MIRA
INFORM REPORT
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Report Date : |
04.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
INFOTECH ENTERPRISES LIMITED |
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Registered Office : |
4TH Floor, A Wing, Software 11 Units Layout, Infocity, Madhapur,
Hyderabad – 500011, Andhra Pradesh |
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Country : |
INDIA |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
28.08.1991 |
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Com. Reg. No.: |
013134 |
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CIN No.: [Company
Identification No.] |
L72200AP1991PLC013134 |
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IEC No.: |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDI00460F |
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Legal Form : |
A Public Liability Company. The Company’s Shares are Listed on the
Stock Exchange |
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Line of Business : |
Provides Engineering Design Services and Geographic Information
Services to Manufacturing, Aerospace, transportation, Telecom, Utilities and
Government Customers Worldwide. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 8463000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Good |
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Comments : |
Subject is a well-established and reputed company having satisfactory track.
Directors are reported as experienced and respectable businessmen. Trade
relations are reported as fair. Business is active. Payments are usually
correct and as per commitments. The company can be considered normal for
business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
4TH Floor, A Wing, Plot No.11 Software Units Layout,
Infocity, Madhapur, Hyderabad – 500011, Andhra Pradesh |
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Tel. No.: |
91-40-23124042 / 23124045 / 66369357 |
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Fax No.: |
91-40-23124043 |
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E-Mail : |
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Website : |
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Branch Office : |
42,Nagarjuna hills,Panjagutta, Hyderabad – 500082 |
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Address : |
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Fax No.: |
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Branch
Office : |
5/6, Sher –e-Punjab Society, Mahakali Caves Road, Andheri (E), Mumbai
– 400093 |
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Tel No. : |
91-22-28230455 / 28391306 / 28390956 |
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Fax No.: |
91-22-28391230 |
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Branch office : |
B -37, Tower B, Sector – 1, Noida – 201301, Uttar Pradesh |
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Tel No.: |
91-120-2519025 / 28/ 2518801 -03 |
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Fax No.: |
91-120-2544905/ 2518933 |
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Branch Office : |
6/1 B, 49/1, 14th Main, Hosur Main Road, Bommanahalli,
Bangalore – 560 068 |
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Tel No. : |
91-80-25723221/ 3/ 4 |
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Fax No.: |
91-80-25723216 |
DIRECTORS
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Name : |
Mr. Mohan Reddy B.V.R. |
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Designation : |
Chairman & Managing Director |
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Name : |
Mrs. Sucharitha B. |
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Designation : |
Whole-time Director |
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Name : |
Mr. Murugappan M M. |
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Designation : |
Independent Director |
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Name : |
Mr. Sudhir Kumar Sethi |
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Designation : |
President & Executive Director |
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Name : |
Mr. Paul Roger Adams |
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Designation : |
Director |
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Address : |
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Name : |
Mr. John Saabas (W.e.f. 19.04.06) |
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Designation : |
Alternative Director to Mr. Paul Admas |
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Experience : |
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Name : |
Mr. Thirunarayana P. N. |
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Designations : |
Independent Director |
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Name : |
Mr. Ranjan Chak |
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Designation : |
Independent Director |
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Name : |
Mr. George Fink |
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Designations : |
Independent Director |
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Name : |
Mr. Prasad G.V. (w.e.f. 19.04.06) |
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Independent Director |
BUSINESS DETAILS
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Line of Business : |
Provides Engineering Design Services and Geographic Information
Services to Manufacturing, Aerospace, transportation, Telecom, Utilities and
Government Customers Worldwide. |
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Products : |
Item Code (ITC Code) Product Description 85249009.10 Software Services |
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GENERAL
INFORMATION
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No. of Employees : |
About 2000 |
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Bankers : |
Oriental Bank of Commerce 9-1,-129/1, Oxford Plaza building, S.D. Road, Secunderabad – 500
003, |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Price Waterhouse Chartered Accountant |
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Address : |
2nd Floor, L.B. Bhavan, Somajiguda, Hyderabad – 500 082 |
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Tel. No.: |
91-40-23301363/65 |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
As at March 31.2006 |
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18,000,000 |
Equity Shares |
Rs.10/- Each |
Rs.180.000 millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
As at March 31.2006 |
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15,219,202 |
Equity Shares |
Rs,10/- Each |
Rs.152.192
millions |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
152.192 |
147.270 |
145.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1963.584 |
1591.514 |
1384.400 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
2115.776 |
1738.784 |
1530.200 |
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LOAN FUNDS |
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1] Secured Loans |
2.314 |
2.402 |
1.500 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
2.314 |
2.402 |
1.500 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
2118.090 |
1741.186 |
1531.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
653.185 |
305.228 |
311.100 |
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Capital work-in-progress |
10.728 |
140.958 |
12.500 |
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INVESTMENT |
671.187 |
673.719 |
563.000 |
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DEFERREX TAX ASSETS |
25.593 |
17.715 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.000
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0.000 |
0.000 |
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Sundry Debtors |
673.787
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567.650 |
434.100 |
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Cash & Bank Balances |
273.519
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253.274 |
311.800 |
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Other Current Assets |
0.000
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0.000 |
102.600 |
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Loans & Advances |
200.965
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74.071 |
0.000 |
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Total
Current Assets |
1148.271
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894.995 |
848.500 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
259.672
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193.978 |
141.800 |
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Provisions |
131.202
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97.451 |
61.600 |
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Total
Current Liabilities |
390.874
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291.429 |
203.400 |
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Net Current Assets |
757.397
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603.566 |
645.100 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
2118.090 |
1741.186 |
1531.700 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover |
2136.903 |
1538.010 |
1245.400 |
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Other Income |
13.613 |
35.376 |
24.400 |
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Total Income |
2150.516 |
1573.386 |
1269.800 |
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Profit/(Loss) Before Tax |
351.390 |
293.140 |
144.400 |
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Provision for Taxation |
67.627 |
70.076 |
22.300 |
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Profit/(Loss) After Tax |
283.763 |
223.064 |
122.100 |
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Expenditures : |
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Cost of Goods Sold |
0.000 |
0.000 |
0.000 |
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Personnel Expenses |
877.171 |
618.956 |
0.000 |
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Administrative Expenses |
779.576 |
536.106 |
367.800 |
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Other Manufacturing Expenses |
3.033 |
1.114 |
79.100 |
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Purchases made for re-sale |
0.000 |
0.000 |
0.000 |
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Consumption of stores and spares parts |
0.000 |
0.000 |
0.000 |
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Increase/(Decrease) in Finished Goods |
0.000 |
0.000 |
0.000 |
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Salaries, Wages, Bonus, etc. |
0.000 |
0.000 |
467.800 |
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Managerial Remuneration |
0.000 |
0.000 |
0.000 |
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Payment to Auditors |
0.000 |
0.000 |
0.000 |
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Interest |
0.000 |
0.000 |
304.800 |
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Insurance Expenses |
0.000 |
0.000 |
0.000 |
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Power & Fuel |
0.000 |
0.000 |
21.700 |
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Depreciation & Amortization |
139.343 |
124.068 |
160.400 |
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Other Expenditure |
0.000 |
0.000 |
0.000 |
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Total Expenditure |
1799.123 |
1280.244 |
1401.600 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2006 1St
Qtr. |
30.09.2006 2nd
Qtr. |
31.12.2006 3rd
Qtr. |
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Sales Turnover |
727.300 |
830.700 |
922.400 |
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Other Income |
34.400 |
02.300 |
11.100 |
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Total Income |
761.700 |
833.000 |
933.500 |
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Total
Expenditure |
559.200 |
620.200 |
66.19 |
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Operating Profit |
202.500 |
212.800 |
271.600 |
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Interest |
00.600 |
00.500 |
01.200 |
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Gross Profit |
201.900 |
212.300 |
270.400 |
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Depreciation |
46.100 |
55.100 |
57.200 |
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KEY RATIOS
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Year |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Debt-Equity
Ratio |
0.00 |
0.00 |
0.00 |
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Long
Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
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Current
Ratio |
2.97 |
3.50 |
4.08 |
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TURNOVER
RATIOS |
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Fixed
Assets |
1.61 |
1.66 |
1.50 |
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Inventory |
0.00 |
0.00 |
0.00 |
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Debtors |
3.44 |
3.07 |
3.02 |
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Interest
Cover Ratio |
118.13 |
267.55 |
61.17 |
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Operating
Profit Margin(%) |
23.10 |
27.20 |
24.67 |
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Profit
Before Interest And Tax Margin(%) |
16.58 |
19.14 |
11.79 |
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Cash
Profit Margin(%) |
19.80 |
22.57 |
22.68 |
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Adjusted
Net Profit Margin(%) |
13.28 |
14.51 |
9.80 |
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Return
On Capital Employed(%) |
18.37 |
17.98 |
9.93 |
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Return
On Net Worth(%) |
14.73 |
13.65 |
8.27 |
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STOCK PRICES
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Face Value |
Rs.10.00 |
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High |
Rs.350.00 |
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Low |
Rs.352.00 |
LOCAL AGENCY
FURTHER INFORMATION
Company Profile
Founded in 1991, Infotech Enterprises is a global software services
company specializing in geospatial, engineering design and IT solutions. The
company specialize in software services in these areas for the utilities,
telecommunications, manufacturing, transportation, government and Retail
Markets. Infotech Enterprises (IEL) was promoted by a technocrat B V R Mohan
Reddy, a pioneer in CAD/GIS technology, in 1991. The company currently employs
over 2000 professionals across an expanding global footprint of 14 locations
including three development facilities in Hyderabad and Bangalore in India, and
Mayaguez in Puerto Rico. Infotech is a SEI CMMi Level 5 company, and is also
certified to ISO 9001:2000 standards. The infotech group of company consists of
Advanced Graphics Software GmbH, Infotech Aerospace Services Inc, Infotech
enterprises Ltd, Infotech Enterprises Europe Ltd, Infotech Software Solutions
Inc, VARGIS.The company has its Development Centers at Hyderabad, Bangalore,
Noida, Puerto Rico and Maryland.
Infotech is one of the largest providers of CAD/GIS-drawing and
mapconversion services, quality enhancement of digital database and format
conversion services in the world. Its net division is involved in designingof interactive
websites, EDI and e-commerce solutions. Currently, it isinvolved in developing
its skills in the area and plans to 'web enable' allits products. The areas of
core competence are Geographical InformationSystems, Engineering Solutions
& e-Solutions.
The company came out with its maiden public offer in March 1997 at a
priceof Rs 10/- each for cash at a premium of Rs 10/- per share to expands
itsactivity in software development. It has rapidly globalised its software
services business through group companies and subsidiary offices in the
UK,Europe & North America.
Further it has received ISO 9001 & ISO 9002 quality certification by
BVQi London, across all operation and has an impeccable track record for
delivering high quality software services and solutions on global scale.
During 1999-2000, the company acquired Data View Solutions Ltd UK
(now known as Infotech Enterprises Europe Ltd ) and became a subsidiary of the
company. Cartographic Sciences Ltd, Mumbai also was acquired by the company and
became a subsidiary during this period. A new state-of-the-art facility
(Development Center) at Infocity , was completed at Hyderabad during this
period by the company.
With effect from 1st April 2000, M/s Cartographic Sciences Ltd,
Mumbai a Wholly owned subsidiary merged with the company.
During 2000-2001, it has made a preferential offer of 2,18,570 shares to
the erstwhile promoters of InfoTech Enterprises Europe as part of acquisition
agreement entered with them. Also in April 2001, it has acquired Advance
Graphic Software.
The company set up a high-end engineering design center at Bangalore in
December 2001. In April 2001, the company acquired Advance Graphics Software
GmbH, Germany as part of its pan European strategy to expand its reach and to
penetrate the European engineering market.
During 2003-2004, the company established Infotech Aerospace
Services Inc 100% subsidiary in Puerto Rico, USA to focus on near shore
delivery to Pratt & Whitney, its largest client and strategic partner. The
company also acquired VARGIS, a US based GIS company. The acquisition was made
through Infotech's wholly-owned -subsidiary Infotech Software Solutions Inc,
USA.
During 2004-2005, the company opened offices in Melbourne, Australia and
in Singapore apart from Noida, India. Today the company operates out of 17
global locations and has 5 global Delivery Centers. The company divested 51%
stake in its Puerto Rican subsidiary, Infotech Aerospace Services Inc. (IASI)
to United Technologies Group Company UTIC for US$ 550,000 during this period.
The company also acquired Tele Atlas India Private Limited, the Indian
subsidiary of Tele Atlas NV, for Rs.82.9 million (Euro 1.43 million) and
entered into a long-term services agreement for providing Database and Software
Solutions to Tele Atlas. In April 2005, shareholders of Infotech have approved
the allotment of 2,50,000 equity shares to Tele Atlas at Rs.278/- per share, a
premium of 10% over the price calculated with the prescribed guidelines of
SEBI.
During 2005-2006, the company has set up new facility at Maryland,
Frostburg, USA in collaboration with Fro stung State University, Allegancy
Country and State of Maryland, USA. The company has also set up a new office at
Rockford, Illinois, USA which shall cater to the needs of After Market Services
in the engineering design space. The company has entered into a strategic
alliance with Ten Sails, a location business builder in the UK to provide a
unique mix of solutions, services and technology expertise to the users of
Smallworld based solutions globally. During the year the company has
entered into several large contracts. In the UTG space, agreements were signed
with KPN Telecom and Swisscom. In the EMI Space, the company entered to an
agreement with Alstom Transport to provide Engineering Design Services and
various other services in the rail segment for a period of next 5
years. During the year, the company has initiated process for amalgamation
of Tele Atlas India Private Limited Noida acquired during the previous year
under the provisions of companies Act, 1956. The Honouble High Court of Andhra
Pradesh has pronounced the order on January 27, 2006 sanctioning the scheme of
Amalgamation between Tele Atlas India Private Limited and the company.
RESULTS
OF OPERATIONS
The financial year 2005-06 proved to be a significant year
for the Company from the perspective of broadening the client base. This year
had witnessed signing of several large contracts and enhancement of service
offerings across the verticals of the Company. This has resulted in an addition
of forty (40) new clients to the existing client base. Besides, the
amalgamation of Tele Atlas India Private Limited, Noida (TAIPL) also
contributed to the growth of the Company. In accordance with the relevant
Accounting Standards, the Financials of TAIPL are (i) Consolidated with effect
from April 11, 2005 to September 30, 2005 (ii) merged with the Company
financials, pursuant to the Orders of Hon'ble High Court of Judicature, Andhra
Pradesh, at Hyderabad, sanctioning the Scheme of Amalgamation between TAIPL and
the Company, from October 1, 2005 to March 31, 2006. Thus the above financial
highlights include the financials of TAIPL, for six
months. Following are the results of operations of the Company for
the year 2005-06:
BUSINESS PERFORMANCE
Revenues
Total Income rose to Rs. 2150.52 million from Rs. 1573.39 millions in the
previous year representing a growth of 36.68%. Operating Revenues grew by
38.94% from Rs.1538.01 millions to Rs. 2136.90 millions, which constitutes
export revenues of Rs. 21173.77 millions (97.05%) and domestic revenues of Rs.
63.14 (2.95%). Other income was lower by 61.53% from Rs.35.38 millions to
Rs.13.61 millions on account of volatility in the foreign currency values. Your
company has re-structured its business model by allowing its subsidiaries to
have a greater measure of operating autonomy as a part of its endeavor towards
integrating its global operations in line with its vision of 'One Global
Organization'. Thus, a greater proportion of revenues were billed directly by
the subsidiaries in their respective geographies.
Profits
Operating Profit, i.e. Profit before considering Other Income, Interest,
Depreciation and Tax increased by 25.38% to Rs. 480.15 millions from Rs.382.94
million. Profit After Tax (PAT) increased by 27.21% to Rs. 283.76
millions from Rs.223.06 millions.
Transfer
to Contingency Reserves
The Company is contesting the Income Tax Appellate Tribunal's (ITAT) order
for the denial of certain export benefits under the Income Tax Act 1961 on the
grounds of the date of establishment of the export Oriented Unit. The petition
contesting the ITAT's Order has been admitted by the High Court of Andhra
Pradesh and the case has not yet come up for hearing during the
year. Further, the Company is contesting certain other disallowances
made by the Deputy Commissioner of Income-tax for the assessment year 2002-03.
The matter is being taken up with the appropriate authorities and the Company
is hopeful of a favorable resolution. However, as a matter of abundant
precaution, the Company has set aside an additional amount of Rs.22,000,000 as
Contingency Reserve to meet any future eventuality.
Transfer
to Reserves
The Directors have proposed to transfer Rs. 215.24 millions
to the General Reserve retaining Rs. 30.76 millions in the Profit and Loss
account.
SUB-DIVISION
OF EQUITY SHARES
In order to create a higher liquidity in the equity shares
of the Company, Directors have recommended a sub-division of existing equity
share having a face value of Rs.10/- each fully paid-up into 2 equity shares
having face value of Rs.5/- each fully paid-up.
Inauguration
of New facility at Frostburg, Maryland & New office at Rockford,
Illinois
The Company has set up a new facility at Maryland,
Frostburg, USA in collaboration with Frostburg State University, Allegany
County and State of Maryland, USA. This will cater to the service requirements
of mapping contracts awarded by the Local government bodies in USA. The
Company has also set up a new office at Rockford, Illinois, USA which shall
cater to the needs of After Market Services in the engineering design
space.
Strategic Alliance with Ten Sails,
UK
The Company has entered into a strategic alliance with Ten
Sails, a location technology business builder in the UK to provide a unique mix
of solutions, services and technology expertise to the users of Small world
based solutions globally This alliance will facilitate companies to migrate
easily to Small world platforms and provide data management, data conversion,
application maintenance and support services.
Opening of Centers of Excellence
for major clients
With a view to provide the comfort of In-house facility to
major clients, during the year under review, the Company has set up Centers of
Excellence (dedicated off shore centers) for Airbus, Alstom Transport, GKN
Aerospace, Hamilton Sundstrand, Invensys etc
Major GIS contracts from KPN
Telecom, SP Austem and Swisscom and Engineering Design Agreement with Alstom
Transport.
During the year, the Company has entered into several large
contracts which provide visibility for the forthcoming years. In the UTG space,
agreements were signed with KPN Telecom (for a period of 18 months) and
Swisscom (for a period of 42 months). In the EMI space, the Company
entered to an agreement with Alstom Transport to provide Engineering Design
Services and various other services in the rail segment for a period of next 5
years.
Completion of 5 years relationship
with Pratt & Whitney
Pratt & Whitney is one of the key clients of the Company
with a long standing relationship. This year has seen the completion of 5 years
relationship with Pratt & Whitney. The visit of Mr. Paul Adams, senior
management personnel of Pratt & Whitney has marked the occasion. This
vindicates the commitment of the Company in servicing its clients to their
utmost satisfaction. Pratt & Whitney also holds a stake of 14.19% in the
Company. Mr. Adams has also been inducted into the Board of Directors of the
Company.
VERTICAL WISE PERFORMANCE
Utilities,
Transportation & Government (UTG)
The UTG vertical is a combination of erstwhile GIS services
division and a part of the Software Development & Services division.
Bringing both the Geospatial Data and Geospatial Technology Services under the
same roof has resulted in providing a comprehensive set of services to
customers and has helped in positioning the Company uniquely.
The Company engaged one of the leading research agencies to identify new areas
in the space in which the Company operates. The agency has submitted its
findings and suggestions some of which were put into practice. The Company has
already put in place new service offerings namely P&ID (Piping &
Instrumentation Design). Revenue contribution of this Vertical
increased to Rs. 784.32 millions from Rs. 499.38 millions. This includes the
revenues of Tele Atlas Private Limited, NOIDA for the period October 01, 2005
and March 31, 2006. As a percentage of total operating revenues, the
contribution of this vertical increased to 36.70% from 32.47%. The human
resources assigned to this vertical stands at 2109 associates as at March 31,
2006.
Engineering, Manufacturing and
Industrial Products (EMI)
The vertical is a blend of erstwhile Engineering services
and the part of software development & services divisions. The association
with Bombardier Transportation has entered the third year and has made an
impact in Company making rapid strides in the new business areas of embedded
solutions and technical publications. Besides, the Company has firmed up a
Contract with Alstom Transport which is expected to generate revenues for a
period of 5 years. While Pratt & Whitney continued to show marginal increase
on a higher base, increased traction was seen in Hamilton Sundstrand, a UTC
group Company. New service offerings were launched in the areas of aero
structures, avionics, interiors & seating, signaling & interlocking,
validation & verification and also initiated marine vertical practice. The
revenues from this vertical increased to Rs. 1361.02 millions from Rs.1048.91
millions at a growth rate of 29.76%. The contribution of this vertical to the
total revenues stands at 63.69% as compared to the previous year's contribution
of 68.20%. The current manpower deployed to the vertical stands at 1466
associates.
SUBSIDIARIES
To establish a brand value of the Company at the global level, the
subsidiary names were brought in line with the parent company. Hence, the
following changes in names were made:
* Infotech Software Solutions Inc. is re-named as Infotech Enterprises
America, Inc. effective March 17, 2006.
* Advanced Graphics Software GmbH is re-named as Infotech Enterprises GmbH
effective March 6, 2006.
Infotech Enterprises Europe Ltd.,
U.K. (IEEL)
The European subsidiary continued to be the major
contributor to the group financials. During the year, it inked up a deal with
KPN Telecom which is expected to generate revenues over a period of 18 months.
In the later half of tile year, the Company had a pact with Swisscom which is
expected to generate revenues over a period of three and half years. While the
existing client base grew stronger, new clients were attracted in various
markets in which the subsidiary operates. During the year, IEEL has acquired
Map Analyst BV, a Private Limited Liability company registered under the laws
of The Netherlands and was made a wholly owned subsidiary of IEEL.
IEEL's revenues increased to GBP 7.06 million
(Rs.552.06 million) from GBP 5.38 million (Rs.446.38 million). The operations
of the Subsidiary resulted in a net profit of GBP 0.84 million (Rs. 65.82
million) as compared to net profit of GBP 0.38 million (Rs.28.68 million) in
the previous financial year.
Infotech Enterprises America, Inc.
(IEAI)
IEAI along with its fully owned subsidiary Vargis continued
to concentrate on the respective markets in much they operate. A new facility
was inaugurated at Frostburg, Maryland to concentrate on US geospatial
production awarded by the government. IEAI witnessed growth in accounts like
Hamilton Sundstrand and Bombardier Transportation. During the year, IEAI has
setup a wholly owned subsidiary at Canada. During the year, Vargis
had faced a few difficulties in starting the projects in time. Consequently the
subsidiary had incurred a loss. However, management is confident of restoring
normalcy of business operations during the fiscal year 2006-07. For the
financial year 2005-06, consolidated revenues of the Subsidiary increased to
US$ 30.78 millions (Rs. 1355.71 million) from US$ 19.83 millions (Rs.884.9
millions). During the year, the consolidated net profits of the subsidiary
increased to US$ 0.51 millions (Rs. 22.37 millions) from US$ 0.44 millions
(Rs.19.41 millions).
Infotech Enterprises GmbH
Substantial growth in Bombardier Transportation and addition
of Alstom Transport are the major contributory factors of this German
subsidiary. Substantial growth was also seen in various other clients like MGI,
MIZ.
For the financial year 2005-06, revenues of the Subsidiary increased to EUR
9.81 million (Rs. 523.36 millions) from EUR 4.92 millions (Rs. 278.3 millions).
Net profit for the period under review teas increased to EUR 361,312 (Rs.19.28
millions) from EUR 117,352 (Rs. 6.6 millions).
AMALGAMATION
During the year the Company had initiated process for
amalgamation of TAIPL, Noida acquired during the previous year, under the
provisions of the Companies Act, 1956. The Hon'ble High Court of
Judicature, Andhra Pradesh at Hyderabad had pronounced the Order on January 27,
2006, sanctioning the Scheme of Amalgamation between Tele Atlas India Private
Limited, NOIDA and your Company.
INDUSTRY
STRUCTURE AND DEVELOPMENTS
Offshore outsourcing has shown significant growth over the
last several years and India has emerged as the leading destination for global
corporations, delivering quality services and cost advantages. The list of
companies outsourcing their IT requirements to offshore locations in India
continues to increase, as does their offshore outsourcing budgets. Industry
analysts expect that India, given its intrinsic advantages as an offshore
destination, would continue to be the dominant force in the foreseeable
future. In its Strategic Review for the year 2006, NASSCOM has
stated that the Engineering services and software products hold significant
opportunity for the Indian IT-ITS sector. While the sector is expected to grow
at a CAGR of 37%, the engineering and R&D services are expected to grow at
a CAGR of 43%. The engineering sector also faces stiff competition
since many local peers and International IT services companies have started to
offer these services. However, the sector is expected to deliver a double-digit
growth with increase in overall outsourcing of services.
OPPORTUNITIES AND THREATS
Presented below is the management's assessment of some key
potential opportunities and threats associated with the business. While the
management is looking to leverage such opportunities in an effective manner to
optimize business advantages, it is also focused to creating effective
mitigates for all potential threats that could impact the business operators. A
more detailed Risk Management Report is available elsewhere in the Annual
Report.
Opportunities:
The Company engages itself into certain niche areas such as GIS and
Engineering Design Services which enables the company to stand out as a leading
player in these areas. The Company has engaged itself into various new service
offerings in both the verticals and foresees huge opportunities in these areas.
In the UTG vertical, apart from the traditional services, the Company has taken
up P & ID services and hence attracting global customers. In the EMI space,
new service offerings have been launched in both the aerospace and railway
segment and these have been already accepted by major customers. The
Company also sees an opportunity in providing electronic design services to the
automobile sector and is constantly working to build the required expertise for
the same. This segment is fragmented to a large extent and hence it has been
challenging to start the service offerings. Optimizing cost
structures has been one of the rationales of outsourcing to Indian IT companies.
The Company has created streamlined procedures and processes so as to provide
competitive cost benefits to its client's business operations. This has
resulted in key relationships turning into strategic partnerships, which
provide continued visibility to the business
.
Threats:,
The following are the risks, which the management believes form a part of
Company's business and try to address the same through corporate actions
1. Financial Risks
2. Business Portfolio Risks
3. Internal Process Risks
4. Legal and Statutory Risks
5. Political Risks
6. Competition Risks
7. Macro Economic Risks
The various threats faced by the company have been provided
in detail in the Risk Management report published else where in this Annual Report.
OVERVIEW
The financial statements have been prepared in compliance with the
requirements of the Companies Act, 1956 and Generally Accepted Accounting
Principles in India. The management of the Company accepts responsibility for
the integrity and objectivity of the financial statements as well as for the
various estimates used therein. The financial statements have been prepared on
a prudent and reasonable basis to reflect in a true and fair manner the state
of affairs of the Company.
The Company closed the financial year 2005-06 with 38.94% growth in
operating revenges and net profit growth of 27.21%. The acquisition of Tele
Atlas India Private Limited, Noida (herein after referred to as Noida
Operations) at the end of previous financial year added to the growth of the
company. The financials of the Noida Operations are consolidated as per
Accounting Standards for the period April 11, 2(105 to September 30, 2005 and
the financials for the period October 01, 2005 to March 31, 2006 are amalgamated
with the Company in accordance with the Scheme of Amalgamation sanctioned by
the Hon'ble High Court of Andhra Pradesh. Hence, the financials reflected above
include financials of Noida operations for 6 months.
PRESS
RELEASES :
InfoTech Enterprises Limited becomes the first IT Company to
set-up a development center at Kakinada at the newly
developed
STPI Facility.
Sri. Y
S Rajasekhara Reddy, Chief Minister of Andhra Pradesh inaugurates the facility.
Kakinada,
February 3rd, 2007: InfoTech Enterprises Limited (IEL), a
leading global Engineering Design Services, Geospatial Information Services and
IT Service provider, today launched their operations in Kakinada with a
development center created by STPI (Software Technology Park of India), Kakinada.
This facility at Kakinada is the result of the joint effort of STPI and
InfoTech to project Kakinada as a Tier 2 destination of choice for IT
companies. STPI developed the facility with infrastructure and network services
ready to plug and play.Infotechinstalled hardware and software and created a
capacity of 60 workstations. InfoTech’s Kakinada facility is located in the
District Collect orate Compound and can house over 120Associates. To begin
with, InfoTech will employ over 60 associates from the region and will scale up
to 120 engineers by end March 2007. This facility would be an incubation center
and based on the initial six-month experience, the company intends to develop a
full-fledged facility owned andoperated by InfoTech.
Speaking
on the occasion, Mr. BVR Mohan Reddy, Chairman & Managing Director, InfoTech
Enterprises Limited, said, “Kakinada is an ideal Tier 2 location in Andhra
Pradesh for software and services companies for it has wealth of engineering
talent generated by quality technical institutes. It has good infrastructure
and is well connected to Hyderabad. Our entry into Kakinada marks the beginning
of the region developing into a preferred IT destination. We would expand our
facilities based on our initial experience in the first six months of
operations”.Out side Hyderabad, Kakinada is the first centre of Infotech in
Andhra Pradesh, which was launched as a part of its strategy to expand its
operations to Tier-II cities. InfoTech will shortly launch its operations in
Vizag.
About
InfoTech Enterprises
Infotech
Enterprises Limited, (BSE & NSE: INFOTECENT) provides Engineering Design
Services and Geospatial Information Services to manufacturing, aerospace,
transportation, telecom, utilities and government customers worldwide. Infotech
currently employs over 4,900professionals across 22 global locations and is
certified to SEI CMMi Level 5, ISO 9001:2000, AS9100 and ISO-27001 standards.
JNTU confers honorary doctorate on Mr. BVR Mohan
Reddy
Hyderabad, March 30th, Friday, 2007: Jawaharlal
Nehru Technological University
(JNTU)
today conferred the Degree of Doctor of Philosophy (Honoris Causa) on Mr.B.V.R
Mohan Reddy, Chairman and Managing Director, Infotech, in recognition of his
outstanding achievements in the areas of technology and academic eminence. His
Excellency Governor of Andhra Pradesh, Mr. Rameshwar Thakur and the Chancellor
of JNTU conferred the doctorate on Mr. Mohan Reddy today at the XXIII
convocation of the JNTU at their Masab Tank premises. Mr. B.V.R Mohan Reddy has
over thirty years of Engineering and Management experience, most of it in the
IT industry. He is a gold medalist in Mechanical Engineering from Andhra
University, Andhra Pradesh, India and has a Masters in Management Engineering
from the University of Michigan, Ann Arbor, USA and in Industrial Engineering
from the Indian Institute of Technology (IIT), Kanpur. He was the Managing
Director of OMC Computers before he became an entrepreneur himself. Mr. B.V.R.
Mohan Reddy established Infotech Enterprises in 1991 as technology Services and
Solutions company and holds its helm of affairs as its Chairman & Managing
Director. Under his leadership InfoTech has achieved global footprint in the
last few years and has grown into a large enterprise with over 5000professionals.Mr.
B.V. R. Mohan Reddy is a Member of the Executive Council of National
Association of Software and Services Companies (NASSCOM), India. He had also
served as President of Electronics Industries Association of Andhra Pradesh
(ELIAP); Hyderabad
Software
Exporters’ Association (HYSEA); and as Chairman of Confederation of Indian
Industry (CII), Andhra Pradesh Chapter. Founder of Infotech Enterprises
Charitable Trust (IECT), Mr. B.V.R. Mohan Reddy established this Trust to
support the cause of underprivileged children and creating better facilities
for their education. Besides, Mr. B.V.R. Mohan Reddy’s personal commitment and
contribution, Infotech Enterprises contributes 0.5 per cent of its net profit
to IECT for improving educational facilities in Government Schools located in
the backward areas in and around Hyderabad.
About
Infotech Enterprises
Infotech
Enterprises Limited, (BSE & NSE: INFOTECENT) provides Engineering Design
Services and Geographic Information Services to manufacturing, aerospace,
transportation, telecom, utilities and government customers worldwide. Infotech
currently employs over 5000 professionals across 25 global locations and is
certified to SEI CMMi Level 5, ISO 9001:2000, AS 9100 and ISO-27001 standards.
International
Executive Council
- Mr. Mohan Reddy B. V. R.
Chairman &
Managing Director
- Mr Ashok Kumar K.
Chief Operating Officer - Mr. Ashok Reddy B.
Executive Vice President (Human resources & Corporate Affairs ) - Mr. Greg Tilley
Chief Executive Officer, Vergis LLC, USA
5. Mr.
John Renard
Managing Director, IEEL, UK
6.
Mr. Lakshminarayanan S. A.
Chief Operating Officer
7.
Mr. Martin Trostel
Managing Director, IE GmbH,
Germany
8.
Mr. Nataraja S.
Vice- President (Finance & Accounts)
9.
Mr. RAjan Babu K.
President IEAL, USA
10. Mr. Rajeev Lal
President
11. Mr. Sudhir Sethi
President & Executive Director
FIXED ASSETS
- Goodwill
- Land
- Building
- Computer & Software
- Plant & Machinery
- Office Equipment
- Furniture & Fixtures (Including
Interior Work )
- Electrical Installation
- Vehicals
CMT REPORT (Corruption,
Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.43.15 |
|
UK Pound |
1 |
Rs.85.22 |
|
Euro |
1 |
Rs.57.63 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
--- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
62 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|