tricom india ltd Management discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Industry Overview

IT Industry is continues to outperform in the Financial Year 2015-16. It is growing with remarkable achievement. Countrys IT potential is paramount for its march towards global competitiveness, healthy GDP and meeting up energy and environmental challenges. The Indian IT and ITeS sectors go hand in hand in every aspect. India is one of the fastest growing IT services market in the world and it is also the worlds largest sourcing destination accounting for approximately 52% of the US $124-130 billion market.

Advantages

• Cheap Labour

• Affordable real estate

• Favourable Government regulations

• Tax Breaks and Special Economic Zone

• Indian Insurance companies also plan to spend on IT products and services in future years also.

Disadvantages

Implementation Expenses: Small businesses fail to afford this expensive technology so they end up losing their clients to a business which has improved its technology and provides a better service or product.

Job Elimination: Technology has replaced most positions which humans used to occupy. Accounting is now being done by software, so accountants run out of opportunities.

Security Breaches: Since businesses store their data on remote cloud servers which can be accessed with a user name and password, they risk losing that data to wrong minded knowledge works, hackers or viruses, which can harm to business.

Risk and Concerns

The risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in earnings and exchange rates, the Companys ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed price contracts, client concentration, restrictions on immigration, our ability to manage our international marketing & sales operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, liability for damages on our service contracts & product warranty, the success of the companies in which the Company has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on acquiring companies outside India, and unauthorized use of our and our customers intellectual property, the latter when in our possession as well as general economic conditions affecting our industry and repayment capability of customers in current market scenario.

The Company is well aware of these risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions.

Internal Control System:-

The Company has adequate internal control systems and procedures commensurate with its size and nature of business. The internal control system is backed up by well documented policies, guidelines and procedures and the Companys internal audit process is designed inter alia, to cover all significant areas of the Companys operations such as accounting, finance, inventory, insurance, treasury etc. The adequacy and effectiveness of the Internal Control Department is reviewed by the Audit Committee of the Board which recommends control measures from time to time.

Human Resources:-

Committed and motivated employees are your Companys most important assets and in this spirit Company keeps focus on its human resources. We are committed to create a transparent organization that helps our employees hone their skills and enable them to deliver superior performance.

Cautionary Statement:-

Report may contain certain statements that the Company believes are, or may be considered to be forward looking statements that describe our objectives, plans or goals. All these forward looking statements are subject to certain risks and uncertainties, including but not limited to, Government action, economic development, risks inherent to the Companys growth strategy and other factors that could cause the actual result could differ materially from those contemplated by the relevant forward looking statements.