ANNUAL REPORT YEAR -1998-2000
SHRI MM SOFTEK LIMITED
Your Directors have pleasure in presenting their third Annual Report
together with the Audited Accounts of the Company, for the period ended
March 31, 2000.
Your company has performed well once again by exceeding the set target for
the year under consideration.
At Rs.1010.33 lakhs gross income and Rs.280.54 lakhs profit after tax, the
annualised growth has been 315.60% and 333.87% respectively.
In the period under retrospect, the Company diversified into Product
development, nonetheless maintained its core operations in software
development, export and training. iSMART is world class e-business software
for the global retail industry. The Company has made several installations
in india and abroad and deeper penetration into market segments are being
effected to proved for an aggressive sales implementation.
The 100% Export Oriented Unit at STPI-Bangalore, which was inagurated on
February 19, 1999 commenced operations from February 22,1999. Equipped with
the latest infrastructure, satellite uplink, communication facilities
amongst others, highly skilled software professionals use COM,DCOM,ACTIVE-X
to develop E-Commerce, E-Business and Internet applications for the global
market. In its maiden year, the unit generated Rs.48,386,271 in earnings.
Transformed from MM COMPUTERS, the training division completed ten
glorifying years in February' 2000. There are at present six centres
including three franchise units and nearly 20,000 students several
corporates have qualified in various disciplines, the latest being
"Training on live projects". The Company has plans to open many more
branches in India and overseas centres particularly in Asia-Pacific region
and African Countries.
Your Directors have pleasure in recommending a dividend of rupee one per
share for the sixteen months period (December 1,1998 to March 31,2000) on
the paid up share capital of the Company as on March 31, 2000 on pro-rata
basis. If approved at the ensuing Annual General Meeting will be paid to
those shareholders whose names appear on the Register of Members as on May
FUTURE PLANS :
The global IT market for e-commerce, net-commerce and e-business are more
focussed on the latest in technology, quality and services. Your company
has clinched a niche for itself in this sphere and wants to take advantage
of the highly profitable global business opportunity. To symbolise the
same, alliance with TRANSTREAM INC., USA was agreed upon which will ensure
synergy in terms of technology, management and business focus. The unique
"e-NETCOM", which is an integration of e-commerce of MM Softek and
Networking of Transtream Inc. is seen to have a global market potential of
While at the time of this report, FIPB approval is awaited, it may be
pertinent to note that due deligence of both entities by experts in the
field of technology, management, law and business was effected to determine
the stock swap of 13,522,727 equity shares of the Company against common
stock and/or stock equivalents of Transtream Inc. USA. (A brief profile of
TRANSTREAM INC. is given in Annexure - II).
At present the employee strength is over one hundred and fifty. An expected
twenty five percent induction during the current financial year is
envisaged. A good compensation package and retention policy besides,
introduction of the Employee Stock Option Scheme has ensured low labour
turnover and has imbibed high morale and motivation.
EMPLOYEES STOCK OPTION SCHEME:
In terms of SEBI guidelines on ESOP and Shareholder's resolution at the
extraordinary general meeting, a compensation committee was constituted
which in turn has vested the administration of the scheme under a TRUST.
Release from the trust will be made at appropriate intervals to invite and
retain the best talent in the industry.
(i) Options granted:
Five lakh equity shares to be vested in "MM SOFTEK COMPFNSATION COMMITTEE
ii) Date of grant of option: April 28, 2000
(iii) Quantum of option :
Based on the number of years of service, future potentiality, aggregate
eligible quantum in respect of each employee will be released in three
(iv) Management of trust:
Shall vest amongst Directors and/or Managerial personnel, who are neither
promoter(s) nor belong to the promoter(s) group.
(iii) Eligible Employees:
Permanent employees of the Company on the muster rolls as on the date of
vesting of option.
(iv) Vesting Period:
To correlate with the 28th day of April each year.
(v) Pricing formula:
At a discount not exceeding 50% of the closing price as at April 28, 2000.
(vi) Options vested: Nil as on date
(vii) Options exercised: Nil
(viii) Total number of shares arising as a result of exercise of option:
(ix) Options lapsed: Nil
(x) Variations in terms of options: Nil
(xi) Money realised by exercise of options: Nil
(xii) Total number of options in force: Nil
(xiii) Employee wise details of options granted to: As in Annexure -III
(xiv) Diluted earnings pershare pursuant to issue of shares on exercise of
option calculated in accordance with international accounting standard
(IAS) 33.: Not Applicable
PARTICULARS OF EMPLOYEES:
As required under the provisions of Section 217 (2A) of the Companies Act,
1956, read with rules framed thereunder, a statement of particulars of the
employees has been annexed to this report and marked as Annexure-I.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORBTION:
The Company has made efforts to ensure conservation of energy in all
departments of operation. No technology was imported during the year.
FOREIGN EXCHANGE EARININGS AND OUTGO:
During the year the Company is in receipt of foreign exchange earnings to
the extent of Rs. 55,959,936 (Previous year- Rs.6,502,758).
The total foreign exchange outflow during the year was Rs. 5,142,957.
(Previous year nil).
Prof. V B Moleyar, Mr. Ch Gopalakrishna Bhat, Mr. B Janardhana Bhat, Mr. K
Shankara Bhat, Mr. K Shivarama Bhat, Mr. K Ganapathi Bhat and Mr. Pare
Mahalingeshwara, have resigned during the revamp of the organisation. The
Board records with appreciation and gratitude their yeoman services to this
organisation. It shall always be the endeavour of the Board to emulate
their good work which created and nourished the organisation thus far.
Joining the Board would be Mr. P K Padhi, Founder, Director, Chief
Executive Officer and Chairman of the Board of Transtream Inc. and subject
to their consent Mr. J D Power III and MF. Hubert J Tremblay, also
Directors of Transtream Inc.
Mr. K UIIas Kamath, Chartered Accountant, will retire at the conclusion of
the forthcoming Annual General Meeting of the Company and the Board has
recommended DELOITTE HASKINS & SELLS to be appointed as Statutory Auditors
under section 224 of the Companies Act, 1956.
Your Directors place on record their deep appreciation for the unstinted
support extended by the Esteemed Customers, Vendors, Bankers, Government
and Quasi Government Agencies, STPI Authorities and the Shareholders.
Nothing could have been possible without the dedicated and untiring efforts
of the Employees at all levels and the Consultants with their continued
support extended to the Company.
The Directors reiterate their appreciation to all Employees and Consultants
for commendable teamwork, high degree of Professionalism and enthusiastic
efforts displayed by them during the year.
For and on behalf of the Board
Place : Bangalore M MAHABALA BHAT
Date : May 5, 2000 Managing Director