Silverline Technologies Ltd Management Discussions.

The Indian information technology IT-ITES industry has played a key role in putting India on the global map. Over the past decade, this sector has become the country’s premier growth engine, crossingsignificantmilestones in terms of revenue growth, employment generation and value creation, in addition to becoming the global brand ambassador for India.

According to a recent report developed by NASSCOM, Perspective 2020, the current industry size of IT-BPO approximately USD 60 billion is projected to grow to approximately USD 225 billion by 2020, and possibly larger. It also estimated that up to 80 per cent of this growth would like to come from adjacent areas where traditional IT-BPO work, combined with deep domain knowledge, innovation and IT- based growth engines would help create new opportunities and Market.

Future Outlook

With a compounded annual growth rate (CAGR) of over 24% in the last decade, the Indian IT/ITeS industry has emerged as a key growth engine for the economy, contributing around 5.6% to the country’s Gross Domestic Product (GDP) in FY 2011 and also providing direct employment to about 2.3 million people (from just about half a million in 2001). It remains one of the biggest sectors for wealth generation in the country. As per the industry body, NASSCOM, the sector is estimated to provide direct employment to 10 million and indirect employment to 20 million by 2020.

Opportunities and threat

The ever-increasing focus towards automation and business process improvements has presented an opportunity for use of technology in almost all spheres of business activity. The advantages available to the Company are:

(a) availability of skilled professionals at competitive rates;

(b) with in-depth industry knowledge and experience; and

(c) global delivery capability through Software Development Centres in India and North America, south America and asian continent.

Segment wise revenue

The Company recognizes information technology services as the single business segment that constitutes the primary basis of segmental reporting set out in its financial statements.

Internal Control

The Company has an internal control function in built into its operation environment to validate the efficiency of internal control systems, effect checks regularly and report to the management and the Audit Committee, comprising of independent Board members and the statutory auditor.

Risks and Concerns

The Company, with its current strengths and going forward with strong business opportunities in the pipeline and revenue streams is definitelypoised in a better position to grow. To address their growth needs and overall industry demands the Company has to be more innovative and look into good recruitment and compensation strategies for existing staff.

Operations

The Company has positioned itself in the area of IT, ITES, and further is strengthened with the recent expansion, which the Company has embarked upon.

The Company is currently seeking to embark on strategic new business initiatives in training and other allied services. A detailed Plan is being worked out to have a go to market approach.

Financial Performance Share Capital

The Company has total paid up capital of 5,99,85,488 equity shares of Rs 10 each.

Fixed Assets

During the year the Company has not made purchase of Fixed Assets.