	Q2 21-22	Q2 20-21
Basic earnings per share	10.04	5.85
Weighted average number of shares outstanding	13,56,72,000	13,93,82,000

Cash flow

We generated strong operating cash flows. Increase in operating cash flow is due to increase in EBITDA and efficient management of working capital. DSO days for Q2 21-22 at 48 days.

Cash flow movement from Q2 20-21 to Q2 21-22

(In ₹ million)

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8,457
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Customers

Revenue and count of customers grew across customer segments. Customers with revenue greater than ₹ 500 million contributed 64% in Q2 21-22 as against 53% in Q2 20-21. Number of customers contributing greater than ₹ 500 million went up from 10 to 19 in Q2 21-22. We added 87 new customers in Q2 21-22. Revenue from new customer for the H1 21-22 was ₹170 million. Our average revenue per customer contributing greater than > ₹10M is ₹ 47 million for the quarter, up 13% from Q2 20-21. Count of customers with revenue greater than > ₹ 10M+ in Q2 21-22 was 175 customers up from 136 customers in Q2 21-22.

Customer segment >₹500M	Q2 21-22	Q2 21-22	Q2 20-21	Q2 20-21	Growth in count 90%	Growth in revenue
	Count 19	Revenue 5,382	Count 10	Revenue 3,103
						73%
>₹100M - < ₹500M	29	1,824	29	1,742	-	5%
>₹10M- < ₹100M	127	982	97	747	31%	31%
Total	175	8,188	136	5,592	29%	46%

Our top twenty customers contributed ₹ 5,491 million in Q2 21-22 as against ₹ 4,090 in Q2 20-21, up 34 %. Customer concentration from top twenty customers reduced from 70% in Q2 20-21 to 66% in Q2 21-22.

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April to September 2021

Revenue

Revenues grew by 41% year-over-year to ₹14,680 million.

Gross profit

Gross profit grew by 68% year-over-year to ₹4,037 million. Platform business gross profit grew by 127% year-over-year to ₹1,112 million and enterprise business gross profit grew by 53% to ₹2,925 million.

EBITDA

EBITDA grew by 83% year-over-year at ₹3,132 million. EBITDA margin improved by 473 basis points to 21.3% year-over-year.

Profit after tax

Profit after tax grew by year-over-year 50% at ₹2,407 million. Profit after tax margin 100 basis points to 16.4%year-over-year.

Condensed Income Statement

(In ₹ million, unless otherwise stated)	Three months Ended September 30	Three months Ended September 30	Six months Ended September 30	Six months Ended September 30	20-21 (audited)	R12M
	21-22 20-21 (Unaudited)		21-22 20-21 (Unaudited)
						(audited)
Revenue from operations	8,416	5,832	14,680	10,388	23,415	27,707
Cost of services	(6,114)	(4,489)	(10,643)	(7,992)	(17,638)	(20,290)
Gross proft	2,302	1,343	4,037	2,396	5,777	7,417
Operating expenses
Sales and Marketing	(74)	(57)	(145)	(101)	(218)	(262)
General and administrative	(442)	(311)	(760)	(557)	(1,217)	(1,420)
Total operating expenses	(516)	(368)	(905)	(658)	(1,435)	(1,676)
EBITDA	1,787	976	3,132	1,738	4,341	5,741
Depreciation	(104)	(99)	(196)	(214)	(396)	(376)
EBIT	1,683	876	2,936	1,524	3,946	5,365
Finance cost	(6)	(1)	(7)	(8)	(11)	(10)
Other income	31	47	74	180	219	13
Proft before tax	1,708	923	3,003	1,683	4,148	(5,468)
Tax expenses	(347)	(108)	(597)	(82)	(586)	(1,101)
Proft after tax	1,362	815	2,407	1,601	3,561	4,367
Earnings per share	10.04	5.85	17.71	11.02	25.27	32.13

Earnings per share

Earnings per share (In ₹ )	Q2 21-22	Q2 20-21	H1 21-22	H1 20-21	20-21	R12M
Basic earnings per share	10.04	5.85	17.71	11.02	25.27	32.13

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Condensed Balance Sheet

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Particulars Sep 30, 2021 Sep 30, 2020
(In ₹ million) (Unaudited) (Unaudited)
ASSETS
Non-current assets
Property, plant and equipment 317 310
Platforms 587 102
Customer Relationships 319 444
Brands 21 57
Technology 25 58
Non-Compete 33 40
Intangible assets under development 123 243
Goodwill 1,346 1,346
Right-of-use assets 349 43
Financial assets 73 70
Deferred tax assets (net) 379 528
Other non-current assets 168 567
Total non-current assets 3,740 3,808
Trade receivables 4,429 3,729
Cash and bank balances 8,457 2,339
Other Financial assets 3,386 1,745
Other current assets 549 222
Total current assets 16,821 8,035
TOTAL ASSETS 20,561 11,843
EQUITY AND LIABILITIES
Equity share capital 135 136
Other equity 10,286 6,854
Total equity 10,421 6,990
Non current liabilities
Financial liabilities
Lease liabilities 359 33
Other financial liabilities 3 15
Provisions 48 50
Other non-current liabilities 5 39
Total Non Current Liabilities 415 137
Current liabilities
Trade payables 6,950 2716
Lease liabilities 18 8
Other financial liabilities 2,390 1931
Other current liabilities 271 49
Short term provisions 12 10
Liabilities for current tax (net) 84 2
Total Current liabilities 9,725 4716
TOTAL EQUITY AND LIABILITIES 20,561 11,843
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Condensed change in equity statement

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Equity Statement Retained Other
Share capital Reserves Total
(In ₹ million) earnings contributions
Opening balance 01 April
146 6,877 (164) 159 7,017
2020
Profit for the period 1,601 1,601
Other comprehensive
(33) (33)
income
Issue of equity shares 7 194 201
Shares bought back (17) (1,644) (1,661)
Dividend declared (136) (136)
Others 1 1
Closing balance 30 Sep
136 5,427 1,301 125 6,990
2020
Opening balance 01 April
136 5,428 3,262 105 8,931
2021
Profit for the period 2,407 2,407
Other comprehensive
23 23
income
Shares bought back (1) (818) (819)
Dividend declared (135) (135)
Others 15 15
Closing balance 30 Sep
135 4,625 5,533 128 10,421
2021
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Condensed Statement of Cash Flow

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Cash flow Q2 21-22 Q2 20-21 H1 21-22 H1 20-21 20-21
(In ₹ million)
Cash flow before changes in working capital 1,836 982 3,217 1,757 4,381
Changes in working capital 846 747 982 177 1,790
Cash generated from operations 2,682 1,729 4,199 1,934 6,171
Taxes (326) - (468) - (561)
Cash flow from operating activities 2,356 1,729 3,731 1,934 5,610
Net investments in tangible and intangible assets (138) (129) (229) (150) (317)
Interest and other income received 31 48 74 151 219
Cash flow from investing activities (107) (82) (155) 1 (98)
Issue of shares - 19 - 201 184
Buyback of shares (819) (1,659) (819) (1,659) (1,661)
Dividend paid during the year (135) (136) (135) (136) (136)
Payment and Interest paid on lease liabilities (9) (3) (6) (8) (65)
Cash flow from financing activities (963) (1,779) (961) (1,601) (1,677)
Cash flow for the period 1,286 (131) 2,615 333 3,836
Cash and cash equivalents at the beginning of period 7,171 2,470 5,841 2,006 2,006
Cash and cash equivalents closing balance 8,457 2,339 8,457 2,339 5,841
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Key Ratios

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Key financial ratios 19-20Q2 19-20 Q3 19-20 Q4 20-21 Q1 20-21Q2 20-21Q3 20-21 Q4 21-22Q1 21-22Q2
Rule of 40 129.5% 103.1% 75.4% 31.9% 36.4% 40.7% 44.9% 59.5% 65.5%
Revenue growth 123.0% 91.3% 64.2% 15.0% 20.0% 21.0% 24.0% 38.0% 44.3%
Gross margin 20.2% 19.2% 21.4% 23.1% 23.0% 24.6% 27.3% 27.7% 27.4%
EBITDA margin 6.5% 11.8% 11.2% 16.4% 16.7% 19.4% 20.7% 21.5% 21.2%
EBIT margin - - - 13.9% 15.0% 18.0% 19.2% 20.0% 20.0%
Net profit margin - 0.1% - 17.3% 14.0% 14.3% 15.8% 16.7% 16.2%
Free cash flow 892 773 (968) 250 1,534 2,147 1,361 1,285 2,217
DSO 66 65 60 59 59 60 58 58 48
ROCE
15.5% 20.3% (25.0%) 31.0% 42.0% 47.0% 46.0% 50.0% 54.0%
(Including CCE)
ROCE
18.5% 25.9% (35.0%) 44.8% 63.1% 101.0% 129.0% 169.0% 247.0%
(excluding CCE)
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Key Policies

Basis for preparation of financial statements

The Consolidated financial statements of the Group have been prepared in accordance with Indian Accounting Standards ("Ind AS") as notified under Section 133 of the Companies Act, 2013 (the "Act") read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 as amended, issued by Ministry of Corporate Affairs (‘MCA’).Accounting policies have been consistently applied to all the years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use

Revenue recognition

Revenue are derived from our Enterprise and Platform business. Revenue from Enterprises are computed based on total transactions processed through our platforms at the agreed fixed value per transaction. Platform revenue are computed by way of revenue share measured as a rate applicable to transaction processed on their network from mobile carriers and other suppliers. Revenue is recognized upon provision of service to customers that reflects the consideration we expect to receive in exchange for those service.

Depreciation and Amortization

Fixed assets including IT assets are depreciated over their estimated useful lives using the straight-line method. Intangible assets created at time of acquisition based on purchase price allocation methodology. Intangible assets are amortized over their estimated useful lives using the straight-line method.

Capitalization of Platforms : Research and development cost are aimed at developing new and innovative products, expanding features for our existing platforms and products. Development cost comprises of third-party product development and other direct related cost associated with it. Internal cost which are revenue expenditure in nature are not capitalized. Development cost incurred are capitalized on product go-live

Provision for bad and doubtful debts

We have an Audit Committee approved policy on norm-based provision for bad and doubtful debts. Debtors are assessed at end of each reporting period and provided for based on bad and doubtful debt policy which is norm based (50%- debtor aged between 180-270 days and 100% for greater than 270 days for Enterprises and 100% for greater than 365 days for Government). Provisions created shall be higher of Expected Credit Loss (ECL) or provision determined by the policy.

Investment policy

We have an Audit Committee approved policy on investments. Investments can be in form of liquid funds- fixed deposits/term deposits with banks, housing finance companies and saving scheme/securities/bonds issued by the central government. Investments are mainly in Fixed deposits with banks and housing finance companies having a credit rating of “AAA”. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

Governance policies:

Code of Conduct:

This code of conduct on the website is for Directors and Senior Employees- the code of conduct generally applicable to all employees in on the HRMS tool.

Supplier code of conduct:

We believe in conducting business with ethics and integrity, treating all people with dignity and respect, supporting our communities and honoring the laws & regulations of the countries in which we operate. We will endeavor to choose reputable business partners who conduct their business in a manner that shows high ethical standards, safe and healthy work environments, protection of human rights and dignity, protection of environment and compliance with the law. The SCoC outlines our expectations regarding the workplace standards and the business practices of our suppliers and those in their supply chain.

Whistle Blower Policy:

This policy is formulated with a view to provide a mechanism for employees to report to the management instances of unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct.

Code for Insider Trading:

All information shall be handled within the Company on a need-to-know basis and no unpublished price sensitive information shall be communicated to any person except in furtherance of the insider's legitimate purposes, performance of duties or discharge of his legal obligations. The Compliance Officer shall report on insider trading to the Board of Directors and to the Chairman of the Audit Committee, if any, at such frequency as may be stipulated by the Board of Directors.

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Risk Management policy:

We are affected by general economic, financial, and regulatory developments at the domestic and international level, as well as by conditions specific to certain countries or regions. We have put in place a structure, procedures, and control systems to detect risks and implement appropriate measures to prevent and mitigate them. The Risk Management Committee reviews the efficiency of the internal control systems and submits a report to the Board and the shareholders.

Related Party Transaction Policy:

Related party transactions are subject to the Audit Committee’s approval. As required by the applicable Regulations, the related party regulations as approved by the Audit Committee, are reported on a half-yearly basis to the Stock Exchanges. Our related party transactions are limited to inter-company transactions with our subsidiaries.

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Definitions

Platform business segment

Platform business segment refers to all revenue generated from “Platform as a service offering” where only cloud and hosting charges is a direct charge on revenue.

Enterprise business segment

Enterprise business segment refers to revenue, where cost of services is incurred towards fee paid to service providers such as carriers and other network providers.

Gross profit

Revenue less cost of services. Cost of services comprises of service transaction fee paid to mobile carriers and other suppliers.

Gross margin

The gross margin reflects percentage of revenue less cost of services.

Sales and marketing expense

Sales and marketing expenses comprise of employee cost and expenses directly associated with sales, marketing, and promotional activities.

General and administrative expense

General and administration expenses comprise of employee cost (excluding the salary cost mentioned above), cloud and data center hosting charges and expenses incurred for day-to-day operations such as rent of facilities, office maintenance, professional fee, and other general expenses.

Capex expenditure

Investments in platforms, IT & Networks and facilities during the period. Development cost incurred on intangible assets are capitalized until product starts generating revenue.

Return on capital employed (ROCE)

ROCE including CCE:

EBIT divided by capital employed. Capital employed is derived by reducing current liabilities from total assets.

ROCE excluding CCE:

EBIT divided by capital employed. Cash and cash equivalents (CCE) are not considered while computing capital employed.

Rule of 40

Revenue growth rate+ EBITDA margin.

New customer

New customers include every unique new contracting entity added in the year.

Customer segments

Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four).

Operating profit-EBITDA

Earnings before interest, taxes, depreciation, and amortization reflects profit derived based on revenue less of operating expenses. It is reflection of profitability of operating business.

Adjusted EBITDA

Adjusted EBITDA excludes one-time expenses such as one time acquisition, buy back, ESPS and other event related costs.

Operating cash flow

Operating cash flow is a measure of amount of cash generated from business operations.

Free cash flow

Free cash flow is derived by reducing capital expenditure from operating cash flow. It measures how much cash is at disposal after covering cost associated with business operations.

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About Tanla

Tanla Platforms Limited transforms the way the world collaborates and communicates through innovative CPaaS solutions. Founded in 1999, it was the first company to develop and deploy A2P SMSC in India. Today, as one of the world’s largest CPaaS players, it processes more than 800 billion interactions annually and about 63% of India’s A2P SMS traffic is processed through Trubloq, making it the world’s largest Blockchain use case. Wisely, our patented enterprise grade platform offers private, secure and trusted experiences for enterprises and mobile carriers. Tanla Platforms Limited is headquartered in Hyderabad. Tanla is listed on two national exchanges, the NSE and BSE, and included in prestigious indices such as the Nifty 500 and BSE 500, FTSE Russell and MSCI.

Forward-looking statements

This document might contain statements that are forward looking in nature. All statements other than statements of historical fact could be deemed as forward-looking in nature. Such statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. By receiving this document, you acknowledge that you will be solely responsible for your own assessment of the market and our market position and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of our business.

Certification

Forthcoming reporting dates

Q3 21-22 - 21 January 2022

The CEO and CFO certify that financial results do not contain any false or misleading statements or figures and do not omit any material fact which may make the statements or figures contained therein misleading.

Guidance

Tanla does not provide any guidance.

Headquarters

Tanla Platforms Limited

ESG

The purpose of our ESG is to build solutions & services which offer security & transparency, earning the trust of customers, investors and governments while acting responsibly towards employees and communities. We envision in building a resilient organization that engages with the customers, suppliers and employees to provide an unparalleled global communications platform while being steadfast to ethics and integrity that result in a better future and a committed triple bottom line of People Planet and Profit. To build strong ESG principles and process a wide range of initiatives are being implemented under ESG- achieving net zero neutrality by 2025.

Tanla Technology Center, Hi-Tech City Road, Madhapur, Hyderabad 500081 CIN: L72200AP1995PLC021262

tanla.com

For additional information, please contact:

Ritu Mehta Aravind Viswanathan Investor Relations Chief Financial Officer ritu.mehta@tanla.com

Board of Directors

Mr. Uday Reddy Founder Chairman & CEO

Ms. Amrita Gangotra Independent Director Ex CTIO - Vodafone

Mr. Sanjay Baweja Mr. Rahul Khanna Independent Director Independent Director Ex CFO – Flipkart, Tata Chief Investment Officer – Habrok Communication Ltd Capital Management LLP

Mr. Rohit Bhasin

Independent Director Ex-Partner – PWC India

Dr. A. G. Ravindranath Reddy Non-Executive Director Corporate Consultant

Mr. Sanjay Kapoor Director Mr. Deepak Satyaprakash Goyal Non-Executive Director Executive Director Ex-CEO Airtel

Auditors

Statutory Auditors M/s. MSKA & Associates Amit Agarwal - Partner

Internal Auditor Deloitte Touche Tohmatsu India LLP Vishal Shah- Partner

GST Auditor M/s. MSKA & Associates Abhinav Shrivastav

Consultants

Process consultants KPMG in India Purushothaman KG – Partner Amit Jain- Director

Secretarial consultants BSR & CO LLP Pradeep Narayana - Partner

Tax consultants Digitalization consultants PWC India EY Amit Jain - Partner Prashant Singhal - Partner

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