MANAGEMENT DISCUSSIONS AND ANALYSIS
Industry Scenario & Review
The domestic IT sector comprises of Computer hardware - manufacturing and selling andIT services- software development, implementation, IT infrastructure and facilitymanagement services. The financial year 2011-12 witnessed challenges. The pricingcompetition for computer hardware continued with MNC and unbranded products puttingpressure on margins.
Performance & Review
IT Services
After careful evaluation and to utilize available resources and expertises, the companydecided to restructure its IT business and diverted its focus on IT services.
The IT sales and Services has recorded a Gross Turnover of Rs. 13619 Lacs and netprofit of Rs. 157.75 lacs as against previous year's turnover of Rs. 18486 Lacs and thenet profit of Rs. 71.53 Lacs.The Company continued to give more focus on IT Servicebusiness over the computer hardware sales.
Operations
In view of restructuring of business, the management decided that computer hardwarebusiness is no longer contributing to profit and cash flow therefore, it diverted itsfocus more on IT and IT enabled services.
Other products such as Laboratory and Hospital Management solutions, GPS have performedin promoting sales and the Company is looking for overseas markets of Africa and UAE.
Opportunities, Threats & Risks
The Company was operating its computer hardware business in an environment which isvery competitive with declining margins. The growth prospects of the domestic computerhardware sales remained subdued as company faced pricing competition, technologicalobsolescence and thin profit margins resulting in low operating profits. As stated above,after careful evaluation, the Company decided to restructure its business to look for moreopportunities in IT and IT enabled Services.
Future Outlook
The Company is one of the leading managed services provider for IT infrastructures.Withthe growth in IT Infrastructure and Company's PAN India presence coupled with strongexisting client relationship, the Company is well placed and able to meet potentialbusiness opportunities. The Company will continue to develop and improve service offeringsin IT infrastructure and Facility Management to clients. However, we may face competitionfrom IT and ITES companies operating on large volume services.
The company will continue to give its focus on other products i.e. Laboratory andHospital Management solutions.
Overseas Subsidiaries
PCS International Ltd., Mauritius
The Laboratory and Hospital Management Solutions have started looking for newopportunities from medical sector in Middle East, West Asia and African markets.
PCS Technology USA, Inc.
The US subsidiary Company did not avail business during the year due to almost stagnanteconomic situation.
Indian Subsidiary
PCS Positioning Systems (India) Limited
The plans are under way to revive the business in near future.
Internal Control and Adequacy
The Company has a proper and adequate system of internal control to ensure that all theassets are safeguard, protected against loss from unauthorised use or disposition andthose transactions are authorised, recorded and reported correctly. The internal auditreports are reviewed for corrective actions wherever required. The views of statutoryauditors are also considered to ascertain the adequacy of the internal control system.
Human Resources
Human resources are a valuable assets and Company seek to attract and retain the besttalent available. Systematic training, development, continuance of productivity andemployee satisfactions is some of the highlight of human resources development activitiesduring the year. Employee relations continued to be cordial. Your Directors acknowledgeand thank employees for their continued contribution.
Cautionary Statement
Statement in this Management Discussions and Analysis describing company's objectiveand predictions may be "forward looking statement " within the meaning ofapplicable laws and regulations. Actual results may differ from those expressed herein.Important factors that could make difference to the operations include Governmentregulations, tax structures, and country's economic development, availability of input andtheir prices and other incidental factors.