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Directors Report of Frontier Informatics Ltd.

Mar 31, 2010

The Directors have pleasure in presenting the Twenty Second Annual Report together with the audited accounts of the Company for the year ended March 31, 2010. The operating results are as follows: (Rupees in Lakhs)

12 Months ended 12 Months ended

FINANCIAL RESULTS 31.3.2010 31.03.2009

Total Income 155.17 546.11

Gross Profit / (Loss) (56.30) (4.97)

Depreciation 268.65 293.31

Operating Profit / (Loss) (324.95) (298.28)

Interest 6.99 1.44

Prior Period Adjustments/ Write Offs/ Taxes 2.65 10.20

Net Profit / (Loss) after tax (334.60) (309.92)

Earnings/ (Loss) per Share (2.51) (2.32)

BUSINESS OPERATIONS

1. Online Training for IT Professionals

Taking into account the prevailing conditions for IT Business in the International Markets and after evaluation of Frontiers present strengths and weaknesses; it has been decided to restructure companys business operations. As a part of this, Online Training to IT Professionals in the International Markets, particularly in USA, has been identified as one of the important Strategic Business Units of the company. In this direction, company has established required infrastructure, recruited relevant staff, networked with competent global faculty and commenced operations. The Online Training activities take place predominantly in the night shift and will enable the company to exploit its infrastructure optimally and improve its future revenues. Subsequently, the company intends to expand these operations to cover IT professional in the Domestic Market as well.

2. Onsite Consulting Services

Onsite Consulting Services Business in US has been a substantial portion of Companys Business. To stabilize and strengthen this segment, Back Office support operations have been established at the companys registered office.

FUTURE OUTLOOK

1. Greater Emphasis on Offshore Projects

Last few years have been witnessing a significant shift from Onsite Business to Offshore Projects. While Onsite Consultancy business will continue to have certain level of demand, significant growth will nevertheless be seen in offshore business opportunities.

2. Advanced Education and Training

In view of improved market conditions in IT Industry, there is a resurgence of Education and Training Business. Making use of its past experience, company is finalizing its plans to re-enter this segment in 2010-11.

3. ITES / BPO Operations

There are a number of new opportunities emerging in IT enabled services and Business Process Outsourcing. The growth in this sector has been significantly higher than the mainstream Software Services Business. e-Accounting, Technical Help Desk, Telemarketing, Health Care support services, Call Centers etc are creating immense opportunities. Company will be looking for opportunities in the areas of Technical Help Desk and Back Office Operations.

DIVIDEND

Your Directors express their inability to recommend any dividend for the year due to the Loss incurred by the Company.

DIRECTORS

By virtue of Section 255 of the Companies Act, 1956 Mr. A.J.Sharma Director is liable to retire by rotation and, being eligible, offers himself for re-appointment.

Brief profile of Mr. AJ.Sharma is given below as per Clause 49 of standard listing agreement:

Name of the Director A.J.Sharma

Date of Birth 07-07-1949

M.A., L.L.B., Diploma in Personnel Management, Fellow Qualification Member of Institute of Company Secretaries of India.

Expertise in Specific Corporate Laws, Management, Business Administration Functional Area

AUDITORS

M/s T P Rao & Co, Chartered Accountants, Auditor: of the Company hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from the Auditors that their appointment, if made, will be in conformity with Section 224 (1B) of the Companies Act, 1956. M/s. T P Rao & Co, Chartered Accountants, being eligible, are recommended for re-appointment as Auditors of the Company till the conclusion of the next Annual General Meeting.

FIXED DEPOSITS

During the year, the Company has neither invited nor accepted any Fixed Deposits from the public under the provisions of Section 58A of the Companies Act, 1956.

CODE OF CONDUCT

The Board has laid down a code of conduct for all Board Members, senior management and employees of the Company. The relevant Declaration is enclosed as an attachment to the Directors Report.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company are listed at the Mumbai Stock Exchange Limited. The listing fee is paid for the financial year 2009-10.

AUDIT COMMITTEE

The Audit Committee consists of following Directors:

1 Mr MV Sastry Chairman

2 Singh B. Yalamanchili Member

3 Mr A J Sharma Member

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors responsibility statement, the Board of Directors hereby confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanations relating to material departures;

2.The Directors had 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 March 31,2010 and of the Loss of the company for that period.

3.Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4.The annual accounts have been prepared on a going concern basis.

PARTICULARS OF EMPLOYEES

There are no employees in the Company, whose particulars are required to be furnished under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and drawing salary in excess of the limits specified therein.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of the Company for the year under review is attached to and forms part of this report.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with the certificate from the Statutory Auditors certifying the compliance of Corporate Governance enunciated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

APPRECIATION

Your Directors wish to acknowledge the valuable support and cooperation, extended by Bank of India and all other Government Agencies. Your Directors also express their appreciation to the shareholders of the Company for their forbearance during difficult period and for reposing confidence in the future ahead.

Your Directors wish to place on record their appreciation of the hard work, dedication and commitment exhibited by its employees at ali levels.

For and on behalf of the Board of Directors

Frontier Information Technologies Ltd

Place : Hyderabad V K Premchand

Date : September 1,2010 Chairman & Managing Director




Mar 31, 2009

The Directors have pleasure in presenting the Twenty First Annual Report together with the audited accounts of the Company for the year ended March 31, 2009. The operating results are as follows:

(Rupees in Lakhs) 12 Months ended 12 Months ended

FINANCIAL RESULTS 31.03.2009 31.03.2008

Total Income 546.11 325.37

Gross Profit / (Loss) (4.97) (34.86)

Depreciation 293.31 301.15

Operating Profit / (Loss) (298.28) (336.01)

Interest 1.44 2.75

Prior Period Adjustments/ Write Offs/ Taxes 10.20 5.55

Net Profit / (Loss) after tax (309.92) (344.31)

Earnings/(Loss) per Share (2.32) (2.59)

BUSINESS OPERATIONS

1. Onsite Consulting Services

Onsite Consulting Services Business in US has been a substantial portion of Companys Business during the year.

2. Domestic Software

Company delivered additional software modules to Indo American Cancer Research Institute.

FUTURE OUTLOOK

1. Emphasis on Domestic Projects

In view of the global recession , particularly in the US, and increasing size of Domestic Software Market, company intends to focus more attention on medium to large domestic software projects, especially in E-governance area.

2. Advanced Education and Training

In view of improving market conditions in IT Industry, there is a resurgence of Education and Training Business. Making use of its past experience, company is finalizing its plans to re-enter this segment in 2009-10 . Company intends to re-launch Advanced Computer Education Programs.

SALE OF ASSETS

During the current financial year 2009-10, your Company had sold its land, building along with furniture and fixtures situated at Kandlakoyya village R R District, A.P., since the same were not being utilised for the business/operations of the Company. The sale was done through postal ballot process and all the formalities were complied with as per law, during the current financial year. The proceeds of the sale were utilized in discharging Bank Loan, short term demand loans, statutory and other dues.

DIVIDEND

Your Directors express their inability to recommend any dividend for the year due to the Loss incurred by the Company.

DIRECTORS

By virtue of Section 255 of the Companies Act, 1956 Mr. Singh B.Yalamanchili and M.V.Sastry Directors are liable to retire by rotation and, being eligible, offer themselves for re-appointment.

Brief profiles of Mr.Singh B.Yalamanchili and. M.V.Sastry are given below as per Clause 49 of standard listing agreement:

Name of the Director Singh B.Yalamanchili M.V.Sastry

Date of Birth 18-03-1945 01.02.1956

Qualification M.S from the University of Notre Dame, Indiana, USA; B.E from REC,Warangal B.Com;ICWA (Inter)

Expertise in VLSI Design, Microcontrollers, Chip Development, Hardware/ Finance, Accounts and Administration Functional Area Firmware and Software etc.



AUDITORS

M/s T P Rao & Co, Chartered Accountants, Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from the Auditors that their appointment, if made, will be in conformity with Section 224 (IB) of the Companies Act, 1956. M/S. T P Rao & Co, Chartered Accountants, being eligible, are recommended for re-appointment as Auditors of the Company till the conclusion of the next Annual General Meeting.

FIXED DEPOSITS

During the year, the Company has neither invited nor accepted any Fixed Deposits from the public under the provisions of Section 58A of the Companies Act, 1956.

CODE OF CONDUCT

The Board has laid down a code of conduct for all Board Members, senior management and employees of the Company. The relevant Declaration is enclosed as an attachment to the Directors Report.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company are listed at the Mumbai Stock Exchange Limited. The listing fee is paid for the financial year 2008-09.

AUDIT COMMITTEE

The Audit Committee consists of following Directors:

1 Mr MV Sastry Chairman 2 Singh B. Yalamanchili Member

3 Mr A J Sharma Member

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors responsibility statement, the Board of Directors hereby confirm that:

5

1. In the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanations relating to material departures;

2.The Directors had 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 March 31,2009 and of the Loss of the company for that period.

3.Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Annual Accounts have been prepared on a going concern basis.

INFORMATION PURSUANT TO THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988.

The Companys operations involve low energy consumption. The Company has already taken energy conservation measures wherever possible. Efforts to conserve and optimize the use of energy through improved operational methods will continue.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

A. Conservation of energy:

(a) Energy Conservation measures taken: Your Companys operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy-efficient computers and purchase of energy efficient equipment.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Nil

(c) Impact of the measures (a) and (b) above for energy consumption and consequent impact on the cost of production of goods: Nil

B. Technology absorption:

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company Software Development.

2. Benefits derived as a result of the R&D Integral part of Companys Activity.

3. Future plan of Action The Company will continue to undertake Research and Development of state-of-theart Software Tools, Applications, Web Services, Knowledge Management and Product Development and related services.

4. Expenditure on R & D Nil

5. R&D expenditure as a % of total turnover NA Technology Absorption,Adaptation and Innovation Nil

C. Foreign Exchange Earnings and Outgo:

Activities relating to Export The Company was engaged in the execution of Software Projects, development of Software Products and related services.

(Rs. in Lakhs)

2. Particulars March 31, 2009 March 31, 2008

Foreign Exchange Earnings 10.67 10.91

Foreign Exchange Outgo - -

PARTICULARS OF EMPLOYEES

There are no employees in the Company, whose particulars are required to be furnished under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and drawing salary in excess of the limits specified therein.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of the Company for the year under review is attached to and forms part of this report.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with the certificate from the Statutory Auditors certifying the compliance of Corporate Governance enunciated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

APPRECIATION

Your Directors wish to acknowledge the valuable support and cooperation extended by Bank of India and all other Government Agencies. Your Directors also express their appreciation to the shareholders of the Company for their forbearance during difficult days and for reposing confidence in the future ahead.

Your Directors wish to place on record their appreciation of the hard work, dedication and commitment exhibited by its employees at all levels.

For and on behalf of the Board of Directors Frontier Information Technologies Ltd

Place : Hyderabad V.K.Premchand Date : September 01, 2009 Chairman and Managing Director



 
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