Q2 20/21

Nov 17, 2020

Ladies and gentlemen, good day and welcome to the IRS Business Services H1 FY 'twenty one Earnings Conference Call. We have with us today on the call, Mr. S. Vaminathan, Hold Time Director and CEO Ms. Deepa Rangarajan, Hold Time Director Mr. Balchandra Krishnan, Hold Time Director and CFO. As a reminder, the lines will be in the listen only mode and there will be an opportunity I would now like to hand the conference over to Mrs. Swaminathan for his opening remarks. Thank you. And over to you, sir. Thank you. Thank you for the introduction. I welcome you for this welcome you to this half yearly conference call today. This is a matter of housekeeping. The platform that we use actually does not support the simultaneous presentation. We have filed the presentation with the Bombay Stock Exchange website. So if you would like to download that and follow that when we make that, when we go to the opening remarks, that may be very useful. So if you go to the BSE website and look for Aiters, you will see the presentation that we have uploaded today, which is the basic presentation. It's been a very interesting half year for us. We've tried to build on what we did the previous year. And traditionally, our first half is always not as good as second half, and you will see it in the numbers itself. Though we managed to thanks to a significant surge in our cash revenues, we managed to improve our revenues as we move last year. We still have a positive, but I think we incurred losses for the last half year. And to take you through a detailed number of take you through the whole thing, I'm just pleased that you have the time to download the presentation that gives you the extra 2 minutes while Balu gets ready to take it through the numbers in some detail. Happy to take any questions thereafter. Over to you, Balu. Thank you, Soumynathan. Welcome everyone for this investor call. My name is Balat Senjan. I'm the CEO for this company. I could wait for a minute, maybe till you download the investor presentation, and then we could start. It's a brief presentation, and it will give you the highlights of how we have done the previous 6 months. So I'll just wait for 20, 30 seconds, then we can start. Excuse me, members of the management, we are unable to hear you. Okay. So we can start now. I was waiting for people to maybe download the presentation and have it with them as we go through the highlights of the current half's performance of our business services. Okay, let's start. Soumynand, the CEO, has already given you a small overview of where we stand today. I will try to spend a little more time on the financial performance side of the presentation. Let me start by saying that we have mentioned this in the past as well that our business to some extent is seasonal. We have more revenues coming in the second half primarily because some of the mandates are skewed towards the second half of the year. And plus regulators opened the purse strings a little more in the second half of the year. So this holds true for this reporting period as well. But the other very important point is that this reporting period bore pretty much the impact from the pandemic breakout, which you mentioned when you got a conference call in June saying that there could be some short term issues because of the pandemic breakout. And this could impact some of the regulatory business since it is particularly difficult for regulators to be in the office and do certain activity, which is linked to both revenue recognition as well as new orders. So that has happened to some extent. I'll maybe elaborate a little more as we go forward. Let me go to the numbers per se. I've given 2 slides, which is the consolidated numbers for both income statement and balance sheet. The consolidated numbers give you the true picture because some of the billings in Singapore and the U. S, we accrue that through our subsidiaries in those respective countries. So the numbers to look at is the consolidated numbers. So if you look at the consolidated figures, you would see that our top line growth has been quite modest at 2%, but it is pretty much due to a slowdown in revenues from our regulatory customer segment that we call as our collect segment. Having said that, we have been able to adjust our expense to some extent. With the result that our EBITDA for the reporting 6 month period, which is about INR 2.57 crores, had declared slightly more than 10% compared to the corresponding period. My sense is that this decline is temporary and can be attributed to a postponement of revenues, primarily from the Collect segment. The affiliate segment wise revenues, you would see that the Collect segment has dropped by about 18%. While the important point is while highlighted is that we have significantly increased our revenues from our SaaS platform. And these are revenues from the Enterprises segment of the market. And this one we also call our Create segment. Actually, the Create segment grew by a significant 3% compared to the corresponding period. Even sequentially, it grew by 12% if you look at the period ending in March 2020. Now let me move to the balance sheet. You will notice that our debt is steadily coming down as we continue to repay our term loan. Having said that, we have availed the moratorium, which we mentioned in our June call as well. So the repayment installments have been deferred from March to August 2020, in line with the RBS relaxations. Still, there has been a small reduction on the total debt. On the receivables side, there is a drop about INR 3 crores as we focus on improving our liquidity. And the same focus has helped us to increase our net cash flow during the reporting 6 months, which is now at about INR 5.6 crores compared about INR 1.6 crores for the previous 6 month period. So our focus has been to make sure that this is an extraordinary period that we are going through, let us make sure that liquidity wise we are okay and then we'll build the business as things improve. In the reporting period, of course, we have also reduced the payables. We have been kind to our vendors and we have reduced the payables to by as much as 50%. Now let me look at the revenues more closely. You'll find that the share of recurring revenue has gone up quite sharply. In fact, there's a 23% growth in recurring revenues compared to the corresponding period. Recurring revenues accounted for as much as 77% of the revenue for this half, increasing substantially over the previous period. That might reduce a little bit going forward because the Collect segment will kick in. And 1 part of RAC segment is, of course, implementation revenues. And that growth to 77% could come down. But the important thing is that there is growth in the SaaS business, and that is helping us to increase the recurring revenue portion of the overall pie. And the bulk of these recurring revenues obviously come from the Create segment. Of course, there is one part of recurring revenue also going from the Collect segment as well because we maintain, we manage the platforms and our regulators. But the Create segment is the main contributor to all the Clean revenue. Overall, the Create segment contributed as much as 50% of revenues for the first half, which is quite an improvement compared to the previous or corresponding halves. And within the Create segment, if you look at you will see iriscarbon, which is a flagship SaaS platform for enterprise reporting, has grown quite substantially. And we have been aided by increased revenues from our existing UK mandate, UK market, what we call the HMRC mandate. Plus, we have made an intro into the European market where there is a mandate called the ESA, European Single Financial Reporting mandate, NxBRL in the NxBRL, where we have made inroads. And we have started accruing revenue albeit on a small albeit at a small number, but it's poised very interestingly as well. The other important segment product line in the Create segment is our GST suite of applications, World adoption of the e invoicing mandate has helped us to increase the revenues as well. This e invoicing mandate is actually unfolding as we speak. It started in October 1. Of course, we did some on boarding of customers in September. That's why there has been some contribution of the VHU revenues in first half from the e invoicing segment. But this should accelerate in the second half of the year. Now let me move to the expenses part. I think we are risk taking report here except that we have been very prudent and as you said, we contain our costs. Employee expenses have moved up a little bit at 13% compared to the corresponding period. That is partly because we have invested in our marketing and scale some marketing resources as we focus more on SaaS revenues from overseas markets. Obviously, similar to many other companies, our overhead, which includes rent, electricity and travel, have reduced in this half. And overall, I think we have grown our expenses about by 7%. Our Mortise also remains pretty much steady. As far as order book is concerned, we feel that order book is as a number, may not be that important going forward because the SaaS revenues is really going up and that will dominate the revenue pay in the years to come. Having said that, we have slightly improved our order book by about INR 2 crores compared to what we were at in March 2020. And this is quite remarkable given that there's a sluggish regulatory segment that we need to we had to confront in the last 6 months. And we are to of course, we got some revenue accruals from the credit segment as well. And we have not got any new orders in the 1st 6 months yet because people are not really entertaining RFP process with the greatest as the pandemic was raging on. So this is where we are. Just a quick update on our financial performance, And I can give back the phone to the moderator. So can we open the call for a Q and A session now? Members of the management, can we open the call for a Q and A session now? Thank you. Thank you. Ladies and gentlemen, we will now begin the question The first question is from the line of Sunil Panani, Skedoshal Investor. Please go ahead. Yes. Hi. I'm an independent analyst. I was going through your 2019 2020 annual report and I came across an item where you said that you have more than 1200 and at 1200 customers that flow to a shipping price of around INR 4 lakhs per customer. Now in the Connect business, you have your regulatory clients. So can you I mean, can you tell us on writing down the number of customers you serve and the revenue per customer? And what are the top customers? Thanks. Sure. Soumya Ratna here. So when you look at the numbers on the aggregate, very often a lot of things get lost in aggregation. So it's almost a head in the oven, food in the freezer on balance sheet, okay, kind of situation. So when you look at our segments, I look at, say, for example, our Create segment, which is where we provide solutions to enterprises for filing with the regulator. On the ROC side, the ticket size can be as small as INR10,000 per customer. When you look at ROC filings in India, that's the kind of pricing that's there for the lowest end of the customers. I think that a high end customers will pay a lot more. When you look at ROC filings in the UK, it's close to about £150 to £200. When you look at ROC filings in South Africa, it's roughly in the same range. When you look at ROC filings in other markets, it's again roughly in the same range. So GBP 150,000 to GBP 200,000 will again come down to between GBP 10,000 to GBP 15,000 per customer literally. And that brings that increase in the number of customers there's many, many more things that one can sell to those customers, but the ticket size is very, very small. When it comes to GST filings, it's a lot more because it is linked to the volume of transactions of the companies, the volume of invoices and so on and so forth. Therefore, the per customer relation will be much, much greater. When it comes to BSE filing, well, they can't use a free tool for the market. When it comes to U. S. SEC filing, the ticket size are much bigger. The value is it's again negotiated, fixed prices, but then people do negotiate. When it comes to Europe as well, the price is much, much higher. But I think what brings it down, so the preponderance of ROC filing customers is what brings the per unit cost down. But having said that, that's the nature of the business. So we actually believe that selling additional products to these people, so we'll increase the share of each customer in the total revenue and that's exactly what we are owing to us. So when you look at the suite of products that we actually have, are there ROC customers we can sell our GSP solution to? Are there GSP customers we sell ROC solution to? That's the way we are actually approaching it. So our moral approach is to sell adjacent solutions, adjacent products to the same customer to increase our revenue. And that's something that we will be successful at going forward. In the case of Connect, which is basically the enterprise where we basically sell our solutions to regulator, the ticket size is much, much bigger. So it could be as high as $300,000 to $500,000 very easily per customer. But what brings the whole thing down in terms of the 1200 companies you talk about is large number of companies, small ticket items. Okay. Hope to answer the question, Suru. Yes. Thanks. The next question is from the line of Narendra Nagani from B. HyveScouti. Please go ahead. Hi, Mr. Sainathan and everyone on the team. I have one I'm just looking for some projects. When are we coming to the positive? That's one. And second thing, I had asked a question last time, but I was not responding, was that the PBT was 5 lakhs or 35 lakhs And since we ended up paying tax to the SML 24 lakhs, why was it Madhav, can you take a few questions? Pravinathan here. And so to answer your question, we'll leave it on positive. I think if you see the numbers as if we did last year's annual report, we did turn positive last year. The nature of our business is like this. ROC filings happen once a year. GST filings happen every month. Your ROC filing in every country happens just once a year. So there's a seasonality to our revenues, which basically means that our first half is certainly on the lower side year after year after year, that's how it will be. And unless we increase the number of customers we actually serve or unless we increase the diversity of the customer that we serve in terms of having different calendar years and using the same solution for different applications, this will remain. We're trying to change that. We've had some modest success, which is how we grew our revenue this past year. But as far as on a year to year basis, if you look at our last year's numbers, we did turn positive already. As for the second question, I will pass the call on to one. One more, one more, just a question, a counter question. I'm sorry to intervene. If we knew about the COVID since March, okay, and we knew that the stink are not going so well, why is it that we ended up the marketing institute? The question was not audible. Can you repeat the question, please? Sure. I'll repeat. While answering the first question, we were told rather during the presentation of the marketing expenses, we have added some resources in marketing. Correct? Why was it so when we knew about the COVID and the consequent lockdown? That is what has increased the salary expenses, the employee benefit expenses, and that is what has led to the negative. Sir, it's a signal execution. It's a signal situation. If I don't add marketing people, if I don't add sales people, I will do much worse off than otherwise, number 1. This is something really important to bear in mind. The bulk of the growth in revenues that happened in the last months have happened from selling our solutions in Europe. We don't have people on the ground in Europe. We need to have people here to be able to call those people in Europe to get some business. At the end of the day, the reason any shareholder comes into a company is because of the growth of the company on account of sales. And the only way to grow sales is by getting more and more people to help contact more and more companies to grow it. We did not add people who are not productive. We added people who brought in revenues into the company and that's the reason why we didn't report the growth that we reported. But for having those people on the ground, our SaaS revenue would not have gone up, but for bringing those people into the company, our revenues would not have increased by 2% as it did. So I think without these marketing and sales people, which I think is extremely important, every company that we admire in the world are companies that do well in sales and marketing. And for us, the focus is on growth and revenues and growth and profitable revenues. And growth and profitable revenues requires people on the ground or people who can actually pick up the phone and call people and add more customers. We also added people for the e invoicing mandate for GSG, where we've had some significant success in terms of bringing in new customers. I think at the end of the day, the sales people speak for themselves in terms of the performance we've actually delivered. Once again, we'll hold back. So, the second question I would revert separately. I don't have the answer right now. I remember there was a technical issue and I remember this question and we had corrected the answer as well. But right now, I don't have it and I definitely No problem. I can wait. Can I get it on email then? Can I get it on the email? Please, please. Thank you. Thank you. The next question is from the line of Tirupaj Kishore, individual investor. Please go ahead. Hello, sir. I'm an individual investor and congratulations for a good set of numbers. I have just I think I had attended the AGM and the previous conference March results. So I just wanted to see that how has COVID impacted going forward over the next one year? So is it going to impact our business in the second half of this year and the early half of next year? And which sorry, here. Thank you for your question. COVID has impacted Bagley. I think it's a challenge to even stand in one place in the middle of this COVID. So let me tell you or speak to you how it's happened. When you look at the current segment of our business, RFPs have dried up completely. No regulator is currently preparing to implement a new disclosure platform. We've had no business from any new regulator in the last 6 months and no regulator anywhere in the world issued fresh RFPs for bringing in for creating a new disclosure platform. How are we coping? We are trying to move as many of them as possible into a SaaS model by basically trying to don't pay any money upfront, but basically pay us over a 10 year period. So like the what we've done in the case of malicious where we get paid on a per filing basis where the malicious regulator to pay nothing upfront. We are now approaching countries in different parts of the world basically saying, how would you like to work with us where we take our platform, you take our platform, don't pay anything upfront, but pay us on a software rental basis. That's one approach we're actually taking. As far as the second business of our concern is concerned, CREATE business is concerned. There are 2 ways in which actually affecting us. So the European regulator had announced an IXBRL mandate that was supposed to be effective from 1st January 2021. Now the European Parliament is currently seized of a new law postponing that mandate or giving the flexibility to individual countries to postpone the mandate. So the big issue here is acquiring new customers. So acquiring new customers has been difficult. It's not been very easy at all. Even before this mandate postponement discussion happened, we've actually have been struggling to get people because we're not going to go to Europe and talk to companies. And ultimately, you need to be there physically in front of a customer very often to be able to give them the satisfaction that you will deliver. With compliance, it's such a sensitive subject and compliance is something where you need to give them assurance. Fortunately, my colleagues have done some really good groundwork in the period before COVID. In fact, one of my colleagues just left one of the last people to leave Europe to come back to India just before the flights got suspended. And her hard work that she put in the 3, 4, 1 proceeding that ultimately ensured that we are we got a reasonable set of companies coming and hanging up with us. What my colleagues also done was to recruit somebody in Barcelona. So we have one local person in Europe who's helping us acquire new customers. But I think acquisition of new customers has been very, very slow and very, very painful. It's something that we need to do and it's something we're trying to do. So I think COVID has affected us in terms of acquiring new customers in that area and also our inability to travel. And that's I hope you'll answer your question. Okay. Thanks for that. And so for the next one, one and a half years, do we see like our revenues getting a bit faded on or be growing a bit? Or is it going to be at the same level given that our existing investments will still stick around and the new accounts might not be coming through average? I think it's a great question. There are 2 parts to the answer. One is we are going to sit on the backside and wait for this map. We're actually trying to see whether we can open up new markets. We're trying to see whether we can open up new customers. Even in Europe, with the mandate getting postponed, we're still in touch with companies with different countries trying to figure out where it gets postponed, where it is only postponed. So I think Germany will probably not get postponed. Let me do one thing. In terms of the European mandate, what the current status is, I'll have my colleague keep that coming in with you. So you're extremely important part in our role for the shareholders. Yes. Hi. This is Vipin, APM. So just There is a move to postpone it and it's kind of pending parliament approval. Different countries are making decisions differently. So some that have already enacted it in their individual countries' laws are deciding to go ahead and roll out with the mandate. Also, even if there is a postponement, companies still have the option to voluntarily transition to this new reporting format, ex BR because anyway they'll have to do it a year down the road. So many companies that we are in touch with or our sales, car sales engine is in touch with, they are saying that even if there is a postponement, we just decided we are too far down in the process and we want to proceed. We don't want to halt this now. So those kinds of things are happening as well as far as the disruptive opportunity is concerned. And things are not enhanced, especially when our clients will come back to the customer offices to do a sign off to be able to book their revenues. We have a very conservative way of booking our revenues. And it's almost like there's a joke that's told about a couple of newspapers in India saying they don't write an opportunity without checking with the person. So we're almost like that. So we are very conservative when it comes to booking our revenues, but we believe that's the only way to do it. So we have every hope and every confidence that we should be able to maintain the number we have still given so far. We're not in business making forward looking statements subject to our sharing of information on the order book, which we have done. Thanks. So, first, a follow-up question on that. So, from that, I think in our previous call, I think you had mentioned that there is a project that we are doing with the RBI in collaboration with PCS. So is that something we have already delivered and there's some traction on that front? Or is it still in the second half of the year? That is a fixed price project where as we complete, we recognize revenues. And I mentioned to you, our conservative approach meant that we could not take credit for all the revenues we could book otherwise. And I believe that as we complete more and more and more, we will be able to book more available. But that's a fixed price project where by doing more work, we're going to get paid more. It's already factored in into the numbers, into the order book that we actually talked about. So there's no additionality on account of that beyond what we mentioned in the order book. It's already there in the order book. Okay. Thanks. Thanks. Thank you. The next question is from the line of Sunil Panani, individual investor. Please go ahead. Yes. I have a 2nd question and this is based on your 2019 2020 annual report. Last year, the total debt was INR8.7 crore, that's long term and short term debt on which you paid an increase of INR1.3 crores. That dropped out to a 15% rate of interest, which seems a little bit high. Any steps by the company to renegotiate the rate? That is my first question. The second question is out of the total turnover of INR 49 crores, debtors were INR 16.44 and they could not pay you because of COVID. Now what is the current status of the debtors and what are the current debtors, add some debtors of sales in the current 6 months? Can you show some light on that? Thanks. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Thank you for the question. Point number 1, when it comes to the interest cost, actually our cost of our interest rate is at about 13% for our long term loan and about 11.5% for working capital. So I don't know how the 15% of these numbers on which interest rate is calculated. I can go back and see how that kind of efficiency came. Having said that, even these two numbers on the highest side, we are renegotiating and we should be having a much better interest rate going forward. Our credit rating also has improved compared to where we were a year back. So I'm hoping that from January onwards, our interest rate, a bit worse on the term loan and the working capital should come down. And point number 2 was on the debtor levels, very important question. This 6 months, we had reduced our debtors to some extent. Of course, the revenues compared to the previous quarter half year has been less as well. We are running it about 100 and 10 days which is we know it's on the highest side. It should come down when the contribution from the Create segment goes up. This 6 months, we have been also impacted this much in from the in terms of cash flow from our regulatory segment because some of the sign offs could not happen because they were not 60% and that has impacted in the sense now we can book revenues when the UAT is completed. But since the go live happened because of the COVID issue, they're not able to release the payment. So this has had some impact. So we remain at 110 days in terms of receivables. Our target is to bring it down to about a level of 80 for a period of time. And right to what Balu said, also we believe that the change in the complexity of revenues will go through a path that will come down dramatically. Okay. Thanks, guys. Thank you. The next question is from the line of Girish Group, individual investor. Please go ahead. Good afternoon. Shan, do you hear me? Yes. Yes. I have a quick question, one is on the operating metric and that is still on the product side. On the operating metrics, can you give me an idea of what is the kind of concentration like maybe in the top 5, top 10 for your as in a full year basis or maybe a quarterly basis? And on the operating metrics, what's the typical attrition rate in idle? And with that particular class, I would like to ask you a little bit more about Sabhar in acceptance. The 3rd and final question I had is on the consumer segment, right? I see that you had invested quite a lot in the consumer. The turnover is still not coming up, but you can give me some idea Let me start with the consumer question on the consumer side. I think we have invested in creating both software as well as databases to launch a business in the consumer segment. And I'm reasonably optimistic that by the end of the year, you will hear some announcements in terms of what we plan to do there. We have invested ahead of revenues coming in. We have invested ahead of launching things. But there are a few things that we have done, which are significant on the consumer side, which you might be aware of. So for example, taking off from the GSP product that we have, we have a unique product called Iris Pay It Out. Girish, are you showing me the product? Yes, I have installed it on our listings also. Have you used the latest version? Yes, there's a latest version, but I need to check if my investor company, they are paying the tax on because that's usually a So take a look at the latest version. If you take me look at the latest version, this is again sharing with everybody in the call right now. Iris Peridot is an app that you can download from the Google Play Store. It's also available on our for Apple phones. Iris Peridot, if you go there and check for any company, you will know the current tax compliance state of the company. So we're actually saying before you invest in a company, be sure. I know of many, many people who currently use a solution. So we've had over 8, 7, 8, 8, 8, 8, 8, 8, 9, 4, like, active users. And I think the number of I think Gautam is on the call. So Gautam will actually share data on the current usage pattern of the product. That's part of the consumer segment. A second thing in the consumer segment is currently being used by many banks is, for example, Clouc is a solution that's used by banks to detect NPAs. So several banks are using our solution to detect NPAs within their own system. So that's again part of the consume segment. The consume segment, there are 2 parts of the business. 1 is the software part of the business. 1 is the data part of the business. The bulk of investments you talk about have gone to data part of the business, which you not really launched in a significant manner. In the case of carbon acceptance, again, I'll let Deepgram's question in terms of the level of carbon acceptance. And she will also mention a new product to launch along with carbon for audit, which she will talk about. Yes. In terms of carbon, it's essentially used for creation and submission of financial reports, including we have a live experience report. It's currently being used in South Africa, in the U. K, in India, in the U. S. And in Europe. And Europe is, of course, the latest mandate that we spoke about a little later, which is the ESMA ESIF mandate. Now there are also newer opportunities. For example, in the U. S, there is a mandate by another regulator, which is the energy regulator called the FERC, the Federal Energy Regulatory Commission. And they are also moving to XDRL as a format. And so they require all energy companies to start filing various forms and reports in this format and fixed data format. And Carbon is gaining early traction in the CRC opportunity as well. So in the case of Europe, like the court mandates have got postponed, we've already Ma'am, I'm sorry to mute you, but there's a lot of static coming from your audio. The audio is not audible. There is a kind of testimonials available on our website, so you'll be able to see some of the names of the clients or customers who have already bought into the product, large names basically. So I think there is certainly an acceptance. The product stand well positioned. So now it depends on how the mandate plays out as far as Europe is concerned. In Europe, there is also another product actually, which is gaining traction too, which is called X audit. So the unique thing in the European mandate is for the first time, the regulator has said that the IXTRO documents that are created not only have to be filed, but they also have to be audited. So for the first time, the machine readable layer also requires an audit. And so auditors are looking for tools or solutions for auditing these XDRL documents. And so we launched a product called X Audit, which is also beginning to So what had happened to the COVID-nineteen pandemic? People are working from home, people are working from anywhere. So you have a distributor enterprise forced on the world by the virus, which means collaboration becomes very important. So of the several products in the market, we are one of the few purely collaborative, truly collaborative products available and that's giving us some traction, not as much as we would like because we're not there on the ground. We don't have a fleet on the ground as we should in Europe and the U. S. But that again is a positive thing as far as carbon emissions is concerned. The question that you asked second was about attrition. I think attrition is well within our attributable levels. The big problem that companies like us have is the following. Attacking new people to the company is not a problem. But once people spend 3, 4, 5 years, that's when they start looking out for better opportunities. And I think that's when we start competing this in the market and there's a pay structure and so on and so forth. If you go to some of the standard platforms on the web where people talk about the quality of work and all that stuff, you'll actually find that people will say, people say wonderful things about Iris as a great place to start your career, as a great place to have freedom in terms of working and so on and so forth. But I think the challenge for us is to retain people once we spend 4, 5 years because they'll even grow, that's when the problem is. But as of now, it's well within the well within the level. We haven't lost too many people and that's a great source of great comfort to us. That means you know about customer consultation. Customer consultation. Now it's inevitable that because the bulk of the revenues have historically come from the connector segment of the business, There has been a customer consultation. But what I will do is I will pass it on to Balu to give you more precise numbers on this. So, I have a question to confirm if you look at the FY 2020 numbers, which is ending on March 2020, the correct segment is quite predominant. And you can we can say about fairly about 50% of the revenues are accounted by about 10 customers. Of course, it has some creates customers as well where we work with a partner. So that also is coming here. Going forward, it should come down for the first half. I don't have a precise number right now with me. But my sense is it will be little less than 50% for the top 10 customers. Thank you. The next question is from the line of Manish Benani. Please go ahead. Individually, investor. Hello? Manish Benani. May I please go ahead, sir? Hello? Yes. Yes. Hi, everybody. So really appreciate the presentation which we have done. So it is a good idea where we are going. Also there are 2 nice things which I see, I mean, which I like to showcase our talent or whatever you guys are doing in making showcase our talent or whatever you guys are doing in making software, etcetera. So my question is towards the fiscal midterm where there is a decline of 5% for savings in grains. So I was wondering how we really managed to see 1 range first of all. And the next question is where we have entered your current line with the previous compared to previous year, like almost 30% here up on current liabilities. I don't know what has been accounted into, but please tell me, tell me, tell me. Sir, can you just repeat these two questions? I could not understand it very well. Because on speaker phone, maybe if you can say again, I have now to the receiver. Yes. Which two points, what is rent? Is it are we talking about Yes, the rent part because the rent has gone down and I don't know how we managed to save on rent, which usually doesn't go now. No. Actually, we had on the rent side, we had taken 2 rented spaces, next year office. It was not much, but we had taken maybe about 5,000 square feet. That we have given up now because now the work from home paradigm is pretty much in place and we are managing with the existing old office of Harris. But that full impact of that will not be is not going to be felt in H1. There is some impact, not complete impact, The impact will be more in the next 6 months. Okay. So we are able to work from home and see you on the entire year. Yes, yes. We are very much able to do that. Now we moved actually somewhere in January itself into a structure where we can do a very large part of activity from work from home. Then by the time the COVID lockdown came, we pretty much moved the full team into a work from home situation. And that is working out very well. We got our process in place. We have the platform, the security aspects. So that has been good for us. Okay. The other question was related to the other current liabilities which has gone up. So I was wondering what things have been accounted for the The other current liabilities, there will be something on unbilled revenues there. Sorry, it won't be let me just open one. Give me a minute, okay? I'll just check that. Just give me a minute. Okay. Other kinds of liabilities, there is in September as on September 20, there is one the September salaries were paid in October 1. So that has come up. That's one reason why it has gone up from 11.1 to 14.3. That is one of the main items that has gone up. And that is, of course, paid by October 1st. Okay. Okay. So that then otherwise, pretty much all other things are stable there. Okay. So again, coming to that marketing part, which we are doing as an advertising source. So have we thought more about envisaging those parts? Like how do we increase the presence of Iris in competition? Could you repeat the question? Because I didn't hear it very clearly. Yes. Since we have increased our expenses towards advertisement or marketing, we can say. Okay. So have you thought more about it, how do we do more such things like doing more marketing, etcetera, where we can get more clients, etcetera, apart from the calls, etcetera? So we don't do too much advertising per se. What we do is we organize events. We organize events, we organize seminars, we organize workshops, and those are the build related activities that actually helps us get customers. So the nature of the compliance business is such that simply advertising won't get you business. You have to be knowledgeable and you have to show that people can trust you. You have to show that you understand the experience space. So for example, I'll tell you, we just finished a study and similar people are very happy. We finished a study reviewing the financials of 7 10 European companies. And you would be very intrigued to know that 10% of companies in Europe have mistakes in their financial statements. By the way, when we did a similar study in India about a few years ago, it's only 5% of companies. So now by when we do things like this, we then so we spend money on the study, which we do ourselves and then we then go and popularize the study among people to talk about how good we are at spotting mistakes because compliance is very important thing and all that stuff. So we don't really advertise, but we do events, we do events, we produce videos, we produce other kind of collateral material to be able to get go out and get customers. So we are using this to demonstrate how good we are And by demonstrating how good we are, we hope that people call us. We then send them a copy of the report. We then ask them to come for workshops with us. So it's a very intensive activity where demonstrating how good we are is the first step to acquiring customers, not necessarily advertising. We don't advertise as much. So basically, my maybe I put up the question wrong, but my idea was to target the GST clients which you guys have. And where we have competitors where like some brands are very famous to work like Zoho and there are few others. So they are very keen to put up their brand in the name of people in general. So tax guys were asking, don't take me wrong. Sir, I'll tell you, I used to be in media myself many, many years ago. When you advertise, only people you become rich are the media owners. I mean, you don't get the money, you don't get something for yourself. And honestly, if you take a look at the numbers generated by these companies who advertise in a very noisy manner, advertise very much in the in mass media. And if you look at our numbers, the numbers are not very different. I mean, we have a small sales and marketing team which goes and calls on customers. It's almost like so the compliance business, we're not really a doctors business at the end of the day. The best doctors don't advertise. And today, when you look at our clientelecenters, in terms of the people that we actually work with on the GFT space, it's a who's who's who's who's who basically come to us will be very quiet about it, we don't advertise and they're not noisy and we deliver high quality work. For every one of them, they judge us by how much tax, how much IPC issues we resolve for them. They judge us by how good the software is to use. They judge us by things like this. And I think the mass advertising thing in the mass media is almost an exception. It's almost an extraordinary company. Without a doubt, it's one of the greatest companies in the country, one of the greatest SaaS Forward in the country. I think it's a company they emulate for all of us. But they're in a slightly different space compared to us. And they go for the mass market. We're not going for the mass market. When you're going after the top 50 companies in the country, when you're going after the top 100 companies in the country, the CFO does not get to know about you because you advertise, the CFO gets to know about you because you pick up the phone and call him and basically talk about how good you are. And therefore, personal touch, personal contact, it may be a SaaS offering, but the ticket size is sufficiently big enough for you to go and call the customer, work with him, work with the customer to ensure you deliver high quality things. So our focus will not be on spending advertising money to acquire customers in GSE space. The GSE space by and large, if you take a look at the numbers here, it's not really grown to the extent that many of us thought it would. It has been fairly subdued because Government of India, 1, kept changing the rules constantly, 2, offer a free tool to a large and large number of people. And then there are people who came in and knocked the price of the market by dropping it to lower and lower and lower levels. Actually, you see some consolidation happening. There has been some consolidation in the GSE space, so you'll see more consolidation happening. So the way we look at the whole thing is, if I'm selling somebody GSE solution, can I also sell them an MCA solution? If I'm selling somebody an MCA solution, can I also sell them a GSE solution? Those are all things that we are looking at right now. But advertising is not going to be very important for us to acquire GFC customers. Thank you, Pohit. Thank you. Thank you for your question. You really make sense. Thank you for your question. Thank you. The next question is from the line of Sameer Panani, Indivatil Investor. Please go ahead. Yes. My next question is about the stock liquidity. Roughly about 93% of the equity shares are held by the top 13 shareholders and the management. Just 101 shareholders hold something like 6 lakh shares. So suppose even if the stock gets on the main board of BSE, how will the liquidity increase? We just have R6 lakhs floating stock. What are the management plans to include the shareholder value in this? I'm stumped. I can really say I'm stumped for an answer because I don't have an answer. The management takes an active interest in the fundamentals of the company. The management takes an active interest in the health of the company. The management does not take an active interest in the goings on of the market. We are mindful of the price. We are mindful of the liquidity in the market or the lack of liquidity in the market. We are mindful of that. But having said that, as a company, I don't know what to do to improve liquidity. I don't have a trading around. None of us have traded the stock. You have known that. You have seen that. And none of us plan to stay trading the stock. That's not where we actually work. So I don't have an answer to your question in a manner that will satisfy you. It is true that there is a fair amount of concentration. I see this as a vote of confidence on the part of those people. Some of them who have taken good positions have also sold and gone and come back. So for me, the concentration is more a sign of a vote of confidence among people who understand and therefore holding on to the stock in the hope that we will deliver spectacular results for them in the years ahead. I think the last 3 years after IP have been excellent for us. I'm glad we did IPO because that's what helped us get into a path of growth where we were stuck earlier otherwise. And that's helped us grow to where we are today, where operating leverage is kicking in. And I think going forward, there are only 2 ways of increasing the closing stock. 1, by holding a gun to people and say, go sell or do whatever else. We also have very significant ownership by employees. So we also believe that at the end of the day, significant employee ownership also contributes to liquidity. Another possibility is if we end up doing additional fundraise, but even then if we do a fundraise, it won't be really increase the number of shareholders in a significant manner. And even going to the main board doesn't necessarily mean that my investors will actually sell. So comes back to the same thing I started with. I'm stumped for an answer. So if you have any solutions to offer, we're very happy to listen. Okay. I will mail it. Thanks for that. If I have suggestions, I'll mail it across. Thanks. Thank you. The next question is from the line of Kirish Gaurav, individual investor. Please go ahead. Thank you. So I have a question for you. Just to keep a standard forward issue and maybe look from the next 3 to 5 years perspective. My first question is, do you have all the products ready or growth to be ready so that you can continue to grow for the next 3 to 5 years without too much investment in the product development? That's 1. 2nd is, look, a filing downer, I mean, what's your ambition or what's the strategy in terms of return of capital employed where you want to reach a bit aspirational value? I'm not expecting that we come down to particular number, but I believe we have an aspirational number to read. So these are my broad questions to understand which direction the company is evolving. Thank you. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Thank you, Girish. I'm going to rephrase your question, Saketi. Do we have products in place to meet our aspirations for the next 3 to 5 years? I will answer the question slightly differently. We are a nimble enough company to be able to develop products for developing situations. For example, 3 years ago, GSP didn't exist. Gautam took the lead and said we need to develop a product for GSP behind. I mean, as I said, I was the 1st person to basically say, no, no, no, I don't think we should do it. Gautam painted the bigger opportunity. Gautam done, came and said, we need to do this. And we have a robust system in place to figure out what products to develop and what products not to develop. And I'm very happy to say that it's paid off for us as far as GSE is concerned. We have a thriving system within the company of people who are able to think through products and identify needs in the market. So do we have what it takes to stay relevant? Absolutely, yes. Do we think between the card bonds and the GFCs and others of the world we can stay relevant? Absolutely, yes. Does it mean that if new product opportunities come, we will service them? Absolutely, yes. It's really a function of what we actually see happening going forward. So I think the question that I would try to answer is not just whether we have the products in place, but whether we have the flexibility and the nimbleness and the capacity to spot opportunities and go and take advantage of them. I'm reminded of a story that I tell people. So I used to play right full back for my football team when I was studying in America. And I score a goal in a certain match and I use an example to basically say just because I'm the right full back doesn't mean I can't be in front of the goal to score a goal. And that's not a same side goal. I score a goal in the game. So when an opportunity comes, I think it doesn't matter where you are. You need to go and score the goal. Luckily, that's what needs to happen. So we have the nimbleness to be able to do that. In terms of aspiration, I think I have 3 aspirations. 1, I hope the market realizes the value of what we are delivering. I think a company with solutions being bought by customers in 36 countries, a company where in the middle of the COVID we didn't acquire customers in Europe, a company which basically has moved SaaS revenues to 50% in the middle of all this, A company with referenceable customers across the world actually needs to attract the attention to more investors and better investors. And when I say better investors, I mean, I don't mean better as opposed to worse. I mean, it needs to attract investors who see the value of what it's actually trying to do. I think so one aspiration is to basically do that. That's one thing very, very important. In terms of the company itself is concerned, within these 36 countries, if I go deeper and sell more to the same customers or if I sell to more customers, there is enough headroom for me to comfortably grow at a significantly reasonable step going forward. So do I want to put a number to it? No, I don't want to put a number to it. As people keep telling me, it's people often end up overestimating the short run and underestimating the long run. And 3 to 5 years relatively long run. So we actually see some significant headroom there, we'll see to present possibilities there. The big uncertainty is always the regulation. For example, if you'd asked me last year about the EU mandate, we were very, very optimistic about the EU mandate. But right now, in the middle of this COVID thing, who knew COVID would happen? I mean, it's ended up postponing the mandate by a year in many countries. So when you are, to some extent, as you're reacting to a regulatory mandate, there are limitations in what you can do. At the same time, if you are in the regulatory space, once you're in, that's a huge opportunity. It's a great opportunity. A lot of people stay with regulatory mandate because of the uncertainty. Though we believe that once a mandate is in place, there is no uncertainty. There's only growth as far as the company is concerned. So I basically believe these 36 countries will give us enough headroom to grow at whatever pace we want to as long as we're generating cash, as long as we have the cash in the company. I said even at the last AGM that the thing that we are missing right now in the company is adequate cash to basically grow the business from a marketing and sales point of view. Any cash that we generate will actually go into reinvesting in marketing and sales to grow at rates which you've not seen in this company so far. And that's why we want to make it happen. I hope I answered your question to the best of my ability. Just wanted to complement that, put a period you are even dealing with tough times that indeed the payments are employed. The next question is from the line of Narendra Nikani from behalf of the company. Please go ahead. Hello. Yes, once again, Narendra here. What you are talking about is liquidity of this profit. I believe a lot of 4,000 shares can become the reduced. And you'll see those shares blocking and maybe it will give you the right price. Otherwise, like if you are really seeing that I am really getting confident on the company, no. But today, I am in the process of demonstrating it at the right price. That's what I said. Then get out. And I am in those balanced nonpromoted, non employee shareholder. Do you think that am I happy as a shareholder? No. That she will continue to do revert to the term because it has not performed to last so many years. It's as simple as that. And I am a business analyst, okay? And we have our own analysis company. So, sir, sorry, Bharati, can you continue? If we reduce from 4,000 to 2,000 or 1,000, the load price can be reduced. There can be floating stock and that floating stock will help. Very pleased to get out. Sir, the market cloud is fixed by Sebi and BSE. I have no role as such as the market cloud is concerned. The market is also fixed on the basis of the movement of the price in the market, again, where I have no control over it. So, it's not something I have any comment over. I thank you for your vote of confidence. I thank you for being a shareholder. Not. My idea is not I do not think I have any answer to that question, sir. Beyond saying that I hear you, but I'm expressing my feeling. Again, sir, please do not give an impression that people are holding on because of their trust in the company. No. It's because they are not able to come back. I hear you, sir. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Balchandra Krishnan for closing comments. Mr. Balchandra, I'll take over. I think a little while ago, Mr. Balchandra asked a question about my aspiration. So my aspiration at the end of the day is also to find a class of investors who don't want to dump their stock. I really think at the end of the day, we are a stock changing the way this world works today. We have implemented an extraordinary filing platform at RBI, we've received the face of Indian Banking. We did some extraordinary work and we therefore need patient investors. I don't think investors would basically need to be there for 5 years 10 years. That's stupid on my part to expect that. But at the end of the day, I think what we need are investors who understand the business and are patient enough to stay with us through our growth path. I'm sorry Mr. Nagali for saying this, but I think it has to be said. On that note, thank you very much for being on the call. And I could only commit to you that we will keep working on the fundamentals and try and improve the fundamentals of the company for your benefit, so that we don't come to a situation where people want to dump a stock. I don't have a problem if people want to sell a stock because of the bidding is overpriced. I have no problem if people want to buy a stock because of the