Nexxoft Infotel Limited Management Discussions

(Forming part of Directors Report)

PERFORMANCE OF THE COMPANY:

The Company has recorded a turnover of Rs. 1567.05 lakhs and loss of Rs. 112.26 Lakhs in the current year against the turnover of Rs 2928.10 lakhs and loss of Rs. 973.16 Lakhs in the previous financial year ending 31.03.2013.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The sustainability of entire industry comprising of smaller companies has been very tough in the previous year under review. As the cost of input, manpower is increasing tremendously when compared to revenues and business generation, expansion is imminent in other lines of development related to our sector..

OPPORTUNITIES AND THREATS:

The core members of management has identified some excellent opportunities in expansion our service range in Indian market and abroad with a distinct variation from competitors. This is expected to yield considerable placement in the market in the current year of operations.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE:

Not applicable

OUTLOOK:

The management is doing its best to forge relations with other companies and take the company forward in the new business lines. However, the outlook of the management is cautious in view of the competitive nature of the market.

RISKS AND CONCERNS:

While venturing into new business lines, the company would need access to funds. The risk of not being able to raise funds at the timer needed is the biggest risk that the management foresees.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The management considers the internal control systems, which has evolved over time and are continuously improved, to be adequate enough.

The internal control system is constantly assessed and strengthened with tighter control procedures. The internal control systems ensure effectively of operations, compliance with internal policies and applicable laws and regulations, protection of resources and assets, and accurate reporting of financial transactions.

The audit committee periodically reviews the adequacy and efficacy of the said internal control systems. All the issues relating to internal control systems are resolved by the audit committee.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

A full fledged R&D is in progress to consider the same.