Earnings Call: Q2 2023

Nov 7, 2022

A very warm welcome to all of you ladies and gentlemen joining us on our inaugural half yearly investor forum. I wish to welcome you all for this forum and look forward to having a deeper and more meaningful shareholder engagement as we go on as a listed company. Just to set the context for today's investor forum, some of you may realize that it's been almost a year since Cenit Business Solutions had its successful IPO on the Columbus Stock Exchange and we as a company thought it's high time we take our shareholder engagement to the next level and hence this investor forum. Now there are 2 objectives that we want to achieve here. 1 is we want to make sure that we give our shareholders and the broader investor community deeper insights into the business and secondly, to commit ourselves to a consistent approach when it comes to shareholder communications. On the first point, it's all about going beyond the financial information or the published reported numbers to go a couple of notches deeper and help you as the investing community and shareholders understand what drives us as a business. On the second point, what we are doing is to commit ourselves to talk about the same KPIs and business drivers about the business. So whether it's a good quarter or a bad quarter, you'll hear us speaking the same language. So essentially, it's us committing ourselves not to cherry pick on various numbers, but to be consistent in our communications and approach to communications with shareholders. And at the end of this, basically what we're trying to achieve is to ensure that there's better visibility and better clarity so that you see as clearly as we do the massive potential in the business and the market opportunity out there and also our strategic plans and what we have in terms of execution plans towards capitalizing these opportunities. So from an IR program point of view, we'll be conducting this deep dive on a semi annual basis. Typically, at the end of the first half in November, unfortunately this time around we had to move it to early December because of conflicting travel schedules. So we'll have a first half review in end November and then the full year review at the end of the post release of the financial statements. Now in terms of reporting performance there is something that I would like to highlight front. It is the fact that we would like as a multinational company where revenues are or revenues are invoiced in up to 9 different currencies in any given period. We would like to separate the effects of either favorable or unfavorable currency movements from the underlying performance. And to do that, you will see us talk about USD constant currency growth rates wherever we talk about growth. So for those of you who are not familiar with it, I'll just spend a minute on that. What we are trying to do is to basically compare performance of the current period versus the past period in U. S. Dollar terms where all non USD denominated currencies are converted to USD at the prevailing current periods cross currency exchange rates. So for example, if you are looking at first half FY twenty twenty three performance versus the first half of financial year twenty twenty two last financial year, we will be using the same non USD to USD cross currency exchange rates of this particular period that is end of September 2022 to convert those non USD cash flows in the base period of the past year as well. So that way what we are trying to achieve is to make sure you only see growth rates on top of the LKR growth rates which is obviously reported. You will see growth rates which are purely reflective of performance and devoid of any favorable or unfavorable currency movements. So that's it when it comes to some of the language we'll be using when speaking about these growth rates. In terms of our customary safe harbor statement, I'd like to draw your attention to this particular statement on all forward looking statements that we make on this call. Once this is emailed post call, you could read through it. In terms of the structure for today's presentation, basically section 1 is the entire update and I'm at the tail end of it. We will kick things off with Chairman's comments where Dinesh will make opening remarks to the investor community and our shareholders followed by a business overview by Sampat, our CEO. That will be followed by a financial update from Raveen, Head of Finance and you'll hear back from me on the strategy and focus areas in terms of what we are focusing on as a company. And at the end, we will have a Q and A session where we will address your concerns. Now from a Q and A point of view, we invite you to either type in your questions into the Q and A box of the platform during the presentation as and when you have your questions and we will address it at the end or alternatively you could click on raise your hand at the end of the presentation during the Q and A session where we will help you unmute yourself and post your question in person. That's it in terms of housekeeping stuff. I think we are good to start our inaugural Investor Forum. Let me now hand over the proceedings to Dinesh Sapramadu, Chairman and Founder of Zenith Business Solutions PLC. Over to you, Dinesh. Yes. Thank you, Nilendra, and a warm welcome to the Zenith Business Solutions First Investor Forum. And as Nilendra mentioned, it's been a year. And last year, this time, we were all very excited about the final stages of collecting all the subscriptions and kind of getting on to this mode of becoming part of the Senate Business Solutions' future plans. And I first of all, let me thank all of you for being here today. And especially people who have been supporting us and throughout our journey of 25 years. And Sanit as a group actually celebrated 25 years this year. So it's actually a milestone for us as a company of being 25 years in Sri Lanka. And just to kind of give you a little bit before I kind of get into some of the Zenit business solutions, you know, Zenit started in 1997. And we started with 3 employees in an office down ward place. And then from there, our first business was actually HR business. Senate Business Solutions was first it was not called Senate Business Solution. It was called Senate Software International. But then we from there, we actually spin out Zenit Business Solutions and then you see the rest of the stuff that unfold. And we are lucky enough to kind of be able to get win early customers in Sri Lanka as well as you know through our systems from Sri Lanka Telecom to Sri Lankan Airlines. Sampat Bank are some of our early customers then we actually learn from them and then we build a platform that we actually was able to take it outside of Sri Lanka. And you will hear later we have more than 1400 customers in 40 plus countries all over the world currently. And coming back to Senate Business Solutions, I just wanted to kind of touch base on maybe 2 or 3 salient points. It's just to kind of talk about what our vision is and where we are, where we are going and some of our key ingredients that we feel as a company that, you know, why we are doing this and, you know, just give some inputs to that. So if you really look at the HRIS space, it's actually one of the fastest growing from all enterprise software market. And even during a recession what we are seeing is that you know throughout the world HRIS companies or HCM companies are actually the ones that are growing. And the reason for that is that you know this whole the pandemic that actually accelerated the digitalization process. The digitalization process that acceleration felt through most of the enterprises around the world. So we will see that it's actually growing more and more in need in coming years. What is the part that senate business solutions is really looking for is that we want to be the centerpiece of that digitalization activities that are happening. We want to be what we call the own the employee of record. So if you take a look at an HRIS systems, you have the employee record. Then you may have other CRM systems or other systems that actually link. But the employee record is the most important one that links into the rest of the enterprise solutions. And senate business solutions want to be that dominant player in that owning that employee record. So that's one of our main objectives or our vision is to kind of be the employee of record in becoming in the next 5 to 10 to 15 years because that's a long term we can actually see that employee record becoming the most important asset of an organization going forward. And second one is from an overall perspective, we want to be the HCM or HRIS dominant player in the APAC anemia because the reason is, if you see in our last annual report, also we talked about it, there's no really a dominant HRIS player in these 2 markets, and we want to become that. And how do we be part of that is actually being very focused on our customers. You know something that we hear very often is that is that we chose SenetBiz because of the product but we stayed because of the team and so that customer focused being being attentive to the customer is something that we truly believe both Sampat and I are still at the level of, we could say support that, you know, we, you can escalate things to us even at this point. This is something that we started 25 years ago. And the reason we are very focused on the customers, the reasons why the customers are staying with us. So that that's our customer focus is very, very important for us. 2nd is the talent. And I think most of you know, currently there is a huge demand for IT talent. Part of it was what I mentioned before the whole digitalization process. Companies are racing to digitalize, automate, you know, all that process. So talent is becomes a very, very important aspect. And for Seni Business Solutions, our tagline was, it's all about people. And we truly believe it's all about people. It's the way that we build the culture, the way that we build our teams makes the huge difference in how we actually build an organization. So talent is very important for us and a few, I think this month itself, we actually took another bold step in creating an employee share option plan. We had an EGM a couple of days back to kind of make sure the success that we get in the company is actually shared and employees actually become part of the organization. So that was a huge step that we actually did, creating an employee share option plan and getting the key employees are the real contributors to the organization to be part of the organization as stakeholders of the organization. And last but not least, the road ahead. What are we looking for the future? And I think we mentioned this during our prospectors as well as in the last annual report, we are looking at the long term. We are taking a long term view because we know that this is a company that we see that we are still at the very surface level of what we can do. The benefit of this will actually come in years to come. So in that, we are actually taking very, very bold steps in areas of new experimentations. Experimentation in business model, experimentations in areas of technology. We are looking at how we can actually look at some of these, AI ML based integrations, aggregations, looking at how we actually can take the data that we are with with our customers and giving them insights into that that we are they would not have seen. So that kind of technologies are getting built in the near future. You will see some of them coming and we are well positioned to bring that kind of technologies and to overlay that throughout customers that were already using our system. So these are some of the areas that we really feel that Safe Business Solutions is positioned and has the capability and the capacity to execute in the years to come. Like I said, it's a it's about long term view. So I might I always say that, you know, we are here to build products, take care of our customers, that help our customers to win and grow. In that process, we as an organization also win and grow. So with that, I will actually pass it back to Nilendra. And again, once again, thank you so much for being here and during the Q and A, I look forward to engaging with you all further. Thank you. Thank you very much, Dinesh. Sampat, over to you to start on the business overview and review. Thank you, Dinesh, for the introduction as well as Nilendra set in the background. So what I'll do is next 15 to 20 minutes, I'll give you overall business overview just to understand like how we are continuing our business in Sri Lanka as well as regional business. Yeah. Hope you all can hear me. So what I'll do is next 2 minutes, I'll give you overall business environment at HPS and Business Solutions PLC. So in at a glance, we are working on 10,000,000,000 plus TAM, total accessible market. That's a bigger market, if you really look at this market purely on Asia Pacific region, as well as Miao region. At the same time, our exit ARR is $2,000,000 at the moment. This is as per the first half results of 2023. At the same time, subscription revenue backlog is $500,000 So this will add during next 3, 4 months to our revenue streams. At the same time, currently, one of the most important point is we have cash like $4,000,000 cash like so even during recession. Our collections are good and like things are moving pretty decent manner. So like we are cash positive as well. On the other hand, like even Dinesh mentioned, like we are working on the product piece as well. Hope you can remember during our initial IPO stage, we mentioned our investment will go to 3 different areas. 1 is product development area, global product enablement and like you know the further enhancing the product capabilities. 2nd thing is market expansion, develop our market presence in both APAC region as well as Miya region. 3rd area is like, you know, possible potential acquisitions and mergers and stuff like that. So these are the 3 areas we are looking at. With that actually, we even developed our seamless connection to 3rd party systems. Now the product is capable of connecting with any globally renowned ERP solution and any other third party solutions. That is one of the notable thing we had during last few years as well. So same time, and we are now geared to handle large and complex organization with some of the large manufacturing company automation as well as government sector automation projects. Now we can handle large corporates across globe in multi country environment and multi industry environment. So that product capabilities are already added to the product and it's well positioned to cater to the global markets. At same time, right now, we are serving 1465 global clients in 40 countries covering 20 plus industries, even though like some of the industries are leading like financial services and same time retail, manufacturing, hospitality. These are some of the leading sectors out of 30 plus industry segments we are handling at the moment. We are now like 1,000,000 plus global user base and we continue to be very low churn company with less than 5% churn. Employee base point of view, we increased our employee base despite of many challenges post COVID scenario and due to like financial global financial issues, we are now 320 employee company and we are with 5 global offices. Reason addition is Bangladesh office. So we start our Bangladesh operation business development activities 2 years back, but we start our own operation, our own office, during this financial year. I'm happy to say, like, you know, this is the 2nd development sector outside Colombo, like, you know, now operating in Dhaka, Bangladesh. So that's a high level overview of the business. Million RIDE India support. Yeah. So, HCM software point of view, earlier also we mentioned actually, our core product is PPC TAR platform. So PPC TAR platform, we have 2 offerings. 1 is on premise offering, on the other hand, cloud offering. So still like on premise and cloud gives equal portion of revenue roughly, because larger organization and especially African MEA region, some of the accounts are still like on on premise. So on premise area like we have roughly 813 clients at the moment and with 24 plus years of history. At same time, 37 plus revenue contribution come from this segment. Same time, cloud area, if you look at like, we have over 500 customers at the moment with 10 plus years of experience on the cloud technology. And right now, like 30% 34% of overall revenue comes from our PPS HR cloud platform. At the same time, like, now we are into related business as well, like, you know, one of the notable areas is PPSHR tracking solution. PPSHR tracking solution contribute 9% to overall our revenue. And also like we are doing these pieces more than 10 years, Sri Lanka and a couple of overseas countries as well. We enable all tracking employee tracking related information for time attendance requirements, security requirement and management and access control related requirement. The last area like the notable revenue point of view like P plus HR outsourcing business. So outsourcing business is now again like 12xCS business. We have 37 clients, Sri Lanka and overseas, especially Asia Pacific Regional Countries, and that also contributes 4% of the overall revenue. Product point of view, we are very strong in terms of our end to end product suit. First section is co HR and employee engagement that start with employee master, employee life cycle, organization structuring, sales service portal with mobile access and kiosk access. So like you can factory environment, you can establish a kiosk machine for employees to access their own records, managers to do like, you know, approvals and stuff like that, or you can get everything onto your mobile today with the language you require, at the same time, like, you know, with the feature enablement for you to, like, you know, work as a supervisor and work as an employee. On the other hand, like, you know, we support the whole bunch of industry relations solutions and reporting analytics suits. So this include actually, descriptive analytics to predictive analytics on one side and and ready made, like, you know, HR dashboards for managers and senior executives to look at HR data for data driven decision making purposes. At the same time, operational areas like grievance, risk management, risk management, reward and recognition, those are add ons for especially factories and other organizations to manage their employees very effectively. Then we have the strategic toolset, starting from performance appraisal, current management framework with competencies, training and development, probation evaluation, manpower planning, then the happiness dashboard for employee engagement, enterprise dashboard to support the whole organization activities, analytical framework, and then and also like, you know, this whole bunch is supported by DuXpress tools. Even companies can develop their own dashboards and publish within the tool. So that's the beauty of the whole application. And then on the other hand, operational HR, like starting from attendance, leave management, payroll, it cover actually all government of different solutions to support the HR operation. So our message to our customers is like, you know, hand over your all operational activities, reporting activities to, HR system, so the HR departments, senior HR executives can purely focus on more employee engagement, working with the employee for their development, and more strategic activities. System handle from recruitment up to retirement, entire cycle of HR domain. So we are not just like, you know, HRIS company providing, few areas. We are end to end HRIS company and and presence in global. Yeah. So, on the other hand, like, you know, as I told you earlier, investments are heavily moving to product development as one core investment. So, we released actually do it yourself mode, product that is called Peeper Say Touch Turbo, and especially some of the markets where, like, you know, we have a good presence. Turbo is one of the fast selling, like, you know, product now in India, and then we are moving that product a couple of other markets as well. This is a fixed product, go to a company where HR department can configure and start using on their own. Then we have the P plus HR marketplace that is a B2B marketplace, where we will bring technology driven latest different application, HR related different application to 1 common people's HR marketplace. So like, you know, this is a seamless integrated environment. We are like, you know, let's say, if someone want to like, you know, let's say, AI driven recruitment related application published on our People's HR marketplace, so there's environment for them to do that and serve our existing client base. So like we enhance the value product point of view, we enhance the value and services to our existing client base. So marketplace, we are expecting a good journey in coming years. On the other hand, like we just released the People's HR Social. Earlier, it was named as Jura. This is enterprise social network beyond HR aspect, like, you know, because we realize, general enterprise social networks are not becoming very much popular. So because of that, we like, you know, focus on HR domain and develop our own social platform for P plus HR. And we are continuing with other R and D initiatives like, you know, bringing, let's say, artificial intelligence, data analytics, robotics, RPSI development. In fact, like, even today, we are winning like, you know, from a different forum happening this evening, like, you know, one of the internal application we developed on robotics process automation to enhance the capabilities of the application as well as increase the efficiency of some of the implementation activities. Yeah. There will move to the next one. Yeah. So when you look at, as I told you at the very beginning, I mentioned, like, you know, our TAM is USD 10,000,000,000, both in APAC and EMEA region. We are well positioned because if you really look at like Sri Lanka is well positioned to serve both the regions. Like, you know, now simple example, last month, November, we all are traveling like, you know, to do some business development work across region. So like, you know, we can reach any of these countries within like, you know, few hours, like, you know, 4 to 8 hours, we can reach like in any of these regional countries. That's the beauty. And then we are well positioned like, you know, to serve these APAC region as well as MIA region. On the other hand, when you look at like, you know, Africa and APAC contribution, this is point of view. Overall, if you look at last few years, 51 percent of our revenue comes from these two regions, APAC and, EMEA region, Middle East and Africa region. If you look at even currently, like in our first half, even though we are getting like only 10% from the African region, that number will be very high like in Q3, because like revenues are sometimes larger ticket invoices will happen like in different quarters. So like, since we can maintain more than 50% of revenue comes from APAC and Africa region, like an overall business point of view. So because of that, our even, 24 by 7 support center is based in Kalamu, like, you know, so you have to start the day little in advance, and you can close the day a little late, like, you know, so you enable, managing, like, you know, all support queries across globe, like, you know, from Colombo office. Yeah. So we'll get into a little detail, like, you know, on on different different areas. So as I told you earlier, our business segments, one of the the key segment is PFS HR on premise. PFS HR on premise still, like, you know, mostly coming from African region. We are, like, you know, low connectivity between countries and between the country. So but like we are well positioned like even the government of Uganda, a project like so we managed to sign the Phase 2 during month of November. So like we are starting the project like we already started the project in November itself, so that will give us a good revenue stream in Q3 and Q4. So this project originally commenced in financial year 2020 and Phase 1 we managed to complete year 2022 and we started the Phase 2 activities like during last month that is H2 FY23. So we are expecting a good revenue on that segment as well. It's still like in other countries like even Kenya, Rwanda, Ethiopia and these regions we are getting business from on premise area. So on the other hand, if you look at the revenue growth as LKR point of view, last 3 CAGR is plus 25% and its constant currency USD like growth rate is plus 17%. So that's a beauty. Like if you look at even if you compare FY 2022 first half and current year first half, we are growing actually 19% USD constant currency like in rupee level like here it's 76% year on year growth. And, 2nd segment is P plus HR cloud revenue. So cloud revenue also, like, you know, growing year on year, and we are we are already, like, you know, hosting this cloud infrastructure with Azure, Microsoft Azure, AWS, Amazon, Google Cloud, and right now, like we are exploring other options as well, like Huawei Cloud Infrastructure. So like, you know, there's a strong demand from the SME segment. And like, you know, we are anticipating, VFGR cloud revenue to grow, because demand is increasing year on year. And also, like, you know, there's a demand come from on premise to cloud migration as well. We have seen like in the APAC region and Sri Lanka, companies are migrating from on premise solution to cloud solution. Because of that, we are expecting good PHR recurring revenue like in order to grow during next few years. If you look at cloud revenue growth, like in the last 3 years, it's 25% on LKR revenue point of view, 16% in USD constant currency point of view. At the same time, if you compare FY 2022 first half as well as 2023 first half, like it is 23% USD constant currency growth. That's notable, but if you really look at cloud point of view. So, 3rd segment I mentioned, like, you know, earlier is the cloud's, tracking solution, PPS HR tracking solutions. PFSHR tracking solution, we track all employee movement, as I told you. Even during COVID time, we managed to track their temperature, like, directly pass that information database for for managers who, like, make real decisions, like, you know, real time decisions. So at the same time, like, you know, there's a roughly, we were expecting during this year, like, you can already see the growth, like, you know, moving from 2021 to 2022. At the same time, like, you know, even the current year, there's a tremendous growth that is due to one reason is the liquidity challenges faced by smaller guys like because of that now we are acting as a distributor. Even the smaller guys are like buying certain items from Celine to resell like for the clientele. So so we are expecting these, numbers to grow in this area as well. If you compare, like, you know, the last, H1 2022 and H1 2023, it's almost 59% USD constant currency growth in this particular segment. Yeah. When you move to P plus HR, outsourcing business, again, primarily like, you know, we are working on the payroll outsourcing, but like, not only payroll outsourcing, when we engage with customers, so like, we are working on form processing and various other third party activities as well. We have deployed some of our resources at client side to handle HRIS and these payroll related activities. So we maintain confidentiality 100%. That is very critical aspect like when you're handling outsource operation globally, because not only in Sri Lanka, we are handling regional customer base as well countries like Myanmar, Cambodia, Laos, Brunei, Sri Lanka, Bangladesh, like by secular regional countries as well. Because of that, like, you know, I think we have potential to grow in this segment as well. And also like, you know, we have healthy mix of local and local MNCs and OCs clients in this particular segment. And the advantage is we are one of the outsourcing companies use technology heavily. Like, you know, so when customer outsource their operation to Celine, we can give them a technology, interface for them to access their data and information, on the system itself. So that's the biggest advantage. Otherwise, moving, like, you know, manual documents here and there is a is a cumbersome process these days like, you know, so it's a technology driven operation if you really look at it. On the other hand, like, you know, the revenue growth point of view, it's 6.2% year on year growth compared to last year and 18% USD constant currency growth happening in this area as well. If you overall, when you look at ARR, last 3 years, our CAGR is growing 18% in the last 3 years. What is more important is our core recurring revenue growth. Our core recurring revenue reached 48% during the start of current year. So that is a notable achievement if we look at like, you know, because this revenue mix is growing, if we look at overall revenue environment. At the same time, like, you know, we hit LKR $730,000,000 in exit AR at H1 like, so that is with the net revenue retention ratio of 100%. So annual recurring revenue growth is compared to last year, for staff is 63% growth compared to last year. One of the important activity we started a couple of years back and we speed up during current financial year with the IPO funds. One is market development with the partnership development. So right now, like, we are very much focused. First time in history, like, we got set of regional resources. Now we have 1 in Myanmar, 2 in Cambodia, 2 in Philippines, 1 in Singapore, 1 in Australia, like, you know, then a set of team set of guys like, you know, in Bangladesh, and other, like, you know, set of resources in India, Kenya, Ganda, and stuff like that. So, like, you know, with that, we build our partner network. These are direct resources. With direct resources, we build a partner network as well. Right now, if you look at, like, overall, we have around 50 partners. APAC region, Southeast Asia, we have around 18. South Asia, around 19 partners. On the other hand, and Amy said as well, North Australia and New Zealand, we have 3 partners. Mia region, Middle East region, we have 1 partner, but we are in the process of building 2 other partnerships during the current quarter. Africa, like we have 12 partners. So like partner revenues are growing at the moment, like if you look at even our numbers. So we have launched multi tiered partnership programs and also like this supported by our own PFSHR Academy. We have like, you know, fully fledged academy when you onboard a partner. We have to train and certify our partner resources. So PFSHR Academy handled 2 areas. 1 is like, you know, partners, partner resource development. On the other hand, customer knowledge transfer to customer and development of customer HR department resources. So like one critical area is partner development and partner resource onboarding and develop their technical skills as well, because some of the partners are doing the implementation work, and some of the partners are doing the level 1 support as well. Now simple example, we have partner in Philippines. So Philippines partner is doing the level 1 implementation activities and the level 1 support activities as well. So we are only adding the level 2 implementation activities and level 2 support activities. So at the same time, like, you know, we are we are targeting white labeling our product with some of these bigger guys in the region, And we are building, like, you know, partnerships with Tecomanica, Microsoft partner network in the region. Both Tecomanica and Microsoft is supporting us, like, you know, build these partner network. They're they're doing interaction to some of the renowned partners in the region. So we are building a relationship with them. And also, like, we are working with Telcos. So through Telcos to reach region, like some of the regional countries we are planning to reach through Telco as well. So like we are expecting good revenue streams like through this partner network years to come. New deal booking point of view, channel partners, the new deal booking is increasing like, you know, so even this year, we recorded 59% of new deal booking through our channel partner network. And also like, you know, overall PHR cloud, revenue, like, you know, new deal bookings is currently is 58%, but we expect when you complete the year, it is around 65%, because last year that value was around 65%. So regionally, Sri Lanka and APAC accounted to 6% to 70% of new deals driven by PFS HR Cloud. And the on premise primarily come from Africa, as I told you earlier. Good news is actually this quarter, like, you know, so we got the government of Ganda phase 2. So that's a good value, roughly around $800,000 new business for H2 this financial year, like, so revenue realization will happen Q3, Q4 and then and part of the revenue during next financial year as well. That's a notable achievement, for this quarter. So if you look at, first half of the key achievement point of view, we signed actually 2 referral partnerships, 1 with Ruby Axiata, that is Bangladesh Telecom, and Sri Lanka Telecom as well. So both Ruby Axiata and Sri Lanka Telecom will introduce, they are like semi clients as well as like the other clients they are working with to P plus HR product range. So that's another very good partnership we established with the both the companies, who will be Axiad as well as like Sri Lanka Telecom. On the other hand, like we incorporated the Sanit Bangladesh Offshore Development Centre. So it is 100% owned company now, like, you know, the investment happened from SINIT Singapore. So like, you know, it's 100% owned company. Now there's a development center as well. We have, like, you know, sales team, presales team. We certainly have the development team and support activities happening from Bangladesh as well. At the same time, we won an NEC award as well. Like, you know, we are, again, like, you know, 3rd time consecutively gold, award like an ICT, BPM, medium sector, this year as well, like, you know, what ceremony happens, 1st week of December, last week actually. At the same time, like, we are establishing the information security management system, in accordance with ISO 27,001 certification. Like we have already done the certification process audits and stuff like that, waiting for the certificate to receive. At the same time, like we are in the process of obtaining ISO 27,017 that is actually setting the guideline for information security controls applicable to cloud services and infrastructure and stuff like that. Same time, we achieved regional recognition from G2 and software suggest awards. So these are some of the notable achievements during this quarter other than some of the product development activities we carried out and also like, you know, government of Uganda, like, you know, phase 2, starting like, you know, happens in this quarter, like, you know, as as we mentioned like during our last press updates as well. Key risk and mitigation plan, even our chairman mentioned like some of the talent related issues like talent retention and recruitment challenges everyone is facing at the moment with migration activities happening like tech workforce in Sri Lanka. So we are working with IT sector associations, STRASCOM, in building like larger resource base. So like, you know, so in that case, like, you know, we are also contributing as mentors and like, you know, and trainers like, you know, to build the large workforce, not only in Kalamu, like, you know, outstation workforce as well. That will, we believe like, you know, that will release the pressure we have at the moment for resources. That is a common problem the whole industry is facing at the moment. At the same time, we are broadening our internship programs. We'll like because then we get more and more people to strengthen our pipeline, then like, you know, successful people can move to development and voltage in other areas as well. Another way of mitigating the risk is actually establishing overseas development center. We already started that from Bangladesh Dhaka, like so we believe Bangladesh Dhaka operation also give us like resources and then development competencies like to manage the current situation. We are like well positioned in overall like to mitigate the risk with regards to talent retention and recruitments. So on the other hand, the potential slowdown in new deal bookings, obviously, there's a global recession like impacting these 2 regions as well. But if you do a comparison like the U. S, Europe versus EMEA and APAC, EMEA and APAC is the least disturbed the two regions. So like we are well positioned in these two regions. Because of that, we expect like new deals, bookings happens through these 2 regions as we did like in Q1, Q2, and then we are expecting like a good growth in Q3 and Q4 as well. So and same time, we are like white labeling with legacy HR players in the region. We already got engaged with OnePlay and that project is happening very successfully. And we are eyeing like a couple of other players do that. So we work as the back end technology service provider. Front end product companies can use PPSHR platform as the back end solution. That way we can strengthen our new sales strategy in especially in APAC region. On the other hand, like, you know, technology challenges, obviously, continuous investment into R and D. Even at the moment, like, you know, we are, working on some of the critical R and D activity in terms of security, in terms of product enhancement, in terms of UI enhancements and stuff like that. Some of the products will release like, you know, even in Q4 2023 financial year. And then we are already like, you know, working on some other very critical technology, bringing new technology like AI, then like, you know, obviously data area, we are working heavily on some of these areas, like, you know, bringing new technology into the product range. And in some of the products that already released to the market, like enterprise dashboards, like, you know, the predictive analytics are already released to the market and then some of the even like, you know, intelligent automation related areas. So so we again use People's HR Marketplace as a tool to offer latest HR tech solution to our client because we are not believing like, you know, we have to do everything like, you know, so globally, if there's a really good solution which benefit HR department and and the company, our existing client base, like, you know, so we are bringing them into our people's HR marketplace because, we are doing seamless integration with our p plus HR platform, purely like the employee and employee related information and can channel through these products and services to our existing clientele. With that, I will hand over to Praveen. Praveen is our Head of Finance, to give you a finance update, and we can take other questions actually end of the presentation. Thank you. In 15 minutes, timeframe, I will take you through the, sum of financial summarized financial summary of last 3 years as well as the H1 of FY 2023. So starting with the revenue mainly in, People's our, record, people's, key product line that is People's HR on prem, p plus HR cloud followed by the tracking solution and the RO outsourcing that also run through the p plus HR platform again. So in that case, main contributor of the portfolio is PBCHR on premise and PBCHR HR cloud. So in that case, in the last 3 years growth. So it has been reported at 25 percent of growth rate in reporting currency basis. Again, it's in USD currency, USD constant currency basis, it's 17% growth. Then when it comes to like last first half of the twenty twenty three, that revenue growth is 76% in LKR basis. Again, USD constant currency basis is 19%. So the in the likewise, the PHS PHSR cloud, again, it's recorded 25% growth last 3 years CAGR with half of the year. Again, it's 101% increase. Growth has been recorded for the PPS HR cloud and constant currency basis is 23%. And the tracking solution, which sell the time attendance systems and the related employee tracking kind of software, tracking kind of hardware stuff. So it's basically a 16% growth rate is recorded and in current consensus currency basis is 12%. So altogether core revenue wise, like, we have split it out with the core revenue and non core revenue in the identification purposes. So in core revenue segment, like, it's 23% growth has been recorded for the 3 years, last 3 years, which is in constant currency USD basis is 17% again. So first half of the year, 578,000,000 has been recorded from only from the constant current on from the core revenue segment. And that is 86% growth year on year basis, which is again 25% of growth rate in USD constant currency basis. So moving to the other category, we basically, this includes the shrinking down the products like the mobile software and the staffing staffing business that is due to the company's product presentation part. So some of these products so in that case, when it comes to the total revenue, it has, the main 3 year constant 3 years CAGR risk at 10% rate and the UST constant currency basis 4%. Like, when it comes to the first half of the year, it's $704,000,000 revenue has been reported, which is year on year basis 72% increment as well as in the constant currency basis, 13% increment shows in the first half of the year. Moving to the cost of sales line. So basically, we have categorized 5 types of cost of sales to give them more understanding what kind of cost of sales can be index of their company. So mainly on-site and third party implementation cost, infrastructure cost, we call as hosting charges as well. And the cost of tracking solution hardware items and the mobile solution related cost and the staff related cost, which include the implementation teams, payroll and related payments. So with that, basically the incremental like 2019, FY 2019 to 2022 has been increased by only by 8%. It's will be some So when it comes to the f year on year basis, FY 23, it has been increased by 68%. This is mainly because of the incremental cost in infrastructure increments. So basically, high demand for the cloud cloud environment as well as the security features that we have enabled for the client requirement and the ISO requirement. So with that, it has increased by 290%. By 23 first half. EBITDA again. So with all that, so EBITDA has been decreased around like up to 27% to 11% during the first half FY 'twenty three. This is mainly due to incremental in the cost of sales due to higher infrastructure cost and incremental cost in the security needs. As I mentioned earlier, enabling the high security costs into the system. It's we have paid the premium, additional premium on that basis, and it has increased the infrastructure costs, which is, most of the high, cost of sales. Again, this is also increased by, staff cost, creating expenditure and all. And also, like, when investing in some global sales force and, force acquisitions and the marketing expenditure, it has been increased. With that recurring EBITDA that is actually when you calculate recurring EBITDA, we have excluded the exchange gain and the interest impact from this area. So it has been recorded at 11% with all the incremental in the cost of sales and the administration, selling and distribution expenditure. This is a summarized income statement for last 3 years as well as the first half of the FY twenty three. So, revenue wise, as I mentioned earlier, like, first half, we have cost, it's a 104,000,000, ryangan rupee reporting currency based revenue, which is 75,000,000 EBITDA and this 11%. With the exchange gain and the net interest income, it has increased to 272, which closed profit margin 160,000,000 with the 37% of profit margin and, earning pressure is 0.94. When you talk about the cash position from 2,000 f y 18 to 2022, it has steadily grown like 100,000,000 to 800,000,000. The funds came into the company around, 692,000,000. With that, the close we closed the year with 1,400,000,000 Sri Lankan rupee cash, cash balance. And when it comes to the FY 'twenty three first half, end of first half, FY 'twenty three, out of the IPO funds, we have utilized around 73,000,000, which is 11% around 11% of the IPO proceeds. And, those have been invested in the market development initiatives as well as the product, development initiatives. So still we have unutilized funds of 690,000,000, and that includes 350,000,000 that has to be spent on the potential acquisitions still under negotiation than the evaluation of that part. Cash flow generation up to financial year 2022. The operation cash flow and the net cash, cash flows were positive. And at 23, first half end, so it has been converted into negative number. That is mainly because of the funds we have, spent over the product development and the market development activities that, use funds from the funds that we raised from the IPO initiatives. So with that with the the mostly like the business development and product development, some of these expenditure are in a OpEx basis. But in our case, so we have to identify this and, it is, affecting to the operation cash flow directly. So in that case, operation cash flow is also showing us a negative, negative number. There are some kind of, working capital changes. You'll do working capital changes also. This has been impacted by the working capital changes. So in that case, we had identified that issue and, working and establish a process to like, input collection process to strengthen the collection process to keep it, make it to the plus and you, net net cash flow figures. So with that, yeah, I'm very happy to answer if there are any questions at the Q and A session, if there are anything to clarify on financial side. What do you need, Randall? Thank you, Ravin. So let me quickly spend the next 10 minutes before we move to Q and A on what we are really prioritizing and focusing on as a company. So Sampat touched a lot about the core products and what we are doing there. So I'll focus more on what we are doing new in terms of new markets, new products. So people that charge turbo, as Sampat mentioned, these are DIY solution focused in the SME segment. Now as a company, Cenit Business Solutions has been working traditionally in the mid market segment and in large enterprises. I mean with 25 years of experience and the robustness of the code and the software that comes with it, we've been very good at dealing with large organizations, complex organizations. But here in the SME segment lies a whole new market and opportunity. And in fact, we've gone through some learnings over the last 9 to 10 months. We've reconstituted the PHR turbo team. Now we function like a startup. There are 8 members. It's not a separating entity, but a division moving the company. So we are completely thinking of it as a new venture, taking off the enterprise thinking and thinking of how to cater to SMEs. So this is complete digital customer acquisition, digital lead generation to digital implementation support, remote support, all that. Compared to a normal enterprise deal which would take 3 to 6 months, we would have a client up and running in 5 to 7 days. So that's how much we've compressed the timelines so that we can be cost competitive to cater at very attractive price points. So right now we have been launched in India and Sri Lanka. India is a complete inside sales operation. So what we call it's all about getting on softphones, calling people, having lead generation campaigns on a paid search, on social media. And then the SLD partnership in Sri Lanka is completely different where SLD takes care of the complete marketing and sales process to their SME customer base and mid market base and we do the technological implementation itself, so this is for Sri Lankan operation. Now why India? Is it a crowded space? Yes, very much. It is very crowded. But if you really look at the market opportunity there for a Sri Lankan company sitting at the doorstep of India, understanding the Asian mentality, the price sensitiveness, it's a huge opportunity and it's an opportunity waiting at our doorstep. Morgan Stanley put out a report early November saying that the Indian economy, which is 3,500,000,000,000 is going to double by 2,030 to $7,000,000,000,000 and if you look at the large Indian companies, they are globally large and their growth is going to be limited by global growth rates. So, mid single digit at most. So, this doubling of the economy is going to come mainly from the MSME segment. And the MSME segment in India is known to employ almost 40% to 50% of their workforce. India has a workforce of about give or take 450,000,000 to 500,000,000 people and easily we are looking at 150,000,000 to 200,000,000 people employed in this workforce. And at the heart of the doubling of GDP, which SMEs obviously would have to grow at a much faster rate than large companies which are growing at low single digit levels, there is digital transformation that unlocking them. If you talk about digital transformation in an organization like Dinesh was articulating at the beginning laying out the vision, we sit at the stepping stone, that first step in terms of digitizing how you store, retrieve, manipulate your employee records and employee talent is the most important talent for any organization nowadays, irrespective of your business model or the sector you operate. And therefore we feel there's a huge opportunity for people at Chartered Home in India. Right now we are maintaining very healthy CAC metrics, customer acquisition metrics for the Indian market. Our return on average return on ad spend is about 1.1x, so we are making almost 10% or 110% of the customer acquisition cost that we make to get a customer. Right now we have about 20 clients approximately on boarded average deal size of 500, so that's an annual deal value of about 10,000 slightly more than $10,000 And for us it's all about making mistakes fast, failing fast, learning what went wrong, fixing ourselves and moving on and improving. And with the traction, healthy traction that we are generating in India we feel there can be huge opportunity for the company in the years to come. 2nd is people's HR marketplace. Now there are 2 ways to look at marketplace, as in 2 customer segments that we cater to. One is you can look at a 1500 organizations that are using People's HR and you have 1500 organizations where you can sell various other value added products and services. This could be we usually categorize it into 3 areas recruitment, learning and development and competition. So we could tap with the pool technology provider, 3rd party product vendors out there in Sri Lanka, in the region globally and offer it as a value added service, which is integrated to our HRIS to these 1500 companies and then we make a revenue share in the process. Secondly, we have nearly 1,100,000 users, slightly short of 1,100,000 users using our system day in and day out. Now what this means is that therein lies a B2C opportunity where if we can identify the right consumer offerings with maybe payroll deductions with the data we have subject to funds and requirements and data privacy requirements, there's a huge monetization opportunity there. In fact, right now we are working on few B2C offerings. When the time is right, when we launch them, we'll keep you apprised of our progress, but this is a very critical area and a huge opportunity in terms of low hanging fruit that we believe that we have within the company. Finally, update on M and A plans. So we've been going through a lot of iterations on our strategy formulation and as a company we've identified Tier 1 and Tier 2 markets that we need to really focus on and our approach to M and A is now being refined where we are looking at our objectives in terms of what we can achieve in this Tier 1 and Tier 2 markets, what will our organic growth deliver in terms of getting to where we want to and then how we can supplement that with our M and A approaches. And M and A always will not be outright acquisitions, it may be just strategic partnerships, it may be joint ventures and it might take different transaction structures and constructs. And we are essentially targeting 2 buckets. 1 is legacy companies where we can buy them for their customer base, migrate the technology or we are looking at early stage ventures. We all know that there's a winter coming for startups in terms of funding globally. So if there are solid startups who are in hypergrowth mode, who can't convert to sustainability mode because of the lack of funding, and if they are operating in niche HR value chains, we may be interested in them as well. So that's it from a kind of overall update on M and A plans point of view. With that, I'd like to open up for Q and A. And again, let me remind you, you can we already have 2 questions on the Q and A. So let me remind you that you can send your questions on the Q and A function of the platform or you can raise your hand and we will help you unmute yourself and post your question in person. We have 2 questions coming both on turbo and relating to the Indian market. First is, can you comment about growth of the turbo product and India growth? I think roughly with about approximate 20 customer numbers at about a $500 annual deal that's about $10,000 annual deal value in terms of revenue we got booked already, but traction is quite good. We are always trying to push the curve and increase the trajectory of the growth. I think we should be able to update the investment community and our shareholders in the coming quarters as to how that moves into the future. Sampat, do you want to add anything on to turbo in India in answer to that? Yes, I think like you know like Nilind mentioned, things are moving pretty fast like you know, so we are doing a good tracking exercises for some of the markets like in India is a key market for that. So we are expecting a good growth during next two quarters as well. Ideally, like the India strategy, we may not plan to acquire to strengthen our like the turbo market sales, But digital marketing is the main model like for Indian market at the moment. But if you find like since then, Miledri is working on like understanding markets and potential companies for acquisition, like if you find a good fitting part in India like you know so we can look at that as well. Yeah, so I suppose we answered the second question as well. Any other questions from the participants? If you want to ask a question, please feel free to click on the raise your hand button so that will be alerted and we can allow you to unmute yourself and pose your question. I feel like both Sampat, Nilayendra and Raveen mentioned, we are very keen to kind of see how we are actually going to grow the business outside. So a lot of time is now actually spent looking at outside Sri Lanka as main growth engine? I think that's the question. Yeah. Let me facilitate that. Sankar, you may be able to speak now. Hi, Nilendra. Thank you for the call. Can you hear me? Yes. Louden. Yes, Shivani. Can you elaborate a bit more as to that increase in cost of sales in the first half and where I mean what kind of infrastructure cost actually contributed to that and what was the underlying rationale for that jump in infrastructure cost? Is it for expansion and actually elaborate on that please? Sampat, do you want to take the numbers? Yes, in the numbers are on the screen, I will start the discussion and then we can pass it to Ravin as well. So that we looked at actually our current infrastructure environment beginning of this financial year. So we realized like with the current demand and global like security increases and stuff like that too, have a more sophisticated infrastructure environment on Azure Cloud. So like, you know, we migrated certain cloud environment from another cloud to Azure, at same time, we increase the security aspects as well. So now if you really look at the current environment, it's highly secure and high available environment on cloud. So we had to do an investment, but good news is actually, we don't have to do this investment in next few quarters. So at least like, you know, we are we are planning to continue the same cloud environment with enhanced features for next at least a good 2, 3 years. So there won't be any jump like we are expecting. Obviously cloud infrastructure will cost will increase like when we add more accounts. But there won't be huge jump in next at least like a good 4 to 6 quarters in next 2 financial years. Secondly, but Niran, I have another thanks, Sampat. Secondly, I have Niran, another question on Indian market. Given India historically is known as a market where software developers that industry is fairly advanced, how is the competition from peers in that market? So, Asankar, I think it would be incorrect to say that it is not competitive. It is very competitive. It is fiercely competitive. However, I mean, if you, if you really look at it, I mean, there's a bunch of companies that's very visible, that's spending a lot of ad spend. But if you really look at India, India in itself is a world. You have completely different extremes in terms of statutory compliance and procedures and policies. Now for us, the fact that we've been around for so long, 25 years, been in India for now more than 10 years, We are payroll compliant, we are statutory compliant across all different states in India, which some even unicorns in India who've raised 100 of 1,000,000 of dollars are not to this date. So, I mean they have different strategies. They would like to focus on one state, get a critical mass there and then go and end up in Singapore, Dubai, so on, focus on overseas growth. Some of the companies will focus on US Europe market that we are not looking at right now. So yes, it is competitive on the face of it, but if you really target a segment, I think there's a lot of opportunity. For example, right now we are focusing on, service organizations. And if you really look at the data, 80% of the leads we are generating and converting are tech companies. So these are tech companies wanting to use a solution. And then we are pan Indian, cross Indian, and we cater to all their requirements in terms of statutory compliance and then payroll compliance. Accident. Thank you, Asankar. I think there are a few more questions that have come up on the Q and A. One question is, can you give examples of B2C offerings now available in the market? Sampat, do you want to take this or shall I take it? Yeah. If primarily, like, you know, that recruitment area, there are quite interesting solutions actually available in the marketplace. So I feel like your question is available solution on the marketplace, like, you know, to offer from B2B2C environment. So like recruitment space, there are multiple solution available, benefit space like multiple solution available. And even like we are working with a couple of other solutions like blockchain related solutions and stuff like that. So this will add a lot of value to customer and also employee health and well-being area like there are a few solutions available. So we actually categorized this solution into multiple categories and each category we are adding multiple solution. 1 area is the recruitment space. Another area is the benefit area. 3rd area is health and well-being area. Likewise, different different categories, we are adding multiple solution into the current marketplace and even, like, you know, employee assessment tools. So there are a few solutions in that space as well. Also just to add something I mean if in case your question was what are the B2C offerings available for HRIS kind of players in the rest of the market outside out there, I mean there's a whole heap of things for example even financial services because an HRIS player gain provided consent is there, data privacy requirements are met with, an HRIS software would be in an ideal position to come up with a credit score than any bank would provided you have the records of payroll for 5, 10, 15 years. And you'd be in a better position to assess credit, recommend financial services, be it insurance, credit cards, loans, so on and so forth. So I think the B2C kind of space possibilities are endless. There are a few that we are working on and then we'll keep you posted as we launch them and things materialize. If I may move on to the next question, are Sri Lanka existing clients converting from the more sophisticated SaaS HR solution to turbo? Will you push this strategy? Sampat, do you want to Yes, I think our enterprise some of the enterprise customers are moving to our PFS HR cloud, may not to turbo because, turbo is a do it yourself mode product. Like, you know, sophisticated plant environment, it may be a little difficult for them to, like, you know, move to turbo directly. But right now, the trend is actually on premise to PHSHR cloud. Yes. There's a movement. Okay. If you have any more questions, you can send it in the Q and A or raise your hand so that we can give you an opportunity to post question yourself. Aniland, there's one on the chat. There's one more question. At the time of the IPO, Sanyin told that they are planning to move their regional office to Singapore to avoid the mandatory dollar conversion here. What's the update on that? Yeah, no, maybe I can take that. I don't think we ever kind of looked at it, not because of conversion. What we mentioned was that some of our regional work will be actually invoiced from the Singapore company. I think that's what we mentioned because, for example, the work that we are doing in Singapore, work we are doing in Philippines and stuff like that are actually done through a Singapore company. And currently, Ravi, that's correct. There's no mandatory conversion for us anyway now for the IT sector, right? It has been removed now from right? It has been removed now from last month only. From last month only, no mandatory conversion. Yes. Yes. So there's no on that. Yeah. So I think we also have another question on the ESOP. So we actually set up an ESOP for employees of Zenith Business Solutions, like I mentioned. And it will be effective from beginning of the year. And the ESOP is set up in a way that we actually grant it on a 4 year vesting period, and that it will be vested 1 fourth every year. And then the exercise can happen from there 3 years after that. Melinda, I'm correct, right? Just to That's right. Yes. And I think it's a very I think for me, personally, I think it's a very, very important part actually setting up an ESOP because I do really believe that employees really needs to be part of this and also they must be part of the growth of the organization. So it's very, very dear to me of getting this e sub setup from an organization standpoint and also looking at future because we need to look at, like I said, we are very, very much of a long term looking at how Sendi Business Solutions can be kind of be a very dominant regional player looking at the fact and EMEA. There's another question regarding the Gunda Phase 2. Actually, it's already as I discussed during my presentation, like we already started Phase 2. So like there's a team now already in Kampala, Uganda like, you know, to do the initial requirement study and the Phase 2 Phase 1 to Phase 2 gap identification. So it's already started. If there are any more questions, you could send it on the Q and A or raise your hand so that we can unmute your mic and facilitate you to post your question in person. We'll probably give it another minute or 2 to see if there are any questions. And one other thing I think I like to request is I think we we there were many analysts who actually was joining this call. I think it's very good if you can actually start looking at the SaaS business models and how it is and, you know, one of the objectives of our decision today was to actually educate and also to kind of have a conversation on both SaaS businesses, you know, software and service business and how those are being valued, the valuations because I think that's a very important and key metrics that we will be kind of reporting on and also the constant currency, what Milena mentioned. Because we, as an organization, we want to be one of the organizations that are very much open with everybody to talk about our plans, talk about what we are doing. And if there are things that are happening, which we need to kind of bring out, we will be very, very transparent and open about it and talk about. So that's the kind of organization that we want to build as a listed company. There's nothing more. No, Nilan? Okay. Yeah. I I think there are no more questions. I think we're at the 1 and a half hour point, so we could probably wind up if there aren't further questions. Okay. So once again, let me thank all of you for joining the call today and I hope we managed to communicate across to you how our core revenues are growing even on a USD constant currency basis with at very high teens, if not in the mid-20s, if you look at first half numbers. So we invite you to continue to engage with us as we go on this journey and share in the value creation of the company. So from an IR point of view, we will have this deep dive session for each half year period and we will have a subset of this information disseminated through our quarterly earnings presentations, which are emailed to you and as well as uploaded onto our Investor Relations page at investorrelations. Senatebiz.com. Once again, thank you very much for your engagement and participation today. We look forward to keep improving and engaging with you in the future. Thank you very much. Thank you. Thank you, everybody. Bye bye.