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Directors Report of Maars Software International Ltd.

Mar 31, 2011

The Directors are pleased to present the Fifteenth Annual Report together with the Audited Accounts for the period ended 31st March, 2011 (July to March) and also in highlighting the performance of the Company in the previous year along with the scope of the profit generating capacity of the Company in the years to come.

FINANCIAL HIGHLIGHTS

2010 -2011 2009 -2010

(1st July, 10 to (1st April, 09 to 31st March 11) 30th June 10)

Profit Before Interest, Depreciation and Tax (11,17,84,296) (11 ,75,35,225)

Less: Interest & other finance costs - -

Depreciation and Amortization 30,59,499 2,54,93,542

Profit / (Loss) Before Tax (11,48,43,797) (14,30,28,767)

Less: Provision for Taxes 1,12,213 (54,62,140) (Current, Deferred 8s FBT)

Profit / (Loss) After Tax (11,49,56,010) (13,75,66,627)

Less: Previous Period

Adjustments

Less: Appropriations ------ ------

Proposed final dividend- Equity Shares

Preference share

Tax on Dividend ------ -----

Balance Carried Forward (11,49,56,010) (13,75,66,627)

TURNOVER AND PROFITS

During the year under review, due to the increase in competition in the IT Sector and the effects of the global meltdown in the previous year, the company has incurred a loss before tax of Rs. 11,48,43,797 /- and the loss before providing depreciation and amortization was Rs. 11,17,84,296 /- but Net Loss after Tax amounted to Rs. 11,49,56,010 /-

- OVERALL PERFORMANCE

The company in the year under consideration has survived the competition and managed to maintain and perform its business activities. The Company has consolidated its business activities in order to remove those which were having a negative impact on the Turnover of the Company. The company's portfolio of activities includes those activities wherein Company has emerged as a competitive organization and wherein Company can integrate its Business.

During the Financial Year under consideration i.e. 2010-2011, the Company has incurred a loss before tax of Rs. 11,48,43,797 /-

DIVIDEND

In view of the loss suffered by your Company during the year, Directors show their inability to recommend any dividend during the year.

FUTURE OUTLOOK

The future for Indian information technology sectors is growing due to the advancement in the technology and growing demand of from the service sectors for the provision of the better IT services. The IT sectors have had a history of outperforming the growth target perceived by various authorities. During the year under review the IT Sector has just been coming out of the economic crisis and the deficit suffered by the Financial Markets in the previous year. The financial markets influence the business cycle indirectly impacting the non-financial sectors, domestic and commercial consumptions of the goods and services. However even though there was a financial deficit your Company maintained its activities and has on the basis of the current experience planned its future activities.

sectors for the provision of the better IT services. The IT sectors have had a history of outperforming the growth target perceived by various authorities. During the year under review the IT Sector has just been coming out of the economic crisis and the deficit suffered by the Financial Markets in the previous year. The financial markets influence the business cycle indirectly impacting the non-financial sectors, domestic and commercial consumptions of the goods and services. However even though there was a financial deficit your Company maintained its activities and has on the basis of the current experience planned its future activities.

SUBSIDIARIES

The Company has three wholly owned subsidiaries namely M/s Maars Infratech Private Limited, Maars Software International Limited FZLLC- Dubai and Hi-tech Software Services INC- USA to manage the business of The details on these subsidiaries are outlined in the Management Discussion and Analysis Section appended to this Report.

CONSOLIDATED FINANCIALS

The Audited Consolidated Financial Statements for the year ended 31st March 2011 are annexed to this report. Further, the reports and standalone audited financial statements of subsidiary company viz. M/s Maars Infratech Private Limited , Maars Software International Limited FZLLC- Dubai and Hi-tech Software Services INC- USA is annexed to this report along with statement pursuant to Section 212 (1) (e) also forms part of this Annual Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the listing agreement with the Stock Exchange, the Corporate Governance Report along with Certificate by the Practicing Company Secretary on its compliance, Management Discussion and Analysis Report forms a part of this Annual Report.

DIRECTORS

3/4 Retiring Directors by Rotation:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Harshavardhan Singh Rathore, Director of the Company retires by rotation, and being eligible offers himself for re- appointment. Appropriate resolutions for re-appointment of aforesaid director are being moved at the ensuing Annual General Meeting. Brief resume of retiring directors are given in the notice of Annual General Meeting.

% Additional Directors:

In accordance with Section 260 of the Companies Act 1956 and Articles of Association of the Company, Mr. Prem Kumar Mysore was appointed as Additional Director w.e.f. 02nd June 2011.

Mr. Prem Kumar Mysore holds office up to the date of the ensuing Annual General Meeting. The Company has received a notice from one of the Member signifying his / her intention to propose the appointment of Mr. Prem Kumar Mysore as Director of the Company and appropriate resolutions for his appointment are being moved at the ensuing Annual General Meeting.

In accordance with Section 260 of the Companies Act 1956 and Articles of Association of the Company, Mr. Sunil Soni was appointed as Additional Director w.e.f. 01st August 2011.

Mr. Sunil Soni Mysore holds office up to the date of the ensuing Annual General Meeting. The Company has received a notice from one of the Member signifying his / her intention to propose the appointment of Mr. Sunil Soni as Director of the Company and appropriate resolutions for his appointment are being moved at the ensuing Annual General Meeting.

% Independent Directors:

In accordance with Section 260 of the Companies Act 1956 and Articles of Association of the Company, Mr. Prem Kumar Mysore and Mr. Sunil Soni were appointed as Additional Director on 2nd June 2011 and 1st August 2011 respectively.

Both of the Directors holds office up to the date of the ensuing Annual General Meeting. The Company has received a notice from one of the Member signifying his / her intention to propose the appointment of both the directors as Director of the Company and appropriate resolutions for his appointment are being moved at the ensuing Annual General Meeting.

Both the directors were designated as the Independent Director of the Company w.e.f 2nd June 2011 and 1st August 2011 respectively. The said Terms and conditions are subject to Members approval and the same is sought to be ratified from the members of the Company in this said Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibilities Statement, the Directors of the company hereby state and confirm that:

(1) In the preparation of the annual accounts, the applicable accounting standards have been followed:

(2) They 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 as at 31st March 2011 and of the profits of the Company for the year ended on that date;

(3) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(4) They have prepared the annual accounts on a going concern basis.

PUBLIC DEPOSITS

The Company has not accepted any deposits from public in accordance with Section 58A of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

Information of the employees of the category specified in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is contained in Annexure-A appended to this report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Considering nature of activities carried on by the Company and the list of industries included in the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988, the consumption of the Energy by the company has been to the minimal level and your company has taken all the steps necessary to conserve the energy as and where required.

AUDITORS

It is proposed to re-appoint the retiring auditors M/s. Daiya, Tiwari & Soni, Chartered Accountants, as the Statutory Auditors of the Company. The Company has received letters from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and they are not disqualified for such appointment within the meaning of Section 226 of the said Act.

The notes on Accounts referred to in the Auditors Report are self explanatory and therefore does not call for any further comments.

INTERNAL CONTROL SYSTEM

The Company has in place appropriate internal control systems, commensurate with its size and nature of operations.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation and sincere gratitude to the various Departments of the Central and State Government, Company's Bankers, clients, media and business constituents for t heir valuable assistance and support. The Directors also acknowledge the continued support received from investors and shareholders and the confidence reposed by them. The Directors place on record their appreciation for the sincere and dedicated services rendered by all the employees of the Company.

For and on behalf of the Board of Directors

Director Director

Ms. Sanhita Dey

(Company Secretary)

Date: 8th September, 2011

Place: Chennai


Jun 30, 2010

The Directors are pleased to present the Fourteenth Annual Report together with the Audited Accounts for the year ended 30th June, 2010 and also in highlighting the performance of the Company in the previous year along with the scope of the profit generating capacity of the Company in the years to come.

FINANCIAL HIGHLIGHTS (Rs. In lakhs)

2009-2010 2008-2009

Profit Before Interest, Depreciation and Tax (1421.52) 25.74

Less: Interest & other finance costs -- --

Depreciation and Amortization 252.13 205.37

Profit / (Loss) Before Tax (1673.65) (179.62)

Less: Provision for Taxes (Current & Deferred) (55.98) 190.94

Profit / (Loss) After Tax (1617.67) (370.56)

Less: Previous Period Adjustments -- --

Less: Appropriations -- --

Proposed final dividend- Equity Shares -- --

- Preference share -- --

Tax on Dividend -- --

Add/ (Less) : Balance Brought forward from the previous year (335.29) 35.28

Balance Carried Forward (1952.96) (335.28)

TURNOVER AND PROFITS

During the year under review, due to the increase in competition in the IT Sector and the effects of the global meltdown in the previous year, the company has incurred a loss before tax of Rs 16,73,65,262/- and the loss before providing depreciation and amortization was Rs 14,21,51,868/- but Net Loss after Tax amounted to Rs 16,17,67,024/-

OVERALL PERFORMANCE

The company in the year under consideration has survived the competition and managed to maintain and perform its business activities. The Company has consolidated its business activities in order to remove those which were having a negative impact on the Turnover of the Company. The companys portfolio of activities includes those activities wherein Company has emerged as a competitive organization and wherein Company can integrate its Business.

During the Financial Year under consideration i.e. 2009-2010, the Company has incurred a loss before tax of Rs 16,73,65,262/-

DIVIDEND

In view of the loss suffered by your Company during the year, Directors show their inability to recommend any dividend during the year.

FUTURE OUTLOOK

The future for Indian information technology sectors is growing due to the advancement in the technology and growing demand of from the service sectors for the provision of the better IT services. The IT sectors have had a history of out performing the growth target perceived by various authorities. During the year under review the IT Sector has just been coming out of the economic crisis and the deficit suffered by the Financial Markets in the previous year. The financial markets influence the business cycle indirectly impacting the non-financial sectors, domestic and commercial consumptions of the goods and services. However even though there was a financial deficit your Company maintained its activities and has on the basis of the current experience planned its future activities.

SUBSIDIARIES- The Company has two wholly owned subsidiaries namely M/s Maars Infratech Private Limited and Maars Software International Limited FZLLC- Dubai. The details on these subsidiaries are outlined in the Management Discussion and Analysis Section appended to this Report.

CONSOLIDATED FINANCIALS

The Audited Consolidated Financial Statements for the year ended 30th June 2010 are annexed to this report. It may be noted that the financial year of the Company has been extended for a period of 3 months. Consequently, the current financial year is for 15 months i.e. from 01/04/2009 to 30/06/2010. Further, the reports and standalone audited financial statements of subsidiary companies viz. M/s Maars Infratech Private Limited & Maars Software International Limited FZLLC- Dubai are annexed to this report along with the statement pursuant to Section 212 (1) (e) which also forms part of this Annual Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the listing agreement with the Stock Exchange, the Corporate Governance Report along with Certificate by the Practicing Company Secretary on its compliance, Management Discussion and Analysis Report forms a part of this Annual Report.

DIRECTORS

Retiring Directors by Rotation:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. T. Vardharajan retires by rotation, and being eligible offers him self for re-appointment. Appropriate resolutions for re-appointment of aforesaid director are being moved at the ensuing Annual General Meeting. Brief resume of retiring directors are given in the notice of Annual General Meeting.

Additional Directors:

In accordance with Section 260 of the Companies Act 1956 and Articles of Association of the Company, Mr. Sangameshwar Mahapure was appointed as Additional Director wef- 7th October 2010.

Mr. Sangameshwar Mahapure, holds office up to the date of the ensuing Annual General Meeting. The Company has received a notice from one of the Member signifying his / her intention to propose the appointment of Mr. Sangameshwar Mahapure as Director of the Company and appropriate resolutions for his appointment are being moved at the ensuing Annual General Meeting.

Independent Directors:

In accordance with Section 260 of the Companies Act 1956 and Articles of Association of the Company, Mr. Sangameshwar Mahapure was appointed as Additional Director wef- 7th October 2010. It may be noted that Mr. Shivprakash Agarwal ceased as Director of the Company on 9th October 2010.

Mr. Sangameshwar Mahapure, holds office up to the date of the ensuing Annual General Meeting. The Company has received a notice from one of the Member signifying his / her intention to propose the appointment of Mr. Sangameshwar Mahapure as Director of the Company and appropriate resolutions for his appointment are being moved at the ensuing Annual General Meeting.

Mr. Sangameshwar Mahapure was appointed as Additional Director wef- 7th October 2010.

He was designated as the Independent Director of the Company w.e.f 7th October 2010. The said Terms and conditions are subject to Members approval and the same is sought to be ratified from the members of the Company in this said Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibilities Statement, the Directors of the company hereby state and confirm that:

(1) In the preparation of the annual accounts, the applicable accounting standards have been followed:

(2) They 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 as at 30th June 2010 and of the profits of the Company for the year ended on that date;

(3) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(4) They have prepared the annual accounts on a going concern basis.

PUBLIC DEPOSITS

The Company has not accepted any deposits from public in accordance with Section 58A of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

Information of the employees of the category specified in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is contained in Annexure-A appended to this report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Considering nature of activities carried on by the Company and the list of industries included in the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988, the consumption of the Energy by the company has been to the minimal level and your company has taken all the steps necessary to conserve the energy as and where required.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(Amount in Rupees)

Foreign Exchange Earnings NIL

Foreign Exchange Outgo NIL

Travel expenses NIL

( Cost of production ) NIL

Total Foreign Exchange Outgo (Business / Travel) NIL

AUDITORS

It is proposed to re-appoint the retiring auditors M/s. Agrawal Jain & Gupta, Chartered Accountants, as the Statutory Auditors of the Company. The Company has received letters from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and they are not disqualified for such appointment within the meaning of Section 226 of the said Act.

The notes on Accounts referred to in the Auditors Report are self explanatory and therefore does not call for any further comments.

INTERNAL CONTROL SYSTEM

The Company has in place appropriate internal control systems, commensurate with its size and nature of operations.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation and sincere gratitude to the various Departments of the Central and State Government, Companys Bankers, clients, media and business constituents for their valuable assistance and support. The Directors also acknowledge the continued support received from investors and shareholders and the confidence reposed by them. The Directors place on record their appreciation for the sincere and dedicated services rendered by all the employees of the Company.

For and on behalf of the Board of Directors

Sd/- Sd/- Director Director

Place : Chennai Date : 10.03.2011



 
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