Compucom Software Ltd Management Discussions.


The Company operates in areas like e-governance projects, ICT education projects, software design & development, electronic Media, IT &media training and learning solutions, wind power generation etc. Pipeline projects underway in hospitality, food processing, cold-chaining and commodity trading sectors.

Our Strategic objective is to build a sustainable organization that remains relevant to the agenda of our clients, while creating growth opportunities for our employees and generating profitable growth for our investors.

These financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 and guidelines issued by the Securities Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, and relevant amendment rules issued thereafter.


In FY 2019, the global market for software and services is estimated to have grown to $1.4 trillion. IT Services is estimated to have grown by 3.2% YoY, driven by strong growth in digital engagements, particularly cloud adoption. Business Process Management grew by 4.5% over the prior year, on account of greater focus on automation.

Indias it &ITeS industry grew to US $ 181 billion in 2018-19. Exports from the industry increased to US $ 137 billion in FY 19 while domestic revenues (including hardware advanced to US $ 44 billion.

Currently, India has over 2.4 lakhs secondary schools with more than 38 million enrolled students of which 17 million students are enrolled in near 1 lakh government schools. Further, 85,343 schools have been approved for ICT out of which 62,917 schools are under implementation for the ICT project and 22,426 schools are yet to be implemented indicating strong demand for ICT project in the schools. However, this outlook of the industry needs to be looked with caution, as the current trend seems challenging due to government policy reasons. Thus, the Company is targeting new customer segments and market verticalsin order to leverage existing land bank and the to continue the steady rate of diversification it has maintained over the years.

One such upcoming project is a 4 star hotel property in Jaipur which the Company wishes to build and operate with existing best practices and an integrated self sustaining supply chain, as far as possible, with backward integration from a cold chaining and food processing project being set up nearby. According to IBEF, during 2018, foreign tourist arrivals (FTAs) in India stood at 10.56 million, achieving a growth rate of 5.20 per cent year-on-year. FTAs in January 2019 stood at 1.10 million, up 5.30 per cent compared to 1.05 million year-on-year. International tourist arrivals are expected to reach 30.5 million by 2028. Jaipur is a major city in both international and domestic tourism circuits. As of FY 19, existing inventory of hotel rooms (branded, all categories) in Jaipur stood at 5,426, up from 5,058 and 4,129 respectively in immediately preceding years. The YoY growth for rooms inventory stood at 7.3% and CAGR at 5.6%, which were well above the average for top 11 tourism cities at 5.9% a piece for both figures. The proposed supply, as per CARE ratings will be around 1089 new rooms by end of FY 23 with upper-midmarket and midmarket segments grabbing the biggest chunks (38.6% and 30.5%) in this new inventory.



a. ICT in Govt. Schools: India is one of the worlds largest education markets, with 445mn of the 1.3bn population comprising the target group (5-20 ages) of the education sector. The ICT in schools scheme is a window of opportunity to bridge the digital device gap in India. The scheme is a comprehensive initiative to open new vistas of learning and provide a level playing field to school students of rural areas. Compucom is a passport for fulfilling career in computer literacy, providing students with hands-on courses to stay abreast with the requirements of the IT world and moreover Compucom is one of the prominent players for ICT SchoolProjects, which are projects funded by Government of Indiaand State Governments in 60:40 ratio. Compucom undertakes large projects that are similar in nature with a turnkey project, from setting-up of computer labs to imparting computer education and other computer aided learning program for government schools. These projects also involve supply of computer hardware, software and connected accessories as well as imparting of education services for a specified time (generally 3-5 years). Government having recognized the importance of IT in education as being fundamental to the development of a globally competitive economic and democratic society as well as placing India on the world IT map, now focus mainly on providing computers and computer literacy Programme in Government schools. Compucom has shaped the lives of millions of students by introducing computer literacy to the students in Government Schools.

Leadership in Information and Communication Technology (ICT) is expected to be maintained by the Company. So far Compucom aims to usher an era of anytime, anywhere learning to break down the barriers to education.

We believe Compucom would witness good growth, in the next Financial Year execution of new orders will increase top line as well as improve bottom line.

The Government in order to streamline the school education projects has merged the Rashtriya Madhyamik Shiksha Abhiyan (RMSA) and SarvaShikshaAbhiyan(SSA) under the aegis ofSamagra Shiksha Abhiyan (SMSA) as an effort to universalize Secondary and Elementary Education by community-ownership of the school system. It is a response to the demand for providing quality school education across the country. The Samagra Shiksha Abhiyan (SMSA) is also an attempt to provide an opportunity for improving human capabilities through provision of community owned quality education. It aims to provide useful and relevant Secondary and Elementary education for all children within the 6-18age groups. The Programme also aims to bridge social, regional and gender gaps, with the active participation of the community in the management of schools. The increased allocation to the Samagra Shiksha Abhiyan (SMSA) will have a positive impact on all the IT training companies including Compucom as there would be increased allocation to computer training as well. The budget has also been positive for the IT-Training companies with increased allocation to the Samagra Shiksha Abhiyan (SMSA). Along with this, the demand for corporate training is increasing with more and more companies outsourcing training to specialized IT training companies hence the growth of the IT-Training companies will be further boosted. Skill training focus of Government under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is also going to prove beneficial to our company in the near future.

b. Software & E-governance Services:Traditionally the company has been focusing on software export market but the way India is emerging as a power house economy, many more software service opportunities in Government sector are emerging in areas of power utilities, Education, Rural Development, Infrastructure Development, etc. Our company has put significant efforts in harnessing this E-Governance business.Our company is also serving overseas clients by providing software development, testing and maintenance and customer support services. The company has developed its own news portal which works in conjunction with its satellite TV Channel and has added shimmer to the companys brand image and generated new business opportunities.

c. Media Services: Your companys subsidiary CSL Infomedia Pvt. Ltd. has successfully completed seventh year operation of its Satellite TV Channel "JAN TV" which is a vehicle of Educational, Financial, Social and Political change. This Channel offers Education, News, Employment, Skill Development, Agriculture, Tourism, Healthcare, Religious, Sports, Entertainment and News and Current Affairs based Programme. The Channel is available on all major Cable Networks in Rajasthan and across the globe through its portal and on android, iPhone/ iPad mobiles through its mobile app available on Google Play store and Apple Store. Jan TV is also available on Reliance JIO TV which is already having 22 Crore subscribers. CSL Infomedia Pvt. Ltd. has also started another Satellite TV channel Jan TV Plus which is an infotainment channel. Both Jan TV and Jan TV Plus channels have been empaneled with Department of Information and Public Relations (DIPR) Government of Rajasthan. Jan TV has subscribed to BARC (Broadcast Audience Research Council) for Television Audience Measurement services. JAN TV is recently empaneled with DAVP (DIRECTORATE OF ADVERTISING AND VISUAL PUBLICITY)

d. Hospitality Sector:Since the Indian tourism & hospitality industry has emerged as one of the key drivers of growth among the services sector in India, and being located at Jaipur, which is among the preferred destination of domestic as well as international tourists, Compucom has decided to venture into this sector. Therefore, we have been constructing a four starred Hotel on our existing piece of land at IT 12-13 Sitapura Industrial Area,requiring phased investment of total20 to 25 crore rupeesapprox. This project has been partly funded by the State Bank of India.


a. Competitive pressures:IT is one sector that is spreading its wing fast throughout the world and India is becoming a preferred destination for global IT players. As a result the competitive pressure is intensifying. The Company has to operate in this competitive scenario and acquire a grip on the market to hold its foot firmly and upkeep the brand name.

b. Talent supply constraint: Both, the IT as well as the manufacturing sector seek Talent. This increases the cost of the talent. The Company has to ensure that it acquires good talent and retains it in order to constitute its major competitive edge. The Company maintains excellent work environment and competitive package for this purpose.

c. Technology Obsolescence:These are the days when technology takes no time to become obsolete. Thus, to be at par with its competitors the company has to ensure that it constantly updates and upgrades its technology.

d. Exchange Rates:Since the company uses India as a major source of manpower, the exchange rate of the rupee vis-a-vis the US-dollar and other currencies affect its ability to compete. The Company attempts to minimize the foreign exchange exponent by taking appropriate measures wherever required.

e. Government Policies:As and when there is a change in the Government, there might be a change in its policies too. Any adverse changes in its policies may affect the business operations of the Company.

f. Downturn in industries being served:Any downturn in the industry being served could have an impact on the Companys business.

III. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE: Detailed information about segment-wise performance of the company are as follows:

Information about reportable segments

A. Information about primary segments


Year ended March 31, 2019

Year ended March 31, 2018

Business Segment Allocated Unallocated Total Allocated Unallocated Total
Software 282 - 282 401 - 401
Learning 5997 - 5997 4028 - 4028
Wind Power 180 - 180 141 - 141
Segment revenue 6459 - 6459 4570 - 4570
Software 234 - 234 302 - 302
Learning 5975 - 5975 4074 - 4074
Wind Power 135 - 135 115 - 115
Segment Expense 6344 - 6344 4491 - 4491
Segment Results
Software 48 - 48 99 - 99
Learning 22 - 22 (46) - (46)
Wind Power 45 - 45 26 - 26
Segment Results 115 - 115 79 - 79
Less: expenses - 30 30 - 30 30
Add: Interest income - - - - - -
Add: Other unallocable income - 548 548 378 378
Profit before tax and exceptional items - - 633 427
Less: Exceptional item - - - - - -
Profit before tax - - 633 - - 427
Tax expenses - - 91 - - 131
Other Comprehensive income - - 13 - - 13
Profit for the year 555 309

B. Information Based on Geography

Particulars For the year ended March 31, 2019 For the year ended March 31, 2018
Revenue by geographical segment
India 6859 4672
USA 148 276
Total 7007 4948

Reconciliation between segment revenue and enterprise revenue

(In Lacs)
Particulars For the year ended March 31, 2019 For the year ended March 31, 2018
Segment Revenue
Software 282 401
Learning 5997 4028
Wind Power 180 141
Total Segment Revenue 6459 4570
Enterprise Revenue
Revenue from operations 7007 4948
Less: Other operating revenues (548) (378)
Add: Export Incentives - -
Total Segment Revenue 6459 4570


The Company has a positive outlook for the coming year and endeavors to achieve a steady business performance in the coming year. This is however, subject to risks and uncertainties given below.


They are, but not limited to, risks and uncertainties regarding fluctuating earnings, interest rates, exchange rates, the Companys ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increase, earnings and exchange rate fluctuations, intense IT competition, Government policies, ability to attract and retain skilled professionals, time- cost over-runs on fixed price contracts, client concentration, ability to manage the international marketing and sales operations as well as the local operations, alterations of the government fiscal incentives, political instability, legal framework and above all general economic conditions affecting the industry.


The Companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Companys internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements.

The Company has a robust internal audit program, where the internal auditor, conduct a risk-based audit with a view to not only test adherence to policies and procedures but also to suggest improvements in processes and systems. Their audit program is agreed upon by the Audit Committee. Internal audit observations and recommendations are reported to the Audit Committee, which monitors the implementation of such recommendations.


Financial Performance:

Income:The Company derives its income from Software& E-Governance services, sale of software products, learning solutions including skilling and placement activities, IT education and training, Wind Power Generation, and treasury income. Treasury income mainly includes interest on FDRs.

(Rs. in lakhs)
Particulars 31.03.2019 31.03.2018
Software & E-Governance Services - Overseas 148.25 275.80
Domestic 133.41 125.22
Learning Solution 5997.26 4028.32
Wind Power Generation 179.96 140.70
Other Income 547.93 377.83
Total 7006.81 4947.87

a. Software Services: Software development at overseas level has shown degrowth due to lower orders.E-Governance projects at domestic level has shown slight improvement. However, the Company is bidding for new project aggressively in the current Financial Year.

b. Learning Solution: Learning Solution comprises imparting computer education in Govt. Schools, skilling and placement activities, providing computer educationto general public through Franchisees and Authorized Business Associates (ABAs) and IT finishing school. During the financial year this segment showed increase due to revenue from two new projects namely 1172 school project and 303 school project of ICT-V, of Rajasthan Government Project.

Regarding the learning solution apart from the ICT and CALP Projects of Government schools, the company indulges in providing skill development training to engineering&other curriculum batches, as well as government & other employees.

c. Wind Power Generation: The Company has set up five wind power plants two in Sikar and two in Jaisalmer, Rajasthan and one in Krishna, Andhra Pradesh. Enercon [Wind World] India Limited now renamed as Wind World India takes care of the wind power project for the company and deals on behalf of the company with all regulatory bodies. This segment has shown an increase of Rs. 39.28 lakhs compared to previous year, mainly due to favorable flow of wind and higher maintenance cost.

d. Foreign Exchange Risks/ Exposures: The Company operates from India with execution facilities in USA. A significant portion of revenue, expenses related to Software business is carried out in US foreign exchange exposure for the last two years is mentioned below:

(Rs. in Lakhs)
Particulars 31.03.2019 31.03.2018
Revenue in Foreign Currency 148.25 275.80
Revenue Expenses in Foreign Currency 0 0
Capital Expenses in Foreign Currency - -
Net Exchange Earning 148.25 275.80

The reason of fall in revenue in foreign currency is due to lower overseas workorders.


Particulars 31.03.2019 % of Total Revenue 31.03.2018 % of Total Revenue
Total Revenue 7006.81 100.00 4947.87 100.00
Purchase of stock in trade 3128.32 44.65 189.96 3.83
Changes in inventories 189.96 2.71 (189.96) (3.83)
Manpower Expenses 453.96 6.48 506.53 10.24
Learning Solution Execution Charges 1155.88 16.50 1097.68 22.18
Administrative & Other Expenses 340.83 4.86 1614.37 32.63
Finance Cost 199.08 2.84 100.20 2.03
Depreciation 905.38 12.92 1202.28 24.30
Profit Before Tax 633.40 9.04 426.81 8.63
Exceptional Items 0.00 0.00 0.00 0.00
Provisions For Income Tax 90.61 1.29 130.87 2.64
Other comprehensive income 13.03 0.19 11.93 0.24
Profit After Tax 555.82 7.93 307.87 6.22

Interest: The Company relies on the internal accruals and/or term loans for financing the IT/ ICT projects awarded by the Government. Interest paid during the year amounted to Rs. 134.18 Lacs and Company has not defaulted in the payment of principal and interest during the year.

Significant increase in total revenue is due to revenue from two new projects namely 1172 school project and 303 school project of ICT-V, of Rajasthan Government project.

Purchase of Rs. 3128.32 lakhs and inventory of Rs. 189.96 lakhs includes those for these two new projects. Finance cost during the current year is higher due to financing for these new projects. During the previous year Bad debts and SLA deductions were to the extent of Rs. 1346.42 lakhs which were not required during the current year.

Operational Performance:

Share capital:The Company has only one class of shares namely equity shares. The face value of the share is Rs. 2/- per share. The paid up capital of the company is Rs. 15,82,50,376/-

Reserves & Surplus Fixed Assets :

(Rs. in Lakhs)

Particulars 31.03.2019 31.03.2018 Particulars 31.03.2019 31.03.2018
Profit & Loss Account 7902.35 7454.78 Gross Block 9243.44 19108.42
General Reserves 1484.79 1484.79 Accumulated depreciation 7468.58 16942.32
Securities Premium 1352.96 1352.96 Net Fixed Assets 1774.86 2166.10
Capital Reserve 209.22 209.22 Total Revenue/Net Block 3.95 2.28
Other Comprehensive Income 36.79 23.76
Total 10986.11 10525.51 Acc.Dep. as % of Gross Block 80.80 88.66

Investments: The details of investment made by the company are as under:

(Rs. in Lakhs)
Particulars 31.03.2019 31.03.2018
Equity Investments in ITneer Inc.(100% subsidiary) - 439.24
Equity Investments in CSL Infomedia Pvt Ltd. 455.00 455.00
Equity Shares 2.37 2.84
Investments in Mutual Funds 87.88 57.88
Other Investments 16.62 15.94
Total 561.87 970.90
Non-Current &Current Liabilities: (Rs. in Lakhs)
Long-Term Borrowings 265.41 0.00
Deferred Tax Liabilities (Net) 0.00 0.00
Other Long Term Liabilities 641.88 630.15
Long-Term Provisions 57.32 67.32
Short-Term Borrowings 238.18 280.90
Trade Payables 66.33 95.76
Other Current Liabilities 856.67 344.21
Short-Term Provisions 1017.16 1129.85
Total 2415.12 2511.25
Long Term Loans and Advances & Other Non-Current Assets: (Rs. in Lakhs)
Long Term Loans and Advances 1271.43 1399.81
Other Non-Current Assets 101.80 136.92
Deferred Tax Assets (Net) 226.88 89.45
Other Financial Assets 860.61 0.00
Total 2460.72 1626.18
Current Assets: (Rs. in Lakhs)
Trade Receivable 5685.25 4639.19
Cash and Bank Balances 3880.53 3306.07
Short Term Loans and Advances 1348.33 1757.81
Stock in trade 0.00 189.96
Total 10914.11 9893.03

Trade receivables are mainly related to Govt. Schools of Rajasthan. These debtors are considered good and are realizable.


Human resource development is paramount in every organization. The management continues to lay emphasis on identifying and developing talent on organization with a view to retain them and impart further training to those capable of handling additional responsibilities. This works to increase employee satisfaction within the organization, by providing employees with fresh challenges. Developing people and harnessing their ideas is of high priority for the Company.

The Companys employee count stood at 532 as of March 31, 2019.


In accordance with the SEBI (Listing Obligations and Disclosures Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to immediately previous financial year) in key sector-specific financial ratios. In the Financial Year 2018-19 the changes in the key sector-specific ratios is not more than 25% as compared to immediately previous financial year.

During the year the Company maintain the specific ratios as follows:

Debtors Turnover Ratio 1.25
Inventory Turnover 34.94
Interest Coverage Ratio 5.72
Current Ratio 5.01
Debt Equity Ratio 0.25
Operating Profit Margin (%) 3.40
Net Profit Margin (%) 7.75
Basic EPS (Rs.) 0.70


Return on Net Worth is computed as net profit by average Net Worth. Net Profit was increased from Rs. 308 Lakh in the previous financial year to Rs. 556 Lakh in the current financial year due to this return on net worth is higher at 4.32% as compared to the previous financial year by 1.88%. The Profit is increased due to new project opted by the Company.


This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be forward looking statements within the meaning of applicable securities laws and regulations. Forwardlooking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forwardlooking statements on the basis of any subsequent developments.

For and on Behalf of the Board of Directors
Compucom Software Limited
sd/- sd/-
Surendra Kumar Surana Vaibhav Suranaa
Managing Director & CEO Director
(DIN: 00340866) (DIN: 05244109)
July 27, 2019