| The directors have pleasure in presenting the Tenth Annual Report
together with the Audited Financial Statement of the Company for the
year ended 31st March 1999.
Financial Results
For the year For the year
Ended 31.03.99 Ended 31.03.98
Income 8,24,75,747 6,84,37,337
Profit/ (Loss) before tax (5,21,335) (42,50,662)
Provision for taxation - -
Prior year tax - 36,001
Profit / (Loss) after tax (5,21,335) (42,86,663)
Balance brought forward (2,18,19,191) (175,32,528)
Balance carried forward (2,23,40,526) (218,19,191)
Operation :
The Gross receipts of the Company during the year were Rs.8.24 Cr. The
total expenditure was Rs.8.29 Cr. As a result, there was a loss of Rs.
5.21 Lac during the year (Previous year loss Rs. 42.86 Lacs). As You
are aware, with the advent of whole new set of services on the Internet
the industry as a whole, is passing through a transitional phase, and
all companies and consumers were closely watching this phase and not
making many fresh ventures. It was very difficult to maintain the
existing volume of business and obtain the new business. However the
management feels satisfied that during the year under review, the
Company was able to increase its business by almost 20%, which is quite
impressive. However due to strong competition, margins remained low
which was further aggravated by the increased promotional expenditures.
Yet losses during the year were reduced to Rs. 5.21 Lac.
During the current year under progress, Company has made good business
headway and has been achieving the targets as fixed at the start of
year. In its efforts to make its forey in Internet based services, the
Company has negotiated and entered into strategic alliance with the SRG
Group having strong base, including a premium and reliable data base of
Internet investment and related service users. The Company has
negotiated to acquire the same for setting up a strong base in Internet
services.
Dividend
Due to non availability of surplus, the directors do not recommend any
dividend for the year.
Note on Y2K Preparedness
a) Risk to the Company due to Y2K problem : The Hardware and software
of the Company are Y2K Compliant. The Company has taken all effective
measures regarding Y2K compliance.
b) Cost to the Company for Y2K compliance :- The cost of the Y2K
project is estimated to be Rs. 5,60,000/-
c) Contingency plan for Y2K :
The Company is maintaining back-ups on soft media, of all its data base
on daily basis, which is kept in the safe custody of respective
departmental heads.
Further hard print outs are also generated monthly on cumulative basis
for all updations, out of backup files to ascertain the reliability of
backups.
Projection V/s Performance
(Rs. In Lac)
Performance Projections
Particulars 1998-99 1998-99
Sales 824.75 2932.00
Expenses 829.96 973.00
Net Profit/ (loss) (5.21) 1959.00
As explained above due to crucial transitional period in the Industry,
technology damages and slow response in the policy matter by the
government, the Company was not able to achieve the targets. However
once this phase is over, due to strong infrastructure and network base,
the Company is quite confident to achieve the future targets.
Auditors' Report
Point No. 2.4 of the Auditor's Report
None of the employees of the Company, has completed the tenure of 5
Years of service with the Company and is thus not covered under the
Gratuity Act. Considering the same, there exists no question of making
any provision.
Point No. 2.5 of the Auditor's Report
Company has initiated the legal proceedings against the defaulting
party M/s. Good Earth Organics Limited for recovery of the said balance
of Rs. 3598425/-. Gujrat high court has appointed the provisional
liquidator against that Company. As on date the matter is sub-judice.
However the directors are hopeful of recovering the dues.
Point No. 2.6 & 2.7 of the Auditor's Report
Being a multilocational organisation, the process of reconciliation and
confirmation of balances of third party is an uphill task. However the
management is making its best effort to stream line the information
system.
Point No. 2.8 of the Auditor's Report
The Company personally and also as a member of Internet Service
Provider Association of India (ISPAI) has pleaded with DOT against the
imposition of Licence fee and for refunding of the excess amount paid
to them, after the announcement of Internet Policy in January 1998 to
maintain the parity with VSNL, which has been providing that service
since August 1995.
In View of the facts that DOT has in-principle agreed with the views of
ISPAI, no provision for licence fee for the year has been considered
necessary. Instead excess payment has been claimed as recoverable.
Point No. 3.15 of the Auditor's Report
The Company is in the process of internal organisational restructuring
and plans to strengthen its Internal Audit System.
Directors
Mr. Deepak Kamdar and Mr. A.D. Narula, Directors retire by rotation at
the ensuing Annual General Meeting of the Company and being eligible
offer themselves for reappointment. The Board recommends their
reappointment.
During the period, Dr. S.S. Sundararajan and Mrs. Punam R. Arora
resigned from the Board of Directors due to their personal
pre-occupation. The Board of Directors places on record its heartly
appreciation and gratitude for the guidance and support extended by
them during their fruitful association with the Company.
Auditor
M/s Chetan D. Kadam, Chartered Accountants, the present auditor of the
Company will hold office until the conclusion of the ensuing Annual
General Meeting. Due to pre-occupancies they have express their
willingness to not to continue for further term.
The Company has received a special notice from one of the members of
the company for appointment of M/s. Rajesh Kukreja Associates,
Chartered Accountants as Auditor of the Company. The matter has been
incorporated as a special business in the notice of the ensuing Annual
General Meeting to be discussed and decided thereat. Same has also been
intimated to both M/s. Chetan D. Kadam & Co. and M/s. Rajesh Kukreja &
Associates.
Particular of Employees
There are no employees covered under Sec. 217 (2A) of the Companies Act
1956 read with Companies (Particular of Employees) Rules 1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
(A) CONSERVATION OF ENERGY AND TECHNOLOGY CONSERVATION
The Company's operation involves low energy consumption, nevertheless the
Company has maintained its efforts to minimise the energy consumption.
(B) RESEARCH & DEVELOPMENT
i) Specific areas of R&D
The Company is in the business of value-added services to Electronic
Mail users. The Company ha& constantly emphasised on upgrading the
systems with the changing technology and constantly endeavours to do,
so.
The Company is in the process of streamlining its Xee- mail service
with other Internet based services and further to add on other
utilities and services to it.
This is expected to result in more comprehensive services to clients
and at the same time to generate more revenue for the Company.
ii) Future Plans
The Company envisons an ambitious plan to enter into Internet-based
services and to look for the opportunity of utilising the Internet as a
supporting tool to its present line of business.
C. Foreign Exchange Earning and outgoing
Earning : NIL
Outgoing : Rs. 28,76,862/-
Human Resources
The Company has a strong team of highly qualified and experienced
professionals, especially in IT and marketing. The directors place on
record their appreciation for the hard work, dedication, and zeal to
excel in the present line of business at all levels and solicit their
co-operation in the years ahead.
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