MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report have been brpared in compliance with the requirements of Listing Agreements and contain expectations and projections about the strategy for growth. Certain statements in the Management Discussion and Analysis Report are forward looking statements which involve a number of risks and uncertainties that could differ from actual results performance or achievements which such forward looking statements on the basis of any subsequent developments, information or events for which the Company do not bear any responsibility. BUSINESS OVERVIEW Sofcom systems Limited was established to provide consultancy for software development in the form of services, turnkey projects and the products for domestic and export market. The software development is targeted towards the distribution, banking, telecommunication, and manufacturing sectors worldwide. The company is also providing software maintenance, re-engineering and downsizing of software application in these market segments. Sofcom systems Limited is providing information technology solutions to both commercial and government clients, The Company is focusing on development o high performance products to meet the diverse needs of growth enterprise. FUTURE BUSINESS PROSPECTS In the last few years the domestic computer market has witnessed rapid growth. Software developers are looking to India as development and production base for their products and a number of software packages developed in this country has gained instant recognition overseas. Over the years the growth drivers for this sector have been the verticals of manufacturing, telecommunications, insurance, banking, finance and of late the fledging retail revolution. As the new scenario unfolds it is getting clear that the future growth of IT and ITeS will be fuelled by the verticals of climate change, mobile applications, healthcare, energy efficiency and sustainable energy. Traditional business strongholds would make way for new geographies, there would be new customers and more and more of SMEs will go for IT application and services. OPPORTUNITIES AND THREATS With the introduction of the concept of e-governance, both the Central and State Government are keen on implementing different projects to keep the activities of the governments transparent, timely and cost effective. There is an absolute increase in the fund allotment by the Governments for implementing the projects. This creates an opportunity for the experienced and expert organizations to broaden their horizon and support the Government in faster implementation of the projects. The increased volume of business attracts more number of players in the field and the competition becomes severe. Only the effective and efficient organizations could stand a competitive situation. The management is confident that with its exposure and experience in this field of e-governance, it stands a better chance than others. OUTLOOK The outlook of the Company remains positive. Sofcom Systems Limited is cautiously optimistic about its prospects in the coming years. The Company aims at providing high quality products and services to the customers and to provide them with greater satisfaction. For last couple of years the company has taken a number of initiatives to restructure and re- engineer the operation to enable the company to compete better in this profound competitive regime. There are no major risks and concerns except the technology up gradation and increasing power tariff and growing competition. The company is guarding itself against these risks by laying down appropriate strategy which is to be supplemented by business plans and review mechanisms. RISKS AND CONCERNS • Inherent risk to accommodate technological changes due to involvement in IT industry. • Unable to expand successfully beyond India. • No clear product vision beyond current offering. • Little brand recognition. • Increased competition from local and big players. • New technology changes. • Changes in government policies and other regulations. |