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AGS INFOTECH LIMITED
15th ANNUAL REPORT 2010-2011
CORPORATE INFORMATION:
Board of Directors
Mr. M Manivannan
Managing Director
Mr. G Dhananjaya Reddy
Director
Ms. B S Padmavati
Director
Mr. R Venkatesh
Director
Mr. S Sudheer
Director
Company Secretary
Ms. Suhasini Ashok B
Auditors
M/s Hariharan & Associates, Bangalore
Bankers
United Bank of India, Bangalore
Registered Office #3rd Floor, 302, Sahiti Arcade, Behind Police Station, S R Nagar, Hyderabad, Andhra Pradesh - 500038.
Corporate Office No:29/1C, First Floor, South Block, Beratina Agrahara, Electronic City Post, Bangalore-560100.
Registrar And Share Transfer Agent
Venture Capital and Corporate Investments Pvt. Limited
12-10-167, Bharatnagar, Hyderabad-500018, Phone: 040- 23818475/476, Fax: 040-23868024.
Listed On
Bombay Exchange Limited
Contents Page Number
Directors Report
04-08
Management Discussion and Analysis
09-10
Managing Director & Director Certification
11-12
Corporate Governance Report
13-17
Auditors Report on Corporate Governance
18-21
Balance sheet
22
Profit and loss Account
23
Schedules to accounts
24-26
Cash flow statement
27
Notes to accounts
28-29
Balance sheet abstract and Company’s General Business profile
30
NOTICE
NOTICE is hereby given that the 15TH
ANNUAL GENERAL MEETING of the members of the
Company "AGS INFOTECH LIMITED", will be held AT #3rd
Floor, 302, Sahiti Arcade, Behind Police
Station, S R Nagar, Hyderabad, Andhra Pradesh - 500038 on Friday, the 30th day of September,
2009 at 10.30 A.M. to transact the following business.
ORDINARY BUSINESS:
1. To receive, consider and adopt the Balance sheet as at 31st March 2011, the Profit and Loss
Account for the year ending on that date along with schedules and the Reports of the Board
of Directors and auditors thereon.
2. To appoint a Director in place of Mr. G Dhananjaya Reddy, who retires by rotation, and
being eligible, offers himself for re-appointment.
3. To appoint a Director in place of Mr. R Venkatesh, who retires by rotation, and being
eligible, offers himself for re-appointment.
4. To appoint Statutory Auditors M/s Hariharan & Associates, who are retiring and has offered
their willingness to be reappointed, and fix their remuneration.
By Order of the Board
Place: Bangalore
Date: 01/09/2011
Manivannan M
Managing Director
NOTES:
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy and the proxy need not be a member. The proxy form, duly filled in all respects, should reach the company at its Registered Office not later than forty eight hours before the commencement of the meeting. 2. Member / Proxies should bring the Attendance Slip duly filled in for attending the meeting. 3. The Register of Members and Share Transfer Books of the Company will remain closed from 26th September, 2011 to 30th September, 2011 (both days inclusive). 4. Members are requested to bring their copies of the Annual Report. 5. Members are requested to notify any change in their address immediately to the Registered Office of the Company. By Order of the Board
Place: Bangalore
Date: 01/09/2011
M Manivannan
Managing Director
Dear Shareholders,
DIRECTORS’ REPORT
Yours Directors have pleasure in presenting the Fourteenth Annual Report of the Company for the financial year ended 31st March, 2011.
FINANCIAL RESULTS: The performance of the Company for the financial year ended 31st March, 2011 is summarized below:
(Rs. in Lakhs)
2010-11
2010 2009-2010
Income 3119.32 2974.59 Work in Progress ****** ****** Expenses 2615.30 2597.83 Bad Debts Written Off ****** ****** Misc Exp Written Off ****** ****** Profit Before Interest and Depreciation 504.01 376.76 Depreciation 182.28 70.85 Interest and Finance Charges 66.19 56.98 Profit Before Tax 255.54 248.93 Profit After Tax 153.25 148.48
OPERATIONS:
As can be seen from the above, the company made a turnover of Rs.3119.32 Lakhs during the year as against Rs. 2974.59 lakhs during the previous year registering growth of a 4.86%. The net profit of the company has increased from Rs.148.48 lakhs to Rs153.25 lakhs, registering growth of 3.21%. The management has reoriented its strategies in the line of business and has inducted new director on the board with talent and good contacts in the industry. The management is hopeful of confident of earning more and more profits in the current year and in the years ahead.`
INDIAN & GLOBAL ECONOMY:
We are witnessing a reverse trend in innovation and the emerging economies making an impact on business in the advanced markets.
The global economy seems to be recovering after the recent economic shock. The global economies including Indian economy are expected to continue to sustain themselves in the short-term, as the effect of stimulus programs is yet to bear fruit and tax cuts are working their way through the system in 2010. Due to the strong position of liquidity in the market, large corporations now have access to capital in the corporate credit markets and the innovation hub markets; growth momentum is the order of the day in emerging economies like India despite of global financial crisis.
In order to keep up the economic growth during times of the worst recession, government authorities in India have announced the stimulus packages to bolster economic growth. To finance the stimulus packages, the Indian government has raised over $100 billion over the last four quarters. The country’s public debt, according to the Reserve Bank of Indian (RBI), has zoomed to more than 50% of the total GDP.
FUTURE OUTLOOK:
Your Company has plans to diversify in to non-conventional energy activities and with the overall sectorial growth indices forecast future growth of your company.
DIVIDEND: Your directors express their inability to recommend any dividend for the financial year 2010-2011.
INCREASE IN AUTHORIZED AND PAID-UP EQUITY CAPITAL: During the year under review there is no changes in the Authorized Equity share capital of your company.
The paid-up Equity capital of your company is 1,24,48,100 Equity shares of Rs.10/- each.
CHANGE OF REGISTRAR AND TRANSFER AGENTS: There is no changes in the Company’s Registrar and Share Transfer agents: Venture Capital and Corporate Investments Pvt. Limited 12-10-167, Bharatnagar, Hyderabad-500018. Phone: 040-23818475/476.
PUBLIC DEPOSITS:
Your Company has not accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.
LISTING: The Equity Shares of your company are listed on The Bombay Stock Exchange Limited.
DIRECTORS:
In accordance with the Companies Act, 1956 read with Articles of Association of the company the Director Mr. G Dhananjaya Reddy and Mr. R Venkatesh retires by rotation and is eligible for reappointment.
Your Board recommends the re-appointment of the Director above.
DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to the provisions of Sec.217 (2AA) of the Companies Act, 1956 the Board of Directors of your Company hereby certifies and confirms that:
i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with
proper explanation relating to material departures;
ii. The Directors have selected such accounting policies and applied them consistently and made judgment 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 the financial year;
iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. The Directors have prepared the Annual accounts on a going concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND
OUT GO The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:
A. Conservation of Energy Adequate measures have been taken to reduce energy consumption, wherever possible. Total energy consumption and energy consumption per unit of production is not applicable as company is not included in the industries specified in the schedule
B. Technology Absorption 1. Research and Development (R&D : Nil 2. Technology absorption, adoption and innovation : Nil
C. Foreign Exchange Earnings and Out Go Foreign Exchange Earnings : nil (Current year)
Rs . 98,58,252/- (PY) Foreign Exchange Outgo : Nil (Current year )
: Nil (Previous year) PARTICULARS OF EMPLOYEES
As the Company is not having any employee during the year under review which attracts provisions of Section 217 (2A) of the Companies Act, 1956, the disclosures required to be made under the said section.
CODE OF CONDUCT
The Code has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them.
AUDITORS
M/s Hariharan & Associates., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible have expressed their willingness for re-appointment. Your directors propose the appointment of M/s Hariharan & Associates, Chartered Accountants, as statutory auditors to hold office until the conclusion of the next Annual General Meeting of the company.
CORPORATE GOVERNANCE As a listed company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors, Forms part of this Report as Annexure.
ACKNOWLEDGEMENTS
Your directors would like to express their grateful appreciation for assistance and co-operation received from clients, banks, investors, Government, other statutory authorities and all others associated with the company. Your directors also wish to place on record their deep sense of appreciation for the excellent contribution made by the employees at all levels, which enabled the company to achieve sustained growth in the operational performance during the year under review.
Declaration by Managing Director of affirmation by Directors and senior Management personnel of compliance
with the code of conduct The shareholders
I, M Manivannan, Managing Director of the Company do hereby declare that the Directors and Senior Management of the Company have exercised their authority and powers and discharged their duties and functions in accordance with the requirements of the code of conduct as prescribed by the company and have adhered to the provisions of the same.
For and on behalf of the Board of Directors M/s. AGS Infotech Limited;
Sd/- Place: Hyderabad M Manivannan Date: 15.06.2011 Managing Director
MANAGEMENT DISCUSSION AND ANALYSIS Your Companies Financial Statements are prepared in compliance with Companies act, 1956 and various other statutory & other regulations as applicable.
Discussion on Financial Performance:
the company made a turnover of Rs.3119.32 Lakhs during the year as against Rs. 2974.59 lakhs during the previous year registering growth of a 4.86%. The net profit of the company has increased from Rs.148.48 lakhs to Rs153.25 lakhs, registering growth of 3.21%.
Market Scenario:
A. Industry structure and developments Changing economic and business conditions and rapid technological innovation are creating an increasingly competitive market environment that is driving corporations to transform their operations. Consumers of products and services are increasingly demanding accelerated delivery times and lower prices. Companies are focusing on their core competencies to adequately address these needs.
The Global and Indian economy in the previous year has seen a sharp decline in several sectors downfall of several large Financial Institutions, fall in stock Market and financial indices despite the meltdown in economy and recession your company outstood all these factors and marked a growth rate of in the profits even the year 2011 was reported to be a tough year.
The role of technology has evolved from supporting corporations, consumers to transforming them. The ability to design, develop, implement, maintain core competitive advantage in this advanced technology scenario the corporations across globe are striving for dynamics in technology.
India being one of the preferred destinations for IT and IT enabled services for foreign clients because of the Indian factors like high quality delivery, significant cost benefits, abundant skilled resources.
Operational Performance: The management & its team has reoriented its strategies in the line of business and has inducted new directors on the board with talent and good contacts in the industry further the dynamics of IT Sector would be adopted to your company by the newly inducted Managing Director.
Forward Looking Statement:
Your Company is positive of procuring big software projects in near future from highly reputed firms and the positive growth of Software industry and locational advantage i.e situation of Corporate office at Bangalore. Further the boom in the economy and GDP growth etc all these factors indicate the Growth prospects of your company. Further the management proposes to diversify in to non-conventional energy sectors.
Financials: The Table below depicts the Comparative figures on the performance of the Company for the current financial year along with the previous year.
(Rs. in Lakhs)
2010-2011 2009-2010 Income 3119.32 2974.59 Work in Progress ****** ****** Expenses 2615.30 2597.83 Bad Debts Written Off ****** ****** Misc Exp Written Off ****** ****** Profit Before Interest and Depreciation 504.01 376.76 Depreciation 182.28 70.85 Interest and Finance Charges 66.19 56.98 Profit Before Tax 255.54 248.93 Profit After Tax 153.25 148.48
Internal Control Systems:
AGS has put in place a strong internal control system through Audits. The Company has an independent Audit committee, which plays a strong oversight role. For more information on the functions of the Audit committee on internal control systems, please refer to the Chapter on Corporate Governance in this annual report.
Cautionary Statement:
Statement in this Management Discussion and Analysis describing the companys expectations may be ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the companys operations include a downtrend in IT & software industry- global or domestic or both, significant changes in political and economic environment in India or key markets abroad, tax laws, litigation, exchange rate fluctuations, interest and other costs. AGS undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
MANAGING DIRECTOR AND DIRECTOR CERTIFICATION. We, M Manivannan, Managing Director and G Dhananjaya Reddy, Director of AGS Infotech Limited, to the best of our
knowledge and belief, certify that;
1. We have reviewed the balance sheet and profit & loss account and all its schedules and notes on accounts, as well as
the cash flow statement and the directors report;
2. Based on our knowledge and information, these statement do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statement were made, not misleading with respect to the statements made;
3. Based on our knowledge and information, the financial statements, and other financial information included in this
report, present in all material respects, a true and fair view of, the company’s affairs, the financial condition, results of
operations and cash flows of the company as of, and for, the periods presented in this report, and are incompliance
with the existing accounting standards and/or applicable laws and regulations;
4. To the best of our knowledge and belief, no transactions entered into by the company during the year are fraudulent,
illegal or violative of the company’s code of conduct;
5. We are responsible for establishing and maintaining disclosure controls and procedures and internal controls over
financial reporting for the company, and we have;
a. designed such disclosure controls and procedures to ensure that material information relating of the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c. Evaluated the effectiveness of the company’s disclosure, controls and procedures. And
d. disclosed in this report any change in the company’s internal control over financial reporting that occurred
during the company’s most recent fiscal year that has materially affected, or is reasonably likely to materially
affect, the company’s internal control over financial reporting;
6. We have disclosed based on our most recent evaluation, wherever applicable, to the company’s auditors and the audit
committee of the company’s Board of Directors (and persons performing the equivalent functions) a) all deficiencies
in the design or operation of internal controls, which could adversely affect the company’s ability to record, process,
summarize and report financial data, and have identified for the company’s auditors, any material weaknesses in
internal controls over financial reporting including any corrective actions with regard to deficiencies; b) significant
changes in internal controls during the year covered by this report; c) all significant changes in accounting policies
during the year, if any, and that the same have been disclosed in the notes to the financial statements, d) instances of
significant fraud of which we are aware, that involves management or other employees who have a significant role in
the company’s internal controls system;
7. In the event of any materially significant misstatements or omissions, we will return to the company that part of any
bonus or incentive or equity-based compensation, which was inflated on account of such errors, as decided by the
audit committee;
8. We affirm that we have not denied any personnel, access to the audit committee of the company (in respect of matters
involving alleged misconduct) and we have provided protection to ‘whistle blowers’ from unfair termination and
other unfair or prejudicial employment practices; and
9. We further declare that all board members and senior managerial personnel have affirmed compliance with the code
of conduct for the current year.
Sd/- Sd/- Hyderabad M Manivannan G Dhananjaya Reddy 15.06.2011 Managing Director Director
CORPORATE GOVERNANCE REPORT
1. Company’s Philosophy on Code of Governance
The Board of Directors of the company believes in and fully supports the principles of Corporate Governance. While
striving to achieve the financial targets, the company seeks to follow the business principles and ethics and in all its
dealings. The company has been regularly implementing the best practices of corporate governance in order to attain total
transparency, accountability and integrity.
In accordance with the requirement of Stock Exchange Regulations and the provisions of the Listing Agreement, the
compliance report on the corporate governance is reproduced here under:
2. Board of Directors:
In terms of the Company’s Corporate Governance Policy, all statutory and other significant and material information are
placed before the Board to enable it to discharge its responsibility of strategic supervision of the Company as trustees of
the Shareholders.
The Board of AGS Infotech Limited comprises of a Managing Director and one executive directors and 3 non-executive
independent directors. The following is the Composition of the Board as on 31st March 2011:
Sl. No Name and Category of Director No. of Directorship held in other Public Companies
No. of Memberships/ Chairmanships held in Committees of other
Companies 1 Mr. M Manivannan 1 Nil
Managing Director, Executive
2 Mr. G Dhananjaya Reddy 3 Nil
Non Independent, Executive 3 Ms. B S Padmavati Nil Nil
Independent, Non-Executive 4 Mr. R Venkatesh Nil Nil
Independent, Non-Executive
5 *Mr. S Sudheer 1 Nil
Non Independent, Executive
Board Meetings
During the Financial Year 2010-2011, the Board of Directors met 10 times on the following dates: 30.04.2010, 31.07.2010, 21.08.2010, 14.10.2010, 31.10.2010, 31.01.2011, 31.03.2011. The Attendance of Directors at these Board Meetings and at the previous Annual General Meeting is as under:
Sl. No
Name of the Directors No. of meetings held during the tenure of the
Director
No. of meetings attended by the Director
Whether present at the previous AGM
1 Mr. M Manivannan 7 7 Yes
Managing Director, Executive
2 Mr. G Dhananjaya Reddy 7 7 Yes
Non Independent, Executive
3 Ms. B S Padmavati 7 3 No
Independent, Non-Executive
4 Mr. R Venkatesh 7 4 Yes
Independent, Non-Executive
5 Mr. S Sudheer 7 7 No
Non Independent, Executive
2. Audit Committee
The Audit Committee was formed by the Board of Directors. The terms of reference of this committee cover the matters specified in the clause 49 of the Listing Agreement and as may be referred to the committee by the Board of Directors of the company.
Composition, name of Members and Chairman: Sl. No Name Designation Category
1 Mr. S Sudheer Chairman Independent, Non-Executive
Independent, Non-Executive 2 Ms. B S Padmavati Member Independent, Non-Executive
Independent, Non-Executive
3 Mr. R Venkatesh Member Independent, Non-Executive
Independent, Non-Executive
Statutory Auditor is invited to the meeting. The total number of meetings held is 4 on 30.04.2010, 31.07.2010, 31.10.2010 and 31.01.2011.
3. Shareholders / Investors Grievance Committee
Shareholders/Investors Grievance Committee was formed by the Board of Directors in terms of clause 49 of the Listing Agreement. The Shareholders/Investors Grievance Committee constitutes of the following persons:
Mr. S Sudheer - Chairman Mr. R. Venkatesh - Member Ms. B. S. Padmavati - Member
The committee looks into the matters relating to the shareholder’s complaints, grievances, various requests in the nature of transfer, transmission, etc., and also overseeing the performance of the Registrar & Transfer agents to improve the quality of investor services. During the year no investor complaint was received. The Committee met once during the year on 31.01.2011.
4. Compensation Committee
The committee was constituted with the following Directors for determining the remuneration packages of Executive / Non-Executive Directors. The Committee met once during the year on 30.01.2011.
The Company is having a remuneration committee comprising of the following:
Mr. S Sudheer - Chairman Mr. R. Venkatesh - Member Ms. B. S. Padmavati - Member
5. Information on General Body Meetings:
The last 3 Annual General Meetings were held as under:
Date Time Venue 30.09.2010 12:00 a.m. 302. 3rd floor, shahiti Arcade, SR Nagar, Hyderabad – 500033. 30.09.2009 10:30 a.m. 503, Harmony Heights, 7-1-67, DK Road, Ameerpet, Hyderabad – 500016. 29.09.2008 10.30 p.m. 503, Harmony Heights, 7-1-67, DK Road, Ameerpet, Hyderabad – 500016.
Special Resolution(s) passed by postal ballot
During the year 2010-11, the Company did not pass any resolution through postal ballot.
6. Disclosures
i) There are no materially significant related party transactions i.e., transactions of the Company of material
nature, with its promoters, directors or the management, their subsidiaries or their relatives etc. that may have potential conflicts with the interest of the company at large;
ii) There are no penalties, strictures imposed on the Company by Stock Exchange or SEBI or other authority on any non-compliance of laws related to capital markets, during last three years;
7. Means of Communication:
As per the listing requirements quarterly, half yearly and yearly financial results of the Company are published in leading English and regional newspapers for public information.
8. General Shareholder Information
i) Annual General Meeting Date : 30.09.2011 Time : 10.30 am Venue : #3rd Floor, 302, Sahiti Arcade, Behind Police Station,
S R Nagar, Hyderabad, Andhra Pradesh-500038. Tel: 040-31921222 Fax: 040-40175959
ii) Financial Calendar
Financial Reporting for 2011-2012.
The First Quarter Results 31.07.2010 The Second Quarter Results 31.10.2010 The Third Quarter Results 31.01.2011 The Fourth Quarter Results 30.04.2011
iii) Book Closure : 25th September 2011 to 30th September 2011 (both days inclusive). iv) Dividend Payment : The Board has not recommended a dividend for the financial year 2010-2011. v) Listing on Stock Exchanges
The Shares of the Company are listed on Bombay Stock Exchange Limited and the company has paid the listing fee for the year 2010-2011.
vi) Market Price Data There is no trading of scrip of the company at the Bangalore Stock Exchange Limited.
vii) Shareholding pattern as on 31st
March, 2011
Particulars Category No. of Shares held Percentage of shareholding A Shareholding of Promoter and Promoter group 59,16,000 47.53 1. Promoters & Persons Acting in concert ******** *****
Sub-Total A 59,16,000 47.53 B Public Shareholding 65,32,100 52.47 1. Institutions 5,00,000 ***** 2. Non Institutions
a. Indian Public and others 60,32,100 *****
Sub Total B 65,32,100 52.47 Grand Total (A+B) 1,24,48,100 100.00
viii) Registrars and Transfer Agents: Venture Capital and Corporate Investments Pvt. Limited 12-10-167, Bharatnagar, Hyderabad-500018. Phone: 040-23818475/476.
ix) Delegation of Share Transfer Formalities
The Board has delegated share transfer formalities to the Registrars and Transfer Agents. All communications regarding Share Transfers, Transmissions Change in Address and any other correspondence etc., may be addressed to the Registrars & Transfer Agents. The company has constituted Share Transfer Committee. Physical transfers are effected within the statutory period of one month. The Board has designated Ms. Suhasini Ashok B - Company Secretary as the Compliance Officer. Hence, in case of any grievances the shareholders are free to approach the Share Transfer Committee for due redressal of their grievances. The Company has created an exclusive E-mail ID for the benefit of the shareholders: [email protected].
x) Dematerialization of shares The Company’s shares are dematerialized on National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited. The Company’s ISIN is INE966E01016.
xi) Address for Correspondence
The Shareholders may correspond with the Company for the redressal of their grievances, if any to the Corporate office of the company as detailed below:-
Registered Office: #3rd Floor, 302, Sahiti Arcade, Behind Police Station, S R Nagar, Hyderabad, Andhra Pradesh-38.
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE The company has obtained a certificate from the Auditors of the Company regarding compliances of conditions of
Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges. The said Corporate Governance
is as under:
CERTIFICATE
To
The members of
AGS INFOTECH LIMITED
We have examined the compliance of conditions of Corporate Governance by AGS INFOTECH LIMITED, for the period
of 12 months ended on 31st March 2011, as stipulated in clause 49 of the Listing Agreement of the said Company with
stock exchanges of India.
The compliance conditions of Corporate Governance are the responsibility of the management. Our examination was
limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance
with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial
statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and the representations
made by the directors and the management, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in Clause 49 of the abovementioned Listing Agreement.
As required by the Guidance note issued by the Institute of Chartered Accountants of India, we have to state that the
Company has certified that as on 31st March 2011 there were no investor grievances remaining unattended / pending for a
period exceeding one month.
We further state that such compliance is neither an assurances as to the future viability of the Company nor the efficiency
or effectiveness with which the management has contributed the affairs of the company.
Hariharan & Associates Chartered Accountants
Place: Hyderabad M Hariharan Date: 15.06.2011 Membership No:022412
AUDITORS’ REPORT
To
The Shareholders
AGS INFOTECH LIMITED
Hyderabad. (AP)
We have audited the attached Balance Sheet of M/s. AGS INFOTECH LIMITED, as at 31st March, 2011 and the Profit
and Loss account for the year ended on that date annexed thereto. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Auditing Standards generally accepted in India. Those Standards required
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An Audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for an opinion:
1. As required by the Companies (Auditors Report) Order, 2003 issued by the Company’s Law Board in terms of
Section 227 (4A) of the Companies Act, 1956, we annexure a statement on the matters specified in paragraph 4
& 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph (1) above,
a. We have obtained all the information and explanations, which to the best of our knowledge and belief we
necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as
appears from our examination of such books.
c. The Balance Sheet and Profit and Loss Account referred to by this report are in agreement with the
Books of Accounts.
d. In our opinion, the Balance Sheet and Profit and Loss Account comply with the Accounting Standards
referred to in sub Section (3c) of Section 211 of the Companies Act, 1956.
e. On the basis of written representation received from the directors and taken on record by the Board of
Directors, we report that none of the Directors of the Company are disqualified from being appointed as
Director of the company in terms of section 274(1) (g) of the companies Act, 1956
f. In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read with accounting policies and Notes on Accounts (Schedule -13) give the information
required by the Companies Act, 1956 in the manner so required and give a true and fair view in
conformity with the Accounting principles generally accepted in India:
I) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2011 and
II) In the case of Profit and Loss Account of the Profit of the Company for the year ended on that date.
For Hariharan & Associates Chartered Accountants
Place: Hyderabad (M Hariharan) Date: 15.06.2011 Proprietor
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE OUR REPORT OF EVEN DATE TO THE
MEMBERS OF M/S AGS INFOTECH LIMITED, HYDERABAD ON THE ACCOUNTS FOR THE YEAR
ENDED 31ST MARCH 2011 1. The Company has maintained proper records showing full particulars including quantitative details and situation of
fixed assets. The fixed assets have been physically verified by the management in accordance with the program of
verification adopted by the company. In our opinion, the frequency of verification is reasonable and to the best of our
knowledge no material discrepancies were noticed on verification.
2. The Company is in Business of IT Services and software development and other incidental activities and does not
carry any stores, spare parts, raw material or finished goods and no discrepancies were noticed on physical
verification and the company is maintaining proper records.
3. As per information and explanations, furnished by the management, the Company has neither granted nor taken any
loans to and from the companies, firms and other parties listed in the register maintained under Section 301 of the
Companies Act 1956. Accordingly the Clauses 4(iii) (b) to (d) of the order are not applicable.
4. In our opinion and according to the information and explanations given to us, there are adequate internal control
procedures commensurate with the size of the company and the nature of its business for the purchase of Plant &
machinery, equipment and other assets. During the course of our audit no major weaknesses has been noticed in the
internal controls.
5. There has been no transactions of purchase of goods and materials and sale of goods, materials and services made in
pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act,
1956, and aggregating during the year to Rs.50,000/- or more in respect of each party have been made at prices which
are reasonable where the company render similar services to other parties.
6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the
Companies Act, 1956, and the rules framed thereunder.
7. In our opinion, the Company has adequate internal audit system commensurate with the size and nature of its
business,
8. The Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies
Act, 1956
9. (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Investor Education protection fund, the Employees State
Insurance, Income tax, Wealth Tax, Sales Tax, customs duty, excise duty and cess, and other statutory dues applicable
to it.(b) According to the records of the company there is no dispute about amount pending with regards to sales tax,
Income tax and other statutory liability.
10. The company has no accumulated losses and has not incurred the cash loss during the year and in the immediately
preceding financial year
11. Based on our audit procedures and on the information and explanation given by the management, we are of the
opinion that the company has not defaulted in repayment of the dues to banks,
12. Based on our examination of the records and the information and explanations given to us the company has not
granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures and other
securities.
13. Clause (xiii) of the order is not applicable to the company as the company is not a chit fund or a nidhi /mutual benefit
fund/society.
14. In our opinion the company is not dealing in or trading in shares, securities debenture and other investments.
15. According to the information and explanations, given to us, the Company has not given guarantee for loans taken by
others.
16. According to the information and explanation given to us, the term loans were applied for the purpose for which the
loans were obtained.
17. Based on the examination of documents and records made available and on the basis of information and explanation
given to us, the company has not used funds raised on short term basis for long term investments and vice versa.
18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register
maintained under section 301 during the year.
19. No debentures has been issued by the Company during the year
20. The Company has not raised money by public by public issued during the year
21. Based on Audit procedures performed and information explanations given by the management, I report that no fraud
on or by the company has been noticed or reported during the course of our audit.
For Hariharan & Associates Chartered Accountants
Place: Hyderabad (M Hariharan) Date: 15.06.2011 Proprietor
Amt In Rupees
31.03.2011 31.03.2010
SOURCE OF FUNDS:
Shareholder's Fund:
Share Capital 1 204,881,000 204,881,000
Reserves & Surplus 2 112,279,863 96,954,356
317,160,863 301,835,356
Loan Funds:
Secured Loan 3 241,470,332 197,304,797
241,470,332 197,304,797
Deferred Tax Liability 4 14,675,903 9,540,488
14,675,903 9,540,488
TOTAL 573,307,098 508,680,641
APPLICATION OF FUNDS:
Fixed Assets
Gross Block 5 116,998,022 111,670,822
Less: Accumulated Depreciation 30,758,483 12,530,321
Net Block 86,239,539 99,140,501
Capital work in Progress 329,541,985 259,081,012
TOTAL 415,781,524 358,221,513
Investment
Investment in shares 60,000,000
Current Assets, Loans & Advances
Sundry Debtors 6 98,028,209 127,256,451
Cash and Bank Balances 7 68,355 13,753,744
Loan and Advances 8 22,897,915 22,415,254
TOTAL 120,994,479 163,425,449
Less: Current Liabilities & Provisions 9
Current Liabilities 18,317,559 8,849,076
Provisions 5,151,347 4,117,245
23,468,906 12,966,321
Net Current Assets 97,525,573 150,459,128
Miscellaneous Expenditure
Preliminary Expenses
-
TOTAL 573,307,098 508,680,641
Accounting Policies & Notes on Accounts 11
Schedules Nos. 1 to 9 and 11 form an integral part of Balance Sheet
As per our report of even date
Hariharan & Associates
Chartered Accountants
M Hariharan
Proprietor
Place: Bangalore
Date: May 15, 2011 Managing Director
For and on behalf of the Board of Directors
PARTICULARS Sch No.
AGS INFOTECH LIMITED
Audited Balance sheet as at March 31, 2011
As at
G Dhananjaya Reddy
Director
M Manivannan
Amt In Rupees
31.03.2011 31.03.2010
INCOME:
Income from Operations 311,932,211 297,458,540
311,932,211 297,458,540
EXPENDITURE:
Operational Expenses 251,118,245 250,785,260
Administrative Expenses 10 10,412,142 8,997,906
TOTAL 261,530,387 259,783,166
Profit from Operations 50,401,824 37,675,374
Less: Depreciation 18,228,161 7,085,093
Interest & Financial Charges 6,619,711 5,698,044
Profit Before Tax 25,553,953 24,892,237
Provision for Tax
Income Tax 5,093,031 3,815,980
Deferred Tax 5,135,415 6,227,966
Net Profit after Tax 15,325,507 14,848,291
Add:Balance brought from Previous year 26,954,356 12,106,065
Profit available for Appropriation 42,279,863 26,954,356
Earning per Share-Basic 1.23 2.72
Diluted 1.23 2.72
Accounting Policies & Notes on Accounts 11
Schedules Nos. 10 to 11 is part n integral part of Profit and Loss Account
Hariharan & Associates
Chartered Accountants
M Hariharan
Proprietor
Place: Bangalore
Date: May 15, 2011
Managing Director
PARTICULARS Sch No.
AGS INFOTECH LIMITED
Audited Profit and Loss Account for the Year Ended March 31, 2011
As at
For and on behalf of the Board of Directors
G Dhananjaya Reddy
Director
M Manivannan
Amt In Rupees
31.03.2011 31.03.2010
SCHEDULE 1: Share Capital:
Authorised Capital:
13,000,000 Equity Share of Rs.10 Each 130,000,000 130,000,000
Issued subscribed and paid up capital
12,448,100 Equity Share of Rs.10/- each 124,481,000 124,481,000
(P Y 12,448,100 Equity share of Rs.10/- each)
124,481,000 124,481,000
Share Application money pending allotment 80,400,000 80,400,000
TOTAL 204,881,000 204,881,000
SCHEDULE-2: Reserves & Surplus
Opening Balance 26,954,356 12,106,065
Add: Current Year 15,325,507 14,848,291
42,279,863 26,954,356
Share Premium 70,000,000 70,000,000
TOTAL 112,279,863 96,954,356
SCHEDULE-3: Loan Funds:
Term Loan - United Bank of India 187,030,127 147,082,963
Cash Credit - United Bank of India 50,889,585 50,221,834
Car Loan-HDFC Bank Ltd 3,550,620 -
TOTAL 241,470,332 197,304,797
SCHEDULE-4: Deferred Tax Liability
Opening Balance 9,540,488 3,312,522
Add: Current Year Liability (Asset) 5,135,415 6,227,966
TOTAL 14,675,903 9,540,488
SCHEDULE-6:Sundry Debtors:
Unsecured, considered good
Debts outstanding for more than six months 58,945
Others 98,028,209 127,197,506
TOTAL 98,028,209 127,256,451
SCHEDULE-7: Cash and Bank Balances:
Cash in Hand 52,141 65,048
Cash at Bank 16,214 13,688,696
TOTAL 68,355 13,753,744
SCHEDULE-8: Loans and Advances:
Advances recoverable in cash or in kind or
Advance to Libra Interactive Learning Pvt Ltd -Share Application 20,400,000 20,400,000
Advances & Deposits 2,078,698 1,608,754
Office Advances 400,000 400,000
Telephone Deposit 8,799 6,500
Prepaid Advances 10,418 -
TOTAL 22,897,915 22,415,254
SCHEDULE-9: Current Liabilities & Provisions:
Liabilities
Sundry Creditors 15,326,928 2,019,238
Outstanding Liabilities 2,990,631 6,829,838
TOTAL 18,317,559 8,849,076
Provision:
Provision for Income Tax 5,093,031 4,117,245
Provision for Expenses 58,316
-
TOTAL 5,151,347 4,117,245
PARTICULARS
AGS Infotech Limited
Schedule annexed to forming Part of Balance Sheet & Profit And Loss Account as on March 31, 2011
As at
AGS INFOTECH LIMITED
SCHEDULE-5: FIXED ASSETS
Amt In Rupees
As on
01.04.2010Additions Deletions
Total as on
31.03.2011
Upto
01.04.2010Deletions For the Period
Total As on
31.03.2011
As on
31.03.2011
As on
31.03.2010
Computers 110,944,900 38,115 - 110,983,015 12,182,977 - 17,986,460 30,169,437 80,813,578 98,761,923
Furniture and Fixtures 156,077 - - 156,077 101,523 - 9,880 111,403 44,674 54,554
Office Equipments 371,645 195,001 - 566,646 134,577 - 26,180 160,757 405,889 237,068
Machinery 198,200 - - 198,200 111,245 - 9,415 120,660 77,541 86,955
Motor Car - 5,094,084 - 5,094,084 - - 196,227 196,227 4,897,857 -
TOTAL 111,670,822 5,327,200 - 116,998,022 12,530,322 - 18,228,161 30,758,483 86,239,539 99,140,500
Description
Gross Block Depreciation Net Block
SCHEDULE 11: Administrative Expenses:
Amt In Rupees
31.03.2011 31.03.2010
General Expenses 64,863 34,743
Office Maintenance 259,500 215,483
Printing and Stationery 292,691 358,451
Rent 330,000 118,000
Filing Fee 130,082 82,355
Postage & Telegrams and Telephones 3,311 205,985
Director Sitting Fee 4,500 4,500
Telephone & Internet Charges 260,619 -
Audit Fee 110,330 110,330
Hire Charges 100,217 -
Professional Charges 508,000 25,000
Salary & Wages 7,172,141 6,874,665
Security Expenses 47,600 -
Bank Charges 44,030 -
Power & Fuel Charges 366,810 269,852
Travelling and Conveyance Charges 717,448 698,542
TOTAL 10,412,142 8,997,906
ParticularsAs at
SCHEDULE-12
NOTES FORMING PART OF ACCOUNTS
1. Significant Accounting Policies:
a. Accounting Convention:
The accounts have been prepared under the historical cost convention based on the principle of going
concern and are consistent with the generally accepted Accounting Principles, unless otherwise stated. b. Fixed assets and Depreciation thereon:
Fixed assets are stated at original cost less depreciation including other expenses relating to acquisition and installation.
Depreciation on fixed assets have been provided for the year on straight line method as per the depreciation
rates specified in Schedule XIV of the Companies Act, 1956 c. Retirement benefits in respect of gratuity, superannuation and leave encashment are accounted on accrual
basis.
2. Additional Information required under Paragraph 3 and 4D of Part II of Schedule VI of Companies Act, 1956-NOT
APPLICABLE.
3. Earnings in Foreign Exchange during the year Rs.Nil (previous year – 98,58,252).Expenditure in foreign currency-
Nil.
4. Loans availed from Bank is charged against fixed asset and current asset of the company, additional collateral
provided and carries the personal guarantee of promoter Directors.
5. No employee has been paid remuneration in excess of Rs.24,00,000/- per annum or Rs.2,00,000/- per month.
6. Balance standing to the debit/credit of parties are subject to confirmation by them.
7. As per requirements of Accounting Standard (AS22)-“Accounting for taxes of Income” issued by the Institute of
Chartered Accountants of India in absence of virtual certainty of sufficient future taxable income, the company,
in the books of accounts has not been recognized the deferred tax in respect of unabsorbed depreciation and
accumulated losses under the Income tax laws.
8. The Amounts payable to Small Scale Industrial Undertaking in excess of Rs.1,00,000/- is NIL.
9. Previous year figures have been re-grouped/re-arranged / re-classified wherever necessary to confirm to the
classification adopted for the current year.
10. Figures have been rounded off to the nearest rupee.
11. Operation of the Company current is in single segment and as such separate segment details are not available.
As Per our report of even date For Hariharan & Associates For and on behalf of the Board of Directors Chartered Accountants
M Hariharan G Dhananjaya Reddy M Manivannan Proprietor Director Managing Director Place: Bangalore Date: 15.06.2011
2010-2011 2009-2010
Cash flow from Operating Activities:
Net profit before Taxation 25,553,953 14,848,291
Adjustments for:
Depreciation 18,228,161 7,085,093
Deferred Tax 5,135,415 6,227,966
Interest 6,619,711 5,698,044
Operating Profit before working capital changes 55,537,240 33,859,394
Change in Sundry Debtors 29,228,242 (79,335,533)
Change in Inventory
Change in Loans & Advances (482,661) 7,180,473
Change in Sundry Creditors (10,502,584) 7,899,080
Cash generated from Operations 73,780,236 (30,396,586)
Cash flows from Investing Activities
Purchase of Fixed Assets (75,788,173) (347,538,862)
Investments - (20,400,000)
Net cash used in Investing Activities (75,788,173) (367,938,862)
Cash flow from Financing Activities
Proceeds from Share capital - 220,400,000
Proceeds from Borrowings 44,165,535 197,304,796
Interest paid (6,619,711) (5,698,044)
Dividends paid -
Net Cash from Financing Activities 37,545,824 412,006,752
Net change in Cash & Cash equivalents 35,537,887 13,671,304
Cash & Cash Equivalents at the beginning of the period 13,753,744 82,440
Cash & Cash Equivalents at the end of the period 68,355 13,753,744
Figures in Rupees
AGS INFOTECH LIMITED
CASH FLOW STATEMENT
AGS INFOTECH LIMITED
Regd. Office: 302, 3RD
Floor, Sahithi arcade,
SR Nagar, Hyderabad
PROXY FORM
I / We ...............................................................................of …………………………………….. .......................................being a
member / members of AGS INFOTECH LIMITED hereby appoint ...............................................................of
.................................................. or failing him............ ...................... .............. ......... ............................of
........................................................ as my / our proxy to attend and vote for me / us and on my / our behalf at the 15th ANNUAL
GENERAL MEETING of the said Company to be held at 10.30 AM at 301, 3rd floor, Sahithi Arcade, SR Nagar, Hyderabad on Friday,
the 30th day of September, 2011and at any adjourned meeting thereof.
Signed this ................. day of ................................ Two Thousand and Eleven
Signature(s) of the shareholder(s)
Folio No. .................. No. of Shares ...................... Distinctive Nos. ....................
Note: 1. this form must be deposited at the registered office of the company not later than 48 hours before time for holding the meeting.
2. A Proxy need not be a member.
.......................................................................................................................
AGS INFOTECH LIMITED
Regd. Office: 302, 3RD
Floor, Sahithi arcade,
SR Nagar, Hyderabad
ADMISSION SLIP
Regd. Folio No:………………….. No. of Shares: .....................
I certify that I am registered shareholder / Proxy for the registered shareholder of the Company. I hereby record my presence of the 15th
Annual General Meeting of the Company to be held on 30th September, 2011, Friday at 10.30 AM at Nexxoft Infotel Limited 302, 3rd
floor, Sahithi Arcade, SR Nagar, Hyderabad
Name of the Proxy (if any) Signature of Proxy
in Block Letters
Signature of member
Note: Please fill this admission slip and hand it over at the entrance of the hall. Those who come to attend the meeting are requested to
bring the copies of Annual Report also with them.
Affix revenue stamp
