INDUS NETWORKS LIMITED
ANNUAL REPORT 2009-2010
Your Directors have pleasure in presenting you the Thirteenth Annual Report
of your Company together with the Audited Accounts for the year ended 31st
March, 2010 comprising of 12 months from 01.04.2009 to 31.03.2010.
Your Directors hereby report that the Company has achieved a turnover of
Rs.9099.75 akhs upto 31.03.2010 consisting of twelve (12) months, as
against the turnover of Rs. 4032.48 lakhs during the previous financial
year ended 31.03.2009 consisting of twelve (12) months.
The highlights of the financial results are as follows:- (Rs. in lacs)
Particulars 2009-2010 2008-2009
From 01/04/2009 From 01/04/2008
To 31/03/2010 To 31/03/2009
(12 Months) (12 Months)
Total Income 9099.75 4032.48
Total Expenditure other than Interest 9065.92 4212.42
Interest 11.86 23.47
Total Expenses 9077.78 4235.89
Profit/(loss) Before tax 21.96 -203.40
Provision for tax
- Current Year Liability 3.75 17.75
- Deferred Tax Liability 16.69 -86.89
- Fringe Benefit Tax - 1.61
Profit/(loss) After tax 1.51 135.88
Amount brought forward 27.00 405.95
Balance carried forward 271.59 270.07
Review of Operations:
Growth in Revenue and Profit During the year under review, your company
recorded a total income of Rs. 9099.75 lakhs, compared to Rs. 4032.48 lakhs
in the previous financial year, which represents a 3.84% growth. The
Company incurred a net Profit Rs1.51 akhs as compared to the net loss of
Rs. 135.88 lakhs in the previous year.
Reserves and Surplus:
Particulars 2009-10 2008-09
Reserves and Surplus 911.47 909.96
The Company has not accepted any fixed deposits and the provisions of
Section 58A of the Companies Act, 1956 are not applicable.
Information in accordance with Section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975, is not
applicable since none of the employees are receiving the remuneration as
mentioned in the said section.
Shri T.Srinivasa Rao retires by rotation at the ensuing Annual General
Meeting and, being eligible, offer himself for re-appointment. Brief
profile of the retiring Director, including areas of his expertise and
other details, is explained in the Notice convening the ensuing Annual
Listing of Company's Securities:
Your Company's shares are currently listed on Bombay Stock Exchange
Dematerialization of Shares:
Your Company's shares have been made available for dematerialization
through the National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL).
Directors' Responsibility Statement:
Your Directors' state:-
a. that in the preparation of the annual accounts for the year ended 31 st
March, 2010 applicable accounting standards have been followed alongwith
proper explanation relating to material departures.
b. that they had 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 and of the profit or loss of the
Company for that period.
c. that they had 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 detecting
frauds and other irregularities.
d. that they had prepared the annual accounts for the year ended 31st
March, 2010 on a going concern basis.
The Company's Auditors M/s Kumar & Giri, Chartered Accountants, Hyderabad,
who retire at the ensuing Annual General Meeting of your Company, being
eligible offers themselves for reappointment.
Your Board of Directors recommended the appointment of M/s Kumar & Giri,
Chartered Accountants, Hyderabad, as Statutory Auditors of your Company.
Your approval for such appointment is solicited.
During the year under review, the Company has closed its wholly owned
subsidiary named M/s INL Software Trading Private Limited under Section 560
of the Companies Act, 1956 , since the Company has not carried on any
business activity during the period from the date of its Incorporation. As
at the date of Balance Sheet, the Company has no subsidiaries..
A report on Corporate Governance along with Auditors' certificate on
compliance with the conditions of Corporate Governance as stipulated in
Clause 49 of the listing agreement, is provided elsewhere in the Annual
Management Discussion and Analysis Report:
Management Discussion and Analysis Report is provided elsewhere in the
Conservation of Energy, Research and Development, Technology Absorption,
Foreign Exchange Earnings and Outgo:
Information pursuant to Section 217 (1) (e) of the Companies Act, 1956 read
with the Companies (Disclosure of particulars in the Report of the Board of
Directors) Rules, 1988 is not furnished since the operations of the Company
are not energy intensive. However, the Company has endeavoured to conserve
energy consumption wherever feasible.
Technology absorption, Adaptation and Innovation:
The Company's business demands continuous efforts and adaptation to
changing technologies to stay competitive in the rapidly changing world.
Significant efforts have been made by your Company towards constantly
absorbing, adapting and deploying new technologies. These are expected to
give substantial benefits in the future.
Foreign Exchange Earnings and Outgo:
Particulars 2009-2010 2008-2009
Travelling expenses Nil Nil
Foreign Exchange Earnings - Rs.66,81,236
Foreign Exchange Outgo Rs.280465081 Rs.197793593
Explanation to Auditors' Report:
The Company is regular in payment of statutory dues with the concerned
authorities except filing of Income Tax Returns for the Assessment years
beginning from 2001 -02 to Assessment year 2010-11. Your Directors have
taken note of the situation and efforts are being made to see that Income
Tax returns for the above years will be filed at the earliest.
The Board of Directors of the Company acknowledges its sincere appreciation
to the Government, Bankers, Financial Institutions, and others for their
kind support. On behalf of the Company, the Board of Directors thanks the
Employees for their valuable efforts and the Shareholders for their
continuing faith in the Company.
BY ORDER OF THE BOARD
PLACE: HYDERABAD K. SUDHIR P.M. MADAN MOHAN
DATE : 30.08.2010 MANAGING DIRECTOR DIRECTOR
MANAGEMENT DISCUSSION AND ANALYSIS
1. Indian IT 2009-10 Industry Outlook:
The year 2009-2010 was been very challenging for the entire Indian it
services industry. With customer it spending staying mostly flat or showing
a decline, the focus among client organizations was on driving efficiencies
into their existing it systems, and pursue projects that higher levels of
guaranteed return on investments and quicker payback.
According to NASSCOM, the IT industry growth rate for financial year 2009-
10 has been estimated at 5.5 percent. However, for the next financial year,
2010-11, NASSCOM has given healthier projections for it services exports to
grow between at 13 percent to 15 percent. They have forecasted the Indian
market to grow between 15 percent to 17 percent.
Customers perception of outsourcing has undergone a distinct and
perceptible change.. They are increasingly looking at outsourcing as a tool
to meet their ever changing and dynamic business environment. It budgets
are subject to high levels of scrutiny to ensure alignment to their overall
business strategy. Customers are seeking partners with mature processes,
financial stability and a demonstrated track record in not only delivering
cost savings but also those who show sustained and continuous improvements
2. Opportunities and Threats:
In every challenge lies an opportunity. Today's enterprises are looking for
solutions that can help them reduce their operational cost and derive
maximum value from their it spend. According to industry analysts like
forrester, enterprises are looking for help making the move from a time &
material model of engagement to a managed services model which not only
help in driving down costs but also ensures that the projects are more
outcome oriented. The industry has been talking about this changed
business, engagement and pricing models for some time now. However, they
are fast becoming a reality. Further, enterprises are prioritizing at
projects that involve application consolidation / rationalization and those
which are collaborative and high impact solutions that enhance
In the customer segment of software product companies who outsource their
product development to offshore outsourcing companies, there has been a
growing preference for engagement models that align their costs with
activity levels (output). We have seen an increased level of activity among
product companies that are relatively new to off shoring - driven by the
need to compete in a challenging economy.
The financial upheaval that hit the developed markets last year threw up a
risk which the industry was not really exposed to earlier i.e. 'customer
sustainability'. Constantly changing business priorities, mergers,
acquisitions and consolidations of companies require it service providers
to be quick and deliver according changing situations.
Companies which are slow to react will get negatively impacted by risks on
account of failed projects, unhappy customers and in extreme cases customer
delinquencies. Further, with costs of delivery from near shore locations
closing up with that offshore, emergence of these centers coupled with
protectionist steps taken by developed economies faced with the recession
could threaten the growth prospects of this sector.
3. Business Outlook:
The Company during the year 2009-2010 has achieved a turnover of Rs.
9099.75 lakhs. During the current year, the Company is expected to achieve
better results with an increased growth rate in comparison to previous
4. Internal Controls and their adequacy:
The Company has suitable internal control systems and processes in place
for the smooth conduct of its businesses. The Company maintains a system of
internal controls designed to provide reasonable assurance regarding the
Effectiveness and efficiency of operations and for safeguarding the assets
of the Company and for ensuring appropriate recording and reporting of
financial information for ensuring reliability of financial controls and
for ensuring compliance of applicable laws and regulations.
5. Discussion on Financial Performance with respect to Operational
A. Financial Conditions:
The authorized share capital of the company as at 31st March 2010 is
Rs.2500 lakhs divided into 250 lakhs Equity shares of face value of Rs.10/-
each. The Share Capital of the Company consists of only Equity Shares. As
on March 31, 2010, the issued, subscribed and paid up capital of the
Company stands at Rs. 650 lakhs consisting of 65,00,000 Equity Shares of
Rs.10/- each fully paid-up.
Reserves & Surplus:
The Reserves and Surplus of the Company as an 31st March 2010 stands at
Loan funds: In Rs Lakhs
Particulars 2009-10 2008-09
Secured Loan Nil 28.98
Unsecured Loan 5464.37 3268.90
Total 5464.37 3297.88
Gross Block of Fixed Assets stood at Rs. 1726.31 lakhs and the net block
stood at Rs. 873.83 lakhs as at 31st March 2010 compared to Rs. 2646.547
lakhs and Rs. 659.321 lakhs as at 31st March 2009 respectively.
Investments as at 31st March, 2010, amounted to Rs. 1145.00 lakhs as
against Rs. 0.99 lakhs as at 31st March, 2009.
Sundry debtors Increased from Rs. 2760.57 lakhs as on March 31, 2009 to
Rs.7030.98 lakhs as on March 31, 2010
Cash and Bank Balances Decreased from Rs. 30.34 lakhs to Rs2.42 lakhs.
Current liabilities and provisions:
Current liabilities and provisions have increased from Rs. 10538.06 lakhs
as on March 31, 2009 to Rs. 6185.23 lakhs as on March 31, 2010.
B. Results of operations Income:
Income from operations for the year was Rs. 9099.75 lakhs against
Rs.4032.48 lakhs recorded in the previous year which represents a growth
rate in income of 3.84%.
The manpower cost for the year was Rs. 39.54 lakhs as against Rs. 72.26 in
the previous year.
Selling and administrative expenses for the year was Rs.263.54 lakhs, as
compared to Rs 196.98 lakhs incurred in the previous year.
The finance expenses increased from Rs. 9.11 lakhs in the previous year to
Rs. 23.46 lakhs for the year ended March 31, 2010.
The company provided Rs. 852.48 lakhs for depreciation compared to
Rs.1987.21 lakhs that was provided in the previous year.
The company has made a provision for current tax of Rs.3.75 lakhs and
fringe benefit tax of Rs.Nil lakhs for the year ended March 31, 2010.
Other income earned was Rs. 9.66 lakhs against Rs. 0.006 lakhs earned in
the previous year.
During the year the Company incurred a Net Profit of Rs 1.51 lakhs as
against net loss Rs. 135.88 lakhs recorded in the previous year.
The liquidity of the company was comfortable throughout the year
6. Segment wise performance and Geographical Information:
The Company provides IT Services globally across various industry and
geographical segments. The industry wise, the geographical wise customers'
risks will differ. Due to stiff competition prevailing in the market, there
is marginal revenue growth in manufacturing and other industrial categories
while the trend is not so in software and IT enabled services. In terms of
geographical segments, revenue growth on export front has shown stable
growth although the domestic revenues have considerably fallen compared to
previous year. A detailed segment wise profitability statement is presented
elsewhere in the report. In view of the emerging competitive trends,
despite the spurt in demand for IT products and services, the margins are
falling, requiring the company to cut down operating costs and adapt
improvements in the range of services to sustain and thrive in the market.
7. Human Resources Development:
Your directors are happy to report that the industrial relations have been
extremely cordial at all levels throughout the year and your Company
continues to develop industry leading HR practices and has conducted a
number of initiatives for recruiting, training and retention of high
quality manpower resources.