The year gone by has indeed been momentous and defining for your Company. Besidessetting new benchmarks and crossing significant milestones Tanla is well poised toleapfrog into a technology partner of choice for enterprises across industry spectrum.With the launch of its Cloud Communications Platform enterprises now have seamlesssolutions for customer engagement. With client additions like Fortune 500 companies and astrong financial performance as borne out by more than quadrupling Profit after Tax Tanlastands on a firm footing to meet future growth targets.
Revenues grew by 34% to Rs 579.3 crores in FY 2017 from Rs 431.5 crores in FY 2016.Increase in volume of messages from existing customers on domestic hub and addition ofmarquee clients on ILD hub contributed to increase in revenues. Earning before InterestTax Depreciation and Amortization(EBITDA) stood at Rs 56.1 crores in FY 2017 (Rs 65.5crores in FY 2016). Decrease in EBIDTA is on account of change in product mix due to exitfrom certain segments of mobile payments vertical in overseas market. Net Profit increasedby 465% to Rs 40.9 crores in FY 2017 from Rs 7.24 crores in FY 2016.
Capex of Rs 7.06 crores was incurred towards deployment of Cloud Communication platformand other geographical expansion. Debtor days have been under control during the year andthere have been no bad debts except provision of Rs 19 lakhs as Expected Credit Loss asrequired under Ind AS 109. Cash and Cash Equivalents improved by 162% to Rs 133.3 croresin FY 2017 from Rs 50.9 crores in FY 2016.
Tanla's proprietary Cloud Communications platform enables enterprises to choose fromSMS voice video push notifications and email for customer engagement. Solutions thathelp them optimize their cost of customer engagement improve their quality ofcommunication analyze customer data on various data points feed into various internalteams thus leveraging their digital potential. Tanla's Cloud platform provides a singleAPI enabling the enterprise to choose its preferred mode of communication which is costfriendly for the enterprise and allows the enterprise to switch between engagement modelswithout having to look for a different vendor for each modality of communication. Thisdifferentiator would enable Tanla to reach out to enterprises of varied scale andindustry. This will further enable a rapid scalable secure and cost-effectivecommunication solution for the enterprises thereby resulting in enhanced revenues forTanla.
As a part of Cloud offering Tanla continues to provide A2P messaging services whileVoice has been added during FY 2017. Platform capabilities shall be enhanced to addInternet of Things(IoT) and Videos going forward.
We have had the privilege of commencing provision of services to Fortune 500 companiesincluding social media and e-commerce majors. In the domestic front almost 80% of BFSIsegment's messages are processed from our platform. Next time you receive a One TimePassword(OTP) on your mobile you can almost be sure it's from your Company's platform.
Your Company has institutionalised best practices in corporate governance:
Tanla continues to have a robust independent internal audit team that submits adetailed report to the Audit Committee every quarter reporting adherence to compliancesfinancial accounting and reporting practices. Your Company has appointed Ernst & Youngas internal auditors for FY 2018. KPMG has been retained to recommend and implementindustry best practices for the Company's systems and processes.
The board proposes to pay a final dividend @ 25% (subject to approval of shareholdersin the AGM) up from 20% during previous year. Your Company aspires to maintain themomentum and improve the pay-out ratio in the coming years.
As per the Ind AS standards prescribed under section 133 of the Companies Actdepreciation and amortization on assets is provided over their respective estimated usefullives on a straight-line basis from the date that they are available for use. At the endof each reporting period a test is conducted to see if there is any objective indicationthat a non-financial asset or a group of non-financial assets should be impaired. If anysuch indication exists the Company estimates the impairment loss and provides for thesame.
Your Company looks forward to adding new solutions to the Cloud Communication platformto be able to add more enterprise clients that will enhance revenues. We plan to launchthese solutions in Q3 FY 2018.
Telecom operators in India are presently facing shrinking margins due to hypercompetition. Tanla views this as an opportunity to offer an ecosystem to enterprises andtelecom operators alike; a cost effective integrated communications solution.
Your Company intends to judiciously utilize its free cash flows. Besides workingcapital requirement industry experts have been boarded to augment and support theexpansion plans. Your Company is continually looking for inorganic opportunities to fuelgrowth and will update the esteemed shareholders should an appropriate opportunity presentitself.
As part of your company's CSR initiative Tanla has pledged to a programme called (1% +1% +1%) wherein 1% of our peoples' time 1% of products and 1% of Profits will be Tanla'shumble contribution back to society at large. The distinctive feature here being besidesmaterial resources effective CSR can only be executed with professional manpower andtechnology tools. This three-pronged strategy provides succour to people affected bynatural calamities differently abled children women and senior citizens and empoweringcommunities with self-sustainable livelihoods
I am proud of the entire Tanla team who has made this transition possible through theirhard work application and strong-willed execution. As part of employee engagementprograms your Company has conducted quarterly townhall meetings where achievements of theprevious quarter and targets for the next quarter are discussed thereby bringing aninclusive culture. Eligible employees have subscribed to the options allotted to themmaking the ESOP plan a success. Your Company encourages non-linear thinking providesenhanced growth opportunities enabling excellence in customer delivery. Being a part of adynamic knowledge-driven industry we promote our employees to be leaders and brandambassadors. We are inviting experienced industry professionals to lead our teams and arehiring new talent to create a diverse workforce; building an equilibrium between themillennials and the senior professionals. I thank you the Board members and all our otherstakeholders including bankers clients and partners for your unflinching and ongoingsupport.
Look forward to meeting you at the Annual General Meeting.
D. Uday Kumar Reddy