CCS Infotech Ltd Management Discussions

1. Industry structure and development:

Your Company is among Indias leading Information Technology Solutions provider. Your Company has wide range of expertise in Systems Integration and e-Governance including Hardware Solutions, Software Development and Networking Services. Your Company is into manufacture of computers and export of IT products from India.

Your Company presently has the following divisions:

1. Manufacturing: Your manufacturing Plant is situated at Puducherry and has got ISO 9001:2008 certifications.

2. System Integration: Your Company has partnered with leading IT hardware Companies and has bagged many System Integration projects.

3. Services AMC/FMS: Your Company is providing AMC/FMS to leading companies in different business verticals.

4. Projects and Solutions under BOLT/BOOM: Your Company is presently executing BOLT projects for Public Sector Undertakings and working to achieve 100% growth year on year in this segment.

5. E-Governance: Your Company is presently doing citizen services in Andhra Pradesh and working to get new orders.

Our clientele strength has been the key success to our growth. We have a long-term association with all our clients and many referral clients are added to clientele year on year. Your company is catering to customers in Government, Education, Defense, Health care, Corporate and SME verticals.

2. Outlook on opportunities, threats, risks and concerns:

The demand for computers and computer peripherals has grown rapidly over the years and is still increasing due to large penetration in rural areas. The demand is more in select verticals due to cost saving during the worldwide economic slowdown.

In 2014, the Global Computer Hardware Manufacturing industry is expected to generate revenue of $585.4 billion (up 2.1% compared with revenue in 2012) and employ almost 3 million people. Tablet and laptop sales represent a major driver of the industry. Worldwide unit PC shipments are expected to remain stagnant or have a slight negative growth in the coming year.

The computer software and hardware manufacturing industry is characterized by significant research and development activity and rapid technological change. The rapid pace of innovation in this sector creates a constant demand for newer and faster products and applications. While the sector, according to the Bureau of Labor Statistics, has grown faster than most other industries over the past several decades, it faces challenges from rising costs, global market share, and the rapid pace of innovation.

Entry of smart phones and hand held devices has become a threat for personal computing products like laptops, tablets and desktop computers. With the phenomenal success of open source platforms like android for these devices the conventional computing devices are loosing its sheen in personal computing. This is a major concern for system manufacturers worldwide.

3.Outlook:

The IT industry after rapid growth has recorded a negative growth this year as per IDC reports. However your company has stopped executing low margin orders and is foraying into renewable energy markets. This move will yield better result in the coming years and your company is expected to grow at a better rate.

4. Internal control systems and their adequacy:

The Company has adequate internal control procedure to ensure efficient use and protection of the resources and compliance with the policies, procedure and statutes. The internal control system provides well documented policies, guidelines, and authorization and approval procedures.

5. Discussion on financial performance with respect to operational performance:

The Total Revenue of the company for the year under review was Rs.4378 lakhs as compared to Rs.10195 lakhs during the previous year. During the year the company has earned a profit of Rs.1.62 lakhs.

6. Material developments in performance in Human Resource/Industrial Relations front, Including number of people employed:

The Company regards its human resource amongst its most valuable assets and proactively Reviews and evolves policies and processes to attract, retain requisite skill sets covering technical and managerial functions through a work environment that encourage initiative, provide challenges and opportunities and recognizes the performance and potential of its people.

7. New Initiatives:

Your Company has entered into renewable energy solutions and Digital signage solutions recently and expects this will give better growth to your Company.

For and on behalf of the Board of Directors

M.A. Hasan Abdul Kader

Chairman & Managing Director

Place: Chennai

Date: 01-09-2013.