cauvery software engineering systems ltd Directors report

CAUVERY SOFTWARE ENGINEERING SYSTEMS LIMITED ANNUAL REPORT 2005-2006 DIRECTORS REPORT Dear Shareholders, Your Directors have pleasure in presenting the 15th Annual Report and the Audited Statement of Accounts of the Company for the financial year ended 31st August, 2006. Rs.000 1. FINANCIAL RESULTS 2004-2005 2005-2006 Turnover 7398 7128 Gross Profit before interest and depreciation 263 220 Less : Interest - - Depreciation 66 48 Profit Before Tax 263 220 Less : Provision for Taxation - - Profit After Tax 263 220 Profit Period Adjustment - - Amount available for appropriation 87533 87533 Total 87533 87533 Appropriations: * Proposed Dividend on equity Shares - * Corporate Tax on Dividend - * Debenture Redemption Reserve - * Balance carried to Balance Sheet - TOTAL 87796 87753 2. MANAGEMENT ANALYSIS AND DISCUSSION COMPANY PERFORMANCE: The sales of the Company for the year ended 31st August, 2006 touched Rs.71.28 lakhs and Net Profit were Rs. 2.20 lakhs. Your Company has lost the business due to poor domestic scenario, industry down trend, war threats and global recession. The year under review was one of them most challenging years for IT industries 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 and Services Company. 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 of IT infrastructure by Government and Private sectors, Education, Computer Training, Call Centre, BPO and Corporate-segments. The Indian IT industry is interspersed with several large, medium and small players offering their services. The competition and challenges to medium size niche players like CSESL is emerging primarily from large system integration companies. Your Company is strong in providing IT infrastructure / Server 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 Companys Customer Centric Approach has resulted in high levels of client satisfaction. OUTLOOK The domestic IT spends is likely to continue its current upward trend. Organizations have been increasing their IT spends for process improvements and efficiency enhancement to face competition and increased productivity. Organizations are widely outsourcing the various activities of managing their IT infrastructure to increase operational efficiency and as well as growth / profitability. Your Company has clearly drawn its roadmap as a dominant provider of end-t- 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, Firewalls, Disaster Management Systems, Security, Converged Communications etc. Your Company has established a national service network and this will help in providing support to a large base of customers to provide the solutions. 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. ISSUE OF SHARES During the year Company had never issued Equity Shares. DIVIDEND Your Directors do not recommend any dividend for the year 31s August, 2006. CLAIM OF LOSS The operation of the company had a set back consequent upon the collapse of the operating office building (Poonam Chambers, B Wing, Dr. A.B.Road, Worli Mumbai) on 16th September, 1997 as a result of which the company had suffered huge losses. The losses quantified have been transferred to claims receivable based on legal advice. The dislocation of the operating has been corrected over the months and it is expected to improve upon further, during the current year. FIXED DEPOSITS The company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under. DIRECTORS Shri Kondala Rao and Shri P Amolik have been appointed as Directors and requests the shareholder for appointment of him as Director of the company. The Company had received Notice with requisite fees. DIRECTORSS 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 31st August, 2006 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 other irregularities. That the Directors had prepared the accounts for the financial year ended 31st August 2006 on a going concern basis. AUDITORS 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 re-appointment. COMPLIANCE CERTIFICATE 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 agreements 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. PERSONNEL 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 Companys operations involve low energy consumption . However efforts to conserve and optimize the use of energy through improved operational methods and other means will continue. TECHNOLOGY ABSORPTION: The Technology available and utilized is continuously being upgraded to improve overall performance and productivity. RESEARCH & DEVELOPMENT: Your company believes that Research & Development is a continues process and is a key driver to scalable and sustained corporate excellence. Our Research & Development activities help us gear for future opportunities and are focused to provide unique benefits to our customers. Accordingly during the year, several key focus areas were indentified. Foreign Exchange Earnings : Nil Foreign Exchange Outgo : Nil CORPORATE GOVERNANCE 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. ACKNOWLEDGEMENT Your Directors place on record their appreciation of the assistance and support extended by all government authorities, financial institution, banks, consultants, solicitors, shareholders and debenture holders of the company. Your 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 & ON BEHALF OF THE BOARD P AMOLIK Director KONDALA RAO Director Place : Mumbai Date : 12th December, 2006