scintilla software technology ltd Management discussions

SCINTILLA SOFTWARE TECHNOLOGY LIMITED ANNUAL REPORT 2004-2005 MANAGEMENT DISCUSSION AND ANALYSIS COMPANY PERFORMANCE: The sales of the Company for the year ended 30th April, 2005 touched Rs.26.66 lakhs and Net Profit were Rs.1.23 lakhs. Your Company has improved its position in the domestic market and software industry. The year under review was one of them most challenging years for IT industry all over the world. Constant efforts are put to redesign the planning and implementation process to aim for leadership on the theme of rapid growth and differentiation. We are confident that the steps taken will help achieve the size, scalability, brand and ambition necessary to create the next generation IT Solutions and Services Company. REVIEW OF OPERATIONS: The Indian IT industry is one of the top 10 industries in India. The IT Industry has shown signs of recovery and IT/Technology expenditure is expected to rise this year as against a stagnant trend in the past two years. The domestic growth has been driven by rapid expansion of IT Infrastructure by Government, Education, Telecom, BPO and Corporate segments. The Indian IT Industry is interspersed with several large, medium and small players offering their services. The competition and challenges to medium size niche players like SSTL is emerging primarily from large system integration companies. Your Company is strong in providing IT Infrastructure set-up, support and management as well as in the system integration business. The wide range of products and solutions, domain expertise and competency pools created by the Company over the year has helped in customer retention and addition of new customer accounts. Clients are looking for a company that is a trusted advisor and a strategic partner. In response to clients needs, we have been working on several new service initiatives. Your company seeks long term partnerships with clients while addressing their various IT requirements. Your Companys customer centric approach has resulted in high levels of client satisfaction. Your Company has reorganized to face new challenges of greater client expectations, rapidly changing business scenario and heightened competition. As a part of it business process engineering the Company is constantly analyzing the business areas to focus on the most profitable and productive ones. This has helped in maintaining the profitability levels despite the reduction in the sales turnover. Your Company has also helped many of its clients improve their processes and systems by providing consulting services and high-end products and solutions. OUTLOOK: The domestic IT spends is likely to continue its current upward trend. Organizations have been increasing their IT spends for process improvements and efficiency enhancements to face competition and increased productivity. Organizations are widely outsourcing the various activities of managing their IT infrastructure to increase operational efficiency. Your Company has clearly drawn its roadmap as a dominant provided of end-to-end IT solutions and services encompassing comprehensive services of IT infrastructure design, implementation and lifecycle support. Continuous research and development of new services, products, processes and solutions allows your Company to enhance quality, productivity and customer satisfaction through innovation. Initiatives are being taken for development of solutions on Storage systems, Disaster Management Systems, Security, Converged Communications etc. Your Company has established a national service network and this will help in providing support to a large base of customers. Your company is continuously evolving new business processes, modifying its existing line of activities and expanding its business capabilities to gain higher growth and market share.