MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL KPO INDUSTRY

TechNavio's analysts forecast the Global Knowledge Process Outsourcing (KPO) market to grow at a CAGR of 23.12 percent over the period 2013-2018. One of the key factors contributing to this market growth is the massive availability of data that needs to be analyzed and processed. The Global Knowledge Process Outsourcing market is also witnessing the transformation of the KPO industry into a consultative model.

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IT INDUSTRY OVERVIEW

According to NASSCOM, in financial year 2014-15, India's information technology and business process management (IT-BPM) industry has accounted for revenues of $146 billion, growing by 13 percent over last year. Industry exports are over USD 98 billion growing at 12.3 per cent.

During FY 2015-16, industry's exports are estimated to grow 12 to 14 per cent at $20 billion, with domestic revenues up 15 to 17 per cent at Rs. 3,629 billion. NASSCOM reports also stated that the industry added 230,000 employees in 2014-15, and provided direct employment to more than 3.5 million people and indirect employment to over 10 million people.

The NASSCOM Strategic Review 2015 also showed a shift in which segments like engineering, research and development, and digital emerged as outperformers. Engineering, research and product development revenues were $20 billion. Business process management was at $26 billion and digital revenue, which rebrsents social, mobility, analytics and cloud computing, grew from 4 per cent of the industry's export revenues to 12-14 per cent in 2014-15.

The spending on new technologies like cloud, mobility and analytics is expected to hit $10 billion (about Rs. 60,000 crore) by 2020. The spending is estimated to grow at a CAGR of over 24 per cent from about $3.3 billion (about Rs. 19,800 crore) as against the overall IT growth of 11.7 per cent.

Between 2015 to 2020, it was estimated that SMAC spending by the enterprise and government sectors together of USD 37 billion. The software and services component of SMAC will grow the fastest.

IT services (>USD 13 billion) and software products (>USD 4 billion) segments are the next fast growing segment at 10 per cent and 12 per cent respectively. IT services are being driven by SMAC-cloud enablement, custom developing application for mobiles. With the return of focus on infrastructure projects (largely in later half of 2014-15), there is an uptick in demand for SI and IT consulting.

Government Initiative

Cloud computing is one of the thrust areas in the national IT and ITeS policy.

In order to benefit from cloud, the Department of Electronics and IT (DeitY) has taken an ambitious project known as 'GI Cloud'. The 'GI Cloud' is the Indian government's initiative to enable the government (both Centre and States) to leverage cloud computing for effective delivery of e-Services.

In the twelfth Five Year Plan (2012-17), the Department of Information Technology proposes to strengthen and extend the existing core infrastructure projects to provide more horizontal connectivity, build redundancy connectivity, undertake energy audits of State Data Centers (SDCs) etc. The core infrastructure including fibre optic based connectivity will be leveraged and additional 150,000 Common Service Centres (CSCs) will be setup to create the right Governance and service delivery ecosystem at the Panchayats.

Opportunities & Threats: Opportunity

During the last year, MTTL has signed a contract with a Germany based product development company in Salesforce cloud platform using latest information technologies. A new ODC has been created for this client and it has started operations recently, this opportunity to develop product using latest cloud and mobile technologies will keep the Company on a higher platform in IT Services.

Threats

Following are some of the major risks any business faces and tries to address the same through corporate actions:

Financial Risks - includes foreign currency rate fluctuations, liquidity and leverage.

Legal and Statutory Risks -includes contractual liabilities & statutory compliances. Competition Risks - New competitors may enter the markets in which your company operates. Outlook

Company's net sales have grown by 6% in 1st quarter of current year, and sales growth will accelerate with revenues adding up from the IT division. Company expects to achieve improved growth in the rest of the year. With revenues being added from new vertical of IT, Company's future looks bright. Company's traditional PEB and structural engineering services are also finding growing demand which will augur well to grow in next few quarters.

Risks and Concerns:

The risk management process is continuously improved and adapted to the changing global scenario. Company is always cautious and brventive about strategic, operational and financial risks across various levels which are applicable to any business; the company does not foresee any serious areas of concern. Company's services mainly based on human resources, company is aggressively taking care of employee satisfaction and facilities to mitigate the any risk. The company is obtaining adequate insurance coverage for its assets.

Internal control systems and their adequacy:

The Company has in place adequate systems of internal control commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies.

The Company has a well-defined delegation of power with authority limits for approving revenues as well as expenditure. Processes for formulating and reviewing annual and long term business plans have been laid down. The management of risks and opportunities in the Company's activities. The internal audit process is designed to review the adequacy of internal control checks in the system and covers all significant areas of the Company's operations.

Discussion on financial performance with respect to operational performance

The details of financial performance of the company are in the Balance sheet, Profit and Loss Account and other financial statements appearing separately. Highlights for the year 2014-15 are as under:

Human Resources:

The HRD department has been suitably enlarged to handle increasing number of skilled manpower in the

KPO Division. The company continues to benchmark and build its HR practices to help attract, retain and develop requisite talent to support its growth. HR's ability to support business strategy with its human capital strategy is an important determinant to the company's future business performance. The company has put in place robust recruitment processes and helped scale critical engagements in a very short span of time. The principle feature of the company's HR strength is its multipronged talent acquisition and retention strategy.

Employee/ employer relations were cordial throughout the year. Measures for safety of the employees, training and development continued to receive top priorities. HR at Mold-Tek plays a key strategic role to support the organization and its various ecosystems in achieving various goals and targets set by deploying best practices and measures.

Cautionary Statement:

Certain statements in the Management Discussion and Analysis describing the company's views about the Industry, expectations/ brdictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those exbrssed in the statement. Company's operations may inter-alia affect with the supply and demand situations, input prices and their availability, changes in Government regulations, tax laws and other factors such as industrial relations and economic developments etc.