Sofcom Systems Ltd Management Discussions

The Management Discussion and Analysis Report have been prepared in compliance with the requirements of Listing Agreements and contain expectations and projections about the strategy for growth. Certain statements in the Management Discussion and Analysis Report are forward looking statements which involve a number of risks and uncertainties that could differ from actual results performance or achievements and the Company undertakes no responsibility to publicly update these forward looking statements to reflect subsequent developments, information or events.

BUSINESS OVERVIEW

Sofcom Systems Limited was established to provide consultancy for software development in the form of services, turnkey projects and the products for domestic and export market. The software development is targeted towards the distribution, banking, telecommunication, and manufacturing sectors worldwide. The company is also providing software maintenance, reengineering and downsizing of software application in these market segments. Sofcom Systems Limited is providing information technology solutions to both commercial and government clients. The Company is focusing on development of high-performance products to meet the diverse needs of growing enterprises.

FUTURE BUSINESS PROSPECTS

In the last few years, the domestic computer market has witnessed rapid growth. Software developers are looking to India as development and production base for their products and a number of software packages developed in this country have gained instant recognition overseas. Over the years the growth drivers for this sector have been the verticals of manufacturing, telecommunications, insurance, banking, finance and of late the fledging retail revolution. As the new scenario unfolds it is getting clear that the future growth of IT and ITES will be fueled by the verticals of climate change, mobile applications, healthcare, energy efficiency and sustainable energy. Traditional business strongholds would make way for new geographies, there would be new customers and more and more of SMEs will go for IT application and services.

OPPORTUNITIES AND THREATS

With the introduction of the concept of e-governance, both the Central and State Government are keen on implementing different projects to keep the activities of the governments transparent, timely and cost effective. There is an absolute increase in the fund allotment by the Governments for implementing the projects. This creates an opportunity for the experienced and expert organizations to broaden their horizon and support the Government in faster implementation of the projects. The increased volume of business attracts a greater number of players in the field and the competition becomes severe. Only the effective and efficient organizations could stand a competitive situation. The management is confident that with its exposure and experience in this field of e-governance, it stands a better chance than others.

OUTLOOK

The outlook of the Company remains positive. Sofcom Systems Limited is cautiously optimistic about its prospects in the coming years. The Company aims at providing high quality products and services to the customers and to provide them with greater satisfaction. For the last couple of years, the company has taken a number of initiatives to restructure and re-engineer its operations to enable the company to compete better in this profound competitive regime.

There are no major risks and concerns except the technology up gradation and increasing power tariff and growing competition. The company is guarding itself against these risks by laying down appropriate strategy which is to be supplemented by business plans and review mechanisms.

RISKS AND CONCERNS

• Inherent risk to accommodate technological changes due to involvement in IT industry.

• Unable to expand successfully beyond India.

• No clear product vision beyond current offering.

• Little brand recognition.

• Increased competition from local and big players.

• New technology changes.

• Changes in government policies and other regulations FINANCIAL REVIEW, FY2025-26 AND OUTLOOK:

• Revenues from operations for the year decreased to Rs. 19,25,000 compared to Rs. 8,01,60,000 in the previous fiscal year.

• PAT for the year is Rs. 3,96,000 compared to Rs. 77,40,000 in the previous fiscal year.

The Company is projected to generate profitable and sustainable growth in foreseeable future. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Company has a proper and adequate system of Internal Control including internal financial controls. Company has an Audit Committee headed by an independent director, inter-alia, to oversee companys financial reporting process, disclosure of financial information, and reviewing the performance of statutory and internal auditors with management. The internal control system, including internal financial controls of the Company, which encompasses examination/ periodic reviews to ascertain adequacy of internal controls and compliance to Companys policies. The committee also looks into

related party transactions, preventive controls, investigations, as well as other areas requiring mandatory review per applicable laws. The powers of Committee, inter-alia, include seeking information from any employee, obtaining outside legal or other professional advice, and investigating any activity of the Company within the committees term of reference.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Particulars	FY 2025-26	FY 2024-25	Change	Reason
Current ratio	5.45	3.68	48.10%	Due to increase in Propionate current Asset
Debt - Equity ratio	0.01	0.02	50.00%	Due to Decrease in Debt
Debt service coverage ratio	Nil	Nil	-	-
Inventory Turnover Ratio	Nil	Nil	-	-
Trade receivables turnover ratio	17.83	3.40	424.41%	Due to decrease in Turnover
Net profit ratio	20.97	9.66	11.31%	Due to Increase in Net Profit
Return on net worth		-	-	-

CAUTIONARY STATEMENT

The statements in the Management Discussion and Analysis Report section describes the Companys objectives, projections, estimates, expectations and predictions, which may be forward looking statements within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.

Registered office: For and on behalf of Board of Directors

Block No. 501, Takshshila Apartment, SOFCOM SYSTEMS LIMITED

Majuragate, Nanpura, Surat, Gujarat, India, CIN: L72200GJ1995PLC179598

395001

	Sd/-	Sd/-
Date: September 10, 2026	Tanvi Jay Rupawala	Denish Shashikant Marwadi
Place: Surat	Managing Director	Director
	DIN:10698868	DIN: 10699241