Lee & Nee Software (Exports) Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW AND OUTLOOK

The global economy is expected to slow, according to the OECDs latest Economic Outlook. The Economic Outlook projects Global growth at 3.0 percent for 2025 and 3.1 percent in 2026, an upward revision from the April 2025 World Economic Outlook. This reflects front-loading ahead of tariffs, lower effective tariff rates, better financial conditions, and fiscal expansion in some major jurisdictions.

As one of the fastest-growing economies, India is poised to become a global leader in artificial intelligence (AI). Indias AI market is growing at a CAGR of 25-35% and is projected to reach around $17 billion by 2027. The UN Report Projects Indias GDP growth at 6.6% in 2025 , down slightly from 6.8% in 2024, and returning to 6.8% in 2026. This strong performance is attributed to robust private consumption, investment, infrastructure spending, and export demand (especially in pharmaceuticals and electronics). AI has significant potential to boost Indias GDP, with projections estimating contributions of hundreds of billions to over a trillion dollars by 2030, driven by increased productivity in sectors like agriculture and manufacturing, a burgeoning IT services sector, and advancements in generative AI .

Artificial Intelligence:

The world is changing at breakneck speed ?€” reshaped by digital disruption, global shifts, and technological breakthroughs.

Your company has made a strategic partnership with MyWave, a leading global provider of AI solutions for SAP. This collaboration positions Lee & Nee as a frontrunner in Indias AI adoption, empowering businesses to achieve unprecedented levels of efficiency and productivity through cutting-edge Gen-AI technology.

Your company has also partnered with few more AI development companies for providing AI solutions like Chatbots, Conversational AI and AI Agents. These solutions will help the customers to improve their efficiency in operations and reduce their manpower cost.

ERP: ENTERPRISE RESOURCE PLANNING

Enterprise resource planning (ERP) is business process management software that provides seamless communication and real-time data for businesses, and is an extremely helpful tool that centralizes all islands of information and streamlines it to multiple departments in an enterprise. Enterprise Resource Planning (ERP) is software that integrates a companys core business processes?€”like finance, human resources, manufacturing, and supply chain?€”into a single, unified system and database. By providing a "single source of truth," ERP systems eliminate data duplication, automate tasks, improve operational efficiency, and offer real-time insights into business performance, making them essential for managing organizations of all sizes.

The most fundamental advantage of ERP is that the integration of a myriad of business processes saves time and expense. Management can make decisions faster and with fewer errors. Data becomes visible across the organization.

The global Enterprise Resource Planning (ERP) market is a large and growing sector, with a market size estimated at $135.9 billion in 2024. Key player include Oracle , SAP , Microsoft , and Workday , with North America holding a significant share of the market. The global ERP software market is projected to reach $179.8 billion by 2029, according to Apps Run The World . The market is experiencing a compound annual growth rate (CAGR) of 5.7%.

Key Players and Market Share:

Oracle: Leading the market with a 6.6% share, according to LinkedIn .

SAP: A major player with a 6.5% market share.

Microsoft: A significant competitor, holding 25.74% of the market by customer count.

Workday: Also a major player, with 11.83% market share.

Other notable vendors: I nfor , Epicor , NetSuite , and Acumatica , among others.

SAP:

SAP SE, or SAP, is a global company that provides enterprise applications and business AI. SAP Business One is a single, integrated solution that provides clear visibility into the entire business and complete control over every aspect of your operations. It captures all critical business information for immediate access and use company- wide. Unlike accounting packages and spreadsheets, it delivers what you need to manage your key business areas.

Because every business is different, SAP Business One is designed with flexibility in mind. Whether its deployed on premise or in the cloud, you can access SAP Business One at anytime, anywhere via any mobile device. And because SAP Business One runs on both the SAP HANA® and Microsoft SQL server platforms, one can choose the one that suits their business best.

Your company is a Partner of SAP, the market share leader in ERP

SAP has evolved to become a market leader in end-to-end enterprise application software, database, analytics, intelligent technologies, and experience management .SAP helps businesses of all sizes and in all industries to operate profitably, adapt continuously, and achieve their purpose. Your company promoted SAP Business One which is an ERP for Small to Medium Size Enterprises.

BizERP for manufacturing sector

Your company has developed a cloud based ERP Solution for manufacturing & trading industries. It comprises of all the modules that is required for any business to operate. It has been deployed in many industries like Steel, Plastic, FMCG, Industrial Products, and Leather etc. This is developed using the dot net platform which is highly secured. The company is continuously making enhancements to this product so that it can be reached out to various other companies.

Spine HR - HRMS & Payroll Solutions:

Your company is fostering its collaboration with SPINE Technologies who is pioneer in the HRMS & Payroll Solution. It offers all the modules on SaaS model. It is a very robust product and we are representing them as their Channel Partner for Eastern India. The company has acquired many reputed customers in this year and looks forward to many more customers in the coming years.

DIGITAL MARKETING:

The company offers Digital Marketing services to many clients in India as well as overseas. There is a huge demand for these services in the entire world. There is a huge growth of business in this area. With vast experience and in-depth knowledge, our experts serve multiple industries across the world with robust solutions fit for modern ?€“ day businesses. Your company provides 360 degree Digital Marketing Agency that helps your business grow consistently. And to do so the company offers following services to its clients:

SEO : Search Engine Optimization

SMO : Social Media Optimization

SMM : Social Media Marketing

PPC : Pay-Per-Click

LINKEDIN MARKETING

GOOGLE MY BUSINESS PAGE

EMAIL MARKETING

CONTENT MARKETING

VIDEO MARKETING

MOBILE APPLICATIONS:

India adds the highest number of internet users per year, vs. any other country in the world. More importantly, over 60% of consumers access the internet via their smart phones.

As per MRFR analysis, the India Mobile Application Market Size was estimated at 11.09 (USD Billion) in 2023. The India Mobile Application Market Industry is expected to grow from 12.2(USD Billion) in 2024 to 40.51 (USD Billion) by 2035.

Big business firms look for a product that helps them to tap in among the target audience, to help them compete with other business and stay ahead of them.

At Lee & Nee Softwares (Exports) Ltd, we have expertise in developing mobile applications for different platform and Mobile devices such as:

Hybrid Mobile Development.

Native Mobile Development (Android/ iOS)

Unlocking Business Potential Through Custom App Development Custom Mobile Applications

As businesses increasingly adopt digital-first strategies, custom mobile applications have become a powerful tool for driving efficiency, transparency, and customer engagement. Unlike generic solutions, custom apps are designed to address the specific needs of each business , helping them improve decision-making, streamline operations, and gain a competitive edge.

At LNSEL, we have successfully developed and deployed such solutions across industries like Manufacturing and tracking investments for family office.

Key Benefits of Custom Mobile Apps:

Tailored to business needs and processes

Enhanced real-time visibility and control

Improved efficiency and faster decision-making

Greater customer and stakeholder satisfaction

Cloud Solutions: Driving Agility and Operational Excellence

Cloud computing continues to be a key enabler of digital transformation across industries. By offering on-demand access to scalable computing resources?€”including storage, processing power, and software?€”cloud solutions eliminate the need for traditional on-premises infrastructure. This shift empowers businesses to focus on their core operations while leveraging powerful, cost-effective, and flexible computing capabilities.

The transition from on-premises systems to cloud-based architectures is accelerating, driven by the need for agility, innovation, and cost optimization. Leading ERP vendors are actively migrating their platforms to the cloud, reflecting an industry-wide

shift. Enterprises are increasingly adopting cloud strategies to house mission-critical applications, streamline operations, and reduce capital expenditure.

Our commitment to cloud adoption is not only improving our operational efficiency but also ensuring we remain agile and resilient in a rapidly evolving digital landscape.

Your company has also been involved with Cloud Solutions. We are partners with world leaders like AWS (Amazon Web Services) and Microsoft Azure for offering robust cloud solutions to its customers.

Challenges Faced by the IT Industry

The Information Technology (IT) industry continues to evolve rapidly, shaped by ongoing digital disruption, increasing client expectations, and complex operational demands. As innovation accelerates, organizations must continuously adapt to navigate a competitive and often volatile environment. Lee & Nee Softwares (Exports) Ltd. acknowledges the following key challenges, along with its proactive strategies to address them:

Continuous Technology Upgradation

The pace of technological advancement is relentless, requiring IT firms to consistently upgrade systems, platforms, and skillsets. Staying relevant in a constantly evolving ecosystem is critical to sustaining business growth.

Lee & Nee Softwares (Exports) Ltd. invests continuously in modernizing its technology infrastructure to align with emerging market trends and client requirements. The Company also emphasizes continuous learning and upskilling, providing regular training programs to employees to ensure preparedness for future-ready technologies.

Cybersecurity and Data Protection

With increased digitization comes heightened exposure to cyber threats. Organizations leveraging AI, robotics, and cloud platforms are particularly vulnerable to sophisticated attacks, with implications ranging from financial loss to reputational damage.

Cybersecurity remains a top priority. The Company maintains a robust and secure IT environment and adheres to globally recognized security standards such as ISO 9001:2015. We conduct regular risk assessments, implement updated security protocols, and ensure compliance with data protection regulations. Periodic audits and network reviews are conducted to safeguard client and internal data assets.

Intensifying Market Competition

The IT sector is marked by intense competition?€”both in client acquisition and talent retention. Price sensitivity, rapid innovation, and evolving client expectations heighten the need for differentiation.

Lee & Nee Softwares (Exports) Ltd. has strengthened its market position through deep domain expertise, a client-centric approach, and enhanced technological capabilities. The Company is recognized as a preferred employer in the sector, owing to its strong employer brand, progressive HR practices, and nurturing work environment.

Infrastructure and Operational Readiness

IT companies must ensure high availability, secure data environments, and seamless connectivity to support round-the- clock operations. Inadequate infrastructure can disrupt delivery capabilities and impact client satisfaction.

The Company maintains robust infrastructure with secure systems, scalable data storage solutions, and reliable networks that support uninterrupted operations. Our infrastructure is continuously evaluated to align with scalability, security, and performance benchmarks .

Regulatory and Compliance Pressures

As IT services expand into regulated sectors such as FinTech and Healthcare, adherence to industry-specific compliance frameworks and global data protection laws becomes more complex and critical.

Lee & Nee Softwares (Exports) Ltd. ensures compliance with all applicable legal, industry, and regulatory standards. The Company is committed to ethical operations and global best practices in governance, risk management, and compliance (GRC).

Talent Acquisition and Retention

The shortage of skilled and employable talent?€”particularly in emerging technologies?€”remains a persistent challenge in major IT hubs. Coupled with rising employee costs, this can impact productivity and project delivery.

The Company places significant emphasis on building and retaining a high-quality workforce. Through competitive compensation packages, a positive work culture, and continuous learning opportunities, Lee & Nee Softwares (Exports) Ltd. ensures a strong employee value proposition and long-term talent engagement.

While challenges in the IT industry are expected to persist, Lee & Nee Softwares (Exports) Ltd. remains agile and resilient. By embracing innovation, investing in people and infrastructure, and maintaining high standards of governance and security, the Company is well-positioned to deliver sustained value to clients and stakeholders in the years ahead.

Segment-wise / Product-wise Performance

Given the uniformity in the geographical location and the nature of the Companys core business?€”Information Technology Enabled Services (ITES)?€”separate segmental reporting is not applicable for the year under review. All operations are carried out within the same segment and region, eliminating the need for distinct reporting based on geography or product classification.

Future Outlook

The Indian IT industry remains on a strong growth trajectory, driven by digital transformation, government-led initiatives, and the global demand for scalable, technology-enabled solutions. However, to stay competitive and relevant, the sector must proactively embrace emerging technologies, invest in talent, and adapt to evolving client expectations.

Key factors shaping the industrys future include :

Artificial Intelligence (AI) & GenAI Integration

Artificial Intelligence, particularly Generative AI, is poised to redefine the IT landscape. According to India Business Trade , over 95% of organizations have identified GenAI as a key investment priority over the next 6?€“12 months, which is expected to significantly drive IT spending. Companies that embed AI capabilities into their core offerings will be well- positioned to lead the next wave of innovation.

Talent and Workforce Dynamics

As Per The Hindu Business Line , IT firms will need to scale up hiring to meet the demands of expanding digital projects and increased client spending. Skill enhancement and retention of quality talent will be critical to maintaining competitive advantage, especially in high-demand areas such as cloud computing, AI, cybersecurity, and enterprise software.

Market Growth and IT Spending

According to IDC , IT spending in India is projected to grow 11% to $44 billion in 2024.

Gartner forecasts an even more optimistic outlook, with spending expected to reach $138.9 billion, marking a 13.2% increase from 2023

The IT services market itself grew by 6.6% in 2023, with a projected CAGR of 7.3% through 2028, reaching $20.7 billion by the end of the forecast period ( IDC ).

Opportunities and Challenges

The Indian IT sector continues to benefit from:

A vast and skilled talent pool

Growing demand for digital transformation across industries

Supportive government policies and infrastructure investments

However, challenges such as the evolving technology landscape, global competition, talent shortages, and increasing wage costs will require strategic agility and innovation.

Strategic Direction for Lee & Nee Softwares (Exports) Ltd.

Recognizing these industry shifts and opportunities, the Company has identified new business avenues and strategic focus areas:

Artificial Intelligence (AI) & GenAI:

The Company is actively exploring partnerships and development in AI technologies, including platforms like Mywave.ai , to embed intelligence into software solutions and enhance client value. The company has partnered with leading technology providers to offer advanced solutions such as Chatbots, Conversational AI, and AI Agents for automation . Looking ahead, we plan to expand and enhance our AI-driven offerings in line with evolving customer needs and market demand.

Enterprise Solutions Expansion :

Plans are underway to collaborate with leading technology partners to deliver ERP and CRM software solutions, tailored to evolving business needs.

Product and Market Diversification :

The Company aims to scale its offerings in:

AI Solutions

ERP Solutions

HRMS & Payroll Solutions

Digital Marketing Tools

I ndustry-Specific Solutions:

Niche software products have been developed to address specific verticals, opening new revenue streams in both domestic and international markets.

The Company anticipates significant growth in the upcoming fiscal year, with increasing demand from global and domestic clients for robust, scalable, and intelligent IT solutions.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Lee & Nee has deployed adequate Internal Control Systems (ICS) in place to ensure a smooth functioning of its business. The processes and the systems are reviewed constantly and changed to address the changing regulatory and business environment.

The Company has developed well-documented regulations and guidelines for authorization and approvals.

Internal audit is a crucial backbone of the internal control systems and it is conducted on a regular basis to check and authenticate that all systems and processes are in compliance with the relevant guidelines and appropriate in safeguarding the assets from unauthorized use or losses.

The existing internal control systems and their adequacy are frequently reviewed and improved upon to meet the changing business environment.

The external auditors as well as the internal auditors periodically review the internal control systems, policies and procedures for their adequacy, effectiveness and continuous operation for addressing risk management and mitigation strategies.

The Control Systems provide a reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against misuse or loss of Companys assets.

The ERP system which the Company had implemented has helped in further strengthening the internal control systems that are in place.

FINANCIAL & PERFORMANCE OVERVIEW

At the Standalone level the sales of the Company have increased by 27.57% as compared to previous year. The international sales of the company continues to increase steadily. We have started working with many new international partners from USA, Canada, Australia, and New Zealand. We have recently added several new partners in USA and Canada Market.

Human Resources

At Lee & Nee Softwares (Exports) Ltd., human capital is regarded as a key strategic asset and a critical enabler of sustainable growth. The Company firmly believes that its core strength lies in a dedicated, skilled, and motivated workforce. Accordingly, it continues to foster a performance-driven culture that promotes accountability, innovation, and continuous learning.

The Companys human resource strategy is built on three pillars: talent acquisition, employee development, and retention. A robust talent acquisition framework has been developed to meet dynamic business needs, ensuring agility in workforce planning even in the face of an increasingly competitive talent market.

Given the industry-wide challenge of sourcing specialized talent, human resource management plays a pivotal role in building organizational capabilities and securing long-term competitive advantage. The Company recognizes that employee engagement, empowerment, and participation are essential to delivering quality outcomes and exceeding customer expectations.

This year, the company strengthened its HR framework by implementing a KRA and KPI-based performance management system for all team members. Regular quarterly appraisals ensure continuous feedback and alignment, while annual increments are linked to performance outcomes, fostering a culture of accountability, growth, and excellence.

The Company continues to invest in its human resources by maintaining a conducive work environment that encourages innovation, collaboration, and high performance. Particular emphasis is placed on the development of middle management, who serve as a vital link between strategic objectives and operational execution. Their role in team leadership, client management, service delivery, and contractual compliance is fundamental to the Companys success.

By aligning HR practices with its broader business strategy, Lee & Nee Softwares (Exports) Ltd. remains committed to nurturing a professional, future-ready workforce capable of delivering consistent value to clients and stakeholders.

The total number of permanent employees of the Company as on 31 stMarch, 2025 was 99.