Chairman's Message

Dear Shareholders,

This has been a year of importance to your Company, and I take pride in writing to you at its conclusion. Till FY18, we were on a quest for efficiency that entailed consistent scaling year-on-year. FY19 marked the consolidation of all that we garnered and learned in the process, into a business marked by efficiency-driven expertise.

This is by convention in e-commerce, whereby a business must first attain scale with which come the related economies, operational learnings, and analysable data. These must then be incorporated into the business model to put the financial metrics into place. Only then can the business achieve organically sustained growth. We felt FY19 was the appropriate time to undertake the second phase of this process.

If we look at the last eight quarters, we see a qualitative shift in the revenue generated by our e-commerce business. While revenue fell, operating cash flow became positive, establishing a strong year-on-year trend across all four quarters this FY. This was the result of conscious revenue reduction, which was necessary at this juncture to solidify the financial soundness of the business.

Brand-partners, our primary customers, specialise in product development, by converting the underlying needs of the end-consumers (marketplace customers) into suitable products. Their forte does not lie in the marketplace ecosystem, defined by dynamism in technology and policies.

Over the years, we built a strong marketplace reputation and demonstrated our capabilities to brand-partners, learning the dos and don'ts throughout our journey. We captured a significant amount of data to build supply-chain archetypes. During the year, as we focused on incorporating these, we saw a critical shift in our relationship with brand-partners. Our marketplace expertise, on the bedrock of technology (our delivery engine), gives them an end-to-end solution to sell products online on marketplaces.

This collaborative engagement made us working capital-efficient. A direct consequence of this was the cash flow performance and the reduction in long-term debt, for our e-commerce business, during the year under review. We saw a perceptible impact on Accounts Payable Days.

The delivery engine enables us to service our brand-partners via a single platform, and we are now far more integrated than it was ever possible. As the flow of data continues, it will strengthen the data lake, the resulting analysis, and the value that is delivered to the brand-partners.

The US e-commerce market, specifically the marketplaces continue to spearhead growth by making e-commerce a way of life. As one of the leading players present on marketplaces and with the recalibration undertaken this year, we are readying ourselves to tap this growth efficiently and sustainably.

We believe we are at the starting point of an incredible journey. On behalf of the Board of Directors and the Management of IntraSoft, I would like to thank you for your unwavering support.

Warm regards,

Arvind Kajaria
Managing Director
28 May 2019

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