Datapro Information Technology Ltd Directors Report.
DATAPRO INFORMATION TECHNOLOGY LIMITED
ANNUAL REPORT 2000-2001
Your, directors are pleased to present their report on the business and
operations of your company for the year ended March 31, 2001.
QUICK REFERENCE ON FINANCIAL RESULTS
Total revenue was Rs.967.66 Lac. Gross profit before Depreciation and
Interest was Rs.110.45 Lac (11.41% of total revenues) and profit after tax
was Rs.1.08 Lac. The fall in the revenue was mainly attributable to the
slump in the Information Technology Sector during the year under review.
However, your Company managed to reduce its overhead expenses and also some
of the direct costs as a part of its restructuring programme at operational
and managerial level.
Your directors have decided not to recommend dividend for the current year.
The fund generated during current year is provided for the utilisation in
the business operation and promotional activities.
Your company has not accepted any public deposits within the meaning of
Section 58A of the Companies Act, 1956, during the year under review and,
as such, no amount of principal or interest was outstanding as on the
balance sheet date.
INCREASE IN SHARE CAPITAL
In accordance with the power conferred to the Board by the special
resolution passed at the 10th Annual general meeting of the Company held on
17th July 1999, your company had issued and allotted vide the board
resolution passed at Board meeting held on 31st July 1999, 23 Lac Zero
Interest Fully Convertible Debentures (FCDs) of Rs. 100/- each with the
option to convert them into Equity Shares within a period of 16 months from
the date of allotment, to rank pari-passu with the existing Shares of the
Company. Pursuant to the authority given to the Board of Directors the
above said 23 Lac FCDs has been converted into 71,87,500 Equity Shares of
Rs. 10/- each at a premium of Rs. 22/- per share on 31st August 2000. As a
result of the above said allotment the Issued, Subscribed and Paid up
Capital of the Company had increased to 2,97,98,800 Equity Shares of Rs.
10/- each. Later on these Equity Shares were splitted up into 14,89,44,000
Equity Shares of Rs. 2/- each fully paid up, pursuant to the approval given
in the 11th Annual General Meeting of the Company held on 30th September
Your company demonstrated all-round though slow but steady growth during
the year under review. Your company has entered into On-line Domain name
Registration business in association with a well established US based
Principal Company eNom. It helped the Company to expand its business
within the existing infrastructure facility. The company has appointed more
than 70 resellers in addition to a number of direct customers during the
Though the year under review does not reflect growth in term of total
inflow and in turn net profit, but from business point of view it was very
crucial year in term of strategic decision, restructuring and
diversification is concerned. Your Company expects good revenue and
stabilising business operations in the corning years on the basis of the
effort made this year.
In addition, Your company is closely monitoring the market situation and
believes that its unique business model and prudent risk-management
practices, coupled with a strong customer base and deep client
relationships gives it a sustainable long-term competitive advantage. Your
company will aggressively pursue new opportunities and will ensure adequate
internal preparedness to take maximum advantage of such opportunities.
Composition of board of Directors
The existing board has a mix of whole-time and non whole-time independent
directors who bring a wide range of skill and experience to the Board.
The Company has implemented various processes to adhere with the Corporate
Governance, through meetings of the Board of Directors.
The Audit committee, comprising of all three independent directors as
members viz. Mr. A. D. Narula, Director and Mr. Deepak Kamdar, Director
arid Mr. Anand Bhatt, Director of the Company with Mr. A. D. Narula as its
Chairman. The Committee in its meeting held on 26th June 2001, discussed
and reviewed the audit plans, observations and reports of the Internal
Audit Department and followed up the implementation of corrective actions,
Companys Statutory Auditors were also present in the meeting to have their
views and comments on the adequacy of internal control systems in the
Company and Financial statements. The Audit Committee submits its reports
to the Board of Directors which are then discussed Board Meeting.
The Securities and Exchange Board of India, vide an amendment to-the
Listing Agreement, has now directed listed companies to follow a uniform
Code of Corporate Governance which also includes disclosures in the Annual
Report. Whilst the Company is in compliance with most of the requirements
prescribed on Corporate Governance, initiatives have been taken to ensure
that the Company is fully compliant with the Corporate Governance Code well
before the schedule of implementation i.e. March 31, 2002. The Company will
commence reporting on compliance with clause 49 of the listing agreement,
which has been mandatory from financial year 2001-2002.
ADEQUACY OF INTERNAL CONTROLS..
The internal control systems in the Company is sufficiently backed with the
reviews by management, and documented policies, guidelines and procedures.
The internal control systems are designed to ensure that the financial and
other records are reliable, for preparing financial statements and other
data, and for maintaining accountability of assets.
Mr. Deepak Karndar and Mr. A. D. Narula, directors, retire by rotation at
the ensuing Annual General Meeting of the Company and being eligible offer
themselves for the appointment. The Board recommends their re-appointments.
M/s. Rajesh Kukreja & Associates, Chartered Accountants, Statutory Auditors
of the Company will hold office till the conclusion of this Annual General
Meeting and being eligible, offer themselves for re-appointment. They have
furnished the requisite certificate to the effect that their re-
appointment, if effected, would be in accordance with Section 224(1B) of
the Companies Act, 1956.
Auditors report for the financial year under review is self explanatory
and it does not include points being qualified for comments and to be
highlighted except following;
Point no. 2(vi)(a)
The company has just ore employee out of total strength, who has completed
five years of service for eligibility of Gratuity benefits. Since the
material effect of the same is not substantial no actuarial valuation of
the same has been done during the current year.
Point no. 2(vi)(b)
Being the mufti location nature of business activities of the company, all
its supplier and customers are spread over the length and breath of the
country. Besides this main customer base of the Company consist of retail
dealing, it is an uphill task to receive the confirmation from them
immediately. However Company as a part of its internal check procedure, is
in the process of receiving the necessary reconciliation and confirmation.
Company has asked for the confirmation of the balance from Sangli Bank and
same is yet to be received.
PARTICULAR OF EMPLOYEES
There is no employee covered under Sec.217(2A) of the Companies Act, 1956
read with Companies (Particular of Employees) Rule, 1975.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING
AND OUTGO ETC.
Conservation of energy
The operations of your company are not energy-intensive. However, adequate
measures have been taken to reduce energy consumption by using energy-
efficient computers and by the purchase of energy-efficient equipment with
the latest technologies.
Research and development (R&D)
Research and development of new services, designs, frameworks, processes
and methodologies continue to be of importance at Datapro This allows your
company to increase quality, productivity and customer satisfaction through
continuous innovation. Further the Company continues to do research in
areas of communication, network management, internet and E-commerce
Future plan of action
There will be continued focus and increased investment in the above R&D
activities. Future benefits are expected to flow in from initiatives
undertaken this year.
Technology absorption; adaptation and Innovation
During the year, your company successfully shifted to latest version of
Software more particularly Windows 2000.
Foreign exchange earnings and outgo
(Value in Rs.)
Year ended Year ended
March 31, 2001 March 31, 2000
Total Foreign Exchange earnings Nil 36,898
Total Foreign Exchange outgo 1,51,79,987 49,35,247
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
1. That in the preparation of the accounts for the financial year ended
31st March 2001 the applicable accounting standards have been followed;
2. That the Directors have, selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the profits of the Company
for the year ended 31st March 2001;
3. That 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 fraud and other irregularities;
4. That the Directors have prepared the annual accounts for the financial
year ended 31st March 2001 on a going concern basis.
HUMAN RESOURCE MANAGEMENT
Given the knowledge-intensive nature of your companys activities, human
resources are among its most critical assets. Recognising this your
company has put in place a scalable recruitment and human resource
management process, enabling it to attract and retain high-caliber
The overall performance of the Company could not have been possible without
the dedication, commitment and enthusiasm of all its employees in another
difficult year. The Directors wish to convey their appreciation to all of
the Companys employees for their enormous personal efforts as well as
collective contribution to enable the Company to achieve the performance it
did. The Directors would also like to thank the shareholders, customers,
dealers, suppliers, bankers, and all the other-business associates for the
continuous support given by them to the Company and their confidence in its
for and on behalf of the board of directors,
Datapro Information Technology Limited
Chairman & Managing Director
Date : 11.08.2001
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