maars software international ltd Management discussions

MAARS SOFTWARE INTERNATIONAL LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS Economic Scenario: The country which was termed underdeveloped till a few decades back has shown the world its great potential. Moving along slowly with accurately measured footsteps India is surely trading on. The recent all round growth and development has made people across the globe realize the importance of India as a powerful economy. The economic scenario in India has been pretty stable over the last 3 years. Despite the economic downturn three years back the Indian economy has managed to remain stable. Indias GDP growth in 2010-2011 has not been phenomenal but is certainly encouraging and forced other powerful economies to take notice of it. The country today, despite all odds is showing signs of health, wealth and vigor. * Overview: The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, guidelines issued by Securities and Exchange Board of India (SEBI) and Generally Accepted Accounting Principles (GAAP) in India. Our Management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs, profits and cash flows for the year. * Industry Structure and Developments: Changing economic and business conditions and rapid technological innovation are creating an increasingly competitive market environment that is driving corporations to transform their operations. Consumers of products and services are increasingly demanding accelerated delivery times and lower prices. Companies are focusing on their core competencies and are using outsourced technology service providers to adequately address these needs. The role of technology has evolved from supporting corporations to transforming them. There is an increasing need for highly skilled technology professionals in the markets in which we operate. At the same time, corporations are reluctant to expand their internal IT departments and increase costs. These factors have increased corporations reliance on their outsourced technology service providers and are expected to continue to drive future growth for outsourced technology services. Technology, especially information technology has transformed business by creating productivity gains and new business models in the last decades. This has resulted in the increased importance of IT to the success of companies worldwide. Changing economic and business conditions, rapid technological innovation, proliferation of the internet and globalization are creating an increasingly competitive market environment that is driving corporations to transform the manner in which they operate. Customers are increasingly demanding improved products and services with accelerated delivery times and at lower prices. To adequately address these needs, corporations are focusing on their core competencies and are using outsourced technology service providers to help improve productivity develop new products, conduct research and development activities, reduce business risk, and manage operations more effectively. The role of technology has evolved from supporting corporations to transforming them. The ability to design, develop, implement, and maintain advanced technology platforms and solutions to address business and customer needs has become a competitive advantage and a priority for corporations worldwide. Concurrently, the prevalence of multiple technology platforms and a greater emphasis on network security and redundancy have increased the complexity and cost of IT systems, and have resulted in greater technology related risks. The need for more dynamic technology solutions and the increased complexity, cost and risk associated with these platforms have created a growing need for specialists with experience in leveraging technology to help drive business strategy. * Opportunities and Threats: Opportunities: India, in the recent years, is witnessing higher investments in infrastructure activities, so the atmosphere for the IT Industry is expected to be more conducive in the time to come. There is an increasing need for highly skilled technology professionals in the market in which we operate. At the same time, corporations are reluctant to expand their internal IT department and increase costs. These factors have increased Corporations reliance on their outsourced technology service providers and are expected to continue driving future growth for outsourced technology services. India is fast developing as a IT Hub and the premier destination for offshore technology services. According to NASSCOMs strategic review 2007, the Indian IT-BPO sector would achieve USD 60billion in export revenue by FY 2010 we believe that our robust quality process and our access to skilled talent base at lower cost of providing services places us in a unique position to take advantage of the trend towards outsourcing IT Services. There is a significant amount of competitions from Indian and Foreign Companies operating in the similar segment. Intense competition for the limited quality talent and skilled professional required to perform the services we offer is a significant threat, looking ahead. These risks are broadly country risks. At an organizational level we have well-defined contingency plans to address the unforeseen events and minimize their impact on the services delivered. * Outlook: The Global IT Industry is expected to grow at a rapid rate for next coming years. The offshore spending of the IT Industry itself is expected to grow at a rapid rate for example In the Countries Like Middle East, where IT investments hitherto were in the nascent stage, have increasingly stepped up their spend on harnessing higher automation and digitization. Not only this ITES/BPO is expected to grow at a much higher rate. The ITES/ BPO is expected to give rise to maximum off shoring opportunities in the near future. Risk and Concerns: Besides increasing the client base, the Company needs to retain its current clients by providing timely quality services. The Company must look for emerging business opportunity in the growing demand for IT professionals across industries. Internal Control Systems and their adequacy: The Company has in place the internal control systems and procedures commensurate with the size and nature of its business. These procedures are designed to ensure that: All assets and resources are used efficiently and are adequately protected. All internal policies and statutory guidelines are complied with. There is accuracy of financial reports and management information. Audit Committee has been entrusted with detailed terms of reference to review and look into proper recording of transactions and preparations of financial statement. One of the important functions of the Audit Committee is to review the adequacy of internal control systems and compliance thereof. * Human Resource Development: The Companys progress is largely attributed to the wholehearted support from its manpower. The technical team were constantly challenged for quality performance and expected to work with an entrepreneurial spirit on the project. For and on behalf of the Board Chairman & Managing Director Ms. Sanhita Dey (Company Secretary) Date : 8th September 2011 Place: Chennai