Our Directors have pleasure in presenting the 20th Annual Report and the Audited
Statement of Accounts of the company for the financial year ended 30st April, 2005.
|Gross Profit before interest and depreciation
|Less : Interest
|Profit Before Tax
|Less : Provision for Taxation
|Profit After Tax
|Balance brought forward
|Amount available for appropriation
|Proposed dividend on equity shares
|Corporate tax on dividend
|Debenture Redemption Reserve
|Balance carried to Balance Sheet
2 MANAGEMENT ANALYSIS AND DISCUSSION
The sales of the Company for the year ended 30th April, 2005 touched Rs.26.66 lakhs and
Net Profit were Rs.1.23 lakhs. Your Company has improved its position in the domestic
market and software industry. The year under review was one of them most challenging years
for IT industry all over the world. Constant efforts are put to redesign the planning and
implementation process to aim for leadership on the theme of rapid growth and
differentiation. We are confident that the steps taken will help achieve the size,
scalability, brand and ambition necessary to create the next generation IT Solutions arid
REVIEW OF OPERATIONS
The Indian IT Industry is one of the top 10 industries in India. The IT Industry has
shown signs of recovery and IT/Technology expenditure is expected to rise this year as
against a stagnant trend in the past two years. The domestic growth has been driven by
rapid expansion of IT Infrastructure by Government, Education, Telecom, BPO and Corporate
segments. The Indian IT Industry is interspersed with several large, medium and is nail
players offering their services. The competition and challenges to medium size niche
players like SSTL is emerging primarily from large system integration companies.
Your Company is strong in providing IT Infrastructure set-up, support and management as
well as in the system integration business. The wide range of products and solutions,
domain expertise and competency pools created by the Company over the year has helped in
customer retention and addition of new customer accounts. Clients are looking for a
company that is a trusted advisor and a strategic partner. In response to clients needs,
we have been working on several new service initiatives. Your company seeks long term
partnerships with clients while addressing their various IT requirements. Your Company's
customer centric approach has resulted in high levels of client satisfaction.
Your Company has reorganized to face new challenges of greater client expectations,
rapidly changing business scenario and heightened competition. As a part of it business
process reengineering the Company is constantly analyzing the business areas to focus on
the most profitable and productive ones. This has helped in maintaining the profitability
levels despite the reduction in the sales turnover. Your Company has also helped many of
its clients improve their processes and systems by providing consulting services and
high-end products and solutions.
The domestic IT spends is likely to continue its current upward trend. Organizations
have been increasing their IT spends for process improvements and efficiency enhancements
to face competition and increased productivity. Organizations are widely outsourcing the
various activities of managing their IT infrastructure to increase operational efficiency.
Your Company has clearly drawn its roadmap as a dominant provider of end-to-end IT
solutions and services encompassing comprehensive services of IT infrastructure design,
implementation and lifecycle support. Continuous research and development of new services,
products, processes and solutions allows your Company to enhance quality, productivity and
customer satisfaction through innovation. Initiatives are being taken for development of
solutions on Storage systems, Disaster Management Systems, Security, Converged
Your Company has established a national service network and this will help in providing
support to a large base of customers. Your company is continuously evolving new business
processes, modifying its existing line of activities and expanding its business
capabilities to gain higher growth and market share.
Your directors do not recommend any dividend for the year ended3d1 April, 2005.
The company has not accepted any deposit within the meaning of Section 58A of the
Companies Act, 1956 and the rules made there under.
Mr. S. R. Poojari retires by rotation at the ensuing Annual General Meeting and being
eligible offers himself for re-appointment. During the year Mr. Sham Mishra have resigned
from the Board due to pre-occupation .The Board placed on record his appreciation of the
valuable services rendered by them during his tenure.
Mr. S. R. Poojari was appointed as Additional Director and requires confirmation of the
Shareholders as Director. He is entitled for re appointment and retired by rotation.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement Under Section 217 (2AA) of the Companies Act, 1956 with
respect to Directors" Responsibility Statement, it is hereby confirmed:-
That in the preparation of the annual accounts for the financial year ended 30th
April, 2005 and the Application Accounting Standards had been followed along with proper
explanation relating to material departures.
That the Directors had selected such accounting policies and applied them
consistently and made judgments and estimates that were 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 the year under review.
That the Director had taken proper and sufficient care 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
That the Directors had prepared the accounts for the financial year ended
30thApril, 2005 on a going concern basis.
M/s S. S. Trimbakkar & Co., Chartered Accountants, Auditors of the company hold
office till the conclusion of the ensuing Annual General Meeting and are eligible for
appointment by the Company.
As there are no employees, drawing remuneration as per provisions of Section 217 (2A)
of the Companies Act, 1956, and due to that, there is no requirement to submit particulars
of employees as per the provisions of section 217 (2A) of the Companies Act, 1956. read
with the provisions of Companies) Particulars of Employees Rules, 1975.
Conservation of Energy, Technology Absorption, Research & Development and Foreign
Exchange Earnings and Outgo:-
Conservation of Energy:
The Company's operations involve low energy consumption. However efforts to conserve
and optimize the use of energy through improved operational methods and other means
The Technology available and utilized is continuously being upgraded to improveoverall
performance and productivity.
|Foreign Exchange Earnings: Nil
||Foreign Exchange Outgo: Nil
Your Company continues to be committed to the systems of good corporate governance by
increased transparency and accountability to its shareholders. Pursuant to clause 49 of
the Listing Agreement with Stock exchanges, a report On Corporate Governance and Auditors
certificate regarding compliance of conditions of Corporate Governance are made part of
the Annual Report.
Your Directors place on record their appreciation of the assistance and support
extended by all Government authorities, financial institutions, banks, consultants,
solicitors, shareholders and debenture holders of the company. Yours directors also wish
to thank management and staff of, the promoter company, for the continuous guidance and
support received from them. Your directors express their appreciation for the dedicated
and sincere services rendered by employees of the company.
For and on behalf of the Board
|Dated: 1st September, 2005
REPORTON CORPORATE GOVERNANCE
(As required by Clause 49 of the Listing Agreement of the Stock Exchanges)
SSTL firmly believes in abiding by the Code of Corporate Governance so as to be a
responsible company. The company's philosophy on corporate governances seeks the
attainment of the highest levels of transparency, accountability and equity, in all facets
of its operations, and in all interactions with its stakeholders, including the
shareholders, employees, government and lenders. The company takes utmost care to balance
individual interest with corporate goals and continues to remain committed to fairness,
transparency, accountability and responsibility.
SSTL believes that all its operations and actions must serve the underlying goal of
long term value creation for its shareholders and investors:
Board of Directors
Composition: - The present strength of the Board is three Directors. Attendance of
each director at the Board meetings and the last AGM conducted. Eight Board Meetings were
held in 2004-2005: -
|Name of the Director
||Category of Directorship
||No. of Board Meetings attended
||% of total meetings attended
||Attendance a! the last AGM
|MR. J. S. VARSHNEY
|MR. S. PAWASKAR
Terms of Reference & Composition, Name of Members and Chairman
The Audit Committee comprises of Mr. M. V. Ramana, Chairman of the Committee,
Mr.S.Pawaskar and Mr. J.S.Varshney all being Non-Executive Independent Directors. The
Directors along with the Statutory Auditors are invitees to the meeting. The Terms of
Reference of this Committee are wide enough covering the matters specified for Audit
Committee under the Listing Agreements.
All the members of the committee are non-executive Directors having knowledge of
finance, accounts and Company Law The Terms of Reference of this Committee are wide enough
covering the matters specified for Audit Committee under the Listing Agreements.
The terms of reference of the Audit commitee includes:-
1. To review the company's reporting process and its financial process,
2. To review the accounting and financial policies and practices.
3. To review the efficiency of the internal control mechanism and monitor risk
management policies adopted by the company and ensure compliance with regulatory
4. To review reports furnished by the internal and statutory auditors and ensure that
suitable follow up action is taken.
5. To examine Accountancy, Taxation and disclosure aspects of all significant
6. Recommending the appointment and removal of external Auditors, Fixation of Audit
Fees and also approval for payment for any other services.
7. To look into the reasons of substantial defaults in the payment to the credtors
8. To seek information from any employee.
Audit Meetings and the attendance during the year.
There were five meetings of the Audit Committee during the year 200405.
Remuneration to Directors
The details of the remuneration paid to the Director, during the year 2004-2005 are
||All elements of remuneration package i.e. salary benefits, bonus, etc.
||Fixed component and performance linked incentives along with the
performance criteria (Rs)
||Service contracts notice period, severance fees
||Stock option with details, if any, and whether issued at discount as
well as the period over which accrued and over which exercisable.
|Mr. Sham Mishra
||Rs.10,000/- p.m. (all inclusive)
The agreement with the Whole Time Director is for a period of one year or normal
retirement date whichever is earlier. Either party to the agreement is entitled to
terminate the agreement by giving not less than one-month notice in writing to the other
party. Due to unavoidable reasons Mr. Sham Mishra has submitted his resignation due to
preoccupation to the Board. Presently, the company does not have a schemefor grant of
stock options either to the executive directors or employees.
The details of payment to Non-Executive Independent Directors during the year 2004-05
are given below: -
||SITTING FEES (IN RS.)
||COMMISSION (IN RS.)
|MR. M.V. RAMANA
|MR. J.S. VARSHNEY
|MR- S. PAWASKAR
Investors/Shareholders Grievance Committee
The Company's Investors/Shareholders Grievance Committee has been functioning under the
Chairmanship of Mr. M. V. Ramana presently.
Independent Director. The other members of the committee are Mr. M. V. Ramana, Mr.S.R.
POOJARI and Mr. Sunil Pawaskar Directors of the company. Mr. M.V.Ramana, Manager is the
Compliance Officer of the Company. The Company had received few complaints from the
shareholders and almost all of them have been resolved by furnishing the requisite
General Body Meetings
Details of the location of the last three AGMs and the details of the resolutions
passed or to be passed by postal ballot.
19th A.G.M.:-Reo Hotel 128 The Mall.Kanpur-208001 at 11.00 a.m
The last two 18th & 17th Annual General Meetings of the company were held at Hotel
Bliss, Near Gumati No.5, Gurudwara, 111-A/5.G.T.Road, Kanpur-208012 between 10.00 t o
12.00 noon and all the Meetings commenced between 10.00 a.m. to 12.00 noon. The
shareholders passed all the resolutions set out in the respective notices.
Disclosure on materially significant related party transactions i.e. transactions of
the company of material nature, with its promoters, the directors or the management, their
subsidiaries or relatives etc. that may have potential conflict with the interests of the
company at large.
Details of non-compliance by the company, penalties, strictures imposed on the company
by stock exchanges or SEBI or any statutory authority, on any matter related to capital
markets, during the last three years. Except NSE/BSE due to non-compliance of some
clauses, the trading was suspended and it was revoked in the year 20042005.
|Means of Communication
| Quarterly results
| The presentations made to institutional investors or to the analysts
| Newspapers in which results are normally published in
||Local newspapers of Kanpur
| AGM: Date, Time andVenue
||Tuesday the 25th October, 2005
||at Reo Hotel, 128,The Mall Road, Kanpur-
| Financial Calendar
||1st May, 2004 to 30th April, 2005
| Date of Book Closure
||Thursday 20th October to Tuesday 25th
||October, 2005 (both days are inclusive)
| Listing on stock exchange
|ISIN Number for NSDL & CDSL
|Registrar and TransferAgents
||Sharpro Services, Satnam Estate
||Chakla, Andheri (E), Mumbai
| Distribution of shareholding and share holding pattern as on
| Outstanding GDRs /ADRs /Warrants or any convertible instruments conversion date
and likely impact on equity
| Address for correspondence.
The distribution of shareholdings as on 30.06.2005 is as follows :-
|No. of equity shares held
||No. of Folios
||No. of shares
|1 to 25
|26 to 50
|51 to 100
|101 to 500
|501 to 1000
|1001 to 10000
|10001 and 100000
|100001 to and above
|No. of shareholders in physical mode
|No. of shareholders in electronic mode
|INFORMATION FOR SHAREHOLDERS
|Shares Listed at
|The Stock Exchange, Mumbai
|National Stock Exchange Ltd., Mumbai
U.P.STOCK Exchange Asso. Ltd.(Regional Stock exchange)
The trading of the equity shares of the company is suspended. The company submitted
papers for the revocation of the same.
The Listing fees are outstanding and same will be paid immediately after improvement of
the cash flow position of the company.
Share Transfer System
The Company's shares are traded on the Stock exchanges compulsorily in Demat mode.
Shares in physical mode, which are lodged for transfer at Share Transfer Agent are
processed and subject to exercise of option under compulsory transfer-cum-demat
procedures. All valid transfers are processed and effected normally within stipulated
period as prescribed by the regulating authorities. The shareholders are given an option t
o convert the shares into dematerialized form and letters to that effect are sent to all
transferees. Based on their response, the share certificates are either sent to their
addresses or dematerialized with intimation to the shareholders' designated Depository
Participants. The entire process is, however, completed normally within a period of 30
days from the date of receipt of an application.
FINANCIAL CALENDAR (TENTATIVE) FOR RESULTS
||End of August.2004
||End of November, 2004
||End of February, 2005
||End of May, 2005
DIVIDEND PAYMENT DATE NIL
Outstanding GDRs/Warrants or any Convertible Instruments, Conversiondate and likely
impact on equity. The company has not issued any GDRs .
The equity shares at par will be issued against the warrants on paymentas under: Nil
Lock-in period: Shares having distinctive Nos. nil are not transferable for 3 years
|For and on behalf of the Board