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Edited Transcript of BLSN.NS earnings conference call or presentation 25-Jun-20 9:30am GMT

Q4 2020 BLS International Services Ltd Earnings Call

NEW DELHI Jun 25, 2020 (Thomson StreetEvents) -- Edited Transcript of BLS International Services Ltd earnings conference call or presentation Thursday, June 25, 2020 at 9:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Amit Sudhakar

BLS International Services Limited - CFO

* Nikhil Gupta

BLS International Services Limited - MD & Additional Director

* Shikhar Aggarwal

BLS International Services Limited - Joint MD & Executive Director

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Conference Call Participants

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* Sanjay Dam

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Presentation

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Operator [1]

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Ladies and gentlemen, good day, and welcome to BSL International Q4 and FY '20 Earnings Conference Call. (Operator Instructions) Please note that this conference is being recorded.

I would now like to hand the conference over to Mr. Shikhar Aggarwal, Joint Managing Director of BLS International. Thank you, and over to you, sir.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [2]

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Good afternoon, everyone. This is Shikhar Aggarwal, Joint Managing Director of BLS International. I welcome you all to our earnings conference call of Q4 and financial year 2020. I have with me on the call, Nikhil Gupta, our MD; Amit Sudhakar, our CFO; and Pooja Dokania from Pareto Capital our IR Adviser.

I hope all of you and your families are keeping safe and healthy. As you all are aware, this unforeseen COVID-19 pandemic has affected everyone globally, and the travel and tourism sector is unarguably the most affected one. Almost all global destinations have imposed restrictions on travel since January 2020, including complete bans on all travel as they work to contain the pandemic. These restrictions have directly impacted our business. Some of our Visa operations in countries such as China started getting impacted from early February 2020 itself. Thereafter, over the next one month, by March 2020, almost all our operations were shut, including Visa operations and citizen services. Though some of these restrictions are getting lifted now, the situation is still fluid, and it would take us a while to reach our pre-COVID levels of business.

However, what keeps us hopeful and confident, even in these trying circumstances is our strong balance sheet and liquidity position. As you know, we have put efforts over the last few years to strengthen our balance sheet, our receivables have gone down, debt now has become 0 and cash balances have increased. With over INR 240 crore of cash, we are confident of riding out this storm. We are also focusing on streamlining and rationalizing our expenses at some of the visa centers we have and are under process of negotiating rentals.

In the post-COVID era, technology would be the main driver. Where meetings and interactions have gone virtual, we believe in investing in technology to make our service accessible to all even remotely. Merging innovative technology to our processes would ensure travel safety as well as data security. We are focusing on leveraging our proprietary technology assets to look at new avenues for expansion that will bring stability to the overall company. We have made some progress there, but would be able to share more at a later stage.

We are also getting some positive news on countries opening up travels. Europe has partially lifted the restrictions. With the partial lifting of lockdown, we have started reopening offices in a phased manner with limited staff, strength, following required social distancing norm and various advisories released by the local governments. However, the resumption of complete operations depend on the directives as maybe issued by the government of various countries. Going forward, we are even more committed to leveraging our technology and operational excellence to ensure and enhance service and customer experience in a post-COVID world. An important aspect of this is keeping our centers in peak readiness from a hygiene and safety perspective as and when they are open.

This is all from my side. I'll now hand over to Amit for updates on financial performance. Thank you.

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Amit Sudhakar, BLS International Services Limited - CFO [3]

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Thank you, Shikhar. Good afternoon, everyone. Let me take you through the financial performance for the quarter and the year ended March 31, 2020. During this quarter, we reported a revenue of INR 151 crores. For FY '20, the revenue totaled INR 786 crores, which is relatively flat compared to INR 803 crores in the preceding year. This was due to lockdown and travel ban during the last quarter of the year. EBITDA for Q4 FY '20 stood at INR 7 crores. For FY '20, EBITDA stood at INR 83 crores compared to INR 108 crores in FY '19. EBITDA margins for Q4 were impacted by a lower level of business, whereas same of the cost was fixed. We reported net profit after tax of INR 8.3 crores for Q4 FY '20 and PAT for FY '20 stood at INR 52 crores compared to INR 105 crores in FY '19. The total cash and bank balance stood at INR 239 crores on 31st March 2020, with 0 debt.

I would also like to highlight that we reported a INR 64 crore reduction in trade receivables during the fiscal. The total receivable as on 31st March stood at INR 113 crores. This includes Punjab contract receivable, which stood at INR 67.5 crore.

The Board have also recommended a final dividend of INR 0.50 per share on face value of INR 1 each. The total EBIT for the year, including interim, amounts to INR 1 per share. This is -- that is all from my side. I would request the moderator to open the call for Q&A. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We will take the first question from the line of Sanjay Dam from Old Bridge Capital.

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Sanjay Dam, [2]

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Congratulations team for a very good performance in such challenging times. The first question that I have was that when I look at your operating expenses for FY '20 it is INR 153 crores, FY '19 was INR 157 crores. So out -- of this INR 150-odd crore of operating expenses, how much of it would be fixed in nature?

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Amit Sudhakar, BLS International Services Limited - CFO [3]

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So around -- before COVID, normally the fixed cost was in the range of INR 10 crores to INR 11 crores a month. So you can work out about INR 130 crores for fixed cost.

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Sanjay Dam, [4]

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Sure. Do you intend -- any plans to change this or would it change meaningfully in the future in any way?

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Amit Sudhakar, BLS International Services Limited - CFO [5]

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Yes, yes. The whole exercise which we have done over the last 3 months after COVID-19 happened is to reduce our and rationalize our cost, fixed cost, to a major extent. So if you see the major component in this cost was the salary component and the rentals. And as on today, we have reduced it to around 40% of this, as a fixed cost. So whole intent is, the breakeven, we are trying to get it down to around 40% of the turnover, we should be able to have our breakeven working at the moment.

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Sanjay Dam, [6]

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So this INR 10 crores to INR 11 crores would roughly stand at around INR 6-odd crore...

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Amit Sudhakar, BLS International Services Limited - CFO [7]

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Perfect, INR 3 crores to INR 6 crores, as on today.

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Sanjay Dam, [8]

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Perfect. So on an annualized basis, it could be somewhere around INR 72 crores to INR 75 crores?

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Amit Sudhakar, BLS International Services Limited - CFO [9]

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See, this will change as the revenue goes up. This is what we have as the minimum when the operations are practically at a very low level.

It will grow as and when the business starts picking up. But yes, the advantage is we will now control the incremental costs. So whole intent is once the business comes to near normal, our margin percentage should go up in the future.

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Nikhil Gupta, BLS International Services Limited - MD & Additional Director [10]

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Just to clarify that these salary costs are really not fixed costs. They are really variable in our company, and they -- except for a very small amount. Okay. So if the operations come down, salaries also come down.

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Sanjay Dam, [11]

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Sure, sure, sure. And the trade receivables have come down pretty significantly to INR 112 crores, which includes that INR 67 crores from Punjab contract. Regarding the INR 67 crores of Punjab, is there any write-off or any provision you expected?

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Nikhil Gupta, BLS International Services Limited - MD & Additional Director [12]

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Let me explain that. So these last 3 months, unfortunately, have been, as you know, down and out because of the COVID. And as a result, a lot of the energies of the Punjab government have gone in that area rather than the focus on paying the vendors. So we are still absolutely on top of it. We are having discussions with the government virtually every day on this, and we expect a resolution very soon on this whole matter. And I do not believe that there will be any write-offs. If anything, there'll be gains out of this.

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Amit Sudhakar, BLS International Services Limited - CFO [13]

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We have maintained -- there is 0 write-off that we're expecting. We have recovered the entire amount of INR 67 crores till now. So I think last year also, we got around more than INR 50 crores. So this -- before this -- in the next couple of months, we expect to get 100% of the amount.

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Sanjay Dam, [14]

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Wonderful. Last question from my side, I'll come back in the queue. Of the total travel that you all have, any idea how much is business travel as a percentage of your...

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Amit Sudhakar, BLS International Services Limited - CFO [15]

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See, business travel would be a very less percentage out of the total travel because the major volumes that we do are the tourism numbers. So exact percentage, I don't know if we have segregated because for us it is the same service charge and same revenue that we generate on each application. So we have not really taken out a different category volume. But I'm pretty sure that the number is quite low in comparison to the total number of applicants that apply.

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Operator [16]

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We take the next question from the line of Rahul Kochi, individual investor.

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Unidentified Participant, [17]

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Are you guys able to hear me?

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Amit Sudhakar, BLS International Services Limited - CFO [18]

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Yes.

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Unidentified Participant, [19]

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So the first question would be like, so for this quarter, right, like the June quarter, so like you were talking about bringing down the rental cost. So like how much percentage on approximately you could say you could bring down the cost? Like it's still in the negotiations or it's already been done? And a follow-up to that, to reduce the cost side, have you furloughed employees or have you cut down their salaries? So how are you saving costs since there are no operations being currently run, right? So all your offices are shut, if I'm not wrong.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [20]

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See, Rahul, first of all, as we speak right now, at least 25% of our operations have come back alive. This majorly includes the counselor services, renewal of passport and OCI applications. Our Punjab business is fully functional and our Starfin business is fully functional. So what we have done is in the last 3 months, we have divided in 3 categories in terms of employees. We have sent some on leave without pay. The entire top management has taken a reduction of 50% of the salaries. And we have accordingly reduced the salaries in the entire company. So that is what we have done. And as we speak, we are working in 62 countries. So all our teams are talking to the landlords. In some places, we have got complete rent waivers. Some places, we have got certain reduction. So those talks are ongoing. So that is how we are managing to control our costs globally. Amit, do you want to add something?

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Amit Sudhakar, BLS International Services Limited - CFO [21]

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Yes. So basically, as Shikhar said, the whole focus is to make it variable, the salary cost with the size of the operations which we are going to do going forward. And rental is something -- another angle I can tell you that a few countries, interestingly, the government is also supporting with subsidies for rentals, like Canada and Singapore. So we are trying to get those benefits also during this period. Also, the benefit that we have in place from the competition is right now that we don't have right now multi centers, in some locations in one center. So we have the advantage of moving centers quickly, expanding or decreasing the operations very quickly. So that is what we have done in many cities where we feel the count might change the next month. So to get reduced rental, we have changed locations in some places.

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Unidentified Participant, [22]

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Okay. And a follow-up to that question, like what would be your revenues, like how much impact has it been done, like in terms of percentage? I don't want the number, but if you can give the number, it would be great. But yes, like what would be the percentage, in fact, like if you have done like your quarterly run rate, if it is INR 200 crores. So what is the revenue you are expecting for this quarter, like -- and how much longer you're expecting this impact to be?

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Amit Sudhakar, BLS International Services Limited - CFO [23]

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See, this will depend on how the COVID situation works out in the next couple of months. Frankly speaking, it's very difficult to give any numbers at the moment. But it will all depend how Europe starts opening on July. That will tell us how much revenue we will be able to move on that. There will be some backlog of travel requirement which may come immediately. But then how it will get smoothen over the couple of months is something we will have to observe. So maybe next call, it will be somewhere in August, we will be in a much better situation to have some idea.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [24]

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But still, we are expecting the profit to be stable in comparison to previous year.

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Unidentified Participant, [25]

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Okay. So when you say the profit to be stable, so are you expecting, like, what would be the fill-up for the remaining quarters, like which revenue streams would fill up for the gap which is created -- which has been created in this quarter? Like are you expecting any new things or like you expect with some existing projects it would cover up?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [26]

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Let me just give you in one line. Basically, last year, we have taken some loss from the addition of some U.K. operations. This year, there is no impact for any of that. So that is why we expect to get full amount in terms of Visa operation. Plus, on top of that, we have won some contract for which we will be starting the operation in a couple of months. So I think that will be -- and also we -- and we also won a contract from one another European government in the first -- last quarter of the year Portugal government in Russia. So we will also be expecting some additional revenue from that. We already started the operations for that in March.

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Unidentified Participant, [27]

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Okay. Gentlemen, one last question. Like for the (technical difficulty)

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [28]

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We couldn't hear you.

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Amit Sudhakar, BLS International Services Limited - CFO [29]

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We cannot hear you.

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Unidentified Participant, [30]

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Are you able to hear me now? Are you guys able to hear me now?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [31]

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Yes, yes, now we can hear you.

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Unidentified Participant, [32]

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Yes. So what I was asking was like from the Punjab government basically it is INR 67.5 crores, right? So does that amount include INR 33 crores of assets?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [33]

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Part of it, yes.

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Amit Sudhakar, BLS International Services Limited - CFO [34]

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Part of it.

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Unidentified Participant, [35]

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Okay. Congratulations on a great quarter. It was really good in spite of all the COVID impact.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [36]

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Thank you.

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Operator [37]

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Next question is from the line of [Sumit Parikh] from (inaudible).

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Unidentified Analyst, [38]

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I want to get the outlook on Spain tourism. And when will you expect to reach the pre-COVID level of Visa processing?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [39]

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See, Spain tourism, as we are discussing, the entire tourism in the world will probably grow at the same pace. And we expect to see pre-COVID level probably, right now, we can -- no one can give a horizon on that, not even the Spain government or any tourism body because situation as we speak is changing every day. But what we know for a fact is Spain has opened their borders as of 1st July for people who are traveling from outside the European area. So they have told us to slowly, gradually also open the remaining offices in the month of July. So we expect by July end all our offices should be functioning with new norms of social distancing and COVID norms. So right now, we cannot give you the exact time line when the pre-COVID level -- tourism levels will be achieved. It could be happening in the next few quarters or it could start from March, but we cannot really give you an exact date on that.

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Unidentified Analyst, [40]

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Okay. Sir, you have said that you have received 2 new orders. So in last 6 months, these are the 2 new contracts you have received, right?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [41]

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Yes. So we basically won a contract for the Portugal Embassy in Russia, for which we started the operations in March. But since the COVID came in, so we had to close out all the offices by March end. So there was not a big revenue we could generate in that duration. But when the operations resume, then we will start again the operations. So we are now right now processing also all the Portugal visa applications coming in from Russia.

And contract is in the space of digital identity card. But since we have an NDA with the government, we cannot announce right now, but we will be announcing the contract that we have already won in the next few months, for which operations will be starting by December or January. That is a new technology space that we have gotten into, BLS International. Now has become -- because of the COVID scenario, we thought that now the world will go more into technology space. That is the reason we have now gotten into new sphere of national IDs and digital ID cards. So that is what we are doing now.

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Unidentified Analyst, [42]

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Okay. Sir, regarding that, the 2 new orders you have contracted, can you please quantify what is the amount of that, if you can?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [43]

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See, I told you, I cannot, right now one is Portugal that we have started from our -- the income that we are generating from the Russian operations, it would probably increase 15% to 20% because of that order. And the new order, as and when we sign the agreement, we can announce.

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Unidentified Analyst, [44]

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Okay. Sir, want to get a sense on the growth strategy in the Visa processing business going ahead?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [45]

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Sorry, what is the question?

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Unidentified Analyst, [46]

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Sir, what is the growth strategy in the Visa processing business?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [47]

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So we are very, very -- as you know, the situation of our company is very strong in terms of cash and everything. So right now, we expect, after this COVID scenario is over, the demand for travel to even resume at a very big level. So there's a lot of pent-up demand. People are inquires -- there are inquiries because there's a problem right now in getting there. That is why there is a lot of traveling. So we expect, first of all, the numbers in our existing operation to grow up very drastically as we see that BLS is now, again, on a growing spree. This year, we started another, with a new government like Portugal, and there are many new tenders that right now are happening currently also. There will be some delay in the results because of COVID, but we expect the growth trajectory for the Visa business to continue in the coming years for our company as we grow.

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Unidentified Analyst, [48]

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Okay. Sir, are you looking for any inorganic opportunities right now?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [49]

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Yes. See, as you know, we are continuing always to explore organic and inorganic opportunities, right now because of COVID scenario also there are very -- some lucrative opportunities that will be coming up. So we will be definitely looking. Our main aim is to make BLS International one of the largest players in outsourcing services globally. So we are always -- we are thinking about things how we can leverage potential from other companies or newer technologies.

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Operator [50]

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We take the next question from the line of [Muskan Solanki] individual investor.

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Unidentified Participant, [51]

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Hello, am I audible?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [52]

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Yes, please.

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Amit Sudhakar, BLS International Services Limited - CFO [53]

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Yes.

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Unidentified Participant, [54]

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So I have a few questions around the strategy of the citizen services vertical. So what are the growth tactics that you're looking at to grow this vertical?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [55]

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See, we are basically right now focusing on technology solutions. For example, even our Punjab contract now, we are focusing on a lot of services, wherein the physical interaction with the citizen does not take place. So we can offer some services on our tech -- technology platform. So we are now looking at services wherein we can integrate the technology solutions that we have developed in-house, plus we have also tied up with some start-ups wherein we are utilizing their technology solutions. So we are now looking at citizen services from technology perspective, wherein we can use our technology and maybe people don't have to -- all of them -- certain categories of people don't have to come and physically visit us. We can offer them biometric solutions, other solutions sitting from their house. So we are also focusing on citizen services from that perspective.

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Unidentified Participant, [56]

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Okay. Okay. And currently, how much is the citizen services vertical contributing to your revenue? And what does that trend look like moving forward? How much focus will be given to this vertical?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [57]

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Our technology services, which include our citizen services and our banking corresponding services right now contribute portion of around 10% to 12% of our total revenue. And going forward, I feel that this portion should grow. We are targeting maybe in the years to come, in the next year, probably there should be some growth and next to next year, we should increase this percentage by more than 7% to 8%. So we should get -- our share of these services should increase to 18% to 20% in 2 years' time because we are right now focused on some solutions that already are undergoing some pilot with the government, wherein because the government takes time to understand these new technologies. So I feel the revenue share would go up.

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Unidentified Participant, [58]

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Okay. And how about the contracts in this vertical? What have they been like in the last 6 months? And how do you see the future pipeline evolving?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [59]

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See, the last 6 months, practically everything was halted because of the COVID scenario. So whatever contracts were coming in were halted. But there are now -- again, government, again, they have started publishing the tenders and whatever the tenders were halted now they've again started coming up. So we see in the next 1 or 2 years to see at least 7 to 8 tenders in citizen service space. But on top of that, we see a lot of tenders in the national ID space. What we have done for particular government that we will be processing the biometric ID cards for residency in that particular country. So that business, we see a huge scope. There are big companies doing multiple business in that space. So we have recently entered into that field by acquiring this tender. So we feel that the potential in that field is quite huge. There is business awarded every year upwards of INR 6,000 crores to INR 7,000 crores in the digital ID space. So that is what BLS is now also focusing on other than our Visa business, where we feel the future is there and the business growing.

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Unidentified Participant, [60]

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Okay. Got it. And if you were to describe your competitive advantage in terms of the tech-enabled offerings that you speak about, how would that compare to maybe a large competitor like VFS or maybe tech companies like TCS are also offering some customized solutions?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [61]

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See, our advantage, what I feel is that we have already physically handled these services. So maybe the tech company who will be proposing solutions for them have never physically handled. So we understand the problems that actually exists. So you cannot really, in one day, shift the customer base who have been coming to your center for these citizen services. You really need to know the nuisances. So I feel this is the advantage that we have that physically already having dealt with them we understand the problems and accordingly, we have developed the solutions. So these big companies have never gotten into this field, the Indian IT companies. But there are some big companies in foreign space which are in the national ID and other space, wherein we are now getting into.

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Operator [62]

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Next question is from the line of [Piyush Jain] from (inaudible) Investments.

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Unidentified Analyst, [63]

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Just one question I had. How much cash burn we are expecting...

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Operator [64]

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Mr. Jain, I'm so sorry to interrupt. Requesting you to please speak a bit louder. Sir, your audio is not audible.

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Unidentified Analyst, [65]

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Can you hear me now?

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Operator [66]

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Yes.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [67]

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Yes, yes. Now we can hear you.

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Unidentified Analyst, [68]

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I just have one question. How much cash burn we are expecting in this financial year?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [69]

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In this financial year -- we will be making profit in the financial year.

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Unidentified Analyst, [70]

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We'll be making profits. There are no expectations in terms of the cash burn?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [71]

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No, no, no. Whatever -- we will still be stable. As we told you already, from the last year scenario, we expect this year also to be stable in terms of profitability. But we are vying towards that.

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Amit Sudhakar, BLS International Services Limited - CFO [72]

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See whole idea wherein we discuss on rationalizing our costs was to ensure that even if at 40% volumes, we are able to make a cash breakeven situation and then take it more from there.

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Operator [73]

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We will take the next question from the line of Sanjay Dam from Old Bridge Capital.

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Sanjay Dam, [74]

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Just wondering, so like in Punjab, so there has been a track record of the services that you have provided. Have there been any inquiries from other state governments on the citizen services and other allied services?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [75]

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Nikhil, you want to add?

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Nikhil Gupta, BLS International Services Limited - MD & Additional Director [76]

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Shikhar, I'll answer this?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [77]

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You can.

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Nikhil Gupta, BLS International Services Limited - MD & Additional Director [78]

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Okay. See, basically, the services that we are providing are under something called the right-to-service act. Right now each state is following its own process of how they would offer these services to the citizen. Many of them have done it through the CFC while Punjab government has taken a view that they want a branded solution, which we are running for them. So each state is still in a space -- in a situation where they are looking at what is the right solution and allowing individuals to operate these services is not giving the brand or the consistency in the quality of service. So we expect that things will settle down, change and then new tenders will come up in a bigger way than they have come up so far.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [79]

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But at the same time, Nikhil, visits have happened, as you are aware, from foreign governments also and from state governments to see our Punjab model. And basically, the visits have been organized by the state governments.

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Nikhil Gupta, BLS International Services Limited - MD & Additional Director [80]

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That's right. So we've got the -- sorry, I should have added that. There have been 7 countries which we are in discussions with, who are looking at what the solution that we have offered in Punjab and whether they can adopt it in their countries. We are helping them to put it together. But because of this last 3-month situation, a lot of that has come to a bit of a standstill, but it will get revised quickly.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [81]

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A lot of ambassadors also from various embassies in Delhi have visited our Punjab centers and they are talking to their countries -- respective countries, what is the scenario? How can things be implemented there?

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Sanjay Dam, [82]

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In a post-COVID world, this should get implemented at some point in time.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [83]

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See, even now. Good thing is in post-COVID world what is happening is some services of embassies, which they wanted to keep to themselves like national services or dealing with their citizens, they normally are very finicky on outsourcing those kind of services. Even they are now interested in outsourcing all these kind of services also because they don't want to deal with customers. So for us, this is also we can take it as a good opportunity going forward because all these services, governments want to outsource more. Wherever you see governments dealing with citizens, they feel there is a risk in maintaining the adequate social norms and those systems -- it is difficult from a government perspective. So they want to outsource even those services. So we are right now in talks with these government for these services. And just to announce also, we have got some -- we have also, for example, now travelers going forward will need to get testing for COVID certificates. They will need to get COVID certificates to attach for the Visa application. So we have got some inquiries from embassies. In fact, we have tied up with some embassies wherein we will be using our partners to do the testing. So because it is a part of our scope because it's essential people need to get these documents when they come and apply for visa.

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Operator [84]

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(Operator Instructions) We take the next question from the line of [Kiran Sera from Sera Investments].

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Unidentified Analyst, [85]

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Sir, can you throw some light on this exceptional item of INR 27.82 crores?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [86]

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Which one?

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Amit Sudhakar, BLS International Services Limited - CFO [87]

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Exceptional item of INR 27....

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Unidentified Analyst, [88]

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INR 27.82 crores for March '20.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [89]

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See, this was in the Q2. We have booked -- we have to close our UKVI operations in Saket. And then -- at that time the impairment of the assets, which were there in the books because the business we closed, we have taken that hit of onetime of INR 27.8 crores.

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Unidentified Analyst, [90]

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Okay. So this INR 23.82 crores is after writing off this INR 27.8 crores?

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [91]

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Which one?

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Unidentified Analyst, [92]

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That is a different thing. In note number 3 (foreign language).

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [93]

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Okay. Thank you.

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Operator [94]

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(Operator Instructions) There looks like no further questions in the queue. I hand the floor back to you Mr. Shikhar Aggarwal for your closing comments.

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Shikhar Aggarwal, BLS International Services Limited - Joint MD & Executive Director [95]

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Thank you, everyone, for your participation in our Q4 FY '20 earnings call. In case of further queries, you may get in touch with Pareto Capital or feel free to get in touch with us. We look forward to interact with you next quarter. Stay safe and healthy. Thank you.

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Operator [96]

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Thank you. On behalf of BLS International, that concludes this conference. Thank you all for joining. You may now disconnect your lines.