ESKAY TELECOM LIMITED
ANNUAL REPORT 2006-2007
Your directors take pleasure in presenting the Fourteenth Annual Report of
the Company together with the Audited Statement of Accounts and the
Auditor's Retort there for the Year ended 31st March. 2007. The summarised
financial results are as under.
(In Rs.) (In Rs.)
PROFIT BEFORE TAXATION 80,109.06 170,341.67
Provision for Taxation 22,747.00 28,678.00
Provision for F.B.T. 42,703.00 -
Deffered Tax (4,723.00) 19,489.00
PROFIT AFTER TAXATION 19,292.06 122,174.67
Special Statutory Reserve (2,954.00) (24,608.00)
Balance brought forward 397,635.57 1,300,069.00
Surplus carried to Balance Sheet 1,413,973.73 1,397,635.67
In view of the marginal profit earned by the company. your directors do not
recommended any dividend for the year under review.
Mr. Deepak Patwari retires by rotation at the ensuing Annual General
Meeting and being eligible offers himself for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act,1956,your Directors
hereby confirm that during the year ended on 31st March. 2007
i) The company had followed applicable accounting standards for the
preparation of annual accounts:
ii) That the directors had selected such accounting policies and applied
them consistently and made judgements and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs of
the company and of the profit of the company,
iii) That proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act. 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities:
iv) That the annual accounts have been prepared on a going concern basis.
M/s. A. K. Basu & Co., Chartered Accountants. retires and being eligible,
offers themselves for reappointment. Your Directors recommend their re-
PARTICULARS OF EMPLOYEES
None of the employees was in receipt of remuneration in excess of the limit
prescribed under Section 217(2A) of the Companies Act. 1956.
The Company being basically in the financial sector, requirement regarding
disclosure of Particulars of conservation of energy and technology
absorption prescribed under Section 217(1)(e) of the Companies Act. 1956
read with Companies (Disclosure of particulars in the report of the Board
of Directors) Rules. 1988 is not applicable.
As stipulated under clause 49 of the listing agreement. Corporate
Governance report along with auditors certificate and Management Discussion
& Analysis thereon is enclosed as Annexure `A' and form part of this
LISTING OF SHARES
The Company's equity shares are listed on the Mumbai & Calcutta Stock
Exchanges Your Company has paid the annual listing fees to each of these
The Company has had no foreign exchange outflow or inflow during the year
The Board expresses its sincere gratitude to the shareholders. Bankers,
Employees and its clients for their continued faith and support reposed in
For & on behalf of the Board
(Sunil Kumar Poddar) (Deepak Patwari) (Dilip Kumar Agrawal)
Director Director Managing Director
Place : Kolkata
Dated : 30th June, 2007
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
World Economic Climate indicator remained at a high level in the recent
past and is clearly above its long-term average. The global expansion was
broad based in the first halt of 2006. with GDP crossing the 5 percent
mark. thus indicating the emergence of a new phase. one :hat is more
diversified with most regions meeting or exceeding expectations.
Growth was particularly strong in the United States in the first quarter
but declined due to an abrupt slow down in housing markets and rising fuel
costs. Business sentiment in Asia was at an all time high with India and
China continuing to contribute to the global growth momentum.
Indian Economy - Overview
India's economy is on the fulcrum of an ever increasing growth curve. With
positive indicators such as stable 8-9 percent annual growth. rising
foreign exchange reserves of close to USS 180 million. a booming capital
market with the popular Sensex index almost touching the magical 15,000
mark and the Government estimating FDI flow of USS 12 billion in this
fiscal. it is easy to understand why India is a leading destination for
Indian Economy witnessed vigorous growth during 2006-07 for the fourth year
in succession. The advance estimates of Gross Domestic Product (GDP) for
2006-07 released Central Statistical Organisation (CSO) on February 7,2007
places GDP growth in the current year at 9.2 percent. The revised estimate
GDP growth released by CSO in May 2007 shows the economy grew an
unprecedented 9.4% in 2006-07 arguably the highest to date in independent
India. The acceleration in growth during 2006-07 was drawn by the continued
momentum in the services and the manufacturing sec:or recording double
digit growth. The manufacturing sector grew by 12.1 percent during April-
February 2006-07 whereas service sector continued to be the key driver of
economic activity for the first three quarters but there was a decline in
the last quarter. Buoyed by the robust performance of the manufacturing
sector, the country's industrial production maintained double digit growth
at 11% as recorded in February 2007.
The overall macroeconomic fundamentals are robust, particularly with
tangible progress towards fiscal consolidation and a strong balance of
payments position. With an upsurge in investment. outlook is distinctly
Global Scenario of Real Estate Sector
Although global private equity firms are currently capturing media
headlines and industry publications, there are other factors just as
significant that are driving changes in the global real estate capital
market. Global mergers and cross border transactions of real estate
companies have become the norm of the day.
In Asia. the Chinese and Indian markets will perhaps be most exciting
regions over the next several years. The increased flow of institutional
funding into the sector will ensure that real estate value will continue to
Capital Market Scenario
The primary capital market remained upbeat during 2006-07. The aggregate
resource mobilisation in the market especially through Initial Public Offer
(IPO) and Private Placements was much higher than the previous year. As
many as 85 initial public offerings (IPOs) mobilised Rs.24.993 crores
during 2006-07, 5% more than in the previous financial year, as investors
responded excitedly to the equal issues,The mobilisation during 2006-07
could have been higher but for the two secondary market crashes. which
forced a temporary shelving of IPOs. In the secondary markets the uptrend
continued in 2006-07 after the first dull half.
ln flows of Foreign Direct Investment (FDI) into India have increased
significantly during the current financial year. Also. India has emerged as
the most favored private equity destination attracting USS 1,239.22 million
worth investments during the year.
Equity Markets witnessed major swings during 2006-07. The BSE Sensex
increased from 11.280 at end of March 2006 to the peak of 12.612 on May 10.
2006 after which it declined to an intra-year trough of 8,929 on June 14.
2006, whereas Nifty was at 3,419 on March 30, 2006 and reached an intra-
year trough of 2,633 on June 14. 2006 after which it touched to an intra-
year high of 4,224 on February 7. 2007.
The market rebounded in subsequent months on institutional buying support,
robust macro-economic fundamental, high corporate profitability and other
global factors such as continuation of relatively soft interest. rates and
fall in crude oil prices in international markets. The Sensex rallied with
intermittent corrections to reach a high of 14,652 on February 8, 2007 but
subsequently moderated to 13,072 by end of March 2007.
Internal Control System
The Company has installed an adequate system of internal controls in all
spheres of its activity. This is to ensure that all assets are safeguarded
and protected against loss from unauthorised use or disposition and that
the transactions are authorised, recorded and reported diligently. The
internal control is supplemented by an effective internal audit being
carried. out by an external firm of Chartered Accountants. The management
regularly reviews the findings of these internal auditors and takes
appropriate steps to implement the suggestions and observations made by
Global economic growth is expected to moderate to 4.9% in 2007-2008 after
scaling 5.4 % in 2006 as stated by IMF in its latest World Economic
Outlook. Emerging markets and developing countries are expected to continue
to grow strongly. albeit at a somewhat slower pace than in 2006.
Indian economy will grow at a relatively sluggish 7.8% pace in 2008 as
stated by IMF and WEO in their reports.
In line with developments in the major markets. emerging equity, markets it
Asia have continued to recover from the May-June sell-off. The markets
which suffered the largest losses have more than recouped earlier losses.
Financial and Operational Performance:
Please refer Directors' Report on the performance review.
The information and opinion expressed in this section of the Annual Report
may contain certain statements. which the management believes are true to
the best of its knowledge at the time of its preparation. The Company and
the Management shall not be held liable for any loss. which may arise as a
result of any action taken on the basis of the information contained
On behalf of the Board of Directors
Place : Kolkata (Dilip Kumar Agrawal)
Dated: 30th June. 2007 Managing Director