klg systel ltd Directors report

KLG SYSTEL LIMITED ANNUAL REPORT 2010-2011 DIRECTORS REPORT 1. To the Members: Your Directors take pleasure in presenting the Twenty Sixth Annual Report of the Company together with Audited Financial Statement of Accounts for the year ended March 31, 2011. 2. Financial Results: The financial results of the Company are summarized here under: (Rs. In Millions) Year ended Year ended 31.03.2011 31.03.2010 Sales and Services 971.29 2359.44 Profit before interest and depreciation (174.37) 714.34 Interest (290.13) (210.83) Depreciation (253.72) (189.24) Profit before tax (809.26) 314.27 Provisions & Adjustments for tax 267.47 (113.76) Prior Period Adjustments (0.34) (2.33) Profit after tax (541.44) 198.18 Surplus brought forward from previous year 221.18 130.42 Amount available for Distribution - 328.59 APPROPRIATIONS: Prior period adjustment of dividend, including dividend tax Proposed dividend - 6.35 Tax on proposed dividend - 1.05 Transfer to general reserve - 100.00 Balance carried forward (320.26) 221.19 3. Sales and Profitability Fiscal year 2010-2011 was challenging period for the whole industry and for your Company as well. Your company has reported a turnover of Rs. 971 million as compared to Rs.2,359 million for the corresponding previous year. The Company reported loss before interest, depreciation and tax of Rs.174.37 million as compared to profit of Rs. 714 million for the corresponding previous year. The Company reported a loss before tax of Rs. 809.26 million as compared to profit before tax of Rs. 314 million for the last year. The loss after tax of Rs. 541.44 million as compared to profit after tax of Rs. 198 million for the previous year. The main reason for loss is because of payments stuck in EPC projects and also the companys decision not to proceed with EPC business. Your Directors are putting in their best efforts to improve the performance of the Company. 4. Dividend In view of losses incurred by the Company, your Directors have not recommended any Dividend on Equity Shares for the financial year ended on March 31, 2011. 5. Future Outlook During financial year 2010-2011 though we started our operations on a positive note, however the global economic scenario has put a tremendous pressure on the whole industry and on your Company too. Details on future outlook are discussed for both Strategic Business Units of the company below: LifeCycle Solution The revenue and profitability has gone down compared to financial year 2009-2010. The decline in revenue and profitability can be attributed to the recessionary conditions in industry and infrastructure. As such the company hopes that revenues shall be better in financial year 2011-12 as compared to 2010-2011. Power Systems Solutions During the financial year 2010-11, your company has been awarded an order of Rs. 897.6 millions from Chattisgarh State Power Distribution Company Limited (CSPDCL) to act as an IT Implementing Agency in CSPDCL under part A of R-APDRP program of the Government of India. Though your company was technically qualified in various other bids for different utilities in India, it was not able to win any contract because of lower price bids from the competitors. This has been a major set back for the company. Some tenders are still under finalization and your company has made competitive bids for the same. Your company has developed Connectgaia.com technology for Energy Efficiency. During the year it has been successfully deployed in Pune Mahanagar Corporation, CPWD-Mumbai, PWD-Delhi, JUSCO, Kolhapur Muncipal Corporation, Maharashtra Jeevan Pradhikaran and Indian Railways. With the increasing pressure on Clean Environment and Global Warming; your company is hopeful that this technology shall find a large national and international market. 6. Conservation of Energy, Research and Development, Technology Adaptation, Foreign Exchange Earnings and Outgo Information pursuant to 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 is as under: * Conservation of Energy The utilization of energy is minimal and need based. The Management of the Company is conscious of the need to conserve energy resources and adopts conservation measures in operations wherever applicable. * Research & Development and Technology Absorption A. Research and Development (R & D): The Company strongly believes that continuous innovation through Research and Development is the only way for compounded growth in future. It has intensified efforts in R&D by setting up a team for development of new technologies and products. The Company has also procured software tools (and trained engineers for using these) from World leaders in their respective fields to make it a World-class software development organization. A revenue expenditure of Rs. 13 million (previous year: Rs. 25 million) was incurred during the period under review on activities relating to research and development while the capital expenditure (previous year: Rs. 12 million). B. Technology Absorption, Adaptation and Innovation The Company has various strategic alliance partners, all-renowned in their respective areas, and is continuously adapting the latest technologies available through these partners. * Foreign Exchange Earnings and Outgo: During the year under review the earnings and outgo in foreign exchange were of the order of Rs. 5.46 million (previous year: 4.53 million) and Rs.113.81 million (previous year: Rs. 172 million) respectively. 7. Directors Responsibility Statement: The Directors confirm that: (i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures; (ii) 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 at the end of the financial year and of the profit or loss of the company for that period; (iii) The directors have 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 frauds and other irregularities; (iv) The directors have prepared the annual accounts on a going concern basis. 8. Corporate Governance The Board of Directors support the concept of Corporate Governance and having regard to transparency, accountability and rationale behind the decisions have made proper disclosures at Annexure I as a separate report under the heading Corporate Governance. A Certificate from the Statutory Auditors confirming compliance of the conditions of Corporate Governance as per the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges is Annexed to the Report on Corporate Governance. 9. Management Discussion and Analysis Report The report as required under the Listing Agreement is at Annexure II and forms a part of the Directors Report. 10. Listing of Securities: - Presently, the Equity Shares of the Company are listed on the following stock exchanges: i) National Stock Exchange of India Limited. (NSE) Exchange Plaza, Bandra (E), Mumbai-400 051 ii) Bombay Stock Exchange Limited. (BSE) Phiroz Jeejee Bhoy Towers, Dalal Street, Mumbai-400 001 The listing fee of above mentioned stock exchanges for the year 2011-2012 has already been paid. - Global Depository Receipts (GDRs) of the Company are listed on Luxembourg Stock Exchange (LuxSE). Foreign Currency Convertible Bonds (FCCBs) of the Company are listed on Singapore Stock Exchange (SGX-ST). 11. Issue of further securities: A. Global Depository Receipts (GDRs): During the year ended March 31, 2007 the Company had raised US $ 7,499,700 by issue of 2,307,600 Global Depositary Receipts (GDR) in international markets. Each GDR holder is entitled to convert GDR into one equity shares worth Rs.10.00 each fully paid up. These GDRs are listed on the Luxembourg Stock Exchange. As on March 31, 2011, 2,306,850 GDRs were cancelled and converted into equivalent number of underlying shares. 750 GDRs are still outstanding. B. Foreign Currency Convertible Bonds (FCCBs): During the year ended March 31, 2007 the Company issued 2200, 1% Coupon bearing Foreign Currency Convertible Bonds (Bonds/FCCBs) of US$10000/- each aggregating US$ 22 million, due in 2012. These Bonds are convertible at any time up to March 16, 2012 by holders into fully paid equity shares of Rs. 10 each with full voting rights (Shares) at a Conversion Price of Rs.400 per share and subsequently Conversion Price has been reset to Rs.350 per share. The conversion rate for US dollar has been fixed at USD 1.00=Rs.43.70. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed in US dollars on March 27, 2012 at 144% of their principal amount. The Bonds may be redeemed, in whole but not in part, at any time at the option of the Company at their Accreted Principal Amount if less than 10% of the aggregate principal amount of the Bonds originally issued remains outstanding. The Bonds may also be redeemed in whole but not in part at any time at the option of the Company at their Accreted Principal Amount in the event of certain changes relating to taxation in India. The Company will, at the option of any bondholder, redeem such holders Bonds at their Accreted Principal Amount upon certain events such as Delisting of the Shares or upon the occurrence of Relevant Event etc. Presently, the outstanding FCCBs are of US$ 16 million. During the year, bondholders have not exercised the option to convert their bonds in the equity shares. These Bonds are listed on the Singapore Exchange Securities Trading Limited (the SGX-ST). 12. Human Resources and Employee Stock Option Scheme Human resources are the key resource for your Company. Your Company has been able to create and continuously improve a favourable work environment that encourages novelty and meritocracy at all levels. Employee relations remained cordial at all Companys locations. The Directors take this opportunity to record their appreciation for the outstanding contribution of all employees. The Company had instituted KLG Systel Limited Employee Stock Option Scheme 2005 to reward and help retain its employees/ directors and to enable them to participate in its future growth and financial success. The Company, on April 12, 2006 had granted 2,99,500 Employee Stock options to the employees/directors of the Company @ Rs. 119.58 per option, which after exercise are to give rise to equivalent number of equity shares of Rs. 10/- each. The company instituted another Employee Stock Option Scheme 2007, the approval for which was obtained by way of special resolution passed by shareholders in its Annual General Meeting held on September 08, 2006. The Company, on May 26, 2008 had granted 69,000 Employee Stock Options to the employees of the Company @ 631.40 per option, which after exercise are to give rise to equivalent number of equity shares of Rs. 10/- each. The Compensation Committee at its meeting held on May 26, 2008 has granted 38,500 options to the employees of the Company at Rs. 621.22 (based on price determined as per the approved Scheme) under the KLG Systel Employee Stock Option Scheme 2005. 13. Consolidated Financial Statements Pursuant to Clauses 32 and 50 of the Listing Agreement, your Company has prepared Consolidated Financial Statements as per the Accounting Standards applicable to the Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. Audited Consolidated Financial Statements along with the Auditors Report are annexed in this Report. 14. Subsidiary Companies As on March 31, 2011, KLG Systel Limited has two subsidiary companies namely (i) KLG Software Technology and Infrastructure Private Limited and (ii) KLG Power Limited. Pursuant to the General Circular No 2/2011 dated February 08, 2011 of the Ministry of Corporate Affairs (Government of India), the Company need not attach the Balance Sheets of its subsidiary companies, however in accordance with the conditions stated in the aforesaid Circular, the Company hereby undertakes that it shall make available the individual annual accounts of its subsidiary companies to the holding and subsidiary Company investors, on receipt of any request for the same. The annual accounts of the subsidiary companies will also be kept for inspection by any investor in its registered office and that of the subsidiary company concerned. The Company is presenting the consolidated financial statements of its subsidiaries as required under the Accounting Standard-21 (AS-21) on consolidation of financial statements. Particulars required to be given under the provisions of Section 212 of the Companies Act, 1956 in respect of the subsidiary companies, are appended. 15. Transfer to Investor Education and Protection Fund In terms of the provisions of Section 205C of the Companies Act, 1956, the Company has transferred an amount of Rs.0.164 million, being the amount of unclaimed dividend for the financial year ending March 31, 2003 to the Investor Education and Protection Fund established by Central Government. 16. Auditors M/s B. Bhushan & Co., Chartered Accountants, the Auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting of the Company and being eligible offer themselves for re-appointment. 17. Directors Mr. Prabir Purkayastha was appointed as an Additional Director by the Board of Directors on January 17, 2011, and he holds office upto ensuing Annual General Meeting of the company. A notice under section 257 of the Companies Act, 1956 has been received from a member proposing his candidature as a Director of the Company and being eligible, Mr. Prabir Pukayastha has offered himself for Directorship. Your Directors recommended his appointment as Director at the ensuing Annual General Meeting. Mr. Vijoy Kumar was appointed as an Additional Director by the Board of Directors on January 17, 2011, and he holds office upto ensuing Annual General Meeting of the company. A notice under section 257 of the Companies Act, 1956 has been received from a member proposing his candidature as a Director of the Company and being eligible, Mr. Vijoy Kumar has offered himself for Directorship. Your Directors recommended his appointment as Director at the ensuing Annual General Meeting. Your Directors regret to inform that during the financial year 2010-11 Mr. K.L. Goel, Mr. MukeshArora, Mrs. Ritu Goel, Mrs. Upasana Goel, Mr. Ankush Krishan, Mr. Adarsh Soni, Mr. B.D. Gupta, Mr. Prabir Sengupta, Mr. Sundararajan Govindarajan and Mr. G.K. Pandey have tendered their resignation to the Board and the same were accepted subsequently by the Board. Your Directors place on record their deep appreciation for the services and contributions made by them as Directors on the Board of the Company. 18. Restructuring of Debts under CDR Your company has approached the Banks for re-scheduling/re-structuring of banking arrangements on account of high interest cost and liquidity crunch faced by the Company during the past one year and M/s SBI Capital Markets Limited has been appointed as an advisor for making the proposal of restructuring of Debts to Corporate Debt Restructuring Cell. The re- structuring proposal under Corporate Debt Restructuring mechanism has been admitted by Corporate Debt Restructuring Empowered Group for the restructuring of outstanding Debts. 19. Particulars of Employees Information in accordance with provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is annexed to this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company. 20. Acknowledgements The Board puts on records its sincere appreciation for the support, which the Company has received from its Bankers, Customers, Government Organizations, Overseas Strategic Alliance Partners, Staff and Employees. The Board also appreciates the confidence reposed by the shareholders in the Company and its management. For and On Behalf of the Board of Directors (Kumud Goel) Chairman Date : August 10, 2011 Place: Gurgaon Annexure-II MANAGEMENT DISCUSSION AND ANALYSIS A) Business Overview and Outlook: The company used Financial Year 2010-11 to consolidate the business of both its Power and Life Cycle business. The company remained focus on its own Connectgaia-Intelligent Electricity and Water management solution and extended portfolio in the Life Cycle business where it successfully formed new relationships to respond to the changing needs of the Indian market. The Connectgaia technology is now gaining lot of traction in the market and the company has been able to secure number of orders in Transportation, Municipal, Public Works, Manufacturing and Water & Waste Water sectors. The technology is helping our customers in these segments by way of saving energy, automation of working of key assets of the company and eventually reduces the carbon footprint. KLG offers knowledge solutions to oil & gas, process, power, water, ferrous and non-ferrous metals, manufacturing and infrastructure sectors in India by providing a unique mix of industry domain expertise, software solutions, consultancy and training. With a strong knowledge base and domain expertise in specific verticals, KLG continues to leverage its existing resources and relationships. The company is expanding its portfolio of offerings in specific verticals continuously with a view to enabling its SBUs in addressing a wider spectrum of market opportunities. B) Segment-wise Performance: A review of the performance of the various Strategic Business Units is given below: (i) POWER SYSTEM SOLUTIONS: The Power System Solutions SBU provides end-to-end integrated solutions for the complete Business Process Automation of Power Distribution Utilities as well as solutions for end consumers of power. These solutions cover hardware, software and communication technologies. Your Company has been developing the products for Power Sector and has assimilated a lot of experience in the Indian Power Sector. * Your Company has been able to maintain the competitive edge in the market and is implementing the following prestigious orders: * To act as an IT Implementing Agency in CSPDCL under partAof R-APDRP from Chattisgarh State Power Distribution Company Limited (Rs. 89 Crores) * Spot Billing for 0.5 million consumers for Punjab State Electricity Board * Operation and Maintenance of IT Infrastructure for 1.0 million consumers for BEST, Mumbai * Supply and Erection for Rural Electrification of 11,806 villages of Punjab under Rajeev Gandhi Grameen Vidyutikaran Yojna. * Supply and Erection of 13 no 33-kV Substations in Panchkula, UHBVN (Rs. 30 crore) Major Opportunities in the current year: Connectgaia.com-lntelligent Energy Management & Demand Response Solution: Connectgaia is a convergence of the internet and power highways empowering electricity and water consumers to intelligently manage their electricity and water consumption through web. It is an end-to-end solution for empowering electricity and water consumers to Measure, Visualize, Analyze and Control their usage in real-time and without any geographical boundaries. It enables energy and business managers, executive staff, and Operations & Maintenance personnel to view electricity consumption and relevant cost data through highly dynamic customizable reports, charts, and graphs. Connectgaia solution is a combination of field devices and enterprise portal that seamlessly integrates energy demand points with meters, sensors, controllers and enterprise web portal. Connectgaia has received industry recognition in India and abroad and there are a number of installations of Connectgaia in various industry segments. Connect Gaia is an enabler for Smart Grid framework where the objective is to make the grid more responsive to the ever-fluctuating electricity demand. Each industry segment has a different requirement to monitor and control their utility consumption and hence Connect Gaia provides a highly customizable dashboard so that users can customize them based on their specific functional needs. Since Connect Gaia is web based, it has wide applications for companies who have a geographically spread infrastructure such as water networks, transportation networks and cluster of building and townships which need to be monitored and controlled at a specific location level as well as enterprise level. In absence of Connect Gaia, companies generally have a very cumulative view of their electricity consumption and assets and hence often fall short of taking a strategic decision to reduce their cost of utility. In light of the above, Connectgaia has already got enormous response in the following markets. a. Water and Waste Water b. Railways c. Municipal Corporations d. Public Works Department e. Industrial Facilities and f. Green Building Initiatives As on date, Connectgaia is being used in the following applications. a. Water Asset Monitoring on intake and distribution side b. Pump House monitoring and automation c. Sensor based intelligent pump operations for remote applications d. Street Lighting automation e. Sub-station automation f. Building Management g. Automated Metering h. Outdoor Lighting Management 1. Market Coverage: Connect Gaia is presently sold on a hybrid Direct and In-direct model. Connect Gaia account management team currently handles large and strategic opportunities while the channel services already established requirements. This gives us a good market coverage but ensures that we are directly involved in creating new market demand. We are in the process of appointing additional partners to have effective market coverage in India. Water sector and Indian Railways have emerged as good market for Connectgaia. 2. International Marketing: Connectgaia addresses a market segment, which has a global demand. It has been found through research that the issues and challenges in the electricity market are very similar across the globe and companies are fighting a similar battle to save energy and get a deeper view of their energy consumption patterns. Most countries are working on an ambitious Smart Grid initiative where Connectgaia plays a vital role. In Phase-I, we have identified following markets for Connectgaia presence through a combination of direct and indirect channel network a. South East Asia b. China c. Americas d. Middle east and Africa Connectgaia R & D team has worked with Intel on an Intel 32-bit industry class atom chipset which has provided us an opportunity to launch entirely new set of applications in the energy management and industrial automation areas. Intel has also partnered in KLG. Application/Benefits of Connectgaia.com Online monitoring and measurement of energy usage Remote switching on and off of equipment, machinery, street lights, water pumps or appliances- instantaneously On Demand/Time based scheduling & Rule based scheduling Energy planning and load forecasting Energy accounting and balancing to check wastages and theft Communicates with temperature, pressure, light, flow, level and all types of sensors Ensures utilities comply with power delivery service levels and utility bill verification Allows users to participate in Demand Response with utilities and power network Allows monitoring of quality parameters in the water and power distribution network Allows for time of day tariff based incentive program Generation of recommendations to improve quality of power Monitor equipment performance or system behavior Detects the need for load shedding Guide to optimize the need for captive power plant generation Stimulates the economic development of an organization Contributes to saving of energy resources Appliance Protection features to safe guard the connected load from power line disturbances/abnormalities. Connectgaia.com is technology partner with global leaders such as IBM, Intel, ZigBee Alliance, Landis+Gyr and many more. Connectgaia.com has been awarded and appreciated for its excellence in innovative product category several times by the leading and renowned award committees and organizations. Some of our major accomplishments include: 2010 IBM Beacon Award for Cloud Computing Innovation IBM Solution Architecture for Energy & Utilities Framework validation (This validation makes KLG Systel the only ISV having a SAFE certified AMI solution in the ISA region) 2009 Logica Global Innovation Venture Partner Award 2009 IBM Ready for Energy & Environment Solution Validation 2009 Best Lotus Energy and Environment (Green) Award 2009 IBM Beacon Award finalist in the Outstanding Energy & Environment (Green) Solution * 2008 NASSCOM Innovation Awards (Finalist) * 2008 IBM Best ISV Award Energy & Utilities Industry Solutions 2007 CM National Award for Excellence in Energy Management 2007 Golden Peacock Award in the Innovative Product/Service Category * Among NASSCOMs 100 IT Innovators of 2007 CE Certification Connectgaia - Magic Meter: We believe in constantly upgrading our Connectgaia.com family of products to keep abreast with latest technologies and have recently launched Magic Meter which is an extension of Connectgaia.com. Magic Meter is a device which allows users to monitor electricity consumption of the home and office appliances like air-conditioners, printers, etc which consume less amount of electricity and also control them from anywhere. Key features of Magic Meter include Energy consumption and cost calculation, support to Home Area Network (Zigbee/Wi-Fi), control of appliances from internet or HAN, monitor of power quality, scheduled on/off of appliances, Email alerts and Group Metering. (ii) BUSINESS LIFE CYCLE SOLUTIONS: In Business Life Cycle Solution focus is on enhancing and effectively using the domain knowledge acquired. The future direction of the company is to consolidate its customer base and to customize and verticalise the life cycle solutions to address the evolving needs of Indian Industries. Some of these growing needs are seamless integration of software solutions within the organization to meet the core financial management, human resources, customer relationships and the supply chain, as well as other functional needs of the organization. The company has formed an exclusive relationship with Digsilent GMBH which is based out of Germany. The relationship will help the company in addressing the complete value chain of the power sectors comprising of Generation, Transmission and Distribution. This relationship will also help the company in addressing the emerging renewable energy market that is growing at a significant pace. (a) Enterprise Project Management: Enterprise Project & Management solutions bring together the disciplines of strategic planning & project management. They provide a framework for effectively managing both resources and the tactical plans for Projects. Delivering projects on time & on budget is a minimum requirement to do business for most organizations and in many industries it is critical to long-term success. Companies that adhere to strong project management methods, including detailed evaluation of scope and budget, ongoing risk management and measurement of project results are consistently more successful than those that do not. Following a structured project management method enables companies to predict and mitigate risks, better manage costs and deliver quality results that satisfy clients. In the most mature organizations these goals are linked to the strategic business objectives, giving these organizations a powerful competitive advantage. Your Company trained large number of professionals in Project Management who were from corporate such as L&T, Reliance, ONGC, GAIL, Tata Power, IOCL, SAIL, Railways, Jindal and many more. They were certified as per training program of PMI, USA which it represents in India. (b) Computational Engineering & Sciences (CES): This SBU continues to be a major contributor in the overall business of the company. With Indias GDP on track & major investments happening, the SBU promises to deliver more than expected in coming years. Your company addresses the engineering design and analysis requirements of its clients by partnering with them in implementation of the Plant/ Product life cycle. This is done through your Companys rich industrial and consulting experience, combined with state-of art software and hardware expertise in solid 3D modeling, plant design, piping analysis, FEA/CFD rapid prototyping, etc. A variety of solutions have been integrated to cover the entire lifecycle of manufacturing, process, petrochemical & infrastructure organizations, one of which is the integration of CAD, GIS & GPS solutions for a utility application. The Computational Engineering & Sciences SBU provides design & analysis tools and services in the area of Plant &Product life cycle to various segments including Oil & Gas, Infrastructure, Manufacturing, Metal etc. We are one of the leading end to end solution providers in this segment in India having experience of more than 20 years. The Company provides tools and services in the following are as: 1. Computer Aided Design 2. Computer Aided Engineering, 3. Plant Design & Analysis 4. Computer Aided Manufacturing 5. Civil/Architectural/Structural Design& Engineering. 6. Enterprise GIS Your company with its partnership with Autodesk offers a broad range of solutions in almost all vertical segments like Mechanical, Civil, Architectural, Electrical. From basic engineering drawing to digital prototyping in Mechanical, to advanced structural detailing in civil & structural and to Building Information Modeling in Architectural, your company provides comprehensive tools and services in CAD domain as one of the leading partner of Autodesk in India. Many of our customers have standard tools based on AutoCAD platform, which is an outcome of the efforts put by us for years. Your company is also associated with Autodesk to provide support to their large installation base in India including companies like BHEL, L & T, Alstom, EIL, Dasturco. With the strategic relationship with Intergraph, your company provides complete end to end solution in the field of plant design. From P & ID to digital plant models, your company provides tools and services for comprehensive design, analysis and modeling in the field of piping, structures, vessels. The company provides solutions where customers can have designers and engineers anywhere in the world working simultaneously, sharing information on projects, all with complete accuracy and synchronization of effort. This eliminates redundancies and reduces errors and delays, saving time and costs throughout the process. Customers: Your Company has a large customer base across all segments in the industry. The enterprise accounts include Larsen & Toubro, Engineers India Limited, Samsung, Indian Oil, Tata Steel, Mecon, BHEL, SAIL, Reliance (ADAG), Essar, Siemens, Alstom, Areva, SMS Demag, Humbolt, Technimont ICB, HCC, IOTL, Godrej, POSCO, Ordinance Factory, VECC-Dept of Atomic Energy, BARC, Geological Survey of India, JUSCO, Jindal, Vedanta, Hero Honda. (c) Industrial and Infrastructure Automation: Your company has enhanced the portfolio of services in this segment by way of partnering with hardware OEMs such as Mitsubishi Electric and IBM. Automation is a rapidly growing market in India. As new infrastructure is being created both in manufacturing as well as in public services, there is a growing need to automate the facilities as well as manufacturing processes. This business unit continues to sustain the growth momentum shown over the years. We have been able to create generic plant automation solutions for the metal industry including steel and aluminum. Our solutions have enabled manufacturing agility, design agility, supply chain agility for the players in these sectors. Your Company offers integrated solution for Industrial Automation and Supply Chain Planning and Optimization. Your Companys Manufacturing Execution System provides complete solutions to analyze the data captured from a wide variety of data sources over multiple sensors, plant organization to improve uniformity, increase yields, maximize productivity and decrease maintenance costs. Your Company assists the customers to achieve these goals by delivering information and analysis tools that organize and deliver plant intelligence, which is accessible throughout the organization from the Sensorto-Boardroom. As a result, the organizations are able to make better-informed decisions about their business. Your Company, for the last 12 years, has been offering IT enabled business optimization solutions in the manufacturing space. These solutions have evolved from a Human Machine Interface and Shop Floor Scheduling solution to a complete Plant Intelligence and Supply Chain Optimization application framework. The agility to accurately promise and quickly deliver increasingly customized products or new products requires synchronization across a broad scope of manufacturing activities performed by multiple organizations. (C) Adequacy of Internal Control: Your Company has an appropriate internal control system for business processes with regard to efficiencies of operations, financial reporting and compliance with applicable laws and regulations etc. The operating processes encompassing the entire gamut of operations are well-established and documented. Adequate internal control procedures and measures are present for cost control, purchase of materials, plant and machinery equipment and other items and maintenance and their sale and disposal. (D) Human Resources: Human Capital is a crucial asset for an IT and ITES Industry and an important business driver. Your Company considers its human resources as its most important asset. Your Company employs a number of well-qualified and skilled employees. Attracting, retaining and motivating employees and creating an environment that nurtures them to deliver their best has been a constant challenge for your Company. Your Company continues to invest in training and development programs for its employees in India as well as abroad. The Company has instituted number of Employee Stock Option Schemes from time to time for rewarding the well performing employees who are contributing to the growth of the company. At the end of the year under review, the total strength of the employees is 311.