IQ INFOTECH LIMITED
ANNUAL REPORT 2010-2011
DIRECTOR'S REPORT
Your Directors have pleasure in presenting herewith the 26th Annual Report
on the activities of your Company during the year ended 31st March 2011.
FINANCIAL RESULTS (Rs. in Lakhs)
PARTICULARS Year Ended Year Ended
31.03.2011 31.03.2010
TOTAL INCOME 409.53 149.48
Profit for the year before Dep. & Tax 99.85 -61.98
Less: Depreciation For the year 30.81 35.08
Profit/Loss (-) before Tax 69.04 -97.06
Performance
During the year under review, the total income of the Company was Rs.409.53
Lakhs as against Rs 149.48 Lakhs achieved during the previous year. The
Company has earned a profit of Rs.69.04 Lakhs during the year.
The Company has good orders from the Defence Department which will be
executed in the coming year. The Company has also received an order to the
tune of Rs. 85.00 Lakhs from M/S. Mahindra Defence which will be executed
during the current year.
Apart from this, orders of Mahindra Reva and Ashok Leyland will continue to
come. Since Reva Electric Company has been taken over by the Mahindra's, we
expect increased orders from them.
As approved in the earlier Annual General Meeting, the Company has
relocated its activities in Industrial Suburb, at Yeshwanthpur in the
Bangalore City limits. The new location of the Company with in the City
limits has improved the operation efficiency of the Company and the Company
is in a better position to attract talented Technicians and Engineers.
Dividend:
As the Company is still in the grip of carry over loss, your Directors
could not propose any dividend for the year.
Prospects & Outlooks
(a) The demand for the products that are being manufactured by your
Company, are very good and hence the Company is confident that the turnover
can be substantially increased during the current year.
(b) Your Company will be completing the Defence orders on hand during the
Current year and hence the Turn over will substantially increase during the
current year. Your Company has also entered into full range of LED Lighting
Systems for home, Industry and Commercial lightings applications. Your
Company has already supplied good number of LED lightings to various
Organizations and has received excellent response. Your Company hopes to
exploit this particular area fruitfully as there is very good demand for
LED lightings both in India and abroad .It may kindly be noted that all
lightings will be converted in to LED Lightings in the course of next five
years.
(c) Your Company continues to work on development of higher version of LED
products in the field of energy saving, safety and general use. Your
Directors are confident that R&D efforts would result in developing fast
moving products. Finance:
Your Company is turning around speedily and looks to be solving many of its
earlier financial problems and it is hoped that the whole financial
structure will be strengthened in the coming years. Your Directors are
following up vigorously various options left to them for raising funds and
since the discussions are in advanced stage, a positive development is in
the coming years.
Public Deposit:
Your Company has not accepted any deposit from the Public during the year.
Human Resources & Industrial Relations:
Your Directors wish to place on record their appreciation for the dedicated
services rendered by the employees at all levels.
Particulars of employees pursuant to Section 217(2A) of the Companies Act,
1956 are not applicable since none of the employees are in receipt of
remuneration in excess of the limits prescribed therein.
Internal Control System & Their Adequacy:
Your Company remains committed to maintain high standards of Internal
Control measures designed to provide adequate assurance of the efficiency
of operations and security of its assets. The adequacy and effectiveness of
the internal control across the various activities is well laid down and
continuously monitored by the management of the Company.
The Audit Committee of the Board meets four times a year and actively
reviews internal control system, financial disclosures and compliance with
various applicable accounting standards.
Energy, Technology & Foreign Exchange :
A. Conservation of Energy
The Company makes evaluation on continuous basis to explore new
technologies to make the infrastructure more energy efficient. Although the
operations of the Company are not energy intensive, Company continues to
upgrade all energy devises to the extend feasible to make the operations,
save energy, where ever possible.
B. Research and Development
Research and Development is one of the thrust areas for the Company and
constant endeavour is made to bring out innovative products for security
and energy saving requirements, in the automobile, domestic and industrial
sectors. R&D activities are carried out on a continuous basis.
Directors Responsibility statement:
As required under section 217(2 A A) of the Companies Act, 1956, your
Directors hereby confirm that:-
* In preparation of these annual accounts, the applicable accounting
standards have been followed and no material departure have been made from
the same.
* They have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company.
* They have taken sufficient care for the maintenance of adequate records
as per the requirements of the Companies Act, 1956, for safeguarding the
assets of the Company and for preventing fraud and other irregularities.
* They have prepared annual accounts on a going concern basis.
Corporate Governance
A detailed Compliance Note on Corporate Governance, as required under the
provisions in the listing agreements with the Stock Exchanges, together
with the certificate of Statutory Auditors thereon, is attached as Annexure
- B to this report.
Management discussion and analysis
Management discussions and analysis, as applicable, is included in this
report, in order to avoid duplication and overlap of materials & matters,
between Directors report and a separate report on management Discussion and
Analysis.
Directors
At the ensuing Annual General Meeting, Mr. Sudarshan S will retire by
rotation and being eligible offers himself for reappointment.
Auditors
M/s.Pal & Shanbhogue, Chartered Accountants, Statutory Auditors of the
Company, retire at the conclusion of the ensuing Annual General Meeting and
being eligible offers for reappointment as Statutory Auditors.
M/s Swamy & Associates, Company Secretaries have been appointed as
Secretarial Auditors of the Company for the year 2011-12.
Replies to Audit Remarks
(1) Observation No.4 of the Annexure to the Auditor's Report regarding the
strengthening of Internal Control procedures have been taken care of by the
appointment of internal audit assistants.
(2) The Audit observation No.9 a. of the Annexure to the Auditor's Report
relating to not regular in depositing undisputed Statutory dues including
Provident Fund, ESI, Sales Tax, Service Tax and Excise Duty would be taken
care of in this fiscal year for the timely remittance.
Acknowledgements
Your Directors place on record their sincere gratitude to the continuing
patronage of our valued customers, whose sustained support and
encouragement has enabled the Company in achieving results.
Your Directors also place on record, their sincere appreciation for the
dedication and commitment of staff at all levels.
Your Directors wish to register their acknowledgement and appreciation for
the timely support and co-operation being extended by the Banks and all
their executives.
For and on behalf of the Board
Place: Bangalore Dr. K R Srinivasan
Date : 03.09.2011 Chairman and Managing Director.
ANNEXURE-C
MANAGEMENT DISCUSSION & ANALYSIS REPORT
I. Industry Structure and Development
The company is now focusing into three main areas namely Defence
Electronics, Industrial Electronics and LED Lightings/Digital Display
Systems and other major areas.
All these three areas have got tremendous potential in terms of market
schemes. Hence the company will focus in these areas in the next 2-3 years.
Since the company was involved in Automotive Electronics for a long time
the company is also looking out at newer potential areas in this segment.
II. Segment wise Performance:
The company is concentrating on Indian PSUs who are the blue chip companies
of India to-day.
III. Industrial Segment:
With reference to the Industrial segment the company was in a position to
bag good orders through tender process and the company is established as
one of the reliable vendors in this sector. LED Lighting is one of the fast
growing sectors. Many lighting majors like WIPRO are sourcing LED Lights
from your Company. Hence, the Company can expect very large orders. The
Company will also continue to concentrate in Defence sector as this segment
is being opened for private industries.
IV. Threats and concerns :
The areas in which the company is working have a number of competitors and
the only way the company can bag orders is through their pricing structure
and also quality of its products. Hence, the company is focusing on value
engineering and also upgrading the technology to appraise these two threats
and concerns.
V. Out look opportunities:
As mentioned above, there is tremendous opportunity in the area of Digital
Display Systems as well as Automotive Electronics in which the company has
the required expertise. The company hopes to strengthen its R & D
activities and also modernize the company in these areas so that the
company can bag large volume orders. The modernization will be in terms of
upgrading existing facilities and also add more equipment in order to
achieve the desired development and manufacturing activities.
INTERNAL CONTROL AND ITS ADEQUACY
The Management reporting system adopted by the company at different levels
for different activities is considered adequate and enables to take
corrective action by the management through regular review meetings. The
company's systems and processes in all areas are regularly reviewed by the
internal auditors. Management regularly reviews the internal audit reports
and corrective actions are initiated to further strengthen the control.
FINANCIAL AND OPERATIONAL PERFORMANCE
Higher productivity, aggressive cost curtailment together with debt
restructuring has been key areas to improve the operational performance.
The sale prices are adjusted wherever required to match cost with the
revenue.
HUMAN RESOURCES
The industrial relations have been harmonious.
By order of the Board of Directors
Place: Bangalore Dr. K R Srinivasan
Date : 03rd September, 2011 Chairman and Managing Director
ANNEXURE-D
Conservation of Energy, Technology absorption, Foreign exchange Earning and
outgo
Conservation of energy:
The Company has installed fuel efficient and energy saving devices with the
help of professional consultants to reduce energy consumption.
Research and Development:
A team has been formed internally comprising of Engineers with experience
in various functions. Few projects have been identified which will yield
results in terms of new product development technological up gradation to
improve manufacturing process and to try out different materials/
consumables to reduce product costs etc.
Technology absorption:
The Company has no outside technical collaboration.
Foreign exchange Earning and outgo:
a. Foreign Exchange utilized Rs.18.53 Lakhs
b. Foreign Exchange earned NIL
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