ANNUAL REPORT 2011-2012
Your Directors have pleasure in presenting the Eighteenth Annual Report of
the company on the Business and Operations ofthe Company, together with the
Audited Accounts for the year ended 31st March 2012.
The Standalone Financial Results of the Company for the financial year
ended March 31, 2012, is summarized below.
PARTICULARS (Rs. in Lacs)
Gross Turnover 642.43 407.01
Other Income 13.81 11.81
Total Income 656.24 418.82
Total Expenditure 521.87 208.85
Profit Before Interest, Depreciation & Tax 38.14 130.71
Prof it before Taxes 21.16 112.48
Tax Expenses 9.83 11.95
Profit After Tax 11.33 100.52
REVIEW OF PERFORMANCE
Members will notice that the revenue from Operations climbed by 57.84% to
Rs. 642.43 Lacs from Rs.407.01 Lacs of previous year. The Total Income also
increased to Rs.656.24 Lacs from Rs.418.82 Lacs of Previous Year.
The Profit after Tax, for the year under review, decreased to Rs. 11.33
Lacs as against Rs.112.48 Lacs of Previous Year, due to huge expenditure
incurred on account of Employee Benefits and Administration Expenses.
The company has identified new avenues for growth and is focusing its
energies to develop business. The company is continuously striving to
improve efficiency and deliver excellence in project execution. The huge
increase in turnover, is a testimony to the strength of your company's
technical competence and execution capabilities.
Keeping the expansion and growth plans in mind, your Directors have decided
not to recommend dividend for the year.
TRANSFER TO RESERVES:
No profits are intended to be transfered to reserves during the year.
Approval of the shareholders is being sought for re-appointment of Mr.
Bharath Champaklal Sutaria and Mr. Vijay Sanatbhai Choskhi, who retire by
rotation at forth coming Annual General Meeting of the company and being
eligible, offer themselves for re-appointment in accordance with article
104 of the Articles of Association and Companies Act, 1956.
Ms. Vasantha Madasu was inducted as Additional Director on the Board during
the year under review as per provisions of section 260 of the Companies
Act, 1956, she holds office only upto the date of this Annual General
Meeting of the Company. Approval of the shareholders is being sought for
her appointment as director, liable to retire by rotation, at the ensuing
Annual General Meeting of the Company under Section 257 of the Companies
The brief resume of the Directors who are to be appointed/re-appointed are
furnished to the Explanatory Statement to the notice of the ensuing Annual
General Meeting as Annexure A.
DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF
THE COMPANIES ACT. 1956.
In pursuance of Section 217(2AA) of the Companies Act, 1956, your Directors
1. that the Directors in the preparation of the Annual Accounts the
applicable Accounting standards have been followed along with proper
explanations relating to material departures.
2. that the Directors have selected such Accounting Policies and applied
them consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
company at the end of the financial year.
3. that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the Assets of the Company and for
preventing and deleting fraud and other irregularities.
4. that the Directors had prepared the Annual Accounts on the ongoing
Ajel Limited has always been devoted to adopting and adhering to the best
Corporate Governance practices recognized globally. The Company understands
and respects its fiduciary role and responsibility towards stakeholders and
the society at large, and strives hard to serve their interest, resulting
in creation of value and wealth for all stakeholders.
The Compliance report on Corporate Governance and Certificate from Auditor
of the Company Regarding Compliance of the conditions of Corporate
Governance, as stipulated under Clause 49 of the Listing Agreement is
Annexed separetely to this Annual Report.
Certificate of the CEO/CFO, inter alia confirming the correctness of the
financial statement, compliance with Company's Code of Conduct, adequacy of
the internal control measures and reporting of matters to the Audit
Committee in terms of Clause 49 of the Listing Agreement.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management's Discussion and Analysis forms part of the Annual Report.
We have two subsidiary companies namely Ajel Technologies India Private
Limited in Hyderabad, and Ajel Technologies Inc, USA.
Pursuant to section 212(8) of the Act, the Ministry of Corporate Affairs
vide its circular dated February 8, 2012, has granted General Exemption
from attaching Balance Sheet, Profit and Loss Account and other Documents
of the Subsidiary Companies with the Annual report of the parent Company.
Accordingly the company has availed an exemption from attaching the Balance
Sheet, Profit and Loss Account and other Documents of the Subsidiary
A statement containing brief particulars of the subsidiaries for the
Financial Year ended 31.03.2012 is annexed. The annual accounts of the
subsidiary companies shall also be kept for inspection during business
hours at our registered office of the company.
The auditors M/s K N Murthy & Co., Chartered Accountants, retire at the
ensuing Annual General Meeting and have expressed their unwillingness to be
The Board recommends appointment of M/s Boppudi & Associates, Chartered
Accountants, as Statutory Auditors of the Company. The Board has received
in writing their willingness for appointment as Statutory Auditors of the
Company along with Certificate under Section 224(1B) of the Companies Act,
The Board of Directors and the Committees thereof recommend their re-
appointment. Appropriate resolutions form part of the Agenda ofthe Annual
We have not accepted any deposits from Public and, as such, no amount of
principal or interest was outstanding as of the Balance Sheet date.
Your Company continues to maintain its Certification as per International
Standards ISO 9001:2008 Quality Management System and your Company is fully
committed to continually improve upon the implemented QMS
Employees are our vital and most valuable assets. We have created a
favorable work environment that encourages innovation and meritocracy. With
vibrant work atmosphere, your Company provide an opportunity to employees
to work with New Technologies. Your Company has put in place a Scalbele
Recruitment and Human Resources Plan, devised to attract and retain high
Ajel Limited has been fortunate in having a set of committed employees at
all levels and looks forward to nurture them and retain their loyalty. The
Company recognized the value of the committed workers and efforts are being
between the Company and the committed employees.
PARTICULARS OF EMPLOYEES:
In terms of the provisions of Section 217 (2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975 and any
amendments thereof, no employees are drawing remuneration in excess of the
INFORMATION UNDER SECTION 217(1) (e) OF THE COMPANIES ACT. 1956 READ WITH
(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES.
CONSERVATION OF ENERGY
Your company consumes electricity mainly for the operation of its
computers. Though the consumption of electricity is negligible as compared
to the turnover of the company, your company has taken effective steps at
every stage to reduce consumption of electricity.
This is not applicable to your company as it has not purchased or acquired
any Technology for development of software from any outside party.
RESEARCH & DEVELOPMENT
Research & Development ( center set-up in Hyderabad has been concentrating
in developing products and production process/ system to improve the
quality of the product at minimal cost. R&D enhancements, innovative
process and production technology bring additional value to all customers.
R & D continually concentrate to improve products, service and processes
using the effective quality management system and testing methodology, by
implementing changes required to maintain the quality standard.
FOREIGN EXCHANGE EARNINGS & OUTGO
Foreign Exchange Earnings: Rs.5,07,48,915/-
Foreign Exchange Outgo : Rs.9,94,651/-
STATEMENT PURSUANT TO LISTING AGREEMENT
The equity shares of the company are listed with the Bombay Stock Exchange
Limited (BSE) and Ahmedabad Stock Exchange Limited (ASE).
We thank our customers, vendors, investors and bankers for their continued
support during the year. We place on record our appreciation of the
contribution made by our employees at all levels. Our consistent growth was
made possible by their hard work, solidarity, cooperation and support.
By order of the Board of Directors
Place: Mumbai Sd/- Sd/-
Date : 03.08.2012 Vijay Sanatbhai Chokshi Srinivasa Reddy Arikatla
Whole Time Director Vice Chairman &
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
1. INDUSTRY OVERVIEW:
The world wide spending towards information technology (IT) related
products and services has crossed USD 1.7 trillion in 2011, a growth of
5.4% over 2010. Software, IT and BPO services, which were 63% of the total
spending, grew at 4% over 2010.
Global IT services spending have increased from USD 586 billion in 2010 to
USD 605 billion in 2011. BPO services spending have increased from USD 147
billion in 2010to USD 153 billion in 2011. The geographic revenue break-up
for IT and BPO services in 2011 was 46.5% (43.0% in 2010) for North
America, 34.1% in 2011 (39.7% in 2010) for Europe, Middle East and Africa
and 19.4% in 2011 (17.3% in 2010) for Asia Pacifi c.
Looking forward, the global IT services spending is expected to grow at a
CAGR of 4.5% over 2011-2012 while the global BPO services spending is
expected to grow at CAGR of 5.3% during the same period. During 2011,
global IT offshoring accounted for 61% of the total global sourcing market
while BPO offshoring accounted for 39%. Trends in global sourcing continued
to remain positive, showing higher growth than the global spending. In 2011
global sourcing grew by 12% over 2010 (2010 growth over 2009 was 10.4%).
The IT outsourcing market is expected to show a 3-year CAGR of 8% over
2011-2012, while BPO offshoring is expected to grow at CAGR of 7% over the
The large size of the addressable global market and its steady expansion
when viewed with the relatively low current level of penetration suggests
significant headroom for future growth. The Company has positioned itself
well for this anticipated growth in business with an appropriate structure,
strategy and capabilities.
Ajel Limited is a global software services company providing consulting,
Systems Integration, and outsourcing solutions to clients in key industry
verticals worldwide. We integrate expert industry knowledge, process and
technology frameworks, strong partnerships, and a global work force to
provide strategic solutions that generate sustainable results
The Company's full services portfolio consists of Consulting, Enterprise
Solutions, Application Development and Management, Internet and Emerging
Technologies, Information Management, Outsourcing Services and Mobility
The Company's strategy to support longer term growth is to continually
extend the core IT services business by expanding its geographic reach,
industry coverage and service capabilities and by deepening existing client
relationships, building or acquiring emerging businesses and adopting or
creating new business models and business solutions strategic partner
capable of reliably delivering innovative solutions.
Ajel Limited continues to invest in futuristic areas related to healthcare
and life sciences, materials science, computer science and electrical /
electronic engineering. The Company's R&D continued to make a difference to
its customers and society. While its improving quality and efficiency of
current offerings, the Company's customer focused technology initiatives
have helped its customers prepare for future challenges. Several of the R&D
outcomes have now moved into the mainstream business in the form of assets,
solutions, frameworks, tools and products.
3. OUTLOOK, RISKS AND CONCERNS.
There are many challenges faced nearly every industry in today's global
marketplace. Ajel has the depth and breadth of experience and expertise
that you need to achieve your business goals and succeed amidst the
fiercest competition. The uncertainities in the global market, business
model redundancy, supply side risks and financial risks are the
major threats faced by IT industry.
The Company believes in building and maintaining deep customer and become a
trusted business partner to global enterprises. The Company's views
industry segmentation, customer-centric organisation as an important
enabler to achieve such mission. By building business units around groups
of key clients in each industry vertical and giving end-to-end sales and
delivery responsibility to the business head, the Company can ensure high
levels of accountability, superior customer service and intimacy.
In order to strengthen future sustainability of the business model, the
Company also believes in pursuing non-linear growth opportunities, which
would bring in revenue growth without commensurate growth in headcount.
Non-linearity in the current IT and IT enabled services businesses comes
from productivity-enhancing tools, frameworks, solution accelerators and
managed services engagements.
The Company's believes in continued investments in technology, process
maturity and deep domain expertise so as to result in superior outcome for
clients and be recognised by the industry as benchmark in delivery
excellence. The Company aims to strengthen Company's newer service
offerings such as application development and maintenance, enterprise
solutions, IT infrastructure services, engineering and industrial services
and asset leveraged solutions. The Company believes to continuously engage
in customer focused innovation and launch new offerings that use technology
to address its clients' business problems.
3.2 RISKS AND CONCERNS:
The Company has been initiating various risk management programmes to
combat strategic, operational and financial as well as compliance-related
risks across various levels of the organisation. It includes risk
assessment and mitigation at the company level, business/functional unit
level, relationship level and project level. The risk management process is
continuously improved and adapted to the changing global risk scenario. The
agility of the risk management process is monitored and reviewed for
appropriateness with the changing risk landscape. The process of continuous
evaluation of risks includes taking stock of the risk landscape on an event
driven as well as quarterly basis.
4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place adequate systems of internal control commensurate
with its size and the nature of its operations. These have been designed to
provide reasonable assurance with regard to recording and providing
reliable financial and operational information, complying with applicable
statutes, safeguarding assets from unauthorised use or losses, executing
transactions with proper authorisation and ensuring compliance of corporate
The Company has a well defined delegation of power with authority limits
for approving revenue as well as expenditure. Processes for formulating and
reviewing annual and long term business plans have been laid down. It has
continued its efforts to align all its processes and controls with best
The Company has an audit committee, the details of which have been provided
in the corporate governance report. The audit committee reviews audit
reports submitted by the internal auditors. Suggestions for improvement are
considered and the audit committee follows up on the implementation of
corrective actions. The committee also meets the Company's statutory
auditors to ascertain, inter alia, their views on the adequacy of internal
control systems in the Company and keeps the board of directors informed of
its major observations from time to time.
The internal audit process is designed to review the adequacy of internal
control checks in the system and covers all significant areas of the
Company's operations such as software delivery, accounting and finance,
procurement, employee engagement, travel, insurance, IT processes in the
Company. Safeguarding of assets and their protection against unauthorised
use are also a part of these exercises.
Thus, the planning and conduct of internal audit is oriented towards the
review of controls in the management of risks and opportunities in the
5. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
the turnover of the company for 2011-2012 of Rs. 642.43 Lacs has grown by
57.84% over the year, compared to Rs. 407.01 Lacs of the Previous Year.
The Expenditure for 2011-2012 has grown to Rs. 635.08 Lacs compared to
Rs.306.33 Lacs in 2010-11. The growth in expenses is to commensurate the
growth in turnover. The Company has incurred huge expenditure incurred on
account of Employee Benefits and Administration Expenses.
During the year under review, the finance costs have reduced to Rs. 108.58
from Rs. 144.75 of previous year.
Personnel Costs increased to Rs. 521.87 Lacs as against Rs. 208.85 Lacs of
previous year largely due to addition in strength of employees.
Profit After Tax
The Profit after Tax, for the year under review, decreased to Rs. 11.33
Lacs as against Rs. 112.48 Lacs of Previous Year, due to huge expenditure
incurred on account of Employee Benefits and Administration Expense.
The Gross Fixed Assets as on 31st March 2012 was Rs. 219.19 Lacs as against
Rs. 193.51 Lacs of Previous year, amounting to an incremental Asset
Acquisition of 25.67 Lacs.
DISCUSSION ON FINANCIAL PERFORMANCE - CONSOLIDATED
The Consolidated Turnover of the Company has deceased to Rs. 4050.09 Lacs
for 2011-12 as against Rs. 7051.12 Lacs of Previous year.
Profit after Tax
The Consolidated Profit After Tax for 2011-12 has decreased by Rs. 117.04
over the year compared to Rs. 276.73 of 2010-11
6. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES.
The Company's innovative human resources management strategies supported
its business growth in a challenging environment. The Company's HRD policy
focuses on creating an environment where performance is rewarded,
individuals are respected and associates get opportunities to realise their
The company's Corporate HRD policy emphasizes on continuous, increased
quality and commitment of its employees in order to succeed in the
achievement of the corporate goals. The company provides employee
development opportunities by conducting training programs to equip the
employee with upgraded skills enabling them to adapt to the contemporary
The HRD Team strive for the enhancement of Human Resources Organization ,
systems, processes and procedures, using the principles of continuous
quality improvement that incorporate quality service and excellent
performance standards, increased accountability and maximizes cost-
Certain statements made in the management discussion and analysis report
relating to the Company's objectives, projections, outlook, expectations,
estimates and others may constitute 'forward looking statements' within the
meaning of applicable laws and regulations. Actual results may differ from
such expectations, projections and so on whether express or implied.
Several factors could make significant difference to the Company's
operations. These include climatic conditions and economic conditions
affecting demand and supply, government regulations and taxation, natural
calamities and so on over which the Company does not have any direct
By order of the Board of Directors
Place: Mumbai Sd/-
Date : 03.08.2012 Srinivasa Reddy Arikatla
Vice Chairman & Managing Director