Octaware Tech. Management Discussions


ANNEXURES TO THE BOARDS REPORT

ANNEXURE –VI

Industry Structure and Development:

Management discussion and Analysis Report Business Overview The company is a software development, enterprise solution and consulting firm engaged in the business of providing a range of Information Technology ("IT") solutions to companies across industries such as Healthcare, Education, Government, consumer goods, retails, IT/ITES, Oil & Gas, Real Estate & Construction, Banking & Financial Services and Manufacturing sectors.

The company design, develop and maintain software systems and solutions, like Business Applications, Low code/ no code, Mobility, E-commerce, Cloud infrastructure & Securities, Quality assurance, Analytics, Product engineering, accessibility, RPA & AI, IOT and Machine Learning and creates new applications and enhances the functionality of the customers existing software products.

The company endeavour to bring together creativity and knowledge with positive business strategy to furnish the requirements of diverse clients with an inclusive range of products, solutions and services which are comprehensive and cost-effective so that the client can focus on their core competencies to improve or expand their businesses.

The company delivers services across all stages of the product life-cycle, which enables us to work with a wide-range of customers and allow the company to develop, enhance and deploy customers software products and solutions. The various services offered by the company are Software Development Services, Enterprise Portal, ERP and CRM Implementation, Consulting Services, Mobile Solutions, RFID Solutions, Cloud and IT Infrastructure Services and Geospatial Services. The comprehensive suite of service offerings allows the company to attract new customers and expand existing customer relationships.

The company provide an array of products and solutions like PowerERM – Employee Relationship Management, Hospice – Healthcare Solution and iOnAsset – Asset Tracking & Management System, Sifa care MD- Innovative solution to urgent healthcare, OTM- Accelerating access to immediate healthcare and eProcurement Management Solution which help our clients in strategising their business objectives.

Octaware Technologies, an IT services company, is organised to carry out Business Transformation journeys that enable customers to achieve their objectives. Before strategizing clients journeys to sustained and exponential growth, we first excel in fully comprehending their unique goals and aspirations.

Through our Innovation Division, we offer outcome-driven solutions to business problems using cutting-edge services. We continuously re -invent ourselves to help our customers with the latest technology solutions to make them market leaders in their chosen area.

We are a Microsoft Gold Partner with a focus on MS Dynamics 365, helping enterprises around the world to solve complex operational challenges. Based in Mumbai, India, our delivery centre and head office are supported by offices in UAE, Qatar, USA and Saudi Arabia regions. As an offshore outsourcing company, the company have various offshore development centres in India. Currently, Octaware has 2 offices in India, including registered office and a SEZ office in Mumbai. The company is promoted by Mr. Aslam Khan and Mr. Sajid Hameed who individually have approximate 20 years of experience.

Having worked with technology companies like TCS, Microsoft, Citibank and AskMe Inc., Mr. Aslam Khan started Octaware in 2005 pooling all his experience. He was aided by Mr. Sajid Hameed who has rich experience in setting up business, developing markets, managing customers and handling overall businesses. In the year 2006, The company acquired 2 large customers in US and the growth continued with our establishing partner relationships in Qatar in 2007, allowing the company to offer specialised solution for the Middle East market. Later in 2008, The company introduced solutions for various industries like healthcare, professional services and real-estate industry by investing in inhouse product development.

Opportunities & Threats:

Many companies recognize the importance of innovation yet continue to be ineffective innovators. Recognizing that innovation requires a structured process, multiple perspectives, silo-busting boundary-free and polarity thinking are important first steps.

Whether developing new products or services, refining internal processes, or creating disruptive business models, innovation is the key to sustained competitive advantage.

Perhaps the greatest challenge of innovation is not creativity but implementation. Innovation efforts fail unless companies have leaders with the right skills to manage the innovation process, balance conflicting priorities and attract the range of contributions required for successful innovation. As much as two-thirds of the innovation climate in a company is defined by leadership behaviours, according to recent research. In short, innovation leadership is not coming up with creative ideas, it is turning those ideas into actions.

The first foundation of leading innovation is to manage the tension between the pressure of day-to-day priorities and the importance of finding ways to create new opportunities. The second foundation is to embrace the constancy of change. Change is difficult, and everyone in the organization must be prepared for its constant presence. Leaders themselves must be agile, which means letting go of the status quo. The third foundation is to take an enterprise-wide perspective. The best ideas will come from cross-collaboration and input from all areas of the organization.

The companys threat is that the market for IT Products and Services is both, highly competitive and rapidly evolving. It has evolved into a consolidated global industry and the company face competition both in the domestic as well as the export markets. The company primarily face competition from the small and large Indian IT services companies as well as international technology services companies which offer broad-based services, offshore captive centres of global corporations and technology firms. The company anticipate this competition to continue to grow as the demand for these services increases and expect additional companies to enter the Indian market. The company expect that further competition will increase and potentially include firms in countries with lower personnel costs than those prevailing in India. Further, Clients that presently outsource a significant proportion of their IT service requirements to vendors in India may seek to reduce their dependence on one country and outsource work to other offshore destinations such as Eastern European countries. Also, many countries have the advantage of being located in proximity to the companys main export markets of American and European countries. The company also face competition from other countries mainly in US and European countries that have advanced technology and ability to cater to large scale businesses in different parts of the world. There are number of competitors offering products and services similar to the company. Octaware believe the principal elements of competition in IT industry are price, timely delivery and reliability and most importantly pace in keeping up with the required changing technology in the industry. The company has the belief that companys cost effective and integrated offerings, focus on customer satisfaction and reliability combined with quality consciousness provides company with competitive advantage in many of products.

Risk & Concerns:

The rapid spread of COVID - 19 pandemic across the world, including India, followed by Lockdowns have impacted the demand. Also, due to COVID - 19, demand of IT solutions is adversely affected till date, resulting in loss of revenue, increased cost of providing solutions which would adversely impact the profitability of the company.

To mitigate various type of risks that the Company has to face, the Board of Directors of the Company has adopted a Risk Management Policy and implemented the same.

Market and outlook:

Our cliental base constitutes customers of diverse sectors encompassing various industries like Healthcare, Education, Telecom, Oil & Gas, Real Estate & Construction, Banking & Financial Services and Manufacturing sectors. Our strategy is to seek new customers and at the same time secure additional engagements from existing customers by providing high quality services and cross-selling new services. Our quality standards, unflinching efforts for punctual order completions and our unmatched overall service have resulted in significant recurring revenue from existing customers and also enabled us to garner clients who are some of the leading banking, financial, healthcare, manufacturing, education and telecommunication names in India and abroad. We believe that our current capabilities and plans for the future ensure that we are well positioned to attract and develop new customer relationships. Business from new customers is accepted upon consideration of factors such as alignment of capabilities and customer expectation, volume of business and future business, potential for close partnership with long-term association, and an analysis of upfront costs. Developed a long-standing relationship with our clients which include companies like, Microsoft, Pitney Bowes, Copernicus Consulting, Integrated Networks, VOIP Connection, Sai Hospital, Essel Propack and Tech Mahindra among others. Further, we continuously endeavour to increase our cliental base and have a dedicated marketing team at several of our Indian and overseas offices for client acquisition.

Internal Control System and their Adequacy:

The Company has an adequate Internal Control System commensurate with the size and nature of its business. The preparation designing and documentation of Policy on Internal Financial Control has been finalized and implemented which will be reviewed periodically and modified suitably to ensure controls.

Financial statements are prepared through the process which has automated as well as manual controls to ensure accuracy of recording all transactions which have taken place during any accounting period, and the resultant financial position at period end. All data/transactions entered in systems are checked by various functional personnel on the basis of supporting documents & records, then the accounting entries are checked by accounts personnel and finally those are validated by managerial personnel. While preparing the financial statements, it is ensured that all transactions pertaining to the accounting period are recorded.

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of fraud and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

Human Resources:

Human Resource programs and initiatives in your Company are aligned to meet the business needs. Your company believes in investing in people to develop and expand their capability. The Company has been able to create a favourable work environment that motivates performance, customer focus and innovation. Companys strategies are based, inter alia, on processes of continuous learning and improvement. The Company has strong programs to update skill, knowledge, and confidence of its employee through ongoing human resource interventions.

Cautionary Statement:

Statements in the Management Discussion & Analysis Report describing the Companys expectations, opinion, and predictions may please be considered as "forward looking statements" only. Actual results could differ from those expressed or implied. Companys operations should be viewed considering changes in market conditions and demand, prices of materials, economic developments in the country and such other factors.

Key Financial Ratios:

Pursuant to financial year the SEBI (Listing Obligations and Disclosure Requirements), (Amendment), Regulations, 2018, the key financial ratios viz., Debtors Turnover, Inventory Turnover, Current Ratio, Operating Profit Margin (%), Net Profit (%), Return on Net Worth, Interest Coverage and Debt Equity ratios do not exceed significantly as compared to the immediately preceding Financial Year.

Details pertaining to Net-worth of the Company:

(Amount in lakhs)

Particulars 31.03.2023 31.03.2022 Explanation for change in Net-worth
Net-worth 1007.40 1010.49 Decrease solution providing level and markets condition and demand of solutions

 

Place: Mumbai By order of the Board of Directors
Date: 07.09.2023 For Octaware Technologies Limited

 

Sd/-
Mohammed Aslam Khan Mr. Shahnawaz Shaikh
Managing Director WTD & CFO
DIN: 00016438 DIN:06910575