EIDER INFOTECH LIMITED
ANNUAL REPORT 2004-2005
Your Directors have pleasure in presenting the 15th Annual Report of the
Company together with Audited Financial Accounts of the Company for the
year ended 31.03.2005.
PARTICULARS 2004-05 2003-04 2002-03
(Rs. in Lakhs) (Rs. in Lakhs)
Total Sales 2573.75 1850 1537.52
Other Incomes 10.08 8.11 6.95
Total Expenditure before 1829.73 1245.73 1093.705
interest and Depreciation
Interest 0.53 0.45 0.46
Gross Profit after interest 954.1 611.93 450.305
but before Depreciation and
Depreciation 109.80 97.47 89.75
Provision for Taxation 0.15 0.10 0.12
Net Profit after Dep. & 844.15 514.36 360.435
Prior Period Adjustment Nil Nil Nil
Appropriations Nil Nil Nil
Transferred to General Nil Nil Nil
Profits carried to Balance 844.15 514.36 360.435
Your Company has continued to excel in computer software and solution arena
there is a growth in the software sector. During the year under review, the
total sales of the Company increased to Rs. 2573.75 lakhs as against Rs.
1850.00 lakhs in the previous year, thus registering a growth of 20% in
sales. The net profits of the Company after Depreciation and taxes have
increased to Rs. 844.15 lakhs as against Rs. 514.36 Lakhs in the previous
year indicating an increment of around 42%.
In view of the restructuring of the existing operations of the Company and
Hyper Growth Plan chalked out for immediate future, the Board of Directors
of the Company has not recommended any dividends.
Shri Ravi Kumar, Director of the Company retire, by rotation and being
eligible, offers himself for reappointment. The said reappointment is
subject to the approval of shareholders at the ensuing Annual General
REPORT ON CORPORATE GOVERNANCE
A detailed Report on Corporate Governance as required under Clause 49 of
the Listing Agreements with the Stock Exchanges, together with a
Certificate from the Company's Auditors has been separately included in
this Annual Report.
The Auditors M/s Varun Koshal & Associates, Chartered Accountants, retire
at the conclusion of ensuing Annual General Meeting of the Company and they
have confirmed their eligibility and willingness to accept the office, if
reappointed. The Board and Audit Committee recommends their reappointment.
The Board of directors of the Company has, subject to the approval of the
shareholders by way of Special Resolution proposed to be passed at the
coming Annual General Meeting, decided to get the equity shares of the
Company voluntarily delisted from the following Stock Exchanges in view of
the SEBI (Delisting of Securities) Guidelines, 2003 vide which the
Companies are allowed to get their shares voluntarily delisted from one or
more stock exchanges. The shares however shall continue to be listed at The
National Stock Exchange of India Limited (NSE) and/or The Stock Exchange
Mumbai (BSE), which have nationwide online trading terminals.
1. The Ludhiana Stock Exchange Assn. Limited, Ludhiana (LSE)
2. The Delhi Stock Exchange Assn. Limited, New Delhi (DSE)
3. The Calcutta Stock Exchange Assn. Limited, Kolkata
4. The Stock Exchange Ahmedabad, Ahmedabad
CASH FLOW STATEMENT
As per the requirements of the Listing Agreements, Cash Flow Statement for
the year ended 31.03.2005 is appended alongwith this Annual Report.
During the year under review, industrial relations at all units of the
Company continued to be cordial and peaceful
PARTICULARS OF EMPLOYEES
During the year, no employee whether employed for the whole or part of the
year was drawing remuneration exceeding the limits provided in Section 217
(2A) of the Companies Act, 1956. Thus the information required under
Section 217 (2A) read with Companies (Particulars of employees) Rules, as
amended is Nil.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO :
As required under Section 217 (1) (e) of the Companies Act, 1956, read with
the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, the said particulars are set out in Annexure `A' to
the Directors Report.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information
and explanations obtained by Directors, they make the following statement
in terms of Section 217 (2AA) of the Companies Act, 1956:
1. that in preparation of Annual Accounts for the year ended 31.03.2005,
the applicable accounting standards have been followed alongwith proper
explanation relating to material departures, if any.
2. That such accounting policies as mentioned in Notes. on Accounts have
been selected and applied consistently and judgments and estimates have
been made that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company as at 31.03.2005 and of the
profits of the Company for the year ended as on that date.
3. That proper and sufficient care has 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 the frauds and the other the irregularities.
4. The annual accounts have been prepared on a going concern basis.
The Board of Directors wish to place on record their appreciation for the
support and cooperation extended by every member of the 'Eider' Family. The
Directors are thankful to the Company's valued customers, suppliers,
dealers, Central and State Governments, Bankers, Shareholders, and
collaborators for their continued support and confidence in the Company.
The Board in particular acknowledges the cooperation of esteemed
shareholders for the constant support and for the confidence reposed in the
Management of the company.
By Order of the Board
For Eider Infotech Limited
Dated : 31.07.2005 Sd/-
Place : Chandigarh (Sanjay Sinha)
ANNEXURE `A' ANNEXURE TO DIRECTORS' REPORT
Particulars pursuant to Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988.
1. CONSERVATION OF ENERGY
The operation of your Company are not energy intensive. Adequate measures
have, however been taken to reduce energy consumption by using energy-
efficient equipments of latest technology. Your Company. Your Company has
replaced incandaescent lamps with CFL fittings and has started using
Electronic Ballast to reduce power consumption of flourscent tubes. Your
Company evaluates, on an ongoing basis, new technologies and techniques to
make the infrastructure more energy efficient. Air Conditions are used
economically when required and AC areas have been treated with heat
resistant materials to reduce heat absorption. As energy cost forms a very
small part of total costs, the impact on costs is not material, however
your company evaluates on an ongoing basis, new. technologies and
techniques to make infrastructure more energy efficient.
2. RESEARCH AND DEVELOPMENT (R & D)
The Research and Development Centre developed by the company provides
technological inputs with thrust on cost reduction, value addition, quality
improvement and development of new projects. The R & D Centre has pioneered
the use of several leading edge management principles in the software
industry in India, and will continue to innovate in these areas.
3. TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION
The Company has continued to invest in the latest servers and workstations
and continues to use the latest technologies for improving the productivity
and quality of its services and products.
4. FOREIGN EXCHANGE EARNINGS AND OUTGO
There has been no foreign exchange earnings and outgo during the year.
By Order of the Board
For Eider Infotech Limited
Dated : 31.07.2005 Sd/-
Place : Chandigarh (Sanjay Sinha)
MANAGEMENT DISCUSSION AND ANALYSIS
HIGHLIGHTS OF PERFORMANCE EVENTS
- The total sales of the Company increased by of 20
- The net profits of the Company after Depreciation and taxes by approx.
- Charting of Hyper Growth Plan
- Improvements in operational efficiencies -
ECONOMY AND BUSINESS ENVIRONMENT
The year, 2004-05 witnessed buoyant and sustained growth of the Indian
economy. The normal monsoon, which spurred the agricultural sector growth,
the pick up of industrial growth and the continued growth of service sector
made the Indian economy one of the fastest growing economies I the world.
The burgeoning foreign reserves and modest inflation notwithstanding the
high crude oil prices are positive factors for economic growth. The key
growth drivers like information technology and software sector are
continuing to be robust which augers for the software industry.
INDUSTRY OUTLOOK AND OPPORTUNITIES FOR SOFTWARE SECTOR
Despite the backlash against outsourcing in the US and other challenges,
Indian IT and ITESBPO exports have touched $12.5 billion (Rs 56,250 crore)
during 2003-04, a rise of 30.5 per cent as against $9.6 billion (Rs 43,200
crore) over the previous year.
Of the total exports, IT services grew by 25 percent, registering revenues
of $8.9 (Rs 40,000 crore) billion while ITES-BPO segment clocked revenues
of $3.6 billion (Rs 16,200 crore) recording a growth of 46 per cent,
according to National Association of Software and Services Companies
The overall software and services market in India will breach the $20
billion (Rs 90,000 crore) mark in 2004-05 with exports growing by 30-32 per
cent to $16.3 billion (Rs 73,350 crore). The IT services and products
exports is expected to touch $11.2 billion while exports in ITES-BPO
segment will be $5.1 billion (Rs 22,950 crore).
Americas continued to be the primary market for Indian software exports,
accounting for 70 per cent of the revenues, followed by UK with 15 per
cent. Indian software and service companies are exporting to 112 countries
around the world and are exploring new markets.
Nasscom is setting up a high-powered Global and National Advisory Board to
constantly evolve best practices, both from a regulatory and compliance
In view of above, there are ample opportunities of growth for this sector
RISKS AND CONCERNS/ THREATS
Our business is subject to extensive regulation by Government, which could
have an adverse effect on our business. We may be required to obtain
additional approvals from Central, State and Local Governments. Competition
is also a matter of concern. Changes in technology may render current
technology obsolete or require further capital investments. However your
Company is always conscious about these factors and tries to think a step
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The operations of the Company's units and subsidiaries are reviewed by
finance and software professionals of the Company's management Audit
The management Audit function 'examines and evaluates the adequacy,
relevance and effectiveness of the internal control systems, compliances
with the policies and statutory/ regulatory and other requirements.
Appropriate recommendations are made from operational and financial
managements perspectives. It also provides value added services to the
auditees for improvements in efficiencies and prevention of avoidable
losses. The system is headed by Chief Auditor and reports to Executive
Industrial relations remained cordial and harmonious throughout the year.
The efforts are being regularly made to enhance the output and efficiency
of employees. The focus is also on the training and development through on
job environment and training programmes.
SEGMENT WISE PERFORMANCE
The segment wise performance of the Company is covered in Notes on Accounts
given in this Annual Report.
* Share Capital
* Paid up capital of the Company stands at Rs. 1999 lakhs.
* Reserves and Surplus
a) Loan funds
Your Company is a Zero Debt Company with no loans liability.
ENHANCING SHAREHOLDERS VALUE
The creation of shareholders value is one of the prime objectives of the
Company. The Management is considering Hyper Growth Plan which in turn will
also improve returns to shareholders.
Business Expansion Programmes
With the above credentials, experience, expertise & strengths, and with a
view to participate in & partake of, the global information revolution,
the company has adopted and is implementing a Business Expansion Programme
through acquisition of Software Company in USA, investment in Software
development and Education Centre at Toronto, Canada and expanding the
operations of its subsidiary in USA through FCCB and Public Issues:-
Expansion of existing Area/Facilites
* Expansion of Software Development Centres Activites in Delhi, Chandigarh
& kala Amb.
* Strengthening of R & D Centres in two engineering Colleges (Land &
Buildings being provided free of cost by the colleges.)
* Formation of Joint Venture Partnerships in South Africa & Kenya for
franchising Higher Technical Education & IT Training.
* Establishment of IT Academies/Software Centers in 08 cities of India.
B) Entry into fresh Allied Areas
* Establishment of an International IT Gateway at New Delhi.
* Creation e-commerce Payment Gateway with Secure Servers & launch of
various specialized products & services thru e-comm sites.
* Acquisition of Infotech & Software/ Companies in USA /Canada for
strengthening overseas marketing promotion activities and launching Sales
* Commercialize the operations of Bio-Technology Division in which the
Company Research and Development has made substantial investment.
* Establishment of out sourcing Office at Shangai China to promote import
export business in High value Hi-Tech products.
* Establishment of Software Development and Education. Centers in Canada,
New Zealand, U. K and South Africa.
* Restructuring of e-comm portals with new 1 MB Mail Box & E-Mail services
internet on GSM & providing leading services as a Global Long Distance
* Strengthening of Wireless Business which the Company has acquired in a
structured deal from Eider Technologies Ltd.
* Enhancing of Channel Partners & Distribution Network from Costing 256 to
Statements in the Management Discussion and Analysis describing the
Company's objectives, expectations or predictions may be forward looking
with in the meaning of applicable securities, law as and regulations.
Actual results may differ materially from those expressed in the statement.
Important factors could influence the Company's operations.