HSenid Business : Interim Financial Statements as at 30th September 2022

INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30th SEPTEMBER 2022

HSENID BUSINESS SOLUTIONS PLC, NO 50, WARD PLACE, COLOMBO 07.

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HSENID BUSINESS SOLUTIONS PLC

Chief Executive Officer's Review

______________________________________________________________________________

Dear Shareholders,

The new financial year continues to progress on a positive note, recording favourable growth across our key business segments and regional operations.

hSenid Business Solutions (hBS) recorded a revenue of LKR 397.2 million for the three months ending 30 September 2022, compared to LKR 209.7 million in the corresponding quarter of the previous financial year. This amounts to a year-over-year growth of 89% (27% growth in USD terms on constant currency basis), driven by improvements in operations across all segments, in particular the core PoeplesHR products. Recurring revenues came in at 44%, driven by PeoplesHR Cloud. For the first six months, cumulative revenues were LKR 704.9 million, recording a 71.7 percent year-over-year growth.

Group earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at LKR 56.8 million for the quarter, compared to LKR 37.9 million in the previous financial year. Growth in revenues helped offset the impact from an increase in operational expenses for the quarter. Cumulative EBITDA for the first six months was LKR 268.2 million, up from 69.1 million in the previous financial year.

Net profits for the quarter under review came in at LKR 57.9 million, compared to a profit of LKR 15.3 million in the corresponding quarter of the previous financial year. Earnings were also aided by favourable interest income for the quarter. This results in an earnings per share (EPS) of LKR 0.21 compared to LKR 0.07 in the second quarter of the previous financial year.

hBS secured LKR 131.0 million in new deals during the quarter under review, a growth of 49.3 percent year-over-year. PeoplesHR Cloud contributed to 59.0 percent of the new deals, while regionally Sri Lanka was the key contributor.

Expansion into Bangladesh is on track, with hBS closing several large ticket deals during 2Q FY23. In addition, the second phase of the Ugandan Government project is expected to be implemented during the second half of FY23. PeoplesHR Turbo continued to gain traction in India with the product being successful in onboarding a number of new clients during the quarter. We continue to focus on expanding the product within India and expect Turbo to be a key product catering to SME businesses in the APAC region.

We continue to focus on the strategic objectives set forth at our IPO, including product development initiatives, market expansion and exploring potential strategic acquisitions in APAC and East African Regions.

Sgd.

---------------------------------

Sampath K. Jayasundara

Chief Executive Officer

31 October 2022

Colombo

HSENID BUSINESS SOLUTIONS PLC

STATEMENT OF FINANCIAL POSITION

	GROUP		COMPANY
	Unaudited		Audited		Unaudited		Audited
AS AT	30.09.2022	31.03.2022	30.09.2022	31.03.2022
	Rs.		Rs.		Rs.		Rs.
ASSETS
Non-Current Assets
Property, plant and equipment	33,182,992	20,060,449	32,508,373	19,717,549
Right of use Assets	32,716,060	28,233,890	27,934,970	20,478,877
Intangible assets	255,893,477	214,888,450	248,984,938	206,040,983
Goodwill on acquisition	2,008,131	2,008,131	-	-
Investments in subsidiaries	-		-		136,859,362		136,859,362
	323,800,660	265,190,920	446,287,643	383,096,771
Current Assets
Inventories	27,450,867	29,685,786	27,450,867	29,685,786
Trade and other receivables	761,019,124	530,067,272	801,104,961	600,858,289
Advances and prepayments	93,105,290	66,315,496	24,951,381	8,389,732
Other current financial assets	1,114,785,090	1,083,462,924	1,114,785,090	1,083,462,924
Cash and bank balances	300,307,454		413,247,696		175,194,289		215,679,628
	2,296,667,825		2,122,779,174		2,143,486,588		1,938,076,359
Total Assets	2,620,468,486	2,387,970,094	2,589,774,231	2,321,173,130
EQUITY AND LIABILITIES
Capital and Reserves
Stated capital	922,748,205	922,748,205	922,748,205	922,748,205
Currency translation reserve	16,182,216	13,097,441	-	-
Retained earnings	1,103,850,726		926,700,879		1,198,427,380		1,007,913,613
Total Equity	2,042,781,147	1,862,546,525	2,121,175,584	1,930,661,818
Non-Current Liabilities
Retirement benefit obligation	78,683,720	80,744,970	78,683,720	80,744,970
Interest bearing borrowings	2,312,995	4,277,354	2,312,995	3,658,420
Deferred tax liability	1,822,942		1,822,942		1,829,107		1,829,107
	82,819,657	86,845,266	82,825,822	86,232,497
Current Liabilities
Trade and other payables	335,428,836	319,021,712	231,230,189	191,942,453
Deferred income	101,453,205	81,481,592	101,453,204	81,481,592
Interest bearing borrowings	46,432,858	31,989,169	41,536,650	24,768,940
Income tax payable	11,552,782		6,085,830		11,552,782		6,085,830
	494,867,682		438,578,304		385,772,825		304,278,816
Total Equity and Liabilities	2,620,468,486	2,387,970,094	2,589,774,231	2,321,173,130

These financial statements are in compliance with the requirements of the Companies Act No. 7 of 2007.

0.00	0.09	0	0
Sgd.

Raveen Lasath

Head of Finance

The Board of Directors is responsible for these financial statements. Signed for and on behalf of the Board by;

Sgd.	Sgd.
Sampath Jayasundara	Malinga Arsakularatne
CEO/Director	Director
October 31, 2022
Colombo

HSENID BUSINESS SOLUTIONS PLC

STATEMENT OF COMPREHENSIVE INCOME - GROUP

		For the three Months ended	For the six Months ended
		Unaudited		Unaudited	Change	Unaudited		Unaudited	Change
		30.09.2022	30.09.2021	%	30.09.2022	30.09.2021		%
		Rs.		Rs.		Rs.		Rs.
Revenue	397,242,791	209,742,480	89%	704,977,364	410,206,614		72%
Cost of sales		(208,000,242)		(117,975,393)	76%	(392,650,566)		(248,022,560)		58%
Gross profit	189,242,549	91,767,086	106%	312,326,799	162,184,054		93%
Other income	3,564,944	2,162,971	65%	197,035,012	3,791,037		5097%
Administrative expenses	(92,818,298)	(42,207,121)	120%	(160,186,128)	(74,462,948)		115%
Selling and marketing expenses	(53,142,961)	(17,959,442)	196%	(96,756,475)	(32,345,127)		199%
Finance cost	(2,949,538)	(2,371,319)	24%	(3,948,847)	(2,683,083)		47%
Finance income	49,741,591	3,249,025	1431%	71,970,431	3,952,719		1721%
Other operating expenses	(25,493,787)	(19,053,219)	34%	(48,768,212)	(37,045,536)		32%
Profit before tax	68,144,499	15,587,982	337%	271,672,580	23,391,116		1061%
Tax (expense)/reversal	(10,164,330)	(310,733)	3171%	(11,514,120)	(1,415,503)		713%
Profit for the period	57,980,169	15,277,249	280%	260,158,460	21,975,613		1084%
Other comprehensive income
Exchange Gain/(Loss) on translation of foreign
operations	(200,362)	5,719,293		3,084,775	2,079,280
Re-measurements of defined benefit obligations	-	-		-	-
Deferred tax on Re-measurements of defined
benefit obligations	-	-		-	-
Total comprehensive income for the period	57,779,807	20,996,542		263,243,235	24,054,893
Profit for the period
Equity holders of the Company	57,980,169	15,277,249		260,158,460	21,975,613
Non-controlling interest	-	-		-	-
Total comprehensive income/profit for the period
Equity holders of the Company	57,779,807	20,996,542		263,243,235	24,054,893
Non-controlling interest	-	-		-	-
Earnings Per Share - Basic	0.21	0.07		0.94	0.10

HSENID BUSINESS SOLUTIONS PLC

STATEMENT OF COMPREHENSIVE INCOME - COMPANY

		For the three Months ended	For the six Months ended
		Unaudited		Unaudited	Change %	Unaudited		Unaudited	Change %
		30.09.2022	30.09.2021	30.09.2022	30.09.2021
		Rs.		Rs.		Rs.		Rs.
Revenue	311,171,347	159,961,132	95%	574,310,715	315,262,311	82%
Cost of sales		(150,620,962)		(75,304,624)	100%	(294,210,218)		(170,546,529)	73%
Gross profit	160,550,385	84,656,507	90%	280,100,497	144,715,782	94%
Other income	597,357	1,080,821	-45%	192,118,631	1,799,397	10577%
Administrative expenses	(78,047,084)	(31,848,386)	145%	(130,401,280)	(53,541,729)	144%
Selling and marketing expenses	(43,174,623)	(15,693,532)	175%	(77,824,811)	(28,476,545)	173%
Finance cost	(2,876,043)	(2,359,304)	22%	(3,774,950)	(2,647,230)	43%
Finance income	49,741,591	3,249,025	1431%	71,970,431	3,952,719	1721%
Other operating expenses	(24,669,549)	(18,322,804)	35%	(47,152,018)	(35,900,437)	31%
Profit before tax	62,122,035	20,762,326	199%	285,036,500	29,901,957	853%
Tax (expense)/reversal	(10,164,330)	-	N/A	(11,514,120)	(1,104,770)	942%
Profit for the period					150%				850%
	51,957,705	20,762,326	273,522,380	28,797,187
Other comprehensive income
Exchange Gain/(Loss) on translation of foreign
operations	-	-		-	-
Re-measurements of defined benefit obligations	-	-		-	-
Deferred tax on Re-measurements of defined
benefit obligations	-	-		-	-
Total comprehensive income for the period		51,957,705		20,762,326		273,522,380		28,797,187
Profit for the period
Equity holders of the Company	51,957,705	20,762,326		273,522,380	28,797,187
Non-controlling interest	-	-		-	-
Total comprehensive income/profit for the period
Equity holders of the Company	51,957,705	20,762,326		273,522,380	28,797,187
Non-controlling interest	-	-		-	-
Earnings Per Share - Basic	0.19	0.09		0.99	0.13