Gracious Software Ltd Management Discussions.

Industry Structure, Developments, Opportunities and threats

The Company has been formed to carry on the Business of providing IT services, consulting and business solutions organization and delivering results to our business clients. We also operate as reseller organization by a team of dynamic professionals with marketing, sales and technical know-how spread across various industries. We predominantly cater to Delhi and nearby markets and act as IT Distribution space. We evolved our business as a startup organization that adds value at all stages of the technology selling value chain. We deliver the value proposition right from establishing the brand and product awareness, creating demand, enlisting partners, conducting demonstrations and training and providing in depth sales and marketing support. We play the role of a Distributor and reseller offering the complete bouquet of services. We act as the vital link between the original manufacturer / developers and end users and other resellers. Distribution and resellers business of software and hardware is high volume business wherein efficient management of stock plays vital role. Higher the turnaround of materials turns better the health of business. Managing the risk of high obsolescence of inventory due to rapid technology changes and managing credit extended to channel partners is very important. We have systematic inventory management processes and strong credit management policies in place to address these business risks. We have a process to continuously monitor the ageing of stocks. Norms are placed on the extent of over-ageing of stocks which are carried on the basis of product category. We have an in house credit management team, which effectively manages our credit risk. We take into consideration the overall quality and aging of the receivable portfolio, specifically identified customer risks.

Segment-wise

Revenue of the Company is generated from only one source namely providing of IT services and consultancy. Income of the company has been at Rs. 15,583,331.00 and current year Profit is Rs. 418,129.85.

Risk and Concerns

The market for IT hardware and software are rapidly growing. We face competition from new entrants as well as existing established domestic and foreign companies in India. We expect further competition from countries with lower wage costs such as China, Philippines and Eastern Europe. Existing players are ramping up their facilities. This has resulted in rising salaries and higher attrition rates. Our competition also depends on several factors which includes rapidly changing technology changes in clients IT budgets, Slowing growth of Indian economy, and most importantly our pace in keeping up with the changing trends in Information Technology industry.

Internal control and their adequacy

The company has adequate internal control systems and procedures commensurate with the size and nature of business. The Company has proper system of disposal of assets of the company. Significant financial, managerial and operating information is accurate, reliable and is provided timely. All internal policies and statutory guidelines are complied with.

Material development in Human Resources and Industrial Relation front, including no. of people employed.

Industrial relations remained cordial and harmonious during the year under review and there was no working day loss due to any adverse activities.

Cautionary statement

Statement in the management discussion and analysis describing the companys objectives, estimates, projections and expectation may be forward looking statements within the meaning of applicable laws and regulations. Actual results could differ materially due to economic conditions effecting demand, supply, prices, change in government policies, tax laws and other incidental factors.