You are here » Home » Companies » Company Overview » Infotech Ltd Infotech Ltd.

BSE: 532417 Sector: IT
NSE: N.A. ISIN Code: INE546B01020
BSE 05:30 | 01 Jan Infotech Ltd
NSE 05:30 | 01 Jan Infotech Ltd Infotech Ltd. (ESTARINFOTECH) - Director Report

Company director report

E.STAR INFOTECH LIMITED ANNUAL REPORT 2006-2007 DIRECTOR'S REPORT The Directors of Infotech Limited ('') take pleasure in presenting the Eighth Annual Report on the operation of the company, together with the audited accounts for the year ended 31st March 2007. (Rs. In lacs) Particulars 31.03.2007 31.03.2006 Total Income 1152.45 1586.72 Profit before Interest, Depreciation, and Tax (PBDIT) 219.08 330.51 Less: Interest 0.02 0.17 Profit before Depreciation and Tax 219.06 330.34 Less: Depreciation 145.93 141.35 Profit before Tax 73.13 188.99 Less: Provision for Tax/ Fringe Benefit Tax 0.01 0.01 Less: Deferred Tax 0.00 (1.66) Profit after Tax 73.12 190.64 Profit brought from earlier years 1942.96 1752.32 Profit transferred to Balance Sheet 2016.08 1942.96 Year and period underreview: During the year under review, the turnover of the company has decreased to Rs.1152.45 lacs as compared to Rs.1586.72 lacs for the previous year. Profit before Depreciation and Taxation amounted to Rs.219.08. After providing for Depreciation and Taxation; the Net Profit stands to Rs.73.13 lacs against Rs.188.99 lacs for the previous year. Dividend With a view to conserve the resources for expansion in Business Process Outsourcing (BPO) and other Information Technology Enabled Services (ITES) your Directors have deemed it prudent to plough back the available profits. Actual Utilization vis-a-vis Projected Utilization of IPO Funds The IPO Funds have been utilized for the purpose and business for which it was raised. Variations as regards the actual utilization of IPO Funds vis-a-vis projected utilization is on account of the changes in business needs arising due to frequent changes in Domestic and Global Software Industry. Status of the Bonus Shares Issue of Bonus shares approved by the Shareholders of the Company a the Annual General Meeting held on 29th November 2002 is subject to approval from Securities and Exchange Board of India for relaxation under the provision of Clause 15.1.6 of Chapter XV of SEBI (Disclosure and Investor Protection) Guidelines, 2000. Responsibility Statement Pursuant to Section 217(2AA) of the Companies Act, 1955, the Directors to the best of their knowledge and belief confirm that: - The applicable standards have been followed in the preparation of the annual accounts. - The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2007 and the profit of the company for the year ended on that date. - The Directors have taken appropriate 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 fraud and other irregularities; and - The Directors have prepared the attached Statement of Accounts for the year ended 31st March 2007 on a going concern basis. Directors In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the company, Mr. Deepak Kotecha director of the company, shall retire by rotation at the forthcoming Annual General Meeting and eligible for re-appointment. The Board of Directors recommends his re- appointment. Fixed Deposit During the year under review, the company had neither accepted nor renewed any deposit from public within the meaning of Section 58A of the Companies Act, 1956. Auditors M/s. Durgesh Kabra & Company the Statutory Auditors of the company retire at the ensuing Annual General Meeting and are eligible for re-appointment. The retiring Auditors have furnished a certificate of their eligibility for re-appointment under section 224(1B) of the Companies Act, 1956 and have indicated their willingness to continue in the said office. Auditors' Report The observations made by the Auditors in their report read with relevant notes as given in the Notes on Accounts annexed to the Accounts , are self explanatory and therefore do not call for any further comments under section 217 (3) of the Companies Act,1956. Audit Committee The company has an Audit Committee comprising of Three Non Executive Directors of the company viz. Mr.Deepak Kotecha, Mr.Bankat Sharma, Mr. Vijay B.Sheth. The Board of Directors has appointed Mr.Deepak Kotecha as the Chairman of the Committee. Conservation of Energy, Research & Development, Technology Absorption, Foreign Exchange Earnings and Outgo A) Conservation of Energy and Technology Absorption Considering the Company's business activities, the Directors have nothing to state in connection with Conservation of Energy and Technology Absorption B) Foreign Exchange Earnings and Outgo The details of expenditure and earnings in foreign currency are given in Note No, 18 of Schedule 15 of Notes to Accounts. Particulars as per section 217(2A) of the Companies Act, 1956 During the year under report, there was no employee who was in receipt of remuneration in excess of limits prescribed under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees), Rules, 1975. Corporate Governance Your Company follows the principles of effective corporate governance practices. The company has taken steps to comply with the requirements of revised clause 49 of the Listing Agreement with the Stock Exchanges. A report on Corporate Governance has been appended under separate section titled 'Corporate Governance Report' and forms a part of the Annual Report. Certificate from Auditors of the Company M/s.Durgesh Kabra & Co., Chartered Accountants, confirming compliance of condition of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this report, CEO/CFO Certificates As required by clause 49 of the Listing Agreement, a CEO/CFO certificate has been attached to this report. Acknowledgements The Directors thanks the Company's Customers, Contractors, Vendors, Bankers, Government and other authorities and the Shareholders for their consistent support to the company. The Directors also sincerely acknowledge the significant contribution made by all the employees for their dedicated services to the company. By Order of the Board For Infotech Limited Place : Navi Mumbai Mahesh Thanvi Dated : 29th August 2007 Chairman & Managing Director MANAGEMENT DISCUSSION AND ANALYSIS Overview The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, and Generally Accepted Accounting Principles (GAAP) in India. The management of e.Star Infotech Limited accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present the Company's state of affairs and profits or the year. Industry Structure, Developments And Outlook The Indian IT sector has proved to be the country's fastest growing segment. The software and services industry, a major component of India's IT sector has showed significant momentum, higher than that of other industries in he country. India continued to be a compelling investment destination, as leading companies either set up shop here or beefed up their existing infrastructure. Outsourcing of IT requirements by leading global companies to Indian majors has also picked up pace in line with worldwide trends. Software and services exports continued to remain on top of the IT industry's revenue table. Global IT services spending is projected to grow at a compound annual growth rate of 5.9% to reach US$556 billion by 2009, from an estimated IT services spending of US$441 billion in 2005 according to International Data Corporation. The growth of global IT services spending is primarily driven by following factors and trends Increased importance of IT to businesses Impact of Internet and other new technologies on business Managing and upgrading existing systems Increasing trend towards offshore outsourcing. India is considered to be the most favored destination for offshore IT service delivery. The Nasscom-Mc-Kinsey Report of 2002 estimates that export revenue generated from the software and service industry in India was approximately US$15.5 billion in 2004 and is expected to reach US$50 billion by 2008 representing a compound annual growth rate of 34%. Opportunities And Threats The Company foresees a big market for new software products in identified segments. The significant threats to the Company's business continues to be the following (a) Competitive pressures: Since the company operates in world markets, competitive pressures can develop from any corner of the globe. Company has to be on the lookout for tracking the competition and maintaining its competitive edge in terms of quality and value proposition. (b) Talent retention: Company has to ensure that the people working for it who constitute its major competitive advantage continue to contribute productively to its business. Company has always maintained excellent work environment and competitive remuneration packages for this purpose. (c) Technology obsolescence : The Company has to ensure that it constantly updates and upgrades it technology so as to be on par with the competitors. (d) Exchange Rates : As the company uses India as a major source of manpower, the exchange rate of the Rupee vis-a-vis the US Dollar and other currencies affect its ability to compete. The Company attempts to minimize the risk by diversifying the currency in which it invoices the customers and by taking forward covers where appropriate. Risk And Concerns The risks and uncertainties include, but are not united to, risks and uncertainties regarding fluctuations to earnings and exchange rates, our ability to manager growth, intense competition in IT sector including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price contracts, client concentration, restrictions on immigration, our ability to manage our international marketing and sales operations, reduced demand for technology in our key focus areas, damages on our service contracts & product warranty, the success of the companies in which the Company has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on acquiring companies outside India, and unauthorized use of our and our customers intellectual property, the latter when in our possession as well as general and economic conditions affecting our industry. Internal control systems and their adequacy e.Star's internal control systems as well as procedures adequately commensurate with the magnitude of its current business. The operating and business control procedures have been framed in order that they ensure efficient use of resources and comply with the procedures and regulatory requirements. The internal control system is being further strengthened by laying out well-documented guidelines, approval and authorization procedures. Human Resources During the year under review, the company has enjoyed cordial professional relations with employees at all levels. Forward looking statements Certain statements as discussed and mentioned under Management Discussion and Analysis and elsewhere, constitute forward looking statements articulated as expectations of future business prospects. However, there are risky and uncertainties with regard to not only general economic conditions but also to the nature of the Company's business including foreign currency fluctuations, technological developments etc., which are out of the Company's control. Hence, these and other crucial factors could cause the actual results to differ materially from the performance or achievements discussed or implied by such forward looking statements.