DIRECTORS REPORT
Your Directors present the 16th Annual Report and the audited accounts of your Companyfor the year ended 31st March 2011.
FINANCIAL HIGHLIGHTS
| | Rs. in ‘000s |
| Particulars | For the year ended 31st March 2011 | For the year ended 31st March 2010 |
| Sales and Services | 333,868.57 | 3,414.91 |
| Other Income | 2,160.62 | 2,147.09 |
| Total Income | 336,029.19 | 5,562.00 |
| Profit /(Loss) Before Depreciation, Interest & Taxes (PBDIT) | 96,916.95 | (5,961.70) |
| Interest | 4,487.19 | 8.10 |
| Depreciation | 59,471.04 | 391.22 |
| Profit / (Loss) Before Tax | 32,958.72 | (6,361.02) |
| Provision for Tax | (14,472.80) | 0.00 |
| Net profit / (loss) before exceptional item | 47,431.52 | (6,361.02) |
| Profit on sale of investments | 0.00 | 0.00 |
| Net profit/(loss) after exceptional item | 47,431.52 | (6,361.02) |
| Earnings Per Share (Rs.) | 4.21 | (0.51) |
| Equity shares, par value Rs. 10/-each | | |
| Basic/Diluted (Rs. per share) | | |
| Before exceptional item | 4.21 | (0.51) |
| After exceptional item | 4.21 | (0.51) |
PERFORMANCE
During the year under review, under the Scheme of Arrangement as approved by theHon'ble High Court of Karnataka, the Managed Printing Solutions division of M/s. wepsolutions India limited was acquired as a new line of business. The financials given abovefor the year 2010-11 are not comparable to the previous year. The Management Discussionand Analysis forms part of the Annual Report.
DIRECTORS
Dr. A L Rao was appointed as additional director with effect from 30thApril 2011.
Mr. Ram N Agarwal was appointed as additional director and Executive Chairman ofthe Company with effect from 9th July 2011. Remuneration payable to Mr. Ram N Agarwal isdetailed in the notice to the AGM seeking approval of members.
Mr. G H Visweswara joined our Company in 1995 as Senior General Manager. In October2006, he was elevated to the post of the Chief Executive Officer & Managing Director.The company has immensely benefited under the leadership of Mr. Visweswara. He offered hisresignation from the Post of Chief Executive Officer & Managing Director. However,considering his vast experience and expertise your Board appointed him as an additionaldirector of the company with effect from 9th July 2011.
Mr. Sudhir Prakash and Mr. Tej Sharma, retire at the forthcoming AnnualGeneral Meeting. Being eligible, Mr. Sudhir Prakash offers himself for reappointment. Mr.Tej Sharma retires from the board.
Mr. Ram N Agarwal, Dr. A L Rao, Mr. G H Visweswara, all additional directors seekelection to the Board at the Annual General Meeting.
A brief profile of the Directors is given in the Notice of the Annual General Meeting.
DIVIDEND
In view of the current economic situation and the financial needs of the company tosustain growth and enhanced investments for targeted growth of the company, it has beendecided to conserve and retain our earnings.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 withrespect to the Directors' Responsibility Statement, it is hereby confirmed that:
(a) In the preparation of the annual accounts for the financial year ended 31st March2011, the applicable accounting standards have been followed along with proper examinationrelating to material departures;
(b) The Directors have selected such accounting policies and applied them consistentlyexcept where otherwise stated in the notes on accounts and made judgments and estimatesthat were reasonable and prudent so as to give a true and fair view of the state ofaffairs of the company at the end of the financial year and of the profits of the companyfor the year under review;
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the accounts for the financial year ended 31st March2011 on a 'going concern' basis.
CORPORATE GOVERNANCE
Your company adheres to all the Corporate Governance Code as prescribed by the StockExchanges and SEBI. A detailed report on Corporate Governance is provided in this AnnualReport. The Auditors Certificate on compliance with the standards also forms part of thisAnnual Report.
DEPOSITORY SYSTEM
Equity shares of your company are compulsorily tradable in dematerialized form. Yourcompany has signed agreements with National Securities Depository Limited and CentralDepository Services (India) Limited for de-materialization of its equity shares.
PUBLIC DEPOSITS
Your Company has not accepted any deposits from the public during the year underreview.
RESEARCH & DEVELOPMENT
Since your company is mainly a solution provider, your company as not so far investedin Research and Development. However, your Board is considering of setting up of anin-house research and innovation team to help the growth of the business in the years tocome.
SUBSIDIARY COMPANY
As on 31st March 2011, company has no subsidiary. Hence requirement of reporting thestatement pursuant to Section 212 of the Companies Act, 1956 and other statutory financialstatements of a subsidiary does not arise.
EMPLOYEE STOCK OPTION PLAN
There is no ESOP scheme in the Company subsequent to the implementation of the schemeof Arrangement approved by the Hon'ble High Court of Karnataka.
AUDITORS
Auditors M/s CGS& Co., Chartered Accountants retire at the ensuing Annual GeneralMeeting and they do not offer themselves for re-appointment. Hence,your Board recommendsappointment of M/s N M Raiji & Co., Mumbai as the Statutory Auditors of the Company.Suitable resolution is proposed in the notice sent to shareholders for the 16th AnnualGeneral Meeting.
PERSONNEL
There are no employees drawing remuneration in excess of limits specified in Section217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules,1975 as amended.
HUMAN RESOURCES
Your directors take this opportunity to record their appreciation for the contributionof all employees of your company during the year. As on 31.03.2011, the employee strengthof your company stood at 1. However, subsequent to the implementation of the Scheme ofArrangement and merger of the business unit Managed Printing Solutions with the company,the strength of employees as of 30th June 2011 stood at 118.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO
The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956, readwith Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988are given in the Annexure to this report.
ACKNOWLEDGMENTS
Your directors take this opportunity to thank all the shareholders, investors, vendors,customers, banks and the governmental authorities for their support. Your Directors wishto place on record their appreciation for the commitment and significant contribution madeby the employees.
| For and on Behalf of the Board of Directors |
| Bangalore | RAM N AGARWAL |
| Date: 6th August 2011 | Executive Chairman |
ANNEXURE TO DIRECTORS' REPORT
Information required under the Companies (Disclosure of Particulars in the Report ofthe Board of Directors) Rules, 1988
A. Conservation of Energy
The company's operations are not energy intensive. However, considering the fact that"Energy Saved is Energy Produced" your company and all the staff members avoidwastage of power usage wherever possible. Our expenditure on account of power consumptionis reasonable.
B. Foreign Exchange Earnings and Outgo
During the year earning in foreign exchange is Rs. Nil (previous year Rs. Nil).
Outgo on account of foreign currency during the year was Rs. 73.82 Mn (previous yearRs. Nil)
| For and on Behalf of the Board of Directors |
| Bangalore | RAM N AGARWAL |
| Date: 6th August 2011 | Executive Chairman |