infodriveservices.cominfodriveservices.com/investors/pdfs/2008_annual_report-info_drive.pdf · 31st...

CORPORATE INFORMATION

Board of Directors Mr. V.N. Seshagiri Rao Director

Mr. K. Chandrasekaran ManagingDirector&ChiefExecutiveOfficer

Mr. K. Shivakumar JointManagingDirector

Mr. N.T. Shiv kumar WholeTimeDirector&ChiefOperatingOfficer

Mr. A.T. Krishnakumar IndependentDirector

Mr. Singanallur Narayanan IndependentDirector

Mr. R. Mohan AlternatetoSinganallurNarayanan

Mr. S. Sriraman IndependentDirector

Company Secretary Mr. V. Gopal Rao B.Sc.,B.L.,F.C.S.

Chief Financial Officer Mr. ANL Madhavann B.Sc.,FCA,FCS.,PGDBA,BGL

Auditors M/s. K.S. Reddy Associates NewNo.36,FirstFloor, CharteredAccountants NorthUsmanRoad,T.Nagar Chennai–600017,India. Tel:+91-44-42605656 Mobile:+91-9444404761

Secretarial Auditors Mr. T. Balasubramanian “Firdous”,FirstFloor PractisingCompanySecretary 25/11,CenotaphFirstStreet Teynampet

Chennai–600018,India.

Bankers Union Bank of India Axis Bank Ltd.

Depository Services Cameo Corporate Services Limited “SubramanianBuilding”Share Transfer Agents No.1,ClubHouseRoad,

Chennai–600002,India. Tel:+91-44-28460390, Fax:+91-44-28460129

Registered Office Info-Drive Software Limited BuhariBuilding,SecondFloor, No.3,MooresRoad, Chennai–600006,India. Tel:+91-44-28212368/9 Fax:+91-44-28212609 Website:www.infodriveservices.com E-mail:[email protected]

Info-Drive Software Limited

Annual Report 2007-08

NOTICE TO THE SHAREHOLDERSNOTICE is hereby given that the TWENTIETH ANNUAL GENERAL MEETING of the Company will be held at the “The MusicAcademy,“KasthuriSrinivasanMiniHall”,NewNo168.T.T.KRoad,Royapettah,Chennai–600014,India,at10.30a.m.onTuesday,the23rdSeptember2008,totransactthefollowingbusiness:

AGENDA

ORDINARY BUSINESS 1. To receive,considerandadopt theProfitandLossAccount for theyearended31stMarch2008andtheBalanceSheetonthatdatetogetherwiththeDirectors’ReportandtheAuditors’Reportthereon.

2. TodeclareaDividend.

3. ToappointaDirectorintheplaceofMr.V.N.SeshagiriRao,Director,whoretiresbyrotation.Mr.V.N.SeshagiriRaobeingeligibleoffershimselfforreappointment.

4. ToappointAuditorsfortheCompany,toholdOfficefromtheconclusionofthisAnnualGeneralMeetingtilltheconclusionofthe21stAnnualGeneralMeetingandtofixtheirremuneration.M/s.K.S.ReddyAssociates,CharteredAccountants,Chennai,whoarepresentlytheAuditorsareeligibleforreappointmentandhaveexpressedtheirwillingnesstobeappointedastheAuditorsoftheCompany.

SPECIAL BUSINESS 5. ToappointMr.S.SriramanasDirectoroftheCompany.

6. ToconsiderandpassaSpecialResolutiontoamendArticle21(g)oftheArticlesofAssociationoftheCompany,inrespectoftheincreaseinpaymentofDirector’ssittingfeesfromthepresentRs.250/- (RupeesTwoHundredandFiftyonly)perDirector,perMeetingoftheBoardoroftheCommitteetoRs.10,000/-(RupeesTenThousandonly)(exclusiveoftravelandoutofpocketexpenses)perDirector,perMeetingoftheBoardoroftheCommitteeorthereof.

ThefollowingResolutionmaybepassedasaSpecialResolutionwithorwithoutmodification.

“RESOLVED that the Articles of the Association of the Company be amendedby substituting the following new Article 21 (g) in the place of the existingArticle21(g).”

ThenewArticle21(g)willreadasfollows:

“TheremunerationofeachDirectorshallbebywayofSittingFeenotexceedingRs.10,000/- (Rupees Ten Thousand only) (exclusive of travel and out of pocketexpenses)perDirectorforeachMeetingoftheBoardorCommitteeattended.”

7. TodeleteArticle21(i)fromtheArticlesofAssociationoftheCompany.

The following Special Resolution may be passed with or without anymodification:

“RESOLVEDthattheArticle21(i)oftheArticlesofAssociationoftheCompanybedeleted.”

ByOrderoftheBoard ForInfo-DriveSoftwareLimited Sd/-Place : Chennai–600006,India V. Gopal RaoDate : 08.08.08 Sr.VicePresident&CompanySecretary



NOTES 1. EverymemberentitledtoattendandappointattheMeetingisentitledtoappointa proxy to attend and vote instead of himself and such a proxy need not be amemberoftheCompany.Theproxyformdulystampedandexecutedshouldbedepositedat the registeredofficeof theCompanyat least48hoursbefore thetimefixedforthecommencementofthemeeting.

2. TheRegisterofMembersandtheShareTransferBooksoftheCompanywillremainclosedfrom8thSeptember2008to10thSeptember2008bothdaysinclusive.

3. MembersarerequestedtonotifytheCompanyatitsRegisteredOfficeortotheShareTransferRegistrarofanychangeinaddressquotingtheirfolionumber.

4. Members who have queries on the accounts of the company are requested tosendthesametotheCompanyatleasttwodaysinadvance,toenablegatheringofdataneededforthereplies.

5. Dividendifdeclaredwillbepaidtosuchmemberswhosenamesappear intheRegisterofMembersonthelastdayofclosureofBooks.

6. Nogiftsorcomplimentaryitemswillbedistributed.

Explanatory Statement under Section 173(2) of the Companies Act, 1956

Item No.5 : Mr.S.SriramanwhohasbeenappointedasanAdditionalDirectorattheBoardMeetingheldon8thAugust2008,vacatesOfficeatthisAnnualGeneralMeetingunderSection260,oftheCompaniesAct,1956.HeisbeingproposedtobeappointedasaDirectorandnecessaryNoticehasbeenreceivedunderSection257fromaMember,proposinghiscandidaturetogetherwiththerequireddeposit.

Mr.S.SriramanisaqualifiedBankerwithCAIIBfromIndianInstituteofBankers.HeisalsoanMBAfromMaduraiKamarajUniversity,withspecializationinFinance&Marketing.Inaddition,heholdsaMastersqualificationinEconomicsfromUniversityofMadrasandaDoctorofBusinessAdministrationfromUniversityofSouthAustralia.

Mr. S. Sriraman has around 25 years of experience in Banking , Fund Management and in Corporate Sector. His stints includeorganizations like Canara Bank, Canbank Mutual Fund, Wipro Finance Ltd., IL & FS Venture Corporation Limited and SilkRouteIndchemLimited.Mr.S.SriramanhasanimpressivetrackrecordofmentoringstartupsaspartofventurecapitalinitiativestilltheyareListed.AtpresentheisinvolvedintheoperationsofafundmanagementcompanyinChennai,withfocusonventurecapital,privateequity,mergersandacquisitions.

ExceptMr.S.Sriraman,nootherDirectorisdeemedtobeinterestedinthisresolution.

Item No.6 :PresentlytheArticlesofAssociationoftheCompanyprovidesforthepaymentofDirectorsSittingFeesnotexceedingRs.250/-(RupeesTwoHundredandFiftyonly)perDirectorforeachMeetingattended.ItisproposedtoincreasetheSittingFeestoRs.10,000/-(RupeesTenThousandonly)(exclusiveoftravelandoutofpocketexpenses)perDirector,perMeetingoftheBoardortheCommittee.

TheRulesframedunderSection310oftheCompaniesAct,1956,permitsthepaymentofhigherSittingFeestotheDirectorsnotexceedingRs.20,000/-incaseofaCompanyhavingPaid-UpCapitalandFreeReservesofRs.10CroresoraboveoraturnoverofRs.50Croresandabove.

AlltheDirectorsforthetimebeingwouldbedeemedtobeinterestedinpassingoftherelevantResolutions.

Item No.7 : Article21(i)oftheArticlesofAssociationwhichreadsasfollowsprovidesformethodologyofresignationofDirectors.

“ADirectormayretirefromtheOfficeupongivingonemonth’snoticeinwritingtotheCompanyofhisintentiontodosoandsuchresignationshalltakeeffectupontheexpirationofsuchnoticeoritsearlieracceptance.”

ThisArticle isnot inconsonancewith theprovisionsof theCompaniesAct,1956orTable–Aof theAct. Hence, theDirectorsrecommenddeletingofArticle21(i)fromtheArticlesofAssociationoftheCompany.

NoneoftheDirectorsareinterestedintheResolution.

ByOrderoftheBoard ForInfo-DriveSoftwareLimited Sd/-Place : Chennai–600006,India V. Gopal RaoDate : 08.08.08 Sr.VicePresident&CompanySecretary



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DIRECTORS’ REPORT Your Directors have the pleasure in submitting the Twentieth Annual Report

withAuditedAccountsoftheCompanyfortheyearended31stMarch2008.

Financial Results ThenewManagementofyourCompanyinlinewithitsstatedobjectives,translateditsstrategicinitiativesintoOperatingresultswhichisevidencedbyitsrecordAnnualresultsfortheyearunderreview.

YourCompany’sIncomefortheyearonaConsolidatedbasiswasRs.19,410.36LakhsincludingotherIncomeofRs.94.21LakhsasagainstRs.17.65LakhsandRs.9.43lakhsrespectively for the previous year. The corresponding total Expenditure includingdepreciationfortheyearamountedtoRs.18,298.63LakhsasagainstRs.16.06Lakhsforthepreviousyear.TheNetProfitfortheyear(beforeminorityinterest)wasRs.726.02LakhsasagainstRs.1.39Lakhsforthepreviousyear.

YourCompany’sIncomefortheyearonaStandalonebasiswasRs.473.68LakhsagainstRs.17.65Lakhsforthepreviousyear.ThetotalExpenditureincludingdepreciationfortheyearamountedtoRs.187.40LakhsasagainstRs.16.06Lakhsforthepreviousyear.YourCompanyhaspostedaNetProfitofRs.227.67LakhsasagainstRs.1.39Lakhsforthepreviousyear.

TheFinancialResultsarebrieflygivenhereunder:

Consolidated

(Rs. In Lakhs)2007 – 2008

Turnover/IncomefromOperations 19316.15

OtherIncome 94.21

InterestandFinanceCharges 283.77

Profit/(Loss)beforeDepreciation 1314.39

ExtraOrdinaryItems(net)Goodwillwrittenoff 18.34

Depreciation 202.66

Profit/(Loss)beforetax 1093.39

ProvisionforTax 295.48

FringeBenefitTax 25.48

Profit/[Loss]afterTax(afterMinorityInterestadjustment) 847.65

ProposedDividend(incl.dividendtax) 174.96

BalanceProfit/[Loss]broughtforwardfromthepreviousyear (523.27)

BalanceProfit/[Loss]carriedtoBalanceSheet. 149.43

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Stand-Alone

(Rs. In Lakhs)2007 – 2008

(Rs. In Lakhs)2006 – 2007

Turnover/Incomefromoperations 424.70 8.22

OtherIncome 48.98 9.43

Interestandfinancecharges 17.06 0.26

Profit/(Loss)beforedepreciation 293.35 3.63

Extraordinaryitems(net)Goodwillwrittenoff 18.34 ----

Depreciation 7.07 2.04

Profit/(Loss)beforetax 267.94 1.59

Provisionfortax(incl.deferredtax) 38.80 0.20

FringeBenefitTax 1.47 ---

Profit/[Loss]afterTax 227.67 1.39

ProposedDividend(incl.dividendtax) 171.05 0.00

BalanceProfit/[Loss]broughtforwardfromthepreviousyear (523.28) (524.67)

BalanceProfit/[Loss]carriedtoBalanceSheet. (466.66) (523.28)

Dividend We are particularly pleased to have achieved record revenues for the year 2008.In addition we achieved our highest ever new Order Bookings, Earnings per ShareandfreeCashFlow.Keeping inmindyourcompany’s futureoutlookandtorewardthe Shareholders, your directors are pleased to recommend a Maiden Dividend of5%(fivepercent)perequityshareforFY07-08.Thedividendwillbepaidinlinewithapplicableregulations,ifapprovedbytheshareholdersattheAnnualGeneralMeeting.TheDirectorsarehopefulthatthereturnoninvestmentstotheShareholderswouldcontinueinthecomingyears.

Business Business Review and Prospects TheNewManagementofyourcompany,inlinewithitsstatedobjectives,translated

itsstrategicinitiativesintooperatingresultswhichisevidencedbyitsrecordAnnualresultsfortheyearunderreview.

The jump/ improvement in the performance of the company has been reflected inthe company’s Market Capitalization from Rs.875.50 Lakhs in 31st March 2007 toRs.15905.95Lakhsin31stMarch2008.

During the year, your company executed a few strategic acquisitions and madeseveral organic initiatives for accelerating growth, drew up an aggressive businessdevelopmentplanglobally,addedhighestevernumberofpeopletoitsteamtocreatea multi-layered and multi-skilled organization structure to achieve the aggressivescale-upplans.

Directors’ Report

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Your company’s plan to focus and invest in niche emerging segments providessignificantroomtogrowandcreatevalueoverthecomingyears.Yourcompanyhasaddeditsgeographicpresence,expandeditsbusinessportfolio,enhanceditsglobaldeliverycapabilitiestofuelorganicgrowthandtofurtherliftthegrowthtrajectory-targetinorganicgrowthavenuesontherelativelyunderservedandhighgrowthSmalltoMediumEnterprises (orSME)segmentof themarket.Wehavestrengthenedthedomainexpertisetooffercustomizedsolutionsthatareapplicabletoawiderarrayofsectorsinthechosendomain.

Tofinancethesame,yourcompanymadeRightsIssue,inJune2007,forRs.24Crores(2CroresEquitySharesofRs.10/-each,atapremiumofRs.2/-perShare)andtheShareswerelistedinM/s.BombayStockExchangeLtd.,on25thJuly2007.Fortheinformationof the members the details regarding utilization of the proceeds are briefly givenbelow:

Particulars 31st March 2008 in Rs.

IssueproceedsthroughRightsIssue 24,00,00,000/-

TotalFundsReceived 24,00,00,000/-

Particulars of utilization / deposits

Investmentinsubsidiarycompanies 17,07,15,525/-

Loanstosubsidiarycompanies/others 3,10,22,000/-

Issueexpenses 40,05,730/-

FeesforIncreaseinauthorizedcapital 24,00,000/-

Balanceamountparkedindeposits 3,18,56,745/-

YourCompanyhadindicatedintheLetterofOfferpertainingtotheRightsIssuethattheproceedsoftheRightsIssuewouldbeutilizedforacquiringcompanies,interaliaotherexpenses.WithregardtotheproposaltoacquireM/s.KashiInfotechPrivateLtd.,Mumbai,India(KIPL),theDirectorswishtostatethatthenegotiationsarestillonandexpectedtobecompletedinthecurrentfinancialyear.

TheBoardthanksalltheShareholdersforthesupportextendedforhavingmadetheIssuebeingsuccessful.

Through these efforts, we have now established formidable global footprint andsignificant presence in such diverse fields as Pension Administration Outsourcing,Islamic Banking Software Solution; Systems Integration; IT Networking Solutions, ITConsulting, Technology Infrastructure Management & Support Services, RemoteInfrastructureManagement,BiometricsSolutionsandE-LivingSolution.

All our strategic initiatives have helped in enabling value creation potential forcustomersandshareholdersalike.Thevariousmilestonesachievedbyyourcompanyfortheyearunderreviewarelistedbelow:

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a. Islamic Banking Software Solution IslamicbankinghasbeenidentifiedaskeyemergingareainBankingIndustryacross

theworldwithIslamicInstitutionsrisingfrom75in1975toover300in2005,inmorethan75countries.Totalassetsworldwideareestimatedat$250billion,andgrowingat about 15 percent per annum. The Malaysian Islamic Banking system registeredstrongperformancewithhigherprofitabilityandpositivetrendsinallkeyindicators.TheoperatingenvironmentofIslamicfinanceinMalaysiahasalsoevolveddramatically.Technologyisfacilitatingnewwaysofworkingwithcustomerstoleverageinformationandknowledgetomeettheircustomers’needs.

TheIslamicBankingandFinanceIndustryisnowlookingatfullfledgedIslamicCoreBankingsolutionwithallrequiredverticalapplicationsanddeliverychannelspracticallyfrom a single vendor. The differentiating capabilities go beyond just providingIntegratedIslamicBankingSolutionbutafollowonsystemthatupgradestosupportthesubsequentgrowthoffinancialinstitution’slongtermbusinessneeds.

InAugust2007,yourcompanyinordertoachieveexpertiseinIslamicBankingSoftwareSolutiondomain,acquired100%stakeinM/s.BhariInformationTechnologySystemsSdnBhd.,KualaLumpur,Malaysia(sincenamedasM/s.Info-DriveSystemsSdnBhd).

This company is an established Information Technology and System Integrationsolutions provider with long and deep experience in delivering business oriented,technology based solutions to the banking, telecommunications and governmentsectors.ThecompanyoffersextensiveexpertiseintheBanking,Finance&InsuranceindustrieswithspecializedfocusonprovidingsolutionstotheIslamicBankingSector.

Your company has the distinction of winning a contract with RHB Bank, one of thelargestIslamicBanksandaleadingFinancialServicesInstitutioninMalaysiawith200offices,toconsult,implementandmaintainIslamicBankingSoftwareSolutiononanEnterprise Scale with a total value of about RM 25 Million (Malaysian Ringitts). ThismandateisreckonedtobeoneofthelargestimplementationprojectsintheIslamicBankingsegment.

With experience gained in such projects, your company will now focus to deliversimilarsolutiontovariousIslamicBanks&FinancialInstitutionsintheASEANcountries.Malaysia being the hub in Far East for Islamic Finance, your company will investadditionallytowardsenhancingskills-base,IPcreationandnewmodulesdevelopmentin the fast emerging areas like Islamic Insurance, Islamic Bonds and other relatedIslamicofferingsinthefinancialsector.

Directors’ Report

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b. Networking & E-Living Solutions During 2008 the spend on Information and Communications Technology (ICT)

productsandservicesintheMiddleEastandNorthAfrica(MENA)willovertaketheUS.AccordingtoarecentreportbyInternationalResearchCompany,GlobalInsight.“The Middle East is one of the fastest growing ICT regions in the world, combiningstrongbusinessacumenandsubstantialexperienceindevelopinggrowth.AccordingtotheGlobalInsightreport,thetotalICTspendintheMiddleEastthisyearispredictedto be US$ 73 billion, rising to more than US$ 95 billion in the next three years”.With the Middle East strategically positioned as a hub of global technology, ICTcompanies are now looking to capitalize on this attractive market with increasedinvestmentinthearea.

In October 2007, your company acquired M/s. Combiz Trading LLC, Dubai(since named as M/s. Infodrive Software LLC). The Company offers full range ofnetworking technologies covering communications and networking infrastructure,software solutions, systems integration projects as well as security solutions. It willcater to the requirements of important market segments such as hospitality, realestate,telecomandutilitiesandthesesectorshaverecordedimpressivegrowthoverthelastfewyears.

Recognizingtheroleofdigitaltechnologyindaytodaylifeofpeople,yourcompanyhas launchedanewpractice for “Digi-life” -digital livingexperience thatcombinesfuturistic living concepts with Industry best technology to cater the need of HauteLiving.Infodrive’sfuturisticdesignluxurycomponentwithuseofdigitaltechnologyredefinestheuseofdigitalandroleofinformationtechnologyindaytodayliving.

YourcompanyrecentlysignedanAgreementasMasterSystemIntegratortodelivere-livingsolutioninDubai.

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c. IT Technology Consulting and Infrastructure Solutions InNovember2007,yourcompanyacquireda51%stake inM/s.Precision Infomatic

(Madras) Private Limited .The company and its subsidiaries offer IT Consulting andInfrastructuresolutionscomprisingofITProductsales,TechnologyConsulting(fortheUserCommunity,DataCenter,NetworkandSecurityneeds),EnterpriseSolutions(ERP,ITILConsultingandSoftwareDevelopment)andBiometricSecuritydevices.

ThePrecisiongroupfoundedin1996hasan impressivearrayofproducts,solutionsandservicesandcomprisesoffouroperatingsubsidiariesasfollows

Remote Infrastructure Management

Enterprises Networking & Security Solutions

Infrastructure Management Solutions

Proactive Management of Mission CriticalInfrastructure

Cisco Premier Select Partner

Biometric Solutions

Identity Management Solutions

PC based Login & Single Sign-on Solutions

Software application integration with SDKs

Access Solutions - for Auto & Premises

HP Exclusive Retail Oulet

Focus on Education

HP Laptop Service Center

Plans for a chain of Retail Outlets

Business Solutions Focus

Microsoft Dynamics Partner

Expertise on MS .NET & Windows Mobile

Biometric Application Development

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Tec

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Leg

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Sys

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Precisio

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alaxy

Precisio

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Product Sales & Warranty, Support - Desktops, Notebooks &Peripherals Managed Services

Infrastructure Solutions - MS & Linux based Design, Integration& Support

Training

Specialized (ITIL, ERP, Business Intelligence &Security )

Productivity applications ( MSOffice, etc)

Customized training for Corporates

Premium Enterprise Business Partner of HP & Microsoft GoldCertified Partner

Only HP Business Soltions Center in India

Pan India Presence-Offices In 5 States

Precision Infomatic

Withthisacquisition,yourcompanywillcrosssynergizetheserviceofferingalongwithIT InfrastructureOutsourcing,toencompassesarangeof ITservicesandprovide itscustomersonestopsolutionforallitsITneeds.

Directors’ Report

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Expanding & Establishing Global Footprint Westronglybelievethatourorganicgrowthmodel,combinedwithourstrategyto

competeinglobalmarketprovidessignificantroomtogrowandcreatevalueoverthecomingyears.

With global delivery is rapidly becoming more accepted, your company laid thefoundation by investing in marketing and sales offices in USA, Singapore, Dubai,MalaysiaandCanada.

• InFebruary2007,yourcompanyestablishedaWhollyOwnedSubsidiaryinUSA. • InNovember2007,yourcompanyestablishedaWhollyOwnedSubsidiaryanda

BranchintheRepublicofSingapore. • InJune2008,yourcompanyestablishedaWhollyOwnedSubsidiaryinCanada.

WemarketourservicesdirectlythroughourSales&Marketingteam,whichoperates

out of New York, Sunnyvale (California), Dubai, Kuala Lumpur, Singapore, and ourbusinessdevelopment/solutionsupportteam,whichoperatesoutofChennai,India.

Oursales,marketingandbusinessdevelopmentgroupisresponsiblefornewclient

acquisition, client relationship management, public relations and participation inindustryforumsandconferences intheUnitedStates,theMiddleEast,FarEastandIndia. Our sales, marketing and business development group identifies prospectiveclientsbasedonselectivecriteriathatapplyourindustryexpertisetotheprospectiveclient’s business lines, goals and operating constraints, and qualify the long-termrelationship potential with the client. Our client relationships typically evolve fromasingle,discreteprocessoranSOW(StatementofWork) intoaseriesofadditionalcomplex,integratedannuitycontractsacrossmultiplebusinesslines.

Our sales and marketing professionals operate collaboratively with our business

development professionals based in India. Our sales and marketing professionalsfocus on identifying, qualifying and initiating discussions with prospective clients,whileourbusinessdevelopmentteamframesservices,preparesresponsestorequestsforproposals,hostsclientvisitstoourfacilitiesandcoordinatesduediligenceprocessintoclientprocesses.WeintendtodoubleoursalesandmarketingteamintheUnitedStates,DubaiandKualaLumpurduringthenext12months.

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Oursales,marketingandbusinessdevelopmentgroupworksactivelywithourservicedeliveryteamasthesalesprocessmovesclosertotheprospectiveclient’sselectionofaglobalserviceprovider.Thesalesteamworkswiththeservicedeliveryteamtodefinethescope,services,assumptionsandexecutionstrategiesforaproposedprojectandto develop project estimates and pricing and sales proposals. Senior managementreviewsandapproveseachproposal.Thesellingcyclevariesdependingonthetypeofservicerequiredandgenerallyrangesfromsixmonthstooverayear.

Members of our sales, marketing and business development group remain actively

involved in a project through the execution phase as relationship managementrepresentatives. Supporting each relationship manager is a corporate sponsor,executive steering committee, operations leadership team and, in some cases, adedicatedhumanresourcesandinfrastructureteam.Relationshipmanagersarealsoresponsibleforbusinessexpansionandrevenuegrowthfromtheiraccounts.

Subsidiaries Our Subsidiaries are:

Name of the Subsidiary Country of Incorporation

M/s.Info-DriveSoftwareInc. UnitedStatesofAmerica

M/s.Info-DriveSystemsSdnBhd. Malaysia

M/s.PrecisionInfomatic(Madras)Pvt.Ltd. India

M/s.InfodriveSoftwareLLC. Dubai,UnitedArabEmirates

M/s.Info-DriveSoftwarePte.Ltd. Singapore

The Board of Directors of your company reviews all the Affairs of your SubsidiaryCompanies periodically. Details of the investment made by your company in itssubsidiariesareshownseparately.SeeNoteNo.1(n)ofSignificantAccountingPoliciesand Notes to Accounts provided as an Annexure to the complete and full BalanceSheetandProfit&LossAccount.

Particulars required as per Section 212 of the Companies Act,1956

YourCompanyhasappliedforanexemptionunderSection212oftheCompaniesAct,1956,totheCentralGovernment,MinistryofCorporateAffairs(MCA)fromattachingtheBalanceSheet,Profit&LossAccount,Directors’ReportandtheAuditor’sReportof itssubsidiariestotheAnnualReport.BasedontheexpectedapprovalfromMCA,thisAnnualReportdoesnotcontainthefinancialstatementsofthesubsidiaries,insteadcontains theConsolidatedAuditedFinancialsofyourCompanyand itssubsidiaries.Further, information relating to each subsidiary has been disclosed in an abstractformat,whichisformingpartoftheconsolidatedBalanceSheet.

The Annual Accounts of the subsidiary companies will be made available by yourcompany to the investors seeking such information at any point of time. AnnualAccounts of the subsidiary companies will be kept for inspection during businesshoursattheCompany’sRegisteredOffice.

AsperClause49oftheListingAgreement,yourcompanydoesnothaveanymaterial

non-listed subsidiary company, whose turnover or networth exceeds 20% of theconsolidatedturnoverornetworthrespectivelyofyourcompanyanditssubsidiariesintheimmediatelyprecedingaccountingyear.

Directors’ Report

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Accolades “Wealth Creator of the Year 2007” Info-Drivehasbeenranked6,amongstthetoptwentywealthcreatorsamongstallthe

smallcapstocksbyTheEconomicTimes,onDecember31,2007. TheimprovementintheperformanceofthecompanyhasbeenreflectedintheMarket

Capitalizationofyourcompanygainingby26timesfromRs.10Croresinthebeginningof2007toRs.264.60Croresattheendoftheyear2007.Info-Drivewillstrivetoprovideattractivereturnstoitsstakeholdersintheyearstocome.

Future Outlook StrivingtocontinuethegrowthmomentuminoverallBusinessscenario,yourcompany

haschalkedoutambitiousplans:

a. Developarobustsales&marketingfrontendinUS,Dubai,Malaysia,SingaporeandCanadawithaclear12-18monthrunwaytoachievetheaggressiverevenuetargetswithateamof6seniorbusinessleadersacrosstheabovelocationswithsales&solutionteamsunderneatheachlineofpractice.

b. Establishing CoE’s (Centre of Excellence) to incubate new products / tools /methodologies / best practices / knowledge centers / IPR etc in each of thepractice line, with subject matter advisory teams & domain experts, to createsignificantdifferentiationintheofferingsportfolio:

• IslamicBankingSoftwareSolutioninKualaLumpur,Malaysia. • RemoteInfrastructureManagement(RIM)atChennai,India. • PensionAdministrationServicesatNewYork,USA. • SystemsIntegrationstagingcenterinSingapore. • E-LivingsolutionsatDubai,UAE. • Product&PortalDevelopmentLabinCalifornia,USA.

c. Augment Offshore delivery infrastructure for emerging areas like RemoteInfrastructureManagementbyinvestingonworldclassNOC(networkoperationscenter)atmultiplelocations,tools,networkmanagementplatformsetc.,

With a healthy order backlog and visibility of definitive revenues from qualifiedbusinesspipeline,yourcompanyisconfidentofachievingitsstatedgoalsonallcriticalbusiness parameters including quality of revenues, well de-risked client portfolioacrossallgeographies,enablingmaturityofGreenfield initiatives, industrystandardprocessesonallservicesdeliveryandrobustclient&employeesatisfaction/retentionprograms,therebysignificantlyenhancingstakeholdervalueonasustainedbasis intheyearstocome.

In order to put in motion the above growth plans, your company convened anExtra-OrdinaryGeneralMeetingon6thMarch2008andobtainedtheMembers’consentforincreasingtheAuthorizedCapitalfromRs.3000LakhstoRs.6000LakhsandalsoforIssuingofADRs/GDRsoranyotherclassofinstrumentforraisingadditionalcapitalnotexceedingUSD100Million.FurtheryourCompanyproposestoholdanExtra-OrdinaryGeneralMeetingon14thAugust2008tofixtherelevantdatefortheIssue.

Fixed Deposit TheCompanydidnotaccept/renewanyfixeddepositduringtheyearunderreview.

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Directors 1. Mr. V. N. Seshagiri Rao,Director,retiresattheensuingAnnualGeneralMeetingand being eligible offers himself for reappointment. Mr. V.N. Seshagiri Rao hasanexperienceofover30yearsinthefieldofManagement.AqualifiedCharteredAccountant by profession, he has worked at the Senior Management levelthroughouthiscareer.HehasbeenintheBoardofseveralprominentIndustrialHouses.HisknowledgeandguidancewillbeanassettotheCompanyinitsgrowthandexpansionplans.Heisholding39,656SharesintheCompany.

2. Mr. A. T. Krishnakumarhasbeenre-appointedasDirectoratthepreviousAnnualGeneralMeetingheldon19thSeptember2007.HeisanMBAProfessional,highlyexperiencedinthefieldofConsultancy,CorporateFinanceandPlanning.HedoesnotholdanySharesintheCompany.

3. TheBoardappointedMr. Clark B. ReinerasadditionalDirectorwitheffectfrom22ndDecember2006.HeisMBAFinanceprofessionalfromU.C.L.A.BusinessSchoolandholdsaNASDLicense.Duetohisotherpre-occupations,hehasresignedfromtheBoardduringDecember2007.

4. Mr. Singanallur Narayanan has been appointed as Director in the previousAnnual General Meeting held on 19th September 2007. Earlier he was anAdditionalDirector.Mr.Narayanan isanMBAfromColumbiaUniversitySchoolofBusiness,M.S. inComputerSciencefromUniversityofTexasandBachelorofTechnologyfromIIT,Chennai,India.HeisthepartnerofM/s.KuberonCapitalLLC.,NewYork,ahedgefundwithmacrolong/shortequitystrategy.Hehasaround15 years of experience in Equity Research and Derivative Strategies. He will beheadingahedgefundtobelaunchedshortly.HeisnotholdinganySharesintheCompany.

5. Mr. K. ChandrasekaranwasappointedasDirectoratthepreviousAnnualGeneralMeeting held on 19th September 2007. Earlier he was an Additional Director.Mr.K.ChandrasekaranisaqualifiedCharteredandCostAccountantandhasovertwodecadesofexperienceintheCorporateSectorbothIndiaandabroad.HehashandledlargeMergerandAcquisitiondealsofITCompaniesandalsocompaniesinotherareas.HehasbeeninstrumentalinlaunchingaBPOventureintheMiddleEast as a Joint Venture between a large conglomerate in the Middle East andthereputedIndianCorporateGroup.Asheisspear-headingtheCorporatethinktank,governance,visionprocessandbusinessstrategy,hehasbeenappointedasManagingDirector&ChiefExecutiveOfficerwitheffectfrom28thSeptember2007bytheBoard.Heisholding14,60,900SharesintheCompany.

6. Mr. N. T. Shiv KumarwasappointedasDirectoratthepreviousAnnualGeneralMeeting held on 19th September 2007. Earlier he was an Additional Director oftheCompany.HeisanalumnusofBITSPilani(India)andhasovertwodecadesofexperienceintheOffshoreITOutsourcing&BPOServicessector.AstheChiefOperating Officer, he is responsible for identifying greenfield opportunities forfast-track growth and managing the global business operations of all practicelinesandportfoliocompanies.PriortohisInfo-Driveventure,Mr.ShivKumarhadanoutstandingtenureastheHeadofglobalsales&marketingatOakhillCapital’sportfolio firmEXLService (NASDAQ:EXLS)afterhis16-yearassociationwiththeHCLgroupwherehehadthedistinctionofsuccessfullyleadingseveralpioneeringinitiativestofueltheorganicandinorganicgrowthofHCLAmerica.Mr.ShivKumaralsoservesasaDirectorontheBoardofseveralotherventures inthe India-USbusinesscorridorincludingSAISEVABPOatPuttaparthi,India(arapidlygrowingventurebuiltonaunique‘Microsourcing’deliverymodeltotransformruralIndia

Directors’ Report

27



thru BPO business), Dreamcricket (a cricket portal that combines eCommerce,fantasy gaming and contents for the global cricket community) and CES(aboutiquetechnologyconsulting&dataresearchfirm).HehasbeenappointedasWholeTimeDirectorandChiefOperatingOfficerwitheffectfrom28thSeptember2007bytheBoard.Heisholding3,50,000SharesintheCompany.

7. Mr. K. ShivakumarwhohasbeentheFounderPromoterof theCompany,hasbeen acting as the Managing Director of the Company since inception. He isan MBA (U.S.A. specialization in Information Systems). He has over 22 years ofworking experience. He has been re-designated as Joint Managing Directorwith effect from 28th September 2007 for a period of two years ending on27thSeptember2009underSection269readwithScheduleXIIIoftheCompaniesAct, 1956 on a cost to company basis. His appointment as Joint ManagingDirector and fixation of his remuneration were ratified by the Members at theExtra-Ordinary General Meeting of the Company held on 6th March 2008. He isholding4,59,090SharesintheCompany.

8. Mr. S. SriramanisaqualifiedBankerwithCAIIBfromIndianInstituteofBankers.HeisalsoanMBAfromMaduraiKamarajUniversity,withspecializationinFinanceandMarketing. Inaddition,heholdsaMastersqualification inEconomics fromUniversity of Madras and a Doctor of Business Administration from Universityof South Australia, Adelaide, Australia. Mr. S. Sriraman has around 25 years ofexperience in Banking , Fund Management and in Corporate Sector. His stintsinclude organizations like Canara Bank, Canbank Mutual Fund, Wipro FinanceLtd., IL & FS Venture Corporation Limited and SilkRoute Indchem Limited.Mr. S. Sriraman has an impressive track record of mentoring start ups as partof venture capital initiatives till they are listed. At present he is involved in theoperationsofa fundmanagementcompany inChennai,with focusonventurecapital, private equity, mergers and acquisitions. He has been appointed asAdditional Director with effect from 8th August 2008. He is vacating Office atthe ensuing Annual General Meeting and being eligible seeks appointment asDirector.HeisnotholdinganySharesintheCompany.

9. TheBoardhasappointedMr. R. MohanasanAlternateDirectortoMr.SinganallurNarayananwitheffectfrom13thFebruary2007andheisre-appointedfromtimetotimeasrequiredundertheAct.He isaCharteredAccountantbyprofession.HeisnotholdinganySharesintheCompany.

28

Retirement and Re-appointment of Directors

Mr. Sriraman was appointed as an Additional Director at the Meeting of the Boardof Directors’ held on 8th August 2008 under the Section 260. He vacates Officeat the ensuing Annual General Meeting and being eligible, seeks appointment.Your Directors’ have proposed a Resolution for appointment of Mr. S. Sriraman.TheprofileofMr.SriramanhasbeengivenintheExplanatoryStatementandalsointheparticularsoftheDirector.

Mr.V.N.SeshagiriRaowhowouldberetiringattheensuingAnnualGeneralMeeting,seeks re-election. Mr. V.N. Seshagiri Rao has got vast experience on Finance andhas been associated with the Company since takeover by the new Management.TheprofileofMrV.N.SeshagiriRaohasbeengivenintheparticularsoftheDirectors.

Directors Responsibility Statement

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956(“Act”)andbasedontherepresentationsreceivedfromtheoperatingmanagement,theDirectorsherebyconfirmthat:

a. in the preparation of annual accounts for the year 2007- 2008, the applicableAccountingStandardshavebeenfollowedandtherearenomaterialdepartures;

b. they have selected such accounting policies in consultation with statutoryauthorities and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the stateofaffairsoftheCompanyattheendofthefinancialyearandoftheprofitoftheCompanyforthefinancialyear;

c. they have taken proper and sufficient care to the best of their knowledge andabilityforthemaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheCompaniesAct,1956.Theyconfirmthatthereareadequatesystems and controls for safeguarding the assets of the Company and forpreventinganddetectingfraudandotherirregularities;

d. theyhavepreparedtheAnnualAccountsonagoingconcernbasis.

Auditors M/s. K.S. Reddy Associates,CharteredAccountants,Chennai,whoaretheAuditorsoftheCompany,holdOfficetilltheconclusionoftheensuingAnnualGeneralMeeting.TheyareeligibleforreappointmentandtheyhaveexpressedtheirwillngnesstobeappointedasStatutoryAuditorsofthecompany,atthesaidAnnualGeneralMeeting,TheyarequalifiedtobeappointedunderSection224oftheCompaniesAct.

Audit Committee TheCompanyhasconstitutedanAuditCommitteeasrequiredundertheprovisionsofSection292AoftheCompaniesAct,1956.

Corporate Governance Report and Management Discussion and Analysis Statement

AreportonCorporateGovernance,ManagementDiscussionandAnalysisStatementisattachedtothisReport.

Directors’ Report

29



Material Development in Human Resources / Industrial Relations Front including number of people employed

Aspartofitsrevampingandbusinessstrategy,thecompanyhadstartedtheprocessofappointingKeyManagerialPersonnellastyear.KeyManagerialPersonnelhavebeenappointedtoheadthefunctionalareas forachievingthesetgoals&targetsandtoensurethatthecompanyisonacontinuedgrowthpath.

During theFinancialYearunder review, therearenoemployees in thecompany intermsoftherequirementofSection217(2A)oftheCompaniesAct,1956.

Conservation of Energy or Technology Absorption Your Company has no activity relating to conservation of energy or technology

absorption.

31



CORPORATE GOVERNANCE Thedetailed reportonCorporateGovernance, for theyearunder reviewasper theformatprescribedbySEBIandincorporatedinClause49oftheListingAgreementissetoutbelow:

Company’s Philosophy CorporateGovernanceforInfo-Driveispassion,mottoandculture.ToattaingrowthinallfacetsandatthesametimeensuringwelfareofthesocietyatlargeisonlypossiblebyadheringtohighstandardsofCorporateGovernance.

We are proud that we believe in Corporate Governance not only as a law butin spirit too. Our endeavour is to maximise the wealth of the stakeholders bymanaging the affairs of the Company with pre-eminent level of accountability,transparencyandintegrity.

We believe that accurate and timely disclosures improve public understanding onthe activities of the Company which consequently attracts investors towards theCompany.WeaimtoadoptbestpracticesinCorporateGovernanceandareconfidentofachievingit.

Board of Directors Composition, Attendance at the Board Meetings and last Annual General Meeting,OutsideDirectorshipsandotherBoardCommitteesason31stMarch2008orfortheyear2008,asapplicableistabulatedhereunder:

Director

No. of Board

Meetings Attended

Attendance at previous

AGM held on19th Sept 2007

No. of Outside Directorship

held (excluding Alternate

Directorships and

Directorships in Pvt

Companies)

No. of Membership / Chairmanship in other Board

Committees

Executive / Non Executive Independent

Mr.V.N.SeshagiriRao 9 Present Nil Nil Non-Executive

Mr.K.Chandrasekaran 3 NotPresent 1 Nil Executive

Mr.K.Shivakumar 9 Present Nil Nil Executive

Mr.N.T.Shivkumar 7 NotPresent Nil Nil Executive

Mr.A.T.Krishnakumar 7 Present Nil Nil Non-Executive

Mr.SinganallurNarayanan 2 NotPresent Nil Nil Non-Executive

Mr.R.Mohan 1 NotPresent Nil Nil AlternateDirector

Board Meetings held during the year 2007 - 2008

1. 27thJune2007 6. 28thNovember2007

2. 24thJuly2007 7. 26thDecember2007

3. 13thAugust2007 8. 23rdJanuary2008

4. 23thAugust2007 9. 17thMarch2008

5. 28thSeptember2007

31

32

Board Committees The Board has set up the following committees as per the Code of Conduct forCorporateGovernance.

Audit Committee TheAuditCommitteewasreconstitutedduringtheyear.Mr.R.Sankarakrishnanwas

oneoftheMembersoftheAuditCommitteeforpartoftheyear(till19thSeptember2007). At present the Audit Committee comprises of Mr. K. Chandrasekaran,Mr. A. T. Krishnakumar, Mr. Singanallur Narayanan (Mr. R. Mohan, alternate toMr.SinganallurNarayanan).

Mr.K.ChandrasekaranistheChairmanoftheAuditCommittee.TheroleandtermsofreferenceoftheAuditCommitteecoverstheareasmentionedunderClause49oftheListingAgreementandSection292AoftheCompaniesAct,1956besidesothertermsasmaybereferredbytheBoardofDirectors.TheAuditCommitteemetthreetimesduringtheyearon27thJune2007,28thNovemberand23rdJanuary2008.TheStatutoryAuditorattendedalltheAuditCommitteeMeetings.

Names of Directors Number of Committee

Meetings Attended

Mr.K.Chandrasekaran 1

Mr.A.T.Krishnakumar 3

Mr.SinganallurNarayanan 2

Mr.R.Mohan 1

Mr.R.Sankarakrishnan 1

Shareholders’ Grievance Committee The Shareholders’ grievances committee comprises of Mr. V.N. Seshagiri Rao,

Mr.K.Shivakumar,Mr.R.MohanandMr.V.GopalRao,whoistheComplianceOfficeroftheCompanyandmeeteverymonth.

Duringtheyear2007-2008allthecomplaintsreceivedfromtheshareholdershave

generallybeensolvedtothesatisfactionoftheComplaints.Twoshareholders,whowere not allotted shares in the Rights Issue, have filed an appeal in the ConsumerForum.YourcompanyhasinitiatedstepstoobtainAnti-SuitInjunctionagainstthesetwoshareholders.

Remuneration Committee The Remuneration Committee has been re-constituted as Mr. R. Sankarakrishnan

resigned. At present the Committee consists of Mr. K. Chandrasekaran andMr. A.T. Krishnakumar and Mr. Singanallur Narayanan. The Committee makesrecommendation to the Board regarding appointment and compensation payable.The Remuneration Committee met on 26th September 2007 for the purpose ofrecommending to the Board and the Members regarding the re-designation ofMr.K.ShivakumarasJointManagingDirectorforaperiodoftwoyearsandfixationofremunerationtohimonacosttocompanybasis.

Corporate Governance Report

33



Directors Remuneration ThecompanyhasnotpaidanySittingFeesduringtheyear2007–2008.

Mr. K. Shivakumar who has been the Managing Director of the Company has beenre-designatedasJointManagingDirectorwitheffectfrom28thSeptember’07witharemunerationofRs.50,000/-permonthonacosttocompanybasisandhisappointmenthasbeenmadeunderSection269readwithScheduleXIIIoftheCompaniesAct,1956.Mr.K.ShivakumarhasbeenpaidaremunerationofRs.3,00,000/- fortheyearunderreview.

Mr. K. Chandrasekaran appointed during the year as Managing Director and ChiefExecutiveOfficerandMr.N.T.ShivkumarappointedduringtheyearasWholeTimeDirectorandChiefOperatingOfficerarenotbeingpaidanyremuneration.

General Meetings of the Company

34

Postal Ballot Duringtheyear,theSpecialResolutionscontained,inthePostalBallotNoticedated28thNovember2007waspassedbytheShareholdersoftheCompanythroughPostalBallot.TheresultsofthePostalBallotweredeclaredon11thJanuary2008.

TheBoardappointedMr.T.Balasubramanian,Practising Company Secretary,as theScrutinizertoconductthePostalBallotprocess.Thedetailsofthevotingpatternwereasunder.

Sl. No. Description of the ResolutionNo. of Valid

Postal BallotForms received

Votes Cast

For Against

1. ApprovalunderSection372AoftheCompaniesAct1956for“CorporateGuarantee”tobefurnishedonbehalfofM/s.PrecisionInfomatic(Madras)Pvt.Ltd.and its Subsidiaries and on behalf of M/s. KashiInfotechPvt.Ltd. 252 218 34

2. Approval under Section 372A of The CompaniesAct1956for“LoantobegrantedtoM/s.PrecisionInfomatic(Madras)Pvt.,LtdanditsSubsidiariesandtoM/s.KashiInfotechPvt.Ltd.

AccordinglythesaidResolutionswereapprovedbytheShareholders,withrequisiteandoverwhelmingmajorityof99.83%.TheresultsofPostalBallotwerepublishedon12th January 2008 in ‘Trinity Mirror’ and ‘Makkal Kural’ (Tamil).The results were alsopostedinthewebsiteofthecompany.TheCompanydoesnotproposetopassanySpecialResolutionbyPostalBallotattheensuingAnnualGeneralMeeting.

Special Resolutions A Special Resolution was passed in the Extra-Ordinary General Meeting of theCompanyheldon19thSeptember2007forobtainingtheShareholdersconsenttoissue42,38,890 Equity Shares of Rs.10/- each at a premium of Rs.26/- per Share forconsideration other than cash, aggregating to Rs.15.26 Crores credited as fullypaid-up,onpreferentialbasistotheexistingShareholdersofM/s.Bhari InformationTechnology Systems Sdn. Bhd., Kuala Lumpur, Malaysia, (BITSSB). This constitutes74%stakeinBITSSB.EarlierInfo-DriveSoftwareLimitedhasobtained26%Equitystakein BITSSB by making direct investment. In this regard the Resolutions were passedunderSection81(1A)oftheCompaniesAct,1956fortheissueofsharesonpreferentialbasisandalsotorankthenewEquitySharespari-passuinallrespectswiththeexistingEquitySharesoftheCompany.

An Extra-Ordinary General Meeting held on 6th March 2008 for obtaining the

ShareholdersconsenttoamendtheMemorandumandaltertheArticlesofAssociationforincreasingtheAuthorizedShareCapitalfrom3CroresEquitySharesofRs.10/-eachaggregatingtoRs.30Croresto6CroresEquitySharesofRs.10/-eachaggregatingtoRs.60Crores.TheMeetingwasconvenedalsoobtainedtheapprovaloftheGeneralBodyforraisingadditionalcapitalinoneormoretranchesforanamountnotexceedingUSD 100 Million by issuing several class of debt instruments which would includeEquity/Debentures/AmericanDepositReceipts/GlobalDepositoryReceipts,ForeignCurrencyConvertibleBondsandQualifiedInstitutionalBuyers.

TheabovespecialresolutionswerepassedattheExtra-OrdinaryGeneralMeeting.


35



Disclosures a. Materially significant related party transactions. Duringtheyear2007-2008,thelistofrelatedpartieswherecontrolexistsandother

relatedpartieswithwhomtheCompanyhadtransactionsandtheirrelationshipisasbelow:

Sl.No. Name of the related party Nature of relationship

1. Info-DriveSoftwareInc.

Subsidiary Companies

2. InfodriveSoftwareLLC

3. Info-DriveSoftwarePte.Ltd.

4. Info-DriveSystemsSdn.Bhd.

5. PrecisionInfomatic(Madras)Pvt.Ltd.

6. PrecisionTechconetPrivateLimitedFellow Subsidiary Companies (Subsidiaries of M/s. Precision Infomatic (Madras) Private Limited)

7. LegendSystemsPrivateLimited

8. PrecisionTechservePrivateLimited

9. PrecisionGalaxyPrivateLimited

10. K.Chandrasekaran

Key Management Personnel11. N.TShivkumar

12. K.Shivakumar

Sl.No.

Name of the related party Nature of Transaction31.03.2008

Rs.31.03.2007

Rs.

1. Info-DriveSoftwareInc.a.InvestmentinEquityb.Advancegiven

40,36,495/-1,57,92,000/-

88,495/-Nil

2. InfodriveSoftwareLLC. a.InvestmentinEquity 3,68,65,000/- Nil

3. Info-DriveSoftwarePte.Ltd. a.InvestmentinEquity 57,39,030/- Nil

4. Info-DriveSystemsSdn.Bhd. a.InvestmentinEquity 21,26,00,040/- Nil

5. PrecisionInfomatic(Madras)Pvt.Ltd.a.InvestmentinEquityb.Receivablesatyearend

9,00,00,000/-6,38,590/-

NilNil

6. PrecisionTechservePvt.Ltd. a.Advancegiven 25,00,000/- Nil

b. Instances of Non-Compliance There has not been any non-compliance, penalties or strictures imposed on the

CompanybytheStockExchanges,SEBIoranyotherstatutoryauthority,onanymatterrelatingtothecapitalmarkets,duringthelastthreeyears.

c. Whistle Blower Policy The Company has evolved a Whistle Blower Policy to provide appropriate avenues

to the Employees to bring to the attention of the Management any issue which isperceivedtobeinviolationorinconflictwiththefundamentalbusinessprinciplesoftheCompany.NoemployeehasbeendeniedaccesstotheAuditCommittee.

36

The Management Discussion and Analysis Report

TheManagementDiscussionandAnalysisreportformspartofthisAnnualReport.

Non-Mandatory Requirements TheCompanyiscomplyingwithallthemandatoryrequirementsofClause49oftheListingAgreementandwithregardtothenon-mandatoryrequirementstheCompanyhas constituted a Remuneration Committee and also adopted the Whistle BlowerMechanismasreferredinClause49oftheListing Agreement. The Company alsofollowstheguidelineslaiddowninthe“SecretarialStandards”,issuedbytheInstituteofCompanySecretariesofIndia.

Means of Communication The quarterly results were posted in the website of the company, published inTheEconomicTimes,NewsToday,TrinityMirror,MaalaiSudarandMakkalkuralandalsointimatedtoSEBIandBSE.

General Shareholder Information

Annual General Meeting Date : Tuesday,23rdSeptember,2008 Time : 10.30am Venue : KasthuriSrinivasanHall(MiniHall),MusicAcademy,T.T.KRoad,

Chennai–600014,India

Financial Calendar of the Company

Thefinancialyearcoverstheperiodfrom1stApril2007to31stMarch2008.

Financial Reporting for 2008 - 2009 (tentative)

Resultsfor30/06/2008 EndJuly2008-sincereported

Resultsfor30/09/2008 EndOctober2008

Resultsfor31/12/2008 EndJanuary2009

Resultsfor31/03/2009 EndApril2009

Date of Book closure Theperiodofbookclosureisfixedfrom8thSeptember2008to10thSeptember2008bothdaysinclusive.

Outstanding ADRs / GDRs / Warrants

OutstandingADRs/GDRs/Warrantsoranyconvertibleinstruments,conversiondateandlikelyimpactonequity:Notapplicable.


37



Listing on Stock Exchanges and Stock Code

The shares of the Company are listed at the Madras Stock Exchange andBombayStockExchange(ScripNo:530703).

Month High Low Month High Low

April2007 21.55 16.75 October2007 93.90 72.75

May2007 20.30 13.85 November2007 101.95 75.00

June2007 18.45 12.50 December2007 111.10 92.50

July2007 28.10 14.85 January2008 133.25 71.30

August2007 55.55 23.90 February2008 78.00 57.10

September2007 94.60 58.30 March2008 71.45 47.55

Distribution of Shareholding The Company has made a Preferential Allotment of 42,38,890 Equity Shares ofRs.10/-eachinDecember2007consequenttowhichtheIssuedandPaid-upCapitalhas increased to 2,92,38,890 Equity Shares. The distribution of Shareholding andtheShareholdingpatternason31stMarch2008andason30thJune2008aregivenbelow:

Distribution Schedule as on 31.03.2008

No. of Equity Shares Held No. of Shareholders No. of Shares

1–500 5120 974061

501–1000 510 440349

1001–2000 223 343993

2001–3000 79 209348

3001–4000 40 143776

4001–5000 44 208036

5001–10000 74 545929

10001andabove 155 26373398

Total 6245 29238890

Distribution Schedule as on 30.06.2008

No. of Equity Shares Held No. of Shareholders No. of Shares

1–500 5113 970952

501–1000 525 452368

1001–2000 224 347407

2001–3000 82 213786

3001–4000 36 129135

4001–5000 46 218519

5001–10000 64 463064

10001andabove 156 26443659

Total 6246 29238890

38

Shareholding Pattern

As on 31.03.2008

Sl.No. Category No. of Holders No. of Shares % of Shares

1. ResidentIndian 5977 15041922 51.45

2. DomesticCompanies 148 9174529 31.38

3. NRIs 100 1788913 6.12

4. Promoters 5 3098536 10.6

5. MutualFunds 1 800 0.00

6. FinancialInstitutions 2 99689 0.34

7. ClearingMember 12 34501 0.11

TOTAL 6245 29238890 100

As on 30.06.2008

Sl.No. Category No. of Holders No. of Shares % of Shares

1. ResidentIndian 5968 15043874 51.46

2. DomesticCompanies 155 8583083 29.36

3. NRIs 100 1787603 6.11

4. Promoters 6 3698536 12.65

5. MutualFunds 1 800 0.00

6. FinancialInstitutions 2 99689 0.34

7. ClearingMember 14 25305 0.08

TOTAL 6246 29238890 100

Dematerialization of Shares and Liquidity

Demat ISIN No. INE – 804D01011

Ason31stMarch2008,2,39,65,740shares,thatis,81.96%wereheldinDematerializedform and the balance of 18.04% of shares that is 52,73,150 shares were held inPhysicalform.

Ason30thJune2008,2,39,83,340shares,thatis,82.02%wereheldinDematerializedform and the balance of 17.98% of shares, that is, 52,55,550 shares were held inPhysicalform.


39



Promoters and Promoters Group

Given below are the Shareholdings of “Promoters and Promoters Group” as on 30th June 2008.

Sl. No. Name of the Shareholder No. of Shares % of Shares

1. Mr.ArifBuharyRahman 13,88,890 4.75

2. M/s.BhariInformationTechnologySystemsPvt.Ltd. 16,49,724 5.65

3. Mr.V.N.SeshagiriRao 39,656 0.13

4. Mr.K.Shivakumar 4,59,090 1.57

5. Mr.K.Chandrasekaran(PersonactinginConcert) 14,60,900 5.00

6. Mr.N.T.ShivKumar(PersonactinginConcert) 3,50,000 1.19

Total 53,48,260 18.29

Capital Structure Given below are the details of the periodic increase in the Issued and Paid-up Capital of the Company since Inception

Sl.No. Date No. of Equity Shares Value (in Rs.)Cumulative increase

in Share Capital (in Rs.)

1. 16.03.1988 200 2,000 2,000

2. 01.12.1989 7,500 75,000 77,000

3. 26.04.1991 2,300 23,000 1,00,000

4. 29.07.1991 20,000 2,00,000 3,00,000

5. 27.03.1992 50,000 5,00,000 8,00,000

6. 29.05.1992 3,20,000 32,00,000 40,00,000

7. 04.06.1993 6,00,000 60,00,000 1,00,00,000

8. 04.11.1994 500 5,000 1,00,05,000

9. 31.01.1995 3,50,000 35,00,000 1,35,05,000

10. 03.06.1995 26,49,500 2,64,95,000 4,00,00,000

11. 14.02.2000 10,00,000 1,00,00,000 5,00,00,000

12. 18.07.2007 2,00,00,000 20,00,00,000 25,00,00,000

13. 10.12.2007 42,38,890 4,23,88,900 29,23,88,900

40

Registered Office M/s. Info-Drive Software Limited BuhariBuildings,SecondFloor No.3,MooresRoad Chennai–600006,India. Tel:+91-44-28212368/9 Fax:+91-44-28212609 Website:www.infodriveservices.com

E-mail:[email protected]

Company’s Registrar M/s. Cameo Corporate Services Limited SubramanianBuilding, No.1,ClubHouseRoad, Chennai–600002,India. Tel:+91-44-28460390 Fax:+91-44-28460129

E-mail:[email protected]

Corporate Communications Ms. Smitha Iyer

SeniorManager-CorporateAffairs M/s.Info-DriveSoftwareLimited No.3,MooresRoad `BuhariBuildings’,SecondFloor Chennai–600006,India. Tel:+91-44-28212368/9 Fax:+91-44-28212609

Email:[email protected]

ACKNOWLEDGEMENT YourDirectorswishtoplaceonrecordtheirgratitudetotheemployeesofthecompany,bankers,customersandshare holdersfortheircontinuedconfidenceandsupport.

ForandonbehalfoftheBoard Sd/-Place:Chennai–600006 V. N. Seshagiri Rao Date:08.08.08 Director


41



AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of Info-drive Software Limited

WehaveexaminedthecomplianceofconditionsofCorporateGovernancebyM/s.Info-driveSoftwareLimitedfortheyearended31stMarch2008asstipulatedinClause49oftheListingAgreementofthesaidcompanywiththeStockExchange(s).

ThecomplianceofconditionsofCorporateGovernanceistheresponsibilityofthemanagement.Ourexaminationwaslimitedtoprocedures and implementation thereof adopted by the company for ensuring the compliance of the conditions of CorporateGovernance.ItisneitheranauditnotanexpressionofopiniononthefinancialstatementsoftheCompany.

Inouropinionandtothebestofourinformationandexplanationsgiventousandtherepresentationsmadebythedirectorsandthemanagement,wecertify that thecompanyhascompliedwiththeconditionsofCorporateGovernanceasstipulated intheabovementionedListingAgreement.

AsrequiredbytheGuidanceNoteissuedbytheInstituteofCharteredAccountantsofIndia,wehavetostateaspertherecordsmaintainedandcertifiedbytheRegistrarsandShareTransferAgentsofthecompany,therewerenoinvestorgrievancesremainingunattended/pendingformorethan30daysasat31stMarch2008.

We further state that such compliance is neither as assurance as to the future viability of the company nor the efficiency ofeffectivenesswithwhichthemanagementhasconductedtheaffairsofthecompany.

forK.S.REDDYASSOCIATES CharteredAccountantsPlace :Chennai Sd/-Date :08.08.08 K. Subba Reddy (Proprietor) M.No.208754

43



MANAGEMENT DISCUSSION & ANALYSIS

Industry Structure and Developments

Indian IT-ITES industry continued to build on the strong growth momentum of therecent past. Over the years, the stature of Indian Information Technology (IT) andBusinessProcessOutsourcing(BPO)servicescompanieshasgrownonthebackofasteady reputation for high quality delivery at costs that are significantly lower thanratesatwhichcomparableservicescanbesourcedfromoverseasvendors.

Sufficientdemand,strongfundamentalsandafavorableenvironmentsupportapositiveoutlookforIndianIT-BPOexports.Further,strongimperativesforincreasingtechnologyadoption in India and growing numbers of Indian MNCs (multinational corporations)representsignificantpotentialforgrowthinthedomesticmarketaswell.

Indian IT and ITES companies have moved up the value chain and have expandedtheirproductandserviceportfoliosgravitatingtowardshighervalueprocessesandachievingincreasedtractioninengineeringandproductdevelopmentservices.India’sedgeintheoffshoringdomainwasbasedonfactorssuchasavailabilityofpeople’sskills,aconducivebusinessenvironment,focusoninformationsecurityandoperationalexcellencebyleadingIT-ITESvendorsandrelevantfinancialstructures.

Outsource or Reskill/Retool

Stra

teg

ic V

alu

eN

on

-Str

ateg

ic V

alu

e

Retain

CoreCompetency

/ StrategicValue functions

Core competencyNon-strategic value

functions

Do

ma

in s

kill

sets

/ v

alu

e d

eliv

ere

d

Non-core competency /Strategic Value functions

Non-core competency / Non-strategic value functions

No. of players

Outsource

Non core competency

Source : Business Consulting Group Analysis

Core competency

Outsource / Spin-offBusiness

2

2

44

1

1

3

3

IndianIT-BPOisontracktoreachUS$60billioninexports,andUS$73billiontoUS$75billioninoverallsoftwareandservicesrevenuesby2010.AchievingthesetargetswillalsoincreasetheIT-BPOsector’scontributiontoIndia’ssocio-economicdevelopment.At the aspired levels of growth, IT-BPO will employ about 2.5 million to 3 millionprofessionals directly in the sector, account for direct investment of about US$10billion to US$15 billion, and contribute 7 percent to 8 percent of the national GDP(GrossDomesticProduct).

TheGlobalITservicesIndustryaredrivenbynumberofenvironmentalfactors,namely,economicgrowth,technologyrelatedspending,propensitytooutsourceIT&businessprocesses that influence impetus of global sourcing. Forrester projects, Global ITspending on technology goods, services, and staff will be US$ 2.4 trillion in 2008,

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up8%fromUS$2.1trillionin2007andtheestimatesofannualgrowthrateforthenextfiveyearsrangefrom5%to8%.(Source:Forrester)

MiddleEastandNorthAfrica(MENA)ITInvestmentandITPurchasesGrowSlowlybutsteadilyperhapsbecauseitisatanearlierstageoftheoutsourcingevolutionarycycleandwillexperiencemoregrowththantheU.S.

ThegrowthratesforregionalITspending,theUSandWesternEuropeclearlyareonalow-growthtrack,withannualgrowthratesfor2007to2008inthe4%to6%range.Incontrast,EasternEurope,theMiddleEast,andAfricaaswellastheAsiaPacificmarketsareonahigh-growthtrack,withannualgrowthratesabove12%in2007and2008.ThoughtheshorttermUSoutlookseemsmuted,globaltechnologyspendingforecastsremainrelativelyontrack,assupportedbymomentuminMENAandAPACregions.

CanadaandLatinAmericaareinbetween,withmoderategrowthof6%to8%in2006,2007, and 2008. Outsourcing is recession-proof. ITO Demand in North America willimprovein2008.(Source:February11,2008GlobalIT2008MarketOutlookbyAndrewBartelforVendorStrategyProfessionals).

Theglobalsourcingindustryisfundamentallydrivenbythreefactors,namely,accesstonewertalentpools,reductionincostsandbusinessimprovements.Thefutureoutlookonthesefactorsfavoursstronggrowthforglobalsourcing.Costpressuresarelikelytocontinueunabatedonbusinessesascustomerscontinuetodemandmoreforlessinaneverincreasingcompetitiveenvironment.Thetrendtowardsoffshoretechnologyservices:-

• Outsourcing is recession-proof. ITO Demand in North America will improve in2008.

• Global multi-shore and multi-provider outsourcing will become more normthanexception.Thiscouldmeanseveralprovidersinseveralregionsaroundtheworld.

• Indian service providers will set up more local delivery services centers in USandMENAastheIndianmarketgetsimpactedbywageinflation;talentattrition;strongerrupeeandinfrastructurestrain.

• Canada’s appeal as a near-shore destination will lessen due to currencyappreciation.

• Governance of outsourcing deals will become paramount as buyers seek tomaximizevalueandminimizevalueleakage.

With significant potential still untapped, it is expected that the global sourcingphenomenon will continue to expand in scope, scale and geographic coverage. Asglobal delivery matures, multi-location strategies will become the norm and mostsourcing destinations, including emerging locations, will grow in size. Building onitsexistingstrengths, Indiawill remain the leadingdestinationandwillcontinuetoplayanimportantroleinmostglobalsourcingstrategies.AsperNASSCOMStrategicReview2008;theIndiantechnologyandrelatedservicessectorisexpectedtoreachUS$64billioninFY2008.

In view of the circumstances referred, Your Company has strengthened its positioninglobalmarketsandhasstrengthenedtechnicalexpertiseinthefocusareas.Ithasacquired domain knowledge in focus areas and is banking on vertical segments todrivethecompany’sgrowthopportunities.

YourCompanyisfilledwithalotofpromisingbusinessopportunitiesandhenceithasequippeditselftocapturetheopportunitiesandatthesametimefocusonexpansionanddiversificationoftheservicesoffered.

Management Discussion & Analysis Report

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Company Overview About INFO-DRIVE SOFTWARE LIMITED Overview Info-DriveSoftwareLimitedisamulti-dimensionalTechnologyandBusinessServices

Company, headquartered in Chennai, India. With headquarters in Chennai (India),Info-Drive has service delivery centers across India, Kuala Lumpur (Malaysia) andDubai(UAE)supportingthebusinessdevelopmentcentersintheUSA(SunnyvaleandNew York), and Singapore to deliver Information Technology and Business ProcessOutsourcingservicesacrosstheselectverticalsincludingBanking,Finance,Insurance,HealthcareandPensionAdministration.

Info-DriveSoftwareLimitedalongwithitssubsidiariesofferssolutionsin(1)ITServices2)BPOServicesand3)ITInfrastructureManagementServices.

IT Services Info-DrivetakeschargeoftheITneedsoftheentireenterprise.Thegamutofservices

extendsfromProductDevelopment,EnterpriseApplicationServices (ERP-MicrosoftDynamics)andcustomizedsoftwareandintegrationservices.OurenterprisesolutionshaveservedandcontinuetoserveclientsinCorporate,SmallandMediumEnterprisesinIndia.Info-drivehaspartnershipswithleadingsoftwareproductcompaniesandhascreatedbroadrangeofservicesacrossIslamicBanking&Financedomain.Thecompanyoffers one stop solution for Islamic Banking Software Solutions suite comprising ofIntegratedCoreBankingSolution,E-BankingsuiteandSystemsIntegration.

BPO Services Info-drive’s BPO services customer requirements by leveraging its tenets of quality

andinnovation,thebestpeopletalent,selfsustainingprocessframeworkanddomainknowledge.Weoffercustomizedserviceofferings;translatingintothemostflexibleand cost effective services of the highest quality for our customers. We offer backofficeprocessingservicestoThirdPartyAdministrators(TPA’s)inUSPensionIndustry.We are pioneers in pension plan back office services in India.Info-Drive’s PensionAdministrationBackofficeservicesarehighlyregardedforsignificant,sustainedvaluedelivery,bolsteredbyanincident-freetrackrecordandrenewalofallmajorcontracts.

Infrastructure Management Services Info-Drive’s Infrastructure Management Services offer the entire gamut of

infrastructure services that enable customers to plan, deploy, operate, manage andreviewtheirITassetswithahighdegreeofresourceefficiencyinanenvironmentthatisengineeredtoachievesecurity,reliabilityandavailability.Theservicesarecompliantwithstateof- the-artqualitystandardssuchas ISO9002,BS:7799.Unique inhousetoolsanddiagnosticsprovideenhancedvisibilityintothecustomer’sITinfrastructureto optimize performance, increase availability and reduce costs. Our services linesinclude(i)EnterpriseNetworkConnectivity(ii)SolutionInformationSecuritySolutionsand Service (iii) IT Infrastructure Management Services (iv) Remote IT InfrastructureManagement Services (v) Biometrics Solutions (vi) e Living solutions like HomeAutomation, Community Connectivity & Datacenter Applications and Telecom-Internet-MediaConvergence.

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Threats, Risks & Risk Mitigation

The Software Industry thrives on a dynamic and highly competitive businessenvironment, characterized by rapid technological change and innovations thatconstantlychallengeconventionalbusinessmodels.Ourfuturedependsonanumberoffactors,including:

• thesize,complexity,timing,pricingtermsandprofitabilityofsignificantprojectsorproductorders;

• seasonalchangesthataffectthemixofservicesweprovidetoourclientsortherelativeproportionofservicesandproductrevenue;

• seasonalchangesandcapexdecisionthataffectpurchasingpatternsamongourconsumersofdesktops,notebooks,serversandcommunicationdevices;

• unanticipatedcancellations,contractterminationsordeferralofprojects,orthoseoccurringasaresultofourclientsreorganizingtheiroperations;

• thedurationoftaxholidaysorexemptionsandtheavailabilityofotherGovernmentofIndiaincentives;

• the effect of seasonal hiring patterns and the time we require to train andproductivelyutilizeournewemployees;unanticipatedvariationsintheduration,sizeandscopeofourprojects,aswellaschangesinthecorporatedecisionmakingprocessofourclients;

• currencyexchangefluctuations;and • othereconomicandpoliticalfactorsinthegeographieswhereyourcompanyis

present.

Info-Drive has adopted a risk management framework that enables continuousmonitoring and management of the organization’s risks. The audit committee ofthe board monitors the risk management framework to provide direction to themanagement.Theframeworkisdesignedtoidentifyandassessrisksattheoperationalaswellasentitylevel.Riskdefinitionsareestablishedtocoverallprimaryriskcategories,which are Strategy; Industry; Market; counter – parts; Resources; Operations andRegulations&compliance.Themitigationplanisdesignedbasedonmanagement’sresponsetotheassessedrisks.

BeingthedriveroftheCompany’sstrategy,thetopmanagementiswellacquaintedwith the risks inherent to the IT business and the risks emerging from its strategicdecisions.Therefore,topmanagementplaysasignificantroleinaddressingbusinessrisks.Yourcompanytoofacesseveralbusinessrisks,ofwhichsomeprominentonesarediscussedhereunder.

Internal Risks a. Businessconcentrationrisks b. M&Aandexecutionrisk

a. Business Concentration Risks The business concentration risk can be classified into Concentration of Service

Offerings,ClientConcentrationandGeographicConcentration.

YourCompanygeneratesrevenuesfromatotalofaround150clientstoensureawelldiversifiedspread.Duringtheyearunderreview,yourcompanyconcludedasignificantlylargeITApplicationandSystemsIntegrationcontractwithoneofthe largest Islamic Bank in Malaysia. Your company is also increasing its focusontheMiddleEast regionbesidesUSandAsiaPacific.Recently,yourcompanyhassigneda“MasterServiceAgreement”withaleadingrealtorinMiddleEasttoaddressthesmartcommunityservicesinrealestatedomain.Yourcompanyunder


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theyearofreviewthroughauniquesynthesisoforganicandinorganicgrowthmodelhascreateditsbusinessportfolioinIT&BPOservicesandhasestablishedawell-balancedportfolioofservicescateringtothemainstream,uncontested,andemergingmarketsglobally.

Yourcompany’sgeographicriskismitigatedthroughspreadinfocusontestedbig market like North America and emerging markets like MENA and Far East.Toachievethis,yourCompanyhasaugmenteditsmarketing&salesteamsandopenednewoffices&establishments inCalifornia,NewYork,Singapore,Dubaiand Kuala Lumpur. Your Company has taken steps to ensure that it does notbecometoodependentonaspecificservicelines,clientorparticulargeography.

b. M & A, Execution risk Your Company follows a very structured approach in pursuance of its M & A

strategy. Many of the risks are mitigated by restricting the choice of targetcompanies by applying certain rigorous selection criteria and after thoroughlegal,business,financialandhumanresourceduediligence.

YourCompanyhasgrowninaninorganicrouteandhasundertakenaseriesofacquisitions intheperiodunderreview.TheCompanyfacesariskwithrespectto executing its post acquisition related transactions. The risk exposure in thisareaisthedifficultiesinintegrationofacquiredentitieswithintheframeworkofacommonoperationalfabric.Yourcompanyhasidentifiedacoretransitionteamthat would address the Financial (managing cash flows & return expectations,Taxandtransferpricing,accountingandcompliance),Operational( integratingsystems&processes,informationflow),Business(establishingsynergybetweendifferent entities) and People integration(performance metrics, motivating andmanaging aspirations. The team will be involved in the integration effort toincorporate learning’sfromdifferentstructurestoreinforcedesiredcultureandinspiresenseofOwnership.

External Risks a. Competitionrelatedrisks b. Exchangeraterisks c. Geo-politicalrisks

a. Competition related risks Your Company faces risks of competition in its BPO and global Information

Technologybusiness. Inspiredbythe Indian IT-ITESsuccessstory,severalothernations have started representing alternate destinations for offshore basedoutsourcing.However,Indiastillremainsapreferredoffshoredestination;themainchallenge is from countries like China, Malaysia, Philippines and East EuropeanCountries. Potential threat for the Company comes from the leading Indian ITvendors, Global IT Services companies having bases in India. Your Company isaddressingsamebycomingupwithproven,systematic,sustainableandscalabletoolsthateffectivelyintegrateonsiteandoffshoreexecutioncapabilities.

Yourcompanyhasalsoincreasedthedepthandbreadthofserviceofferingstoprovideaone-stopsolutioninanenvironmentwherecorporationsareincreasinglyreducingthenumberoftechnologyservicevendorstheyareusing.

b. Exchange related risk Strengthening of the Indian Rupee has adversely affected the IT industry in

fiscal2008andmaycontinue2009.TheCompany’s revenuesaredenominated

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inforeigncurrencyapartfromtheIndianrupeerevenuesderivedfromdomesticmarket.PredominantlytheforeigncurrencyrevenuesareUS$,AEDandRM.Alargeproportionoftherevenuesandcostsfortheyearunderreviewaredenominatedin Indian Rupees (INR).Hence the exchange risk for the year under review hasbeenminimal.Howevertomitigaterisk,theCompanywouldfollowaproactivehedgingpolicyforalltheforeigncurrencies.

c. Geo-Political Risks Your company continues to expand its global footprint and is establishing its

operations in many countries. Your company has Delivery Centers in Malaysia,United Arab Emirates and looking at ramping up a new Delivery Center inSingapore. Operating in multiple geographies reduces the risk of businessconcentrationinspecificmarketsbutincreasesgeo-politicalandmacro-economicrisks. To mitigate this risk, your Company carries out a thorough due diligenceexercisepriortostartingoperationsinanewdeliverylocationandincludesactionofmovingmoreworkoffshoretoIndia.Attheoperationallevel,yourCompanyhas made adequate investments in business continuity and disaster recoveryplansacrosslocationsincaseofanyunforeseenturnofevents.

Opportunities AsanIT&ITeSserviceproviderwithuniqueserviceportfolio,Info-Drivehasidentifiedseveralbusinessareaswhichwilldrivecompany’sorganicgrowthfortheforeseeablefuture.Someofthesegrowthdriversare:

Geographic expansion to new markets Thecompanyhasconsolidatedonthenewregionsenteredin2007-2008andcontinues

onitsstrategyforgrowthintoemergingmarkets;

• ThecompanyhasidentifiedCanadaastheoneoftheemergingmarketsandhasestablisheditsfootprintinJune2008.

• ThecompanyproposestotargetwidergeographiesthroughitsmarketingandsalesofficeinSingapore.

IP Monetization NewinternationalmarketstrategiesandmonetizationoftheIntellectassetsposesan

immenseopportunityforgrowthforthecompanyinthecomingyears.

New Sales Thecompanycontinuesitssalesthrustinareasofindustryverticalsandkeyaccounts

in which it has built significant competitive strength, which are also the mainstaybusinessoftheCompany.

Service Portfolio Enhancement WeprovideacomprehensiverangeofITservices,includingapplicationdevelopment,

maintenance & support, packaged software implementation, infrastructuremanagement services, system integration and business process outsourcing. Ourknowledge and experience span multiple computing platforms and technologies,which enable us to address a range of business needs and to function as a virtualextension of our clients’ IT departments. We offer a broad spectrum of services inselectindustrysectors,whichweleveragetocapitalizeonopportunitiesthroughoutourclients’organizations.


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Outlook The year 2007-08 was a year of phenomenal growth and 2008 will be a year ofconsolidationandexploringnewmarketsinthechosenareasofdomain.Thesoftwareindustryisonnewfootingandispoisedforsignificantadvancesin2008.

TheITandITeSindustryisanexcitingphaseofgrowthasitgearsuptotapsignificantopportunitiesthattheglobaleconomypresents.Itisalsoworkinghardonimprovingitsproductivity further, toovercomechallengesof infrastructureand inflation.M&Ahasbecomeawayoflifeandyourcompanyrecognizesthisfactandwouldcontinuetolookforopportunitisticgrowthalliances.

Againstthebackdropofthisscenario,yourcompanyhasembarkeduponanexpansionprogramwhichisajudiciousmixoforganicandinorganicgrowth.Itexpectstocreatevalue for the shareholders with focused efforts in business development, mutuallyrewarding acquisitions, and investments in execution excellence throughout theentireoperations.

AlltheBuildingBlocksforgrowthareinplaceandthefutureoutlookofthecompanyis very encouraging to keep all its stakeholders excited and moving forward. YourcompanyisconfidentofachievingtheIndustrygrowthrateinrevenuesandprofits.

Internal Control Systems and Adequacy

ThereisadequateinternalcontrolsystemcommensuratewiththesizeoftheCompanyandthenatureofitsbusinesswithregardtothepurchaseofinventory,fixedassetsandforthesaleofgoodsandservices.Policieshavebeendesignedtoprovidereasonableassuranceswithregardtorecordingandprovidingreliablefinancialandoperationalinformation,complyingwithapplicablestatutes,safeguardingassetsandexecutingtransactions with proper authorization and delegation ensuring compliances. Yourcompanyhasputinplacebudgetaryreviewmechanismswherebythemanagementregularlyreviewsactualperformancewithreferencetobudgetsandforecasts.

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Discussion on Financial Performance with respect toOperational Performance

Info-Drive Software Limited (Consolidated) TheManagementDiscussionandAnalysisbelowrelatestotheConsolidatedfinancial

statementsofInfo-DriveSoftwareLimitedandincludestheresultsofitssubsidiaries.TheDiscussionshouldbereadinconjunctionwiththefinancialstatementsandrelatedNotestotheConsolidatedAccountsofInfo-DriveSoftwareLimitedfortheyearendedMarch31st,2008.

ThefinancialstatementshavebeenpreparedincompliancewithrequirementsoftheCompaniesAct,1956andGenerallyAcceptedAccountingPrinciples(GAAP)inIndia.Our management accepts responsibility for the integrity and objectivity of thesefinancial statements as well as for various estimates and judgements used therein.The estimates and judgments relating to the financial statements have been made(whereverapplicable)onaprudentandreasonablebasis, inorderthatthefinancialstatementsreflectatrueandfairviewoftheformandsubstanceoftransactionsandreasonablypresentourstateofaffairsandprofitsfortheyear.

Results of Operations (Consolidated)

Income from Operations In fiscal 2008, the total operating income aggregated to Rs. 19,410.36 Lakhs. The

company’s revenues consist mainly of income from ITeS and Overseas ConsultancyServicesandalsoduetoacquisitions.Thecompanyrecognizescontractspricedonatimeandmaterialsbasiswhenservicesarerenderedandrelatedcostsincurred.Theclassificationofrevenuesbygeographyandindustrypracticeismorerelevantwhenreviewedasconsolidatedresultsofthecompany

Revenue by Geography

Revenue(Rs. Lakhs)

Malaysia 3,176.55

UnitedStatesofAmerica 1,346.77

UnitedArabEmirates 549.48

India 14,337.56

Total 19,410.36

Expenditure

Employee costs EmployeeCostsfortheyearunderreviewwasRs.2014.92Lakhs.Totalemployee

costasapercentageoftotalincomewas10.38%.Therehadbeenincreaseintheheadcountandcompensationpackagesarecommensuratewiththemarket.Thetotalemployeestrengthis1400plus

Administration and Other expenses Thenatureofadministrativeexpenses(otherthanemployeecosts)includesrent,

rates, taxes, advertisement, repairs and maintenance, postage, telephone etc.,amountingtoRs.1108.68Lakhs.


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Profit before Interest, Depreciation and Taxes (PBIDT) Theprofitbefore interest,depreciationandtaxes in fiscal2008wasRs.1598.16.The

profit after tax (before maiden dividend during the year) as a percentage of totalincomeis4.64%infiscal2008.

Interest costs & Depreciation Interestexpense isRs.283.77Lakhs in fiscal2008.Depreciationcharge isRs.202.66

Lakhsinfiscal2008.Intermsoftotalincome,depreciationchargewas1.04%infiscal2008.

Profit before Taxes TheProfitbeforetaxesinfiscal2008wasRs.1093.39Lakhs.

Maiden Dividend TheBoardhasrecommendedamaidenDividendof5%(Re.0.50pershare)amounting

toRs.146.19Lakhs(excludingdividendtaxofRs.28.77Lakhs).

Net Profit before Minority Interest The company’s net profit before minority interest in fiscal 2008 is Rs. 726.02 Lakhs.

Netprofitasapercentageoftotalincomeis3.74%.

Minority Interest Minority interest is that part of the net profit attributable to third party ownership

interestsinthecompany’ssubsidiaries.

Net Profit (after minority interest) TheCompany’snetprofit(consolidated)isRs.672.70Lakhs.Netprofitasapercentage

oftotalincomeis3.46%infiscal2008.

Financial Position (Consolidated)

Share Capital Atpresent,wehaveonlyoneclassofsharesviz.,equitysharesofparvalueofRs.10/-

each.Duringfiscal2008ourAuthorisedShareCapitalwasincreasedfromRs.30Crorescomprisingof3CroresequitysharesofRs.10/-eachtoRs.60Crorescomprisingof6CroresequitysharesofRs.10/-each.

Reserves and Surplus The net addition to the share premium of Rs.1502.11 Lakhs during the year is due

[email protected]/-pershare(issuepricewithapremiumofRs.2/-pershare)andinaddition,apremiumofRs.26/-perequityshare(facevalueRs.10/-perequityshare)on42,38,890equitysharesissuedonpreferentialbasisforconsiderationotherthancash(swap).

ReservesandSurplusattheendoffiscal2008stoodatRs.2976.32Lakhs.

Loans SecuredLoansattheendoffiscal2008wereRs.2495.99Lakhs.Unsecuredloansatthe

endoffiscal2008wereRs.217.16Lakhs.

Deferred Tax Liability (Net) Thecompanyhasdeferredtaxliability(net)ofRs.22.23Lakhs.

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Fixed Assets Addition to Gross Block in fiscal 2008 amounted to Rs.710.54 Lakhs. The significant

items of additions in fiscal 2008 were office equipments (Rs. 63.44 Lakhs), furniture&fittings(Rs.83.46Lakhs)electricalinstallations(Rs.2.50Lakhs),buildings(Rs.193.38Lakhs), vehicles (Rs. 66.45 Lakhs), computer systems (Rs. 127.86 Lakhs), softwarepackages(Rs.9.33Lakhs),intangibleassets(Rs.145.24Lakhs).

Investments Thecompanyhasbeeninvestinginvariousmutualfundsduringthefiscal2008.These

aretypicallyinvestmentsinshort-termfundstogainfullyuseinvestiblecashbalancewiththecompany.Theinvestmentsinfiscal2008stoodatRs.10.50Lakhs.

Inventories Thecompany’sinventoryconstitutesrawmaterials,components,sub-assembliesand

finishedgoods.Theinventoryinfiscal2008stoodatRs.609.80Lakhs.

Current Assets, Loans & Advances

Sundry Debtors SundryDebtorsasat31stMarch,2008aggregatedRs.4274.63Lakhs.Asapercentage

oftotalincome,sundrydebtorswere22.02%asat31stMarch,2008.

Cash and Bank balances ThecompanyhadcashandbankbalanceofRs.1761.84Lakhsasat31stMarch,2008.

Loans & Advances Loans&Advancesasat31stMarch,2008stoodatRs.557.34Lakhs.Significantitems

of loansandadvancesweredepositswithgovernmentdepartments (Rs.1.70Lakhs)and other advances Rs. 387.34 Lakhs, rental deposits Rs. 16 Lakhs, staff-advancesRs.1.15Lakhs.

Current Liabilities & Provisions Current liabilities as at 31st March, 2008 include sundry creditors Rs. 2772.05 Lakhs,

provisions made towards taxes, contingencies, proposed dividend, tax on dividendaggregatedRs.470.04Lakhs.

Cash Flow (Consolidated)

Cash Flow from Operations In fiscal 2008, the company generated net cash of Rs. 643 Lakhs from operating

activities.Apartfromnetprofitbeforetaxes&writeoffRs.1093.39Lakhs,thenetcashgeneratedincludesnoncashitemslikedepreciationofRs.202.66Lakhs.

Cash Flow from Investing Activities In fiscal 2008, the company used Rs. 4219.78 Lakhs on investing activities. Significant

amountofcashusedininvestmentactivitiesinfiscal2008are(a)acquisition/investmentinsubsidiarycompaniesRs.3466.19Lakhsand(b)purchaseoffixedassetsRs.753.59Lakhs.

Cash Flow from Financing activities Infiscal2008,thesignificantitemofcashusedinfinancingactivitiesincludesproceeds

offurtherissueofequitysharesamountingtoRs.4932.01Lakhs,longtermborrowings(net)Rs.817.36Lakhs,short-termborrowings(net)Rs.23.80Lakhsetc.

Cash Position Cashandcashequivalentsasat31stMarch,2008amountedtoRs.1761.84Lakhs.


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Discussion on Financial Performance with respect toOperational Performance

Info-Drive Software Limited (Unconsolidated)

The Management’s Discussion and Analysis given below relates to the financialstatementsofInfo-DriveSoftwareLimited(Unconsolidated).ThediscussionshouldbereadinconjunctionwiththefinancialstatementsandrelatednotesfortheyearendedMarch31st,2008.

Overview Thefinancialstatementshavebeenpreparedincompliancewithrequirementsofthe

CompaniesAct,1956andGenerallyAcceptedAccountingPrinciples(GAAP)inIndia.Our management accepts responsibility for the integrity and objectivity of thesefinancial statements as well as for various estimates and judgments used therein.The estimates and judgments relating to the financial statements have been made(whereverapplicable)onaprudentandreasonablebasis, inorderthatthefinancialstatementsreflectatrueandfairviewoftheformandsubstanceoftransactionsandreasonablypresentourstateofaffairsandprofitsfortheyear.

Results of Operations (Unconsolidated)

Income from Operations Thecompany’srevenuesconsistmainlyofincomefromITeSandConsultancyServices.

Thecompanyrecognizescontractspricedonatimeandmaterialsbasiswhenservicesare rendered and related costs incurred. The company’s (unconsolidated) revenuesincreased to Rs. 424.70 Lakhs in fiscal 2008, from Rs. 8.22 Lakhs in fiscal 2007- astupendousgrowthofmorethan fifty times (50.66times) in theyearunder review.Revenues increase is due to increased overseas consultancy services and enabledservices.

Expenditure

Employee costs Employee Costs in fiscal 2008 was Rs. 71.68 Lakhs an increase of 32.5% over

thetotalemployeecostofRs.2.14Lakhsinfiscal2007.Totalemployeecostasapercentageoftotalincomewas15.13%infiscal2008ascomparedtoapercentageof12.12%infiscal2007.

This increase is attributable to the relative increase in the headcount andcompensationpackagecommensuratewiththemarket.

Administration and Other expenses Thenatureofadministrativeexpenses(otherthanemployeecosts)includesrent,

rates, taxes, advertisement, repairs and maintenance, postage, telephone etc.,TheyrosefromRs.11.52Lakhsinfiscal2007toRs.91.54Lakhsinfiscal2008,anincreasebyalmost7times

Profit before Interest, Depreciation and Taxes (PBIDT) Theprofitbeforeinterest,depreciationandtaxesinfiscal2008wasRs.310.41Lakhs,an

increaseofalmost79timesfromRs.3.89Lakhsinfiscal2007.Theprofitaftertax(beforemaidendividendduringtheyear)asapercentageoftotalincomeis48.06%infiscal2008ascomparedto7.87%infiscal2007.

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Interest costs & Depreciation Interest expenses increased from Rs. 0.26 Lakhs in fiscal 2007 to Rs. 17.06 Lakhs

in fiscal 2008. Depreciation charge increased from Rs. 2.04 Lakhs in fiscal 2007 toRs.7.07Lakhsinfiscal2008-anincreaseofaround2.46times.Intermsoftotalincome,depreciationchargewas1.49%infiscal2008(11.55%infiscal2007).Thevalue-increaseinfiscal2008isattributabletoadditionsininfrastructuralfacilities.

Profit before Taxes TheProfitbeforetaxesinfiscal2008wasRs.267.94Lakhs,astupendousincreaseof

168timesfromRs.1.59Lakhsinfiscal2007.

Maiden Dividend TheBoardhasrecommendedamaidenDividendof5%(Re0.50pershare).

Profit after Tax (PAT) The Company has achieved an exemplary PAT of Rs. 227.67 Lakhs in fiscal 2008

comparedtoRs.1.39Lakhsresultinginastupendousincreaseby163times.

Financial Position (Unconsolidated)

Share Capital Atpresent,wehaveonlyoneclassofsharesviz.,equitysharesofparvalueofRs.10/-

each.Duringfiscal2008ourAuthorisedShareCapitalwasincreasedfromRs.30Crorescomprisingof3CroresequitysharesofRs.10/-eachtoRs.60Crorescomprisingof6CroresequitysharesofRs.10/-each.

Reserves and Surplus The net addition to the share premium of Rs.1502.11 Lakhs during the year is due

[email protected]/-pershare(issuepricewithapremiumofRs.2/-pershare)andinaddition,apremiumofRs.26/-perequityshare(facevalueRs.10/-perequityshare)on42,38,890equitysharesissuedonpreferentialbasisforconsiderationotherthancash(swap).

Fixed Assets Duringtheyear,thecompanyaddedRs.57.36Lakhstogrossblockofassetstowards

infrastructureincludingforexpansions.

Investments Wholly-ownedSubsidiaries • Info-DriveSoftwareInc.,USA • Info-DriveSystemsSdnBhd,Malaysia • Info-DriveSoftwarePteLtd.,Singapore

OtherSubsidiaries • InfodriveSoftwareLLC,(80%) • PrecisionInfomatic(Madras)PrivateLimited.(51%)

Liquidity The Company had cash equivalents of Rs. 459.04 Lakhs as at 31st March, 2008

(Rs.0.05Lakhsasat31stMarch,2007)


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Cautionary Statement

Certain statements made in the Management Discussion and Analysis Report relating to the Company’s objectives, projections, outlook, expectations, estimates and others may constitute ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections and so on whether express or implied. Several factors could make significant difference to the Company’s operations. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on over which the Company does not have any direct control.

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AUDITORS’ REPORT

TothemembersofINFO-DRIVE SOFTWARE LIMITED

WehaveAuditedtheattachedBalanceSheetofINFO-DRIVESOFTWARELIMITED,asat31stMarch2008andalsotheProfit&LossAccountandalsotheCashFlowStatementfortheyearendedonthatdateannexedthereto.Thesefinancialstatementsaretheresponsibilityofthecompany’smanagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.

WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedinIndia.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

AsrequiredbytheCompanies(Auditor’sReport)(Amendment)Order,2004,(theOrder)issuedbytheCentralGovernmentofIndiaintermsofsubsection(4A)ofSection227oftheCompaniesAct,1956,weencloseintheAnnexureastatementonthemattersspecifiedinparagraphs4and5ofthesaidOrder.

Further to our comments in the Annexure referred to above, we report that:

a) Wehaveobtainedalltheinformationandexplanations,whichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit;

b) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbythecompanysofarasappearsfromourexaminationofthosebooks;

c) TheBalanceSheet,ProfitandLossAccountandCashFlowStatementdealtwithbythisreportareinagreementwiththebooksofaccounts;

d) Inouropinion,theBalanceSheet,ProfitandLossAccountandCashFlowStatementdealtwiththisreportcomplywiththeaccountingstandardsreferredtoinsub-section(3C)ofSection211oftheCompaniesAct,1956totheextentapplicable.

e) OnthebasisofwrittenrepresentationsreceivedfromthedirectorsandtakenonrecordbytheBoardofDirectors,wereportthatnoneofthedirectorsisdisqualifiedasonMarch31,2008frombeingappointedasdirectorintermsofclause(g)ofsub-section(1)ofSection274oftheCompaniesAct,1956;

f) Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thesaidaccountsgivetheinformationrequiredbytheCompaniesAct,1956,inthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

i) inthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasat31stMarch2008 ii) inthecaseoftheProfitandLossAccount,oftheprofitfortheyearendedonthatdate. iii) inthecaseofthecashflowstatement,ofthecashflowsfortheyearendedonthatdate.


58

Annexure to the Auditor’s Report of even date to the Members of INFO-DRIVE SOFTWARE LIMITED

i) a) Thecompanyhasmaintainedproperrecordsshowingfullparticulars,includingquantitativedetailsandthesituationofitsfixedassets.

b) Asexplainedtous,allthefixedassetshavebeenphysicallyverifiedbythemanagementduringtheyear.

c) Duringtheyearthecompanyhasnotdisposedoffsubstantialpartofthefixedassetsandhencethegoingconcernstatusofthecompanyisnotaffected.

ii) a) Theinventoryhavebeenphysicallyverifiedbythemanagementatreasonableintervals.Inouropinionthefrequencyofverificationisreasonable.

b) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theproceduresforphysicalverificationofinventoryfollowedbythemanagementwerereasonableandadequateinrelationtothesizeofthecompanyandthenatureofitsbusiness.

c) In our opinion the company has maintained proper records of inventory. The discrepancies between the physicalstocksandthebookstockswerenotmaterialandhavebeenproperlydealtwithinthebooksofaccount.

iii) a) The company has granted secured/unsecured loans to four companies covered in the register maintained undersection301oftheAct.

b) Therateofinterestwhereeverapplicableandothertermsandconditionsofloansgivenbythecompanyarenotprimafacieprejudicialtotheinterestofthecompany.

c) Wehavenocommentastherearenospecifictermsandconditionsinrespectofrepaymentofprincipal.

d) Thecompanyhasnottakenanyloans,securedorunsecuredfromcompanies,firmsorotherpartiescoveredintheregistermaintainedundersection301oftheAct.

iv) Inouropinionandaccordingtotheinformationandexplanationsgiventousthereisadequateinternalcontrolsystem

commensuratewiththesizeofthecompanyandthenatureof itsbusinesswithregardtopurchaseof inventory, fixedassetsandforsaleofgoodsandservices.

v) a) Accordingtotheinformationandexplanationsgiventous,weareoftheopinionthattheparticularsofcontractsorarrangementsneedtobeenteredintotheregistermaintainedundersection301oftheActhavebeensoentered.

b) In our opinion and according to the information and explanations given to us, there are no transactions made in

pursuanceofsuchcontractsorarrangementshavebeenmadeatpriceswhicharereasonablehavingregardtotheprevailingmarketpricesattherelevanttime.

vi) Thecompanyhasnotacceptedanydepositsfromthepublicaspersection58A,58AAoranyotherrelevantprovisionsoftheAct.

vii) Thecompanyhasaninternalauditsystemcommensuratewiththesizeandnatureofitsbusiness.

viii) TheCentralGovernmenthasnotprescribedmaintenanceofcostrecordsundersection209(1)(d)ofthecompaniesAct,1956forthecompany.

Auditors’ Report

59



ix) a) Accordingtotherecords,informationandexplanationsprovidedtous,thecompanyisgenerallyregularindepositingwithappropriateauthoritiesundisputedamountofprovident fund,employees’ state insurance, income-tax, sales-tax,wealth-tax,Service-taxandanyotherstatutoryduesapplicabletoitandnoundisputedamountspayablewereoutstandingasat31stMarch,2008foraperiodofmorethansixmonthsfromthedatetheybecomepayable.

b) Accordingtotheinformationandexplanationsgiventous,therearenoduesofsales-tax,income-tax,customsduty,wealthtax,servicetax,excisedutyandcesswhichhavenotbeendepositedonaccountofanydispute.

x) Inouropinionandaccordingtotheinformationandexplanationsgiventous,theaccumulatedlossesofthecompanyarenotmorethanfiftypercentofitsnetworth.Thecompanyhasnotincurredcashlossesintheimmediatelyprecedingfinancialyear.

xi) Basedonourauditproceduresandontheinformationandexplanationsgivenbythemanagement,thecompanyhasnotdefaultedinrepaymentofduestoanyfinancialinstitutionorbank.

xii) Basedonourexaminationandaccordingtotheinformationandexplanationsgiventous,thecompanyhasnotgrantedloansandadvancesonthebasisofsecuritybywayofpledgeofshares,debenturesandothersecurities.

xiii) Thecompanyisnotachit/nidhi/mutualbenefitfund/societyandclausexiiioftheOrderisnotapplicable.

xiv) Thecompanyisnotdealingortradinginshares,securities,debenturesandotherinvestments.

xv) Inouropinion,thetermsandconditionsonwhichthecompanyhasgivenguaranteesforloanstakenbyothersfrombanksorfinancialinstitutionsarenotprejudicialtotheinterestofthecompany.

xvi) Inouropinion,thetermloanshavebeenappliedforthepurposeforwhichtheywereraised.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of thecompany,wereportthatnofundsraisedonshorttermhavebeenusedforlongterminvestment.Nolongtermfundshavebeenusedtofinanceshorttermassets.

xviii) Duringtheyear,thecompanyhasnotmadeanypreferentialallotmentofsharestopartiesandcompaniescoveredintheregistermaintainedundersection301oftheact.

xix) Thecompanydidnothaveanyoutstandingdebenturesduringtheyear.

xx) Wehaveverifiedtheenduseofmoneyraisedbyrightsissueasdisclosedinthenotestothefinancialstatements.

xxi) Basedontheauditproceduresperformedandinformationandexplanationsgiventousbythemanagement,wereportthatnofraudonorbythecompanyhasbeennoticedorreportedduringthecourseofouraudit.

for K.S.REDDYASSOCIATES CharteredAccountantsPlace :Chennai Sd/-Date :08.08.08 K. Subba Reddy (Proprietor) M.No.208754

60

BALANCE SHEET AS AT 31ST MARCH 2008Rs.Inlakhs

Schedule

As at 31.03.2008

As at31.03.2007

SOURCES OF FUNDS:

SHAREHOLDERS’FUNDS

ShareCapital A 2,923.89 500.00

Reserves&Surplus B 1,562.11 60.00

LOANFUNDS

SecuredLoans C 31.61 -

UnsecuredLoans D - 58.32

DeferredtaxLiability 7.80 -

Total 4,525.41 618.32

APPLICATION OF FUNDS:

FIXEDASSETS - E

GrossBlock 159.81 120.79

Less:Depreciation 80.67 73.60

NetBlock I 79.14 47.19

INVESTMENTS

Insubsidiarycompanies-Unquoted II F 3,492.68 0.88

CURRENTASSETS,LOANS&ADVANCES

a.Inventories G 15.23 15.28

b.SundryDebtors H 186.58 8.00

c.Cash&BankBalances I 459.04 0.05

d.Loans&Advances J 389.86 4.03

1,050.71 27.36

LESS:CURRENTLIABILITIES

a.CurrentLiabilities K 418.38 1.55

b.Provisions L 203.50 0.20

NetCurrentAssets III 428.83 25.61

MISCELLANEOUSEXPENDITURE

Preliminary&IssueExpenses(totheextent

neitherwrittenoffnoradjusted) M 58.10 21.36

ProfitandLossAccount 466.66 523.28

IV 524.76 544.64

Total = I + II + III + IV 4,525.41 618.32

Notes to Accounts T

Place :Chennai AsperourreportofevendateDate :08.08.08 forK.S.REDDYASSOCIATES CharteredAccountants Sd/- K. Subba Reddy (Proprietor) M.No.208754

ForandonbehalfofInfo-DriveSoftwareLimited Sd/- Sd/- Sd/- Sd/- Sd/-K. Shivakumar N. T. Shiv Kumar V. N. Seshagiri Rao V. Gopal Rao ANL MadhavannJt.ManagingDirector WholetimeDirector&COO Director Sr.VicePresident&CompanySecretary ChiefFinancialOfficer

Financial Statements

61



PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2008Rs.Inlakhs

Schedule 2007-2008 2006-2007

INCOME:

Incomefromoperations N 424.70 8.22

OtherIncome O 48.98 9.43

473.68 17.65

EXPENDITURE:

Increase/DecreaseinStockintrade P 0.05 0.10

PaymentstoEmployees Q 71.68 2.14

Administrative,Selling&OtherExpenses R 91.54 11.52

FinanceCharges S 17.06 0.26

Depreciation E 7.07 2.04

187.40 16.06

Profitfortheyearbeforetaxation 286.28 1.59

Less:Goodwillwrittenoff 18.34 -

267.94 1.59

Less:ProvisionforTaxationincludingDeferredtax&FBT 40.27 0.20

227.67 1.39

Less:Provisionfordividendincludingdividendtax 171.05 -

56.62 1.39

Add:Lossbroughtforwardfrompreviousyear 523.28 524.67

BalancecarriedtoBalanceSheet (466.66) (523.28)

Notes to Accounts T



62

SCHEDULES FORMING PART OF THE BALANCE SHEETRs.InLakhs

31.03.2008 31.03.2007

SCHEDULE - A -

SHARECAPITAL -

Authorised:

6,00,00,000/3,00,00,000equitysharesofRs.10/-each 6,000.00 3,000.00

Issued,SubscribedandPaidup:

2,92,38,890/50,00,000equitysharesofRs.10/-eachfullypaidup 2,923.89 500.00

31.03.2008 31.03.2007

SCHEDULE - B

RESERVES&SURPLUS

SharePremiumAccount 1,562.11 60.00

31.03.2008 31.03.2007

SCHEDULE - C

SECUREDLOANS

a.UnionBankofIndia(Securedonhypothecationofvehicles) 15.57 -

b.UnionBankofIndia-TermLoan(Securedoncomputersand

corporateguaranteegivenbyBhariInformationTechnology -

SystemsPrivateLimited) 16.04 -

31.61 -

31.03.2008 31.03.2007

SCHEDULE - D

UNSECUREDLOANS

a.Others - 43.14

b.UTIBankOverdraft - 15.18

- 58.32


63



64


31.03.2008 31.03.2007

SCHEDULE - F

INVESTMENTS

Wholly Owned Subsidiaries

Info-DriveSoftwareInc

(102000sharesof$1eachfullypaidup) 40.36 0.88

Info-DriveSystemsSdnBhd

(1000000sharesofRM1eachfullypaidup) 2,126.00 -

Info-DriveSoftwarePteLtd

(205600sharesofS$1eachfullypaidup) 57.67 -

Other Subsidiaries

PrecisionInfomaticMadrasPrivateLimited -

(124900equityshareofRs.10/-eachfullypaidup) 900.00

InfodriveSoftwareLLC -

(240sharesofDirham1000eachfullypaidup) 368.65

3,492.68 0.88

31.03.2008 31.03.2007

SCHEDULE - G

INVENTORIES

StockofBharatanatyamCDs 15.23 15.28

(AsvaluedandcertifiedbytheManagement) 15.23 15.28

31.03.2008 31.03.2007

SCHEDULE - H

SUNDRYDEBTORS

(Unsecuredandconsideredgood)

a.Dueformorethan6Months 90.15 -

b.Dueforlessthan6Months 96.43 8.00

186.58 8.00


65




31.03.2008 31.03.2007

SCHEDULE - I

CASH&BANKBALANCES

a.Cashonhand 2.11 0.05

b.WithScheduledBanks-inCurrentAccount 5.05 -

c.WithScheduledBanks-inFixedDeposits 451.88 -

459.04 0.05

31.03.2008 31.03.2007

SCHEDULE - J

LOANSANDADVANCES(Unsecured)

Advances(Recoverableincashorkindorforvaluetobereceived)

a.DepositswithGovernmentDepartments 1.69 1.59

b.OtherAdvances 30.56 -

c.RentalDeposit 16.00 -

d.StaffAdvances 1.15 -

e.Taxdeductedatsource 11.14 2.44

f.IntercorporateLoans 316.47 -

g.SecuritydepositwithBSE 12.00 -

h.FringeBenefittaxpaid 0.85 -

389.86 4.03

31.03.2008 31.03.2007

SCHEDULE - K

CURRENTLIABILITIES

SundryCreditors

-Trade&Others 262.42 -

-Advancereceivedforsupplyofservices 147.25 -

-OutstandingLiabilities 8.71 1.55

418.38 1.55

66


31.03.2008 31.03.2007

SCHEDULE - L

PROVISIONS

-Provisionfortaxation 31.00 -

-ProvisionforFBT 1.46 0.20

-Provisionfordividend 146.19 -

-Provisionfordividendtax 24.85 -

203.50 0.20

31.03.2008 31.03.2007

SCHEDULE - M


RightIssueExpenses

ROCFeespaid 24.00 9.00

IssueExpenses 40.56 12.36

64.56 21.36

Less:Writtenoffduringtheyear 6.46 -

58.10 21.36


67



SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNTRs.Inlakhs

31.03.2008 31.03.2007

SCHEDULE - N - -

INCOMEFROMOPERATIONS - -

Sales 200.95 8.13

OverseasConsultancy 223.75 0.09

424.70 8.22

31.03.2008 31.03.2007

SCHEDULE - O

OTHERINCOME

InterestIncome 48.81 6.81

OtherIncome - 2.62

ExchangeFluctuation 0.17 -

48.98 9.43

31.03.2008 31.03.2007

SCHEDULE - P

INCREASE/DECREASEINSTOCK

OpeningStock 15.28 15.38

Less:ClosingStock 15.23 15.28

0.05 0.10

31.03.2008 31.03.2007

SCHEDULE - Q

PAYMENTSTOEMPLOYEES

StaffSalaries 59.03 2.11

Jt.ManagingDirectorsRemuneration 3.00 -

MedicalReimbursement 2.41 -

StaffWelfare(Food&Beverages) 7.24 0.03

71.68 2.14

68

SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNTRs.Inlakhs

31.03.2008 31.03.2007

SCHEDULE - R

ADMINISTRATIVE,SELLING&OTHEREXPENSES

Rent 7.12 0.30

Rates&Taxes 0.51 0.03

Subscription,Books&Periodicals 0.34 -

Postage,Printing&Stationery 7.23 2.71

TelephoneExpenses 7.69 0.74

Compensationpaid - 0.33

ConveyanceExpenses 3.44 -

Donations 0.01 -

ElectricityExpenses 2.14 0.31

Insurance 0.57 -

IssueExpenseswrittenoff 6.46 -

Auditor’sRemuneration

-AuditFees 0.60 0.18

-TaxAudit 0.25 -

-Others 0.15 -

Websiteexpenses 0.96 0.55

Repairs&Maintenance

-VehicleMaintenance 0.72 -

-OfficeMaintenance 1.26 0.16

-Plant&Machinery(Computers) 0.70 -

-Others 3.02 0.24

Advertisement 5.95 0.20

FilingCharges&ListingFees 3.06 0.46

FolioMaintenanceCharges 0.27 0.37

SecurityCharges 0.68 -

CarHireCharges 4.41 -

MeetingExpenses 0.55 0.12

Legal&ProfessionalExpenses 21.40 1.80

TravellingExpenses 11.19 1.92

Transportationcharges 0.26 0.36

Generalexpenses 0.60 0.74

91.54 11.52

31.03.2008 31.03.2007

SCHEDULE - S

FINANCECHARGES

Interest&BankCharges 17.06 0.26

17.06 0.26


69



CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2008Rs.Inlakhs

2007-2008 2006-2007

A. Cash flow from operating activities

NetProfitbeforetaxes 286.28 1.60

Adjustments for

Depreciation 7.07 2.04

InterestIncome (48.81) (6.81)

Goodwillwrittenoff (18.34)

Otherincome - (2.62)

Operatingprofitbeforeworkingcapitalchanges 226.20 (5.79)

Adjustments for increase/ (-) decrease in

SundryDebtors (178.58) (8.00)

Loans&advances (385.83) 201.22

Inventories 0.05 0.10

CurrentLiabilities&Provisions 620.13 (2.18)

Cashgeneratedfrom/(usedin)operations 281.97 185.35

InterestIncome 48.81 6.81

Otherincome - 2.62

Taxespaid (32.47) -

Net cash from operating activities A 298.31 194.78

B. Cash flow from investing activities:

InvestmentinSubsidiaryCompanies (3,491.80) (0.89)

PurchaseofFixedAssets (39.02) (0.80)

Sale/withdrawalofFixedAssets - -

Withdrawalofdepreciation - -

Net cash flow from/(used in) investing activities B (3,530.82) (1.69)

C. Cash flow from financing activities:

Longtermborrowings(Net) 31.60 -

Shorttermborrowings(Net) (58.32) (177.78)

ShareIssue 3,926.00 -

Issuerelatedexpenses (36.74) (21.36)

Dividend (146.19) -

Dividendtax (24.85) -

Net cash from financing activities C 3,691.50 (199.14)

Net increase/decrease in cash and cash equivalents 458.99 (6.05)

Cash&Cashequivalents(OpeningBalance) 0.05 6.10

Cash&Cashequivalents(ClosingBalance) 459.04 0.05


Auditor’s Certificate: TheabovecashflowstatementhasbeenpreparedonthebasisofAuditedAccountsbytheBoardofDirectors’andisinagreementwiththeProfit&LossAccountandBalanceSheet.


70

NOTES ON BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

SCHEDULE – T NotesannexedtoandformingpartoftheBalanceSheetasat31stMarch2008andtheProfitandLossAccountfortheyearendedonthatdate.

Significant Accounting Policies: i. BasisofPreparation:Thefinancialstatementsarepreparedunderthehistorical

costconventionunderaccrualmethodofaccountingandasagoingconcern,inaccordancewiththeGenerallyAcceptedAccountingPrinciples(GAAP)prevalentin India and the mandatory accounting standards issued by the Institute ofChartered Accountants of India (ICAI) and according to the provisions of theCompaniesAct,1956.

ii. Fixed Assets: Fixed assets are stated at historical cost of acquisition andimprovementsthereonlessaccumulateddepreciation.

iii. Depreciation:DepreciationonfixedassetshavebeenprovidedonStraightLineMethod at the rates and in the manner prescribed in the Schedule XIV to theCompanies Act, 1956 and on pro-rata basis of the assets acquired during theyear.

iv. Revenuerecognition:Revenuesfromcontractspricedonatimeandmaterialbasisarerecognizedwhenservicesarerenderedandrelatedcostsareincurred.

Revenues from turnkey contracts, which are generally time bound fixed pricecontracts, are recognized over the life of the contract using the proportionatecompletionmethodwithcontractcostsdeterminingthedegreeofcompletion.

v. Investments:InvestmentsareclassifiedascurrentorlongterminaccordancewithAccountingStandard13on‘AccountingforInvestments’.

i) Long term investments are stated at cost to the company. The company providesfordiminutioninthevalueoflongterminvestmentsotherthanthose temporaryinnature.

ii) Currentinvestments–Nil iii)Incaseofforeigninvestments

1) thecostistherupeevalueoftheforeigncurrencyondateofinvestments. 2) the face value of the foreign investments is shown at the face value

reflectedintheforeigncurrencyofthatcountry.

Duringtheyearunderreviewthecompanyhasacquiredthefollowingcompanies.

Sl.No. Name of the company acquired % of holding

1. Info-DriveSoftwareInc.USA 100

2. Info-DriveSoftwarePte.Ltd,Singapore 100

3. Info-DriveSystemsSdnBhd,Malaysia 100

4. InfodriveSoftwareLLC,Dubai 80

5. PrecisionInfomatic(Madras)PrivateLimited 51

Notes

71



vi. Employeebenefits:Shorttermemployeebenefitsaremeasuredatcost.Longtermemployeebenefitsandpostemploymentbenefitswouldbeworkedandcarriedoutateachbalancesheetdate.

vii. As the company is dealing with only one segment viz Information TechnologythesegmentreportingasperAccountingStandard17issuedbytheInstituteofCharteredAccountantsofIndiaisnotresortedto.

viii. EarningsperShare:Indeterminingtheearningspershare,thecompanyconsidersthenetprofitaftertaxandextraordinaryitems.

Particulars 31.03.2008 31.03.2007

Profitaftertaxandextraordinaryitems Rs.2,27,66,893/- Rs.1,40,247/-

No.ofequitysharesoutstandingduringtheyear 2,92,38,890 50,00,000

Basic&Dilutedearningspershare Re.0.78 Re.0.03

ix. Taxation: CurrentincometaxexpensecomprisestaxesonincomefromoperationinIndia.

IncometaxpayableinIndiaisdeterminedinaccordancewiththeprovisionsoftheIncomeTaxAct,1961.FortheyearunderreviewanamountofRs.31lakhshasbeenprovidedforasincometax.

Deferred tax expense or benefit is recognized on timing differences being thedifferencebetweentaxableincomeandaccountingincomethatoriginateinoneperiodandarecapableofreversalinoneormoresubsequentperiods.Deferredtaxassetsandliabilitiesaremeasuredusingthetaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.FortheyearunderreviewanamountofRs.7,80,423/-hasbeenprovidedasdeferredtaxliability

Fringebenefittax(FBT)isprovidedinrespectofbenefitstoemployeesasdefinedundersection115WB.FBTpayableundertheprovisionsof115WCoftheIncomeTaxAct1961,isinaccordancewiththeguidancenoteon‘AccountingforFringeBenefitsTax’issuedbytheInstituteofCharteredAccountantsofIndiaregardedasanadditionalincometaxandconsideredindeterminationofprofitsfortheyear.FortheyearunderreviewanamountofRs.1,46,500/-hasbeenprovidedasFBT.

x. Miscellaneousexpenditure:PreliminaryExpensesandRightsIssueExpensesareamortizedoveraperiodof10years.

72

xi. Related party disclosures: List of related parties where control exists and otherrelatedpartieswithwhomthecompanyhadtransactionsandtheirrelationshipisasbelow.

Sl.No. Name of the related party Nature of relationship

1. Info-DriveSoftwareInc.USA

2. InfodriveSoftwareLLC,Dubai

3. Info-DriveSoftwarePte.Ltd.,Singapore SubsidiaryCompanies

4. Info-DriveSystemsSdnBhd,Malaysia

5. PrecisionInfomatics(Madras)PvtLtd

6. PrecisionTechconetPrivateLimitedFellowSubsidiaryCompanies(SubsidiariesofPrecisionInfomatics(Madras)PrivateLimited)

7. LegendSystemsPrivateLimited

8. PrecisionTechservePrivateLimited

9. PrecisionGalaxyPrivateLimited

10. K.Chandrasekaran

KeyManagementpersonnel11. K.Shivakumar

12. N.TShivKumar

Sl.No. Name of the related party Nature of Transaction 31.03.2008Rs.

31.03.2007 Rs.

1. Info-DriveSoftwareInc. a.Investmentinequity 40,36,495/- 88,495/-

b.Advancegiven 1,57,92,000/- Nil

2. InfodriveSoftwareLLC a.Investmentinequity 3,68,65,000/- Nil

3. Info-DriveSoftwarePte.Ltd., a.Investmentinequity 57,39,030/- Nil

4. Info-DriveSystemsSdnBhd a.Investmentinequity 21,26,00,040/- Nil

5. PrecisionInfomatics(Madras)PvtLtd a.Investmentinequity 9,00,00,000/- Nil

b.Receivablesatyearend 6,38,590/- Nil

6. PrecisionTechservePLtd a.Advancegiven 25,00,000/- Nil

xii. DetailsofutilizationoffundsreceivedonRightsIssueofequityshares.

Particulars 31.03.2008Rs.

Issueproceedsthroughrightsissue 24,00,00,000/-

TotalFundsReceived 24,00,00,000/-

Particulars of utilization / deposits

Investmentinsubsidiarycompanies 17,07,15,525/-

Loanstosubsidiarycompanies/others 3,10,22,000/-

Issueexpenses 40,05,730/-

Increaseinauthorizedcapital 24,00,000/-

Balanceamountparkedindeposits 3,18,56,745/-

Notes

73



xiii. DetailsofSecuredLoansandSecurity:

LoanfromUnionBankofIndiaissecuredbywayof:

Hypothecation to the bank by way of first charge of on all computers, un-interruptedpowersupplyequipmentsandalso thecompanyhas facilitatedbya corporate guarantee given by Bhari Information Technology Systems PrivateLimited.

xiv.ForeignCurrencyTransactions: Monetary current assets and monetary current liabilities relating to foreign

currencytransactionsremainingunsettledattheendoftheyeararetranslatedattheexchangeratesprevailingatthedateofbalancesheet.

InRs.

This Year Last Year

EarningsinForeignCurrency 4,24,64,492/ 8,08,520/-

ExpenditureinForeignCurrency 1,82,275/- Nil

InvestmentinForeignCurrency 18,65,07,525/- 88,395/-

xv. Directors traveling included in traveling and conveyance amounts toRs.12,47,384/-

xvi. Extraordinary item: Extraordinary items are separately classified, identified anddealt with as required under Accounting Standard 5 issued by the Institute ofCharteredAccountantsofIndia.

xvii.Managerial Remuneration: An amount of Rs.3,00,000/- paid to Joint ManagingDirectorMr.K.Shivakumarasmanagerialremuneration.

xviii.AuditFees:

InRs.

2008 2007

ForservicesasAuditors 60,000/- 17,500

Fortaxaudit 25,000/- Nil

Forotherservices 15,000/- Nil

xix. IncreaseinauthorizedsharecapitalduringtheyearisRs.30crorescomprisingof3,00,00,000equitysharesofRs.10/-each.However,duringthepreviousyeartherewas an increase in authorized capital of Rs.18 crores comprising of 1,80,00,000equitysharesofRs.10/-each.

xx. Quantitativeinformation:

Opening Production Sales Closing

SoftwareCD’S 1,465 --- 5 1,460

74

xxi. Asat31stMarch2008thecompanyhasnooutstandingduestoMicroEnterprises,SmallEnterprisesandSmallScaleIndustrialUndertakings.

xxii.Thefiguresforthecurrentyearandpreviousyearhavebeenroundedofftothe

nearestrupee.

xxiii.Previousyearfigureshavebeenrearrangedorregroupedwherevernecessary.

SignaturestoSchedulesAtoT


ForandonbehalfofInfo-DriveSoftwareLimited Sd/- Sd/- Sd/- Sd/- Sd/-K. Shivakumar N.T. Shiv Kumar V.N. Seshagiri Rao V. Gopal Rao ANL MadhavannJt.ManagingDirector WholetimeDirector&COO Director Sr.VicePresident&CompanySecretary ChiefFinancialOfficer

Notes

75



BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS

RegistrationNo. : 15475 StateCode : 18

BalanceSheetDate : 31 – 03 – 2008

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousand)

PublicIssue : NIL RightsIssue : 240000

BonusIssue : NIL PrivatePlacement : NIL

III. POSITION OF MOBILIZATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousand)

TotalLiabilities : 452541 TotalAssets : 452541

Sources of Funds Application of Funds

PaidupCapital : 292389 NetFixedAssets : 7914

Reserves&Surplus : 156211 Investments : 349268

SecuredLoans : 3161 NetCurrentAssets : 42883

UnsecuredLoans : NIL Misc.Expenditure : 5810

Diferredtaxliability : 780 AccumulatedLosses : 46666

IV. PERFORMANCE OF THE COMPANY (Amount in Rs. Thousand)

Turnover : 47368 TotalExpenditure : 20574

Profit/(Loss)beforetax : 26794 Profit/(Loss)aftertax : 22767

EarningsperShareinRs. : 0.78 Dividendrate% : 5%

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY

ItemCode : 85241000

ProductDescription : Software

Place :Chennai AsperourreportofevendateDate :08.08.08 forK.S.REDDYASSOCIATES CharteredAccountants Sd/- K. Subba Reddy (Proprietor) ForandonbehalfofInfo-DriveSoftwareLimited Sd/- Sd/- Sd/- Sd/- Sd/-K. Shivakumar N. T. Shiv Kumar V. N. Seshagiri Rao V. Gopal Rao ANL MadhavannJt.ManagingDirector WholetimeDirector&COO Director Sr.VicePresident&CompanySecretary ChiefFinancialOfficer

77



AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

TothemembersofINFO-DRIVE SOFTWARE LIMITED

WehaveauditedtheattachedConsolidatedBalanceSheetofINFO-DRIVESOFTWARELIMITED,anditssubsidiariesasat31stMarch2008andtheConsolidatedProfitandLossAccountandtheConsolidatedCashFlowStatementfortheyearendedonthatdateannexedthereto.Thesefinancialstatementsaretheresponsibilityofthecompany’smanagementandhavebeenpreparedbythemanagementonthebasisofseparatefinancialstatementsandotherfinancialinformationregardingcomponents.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.

WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedinIndia.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

WedidnotauditthefinancialstatementsofsubsidiarieswhosefinancialstatementsreflecttotalassetsRs.5021.74lakhsasatMarch31,2008,totalrevenuesofRs.19498.25lakhsandcashinflowsamountingtoRs.1761.84lakhsfortheyearendedonthatdate.Thesefinancialstatementsandotherfinancialinformationhasbeenauditedbyotherauditorswhosereportshavebeenfurnishedtous,andouropinionisbasedsolelyonthatreportofotherauditors.

We report that the consolidated financial statements have been prepared by the Company’s management in accordance withthe requirements of the Accounting Standards (AS) 21, Consolidated Financial Statements issued by the Institute of CharteredAccountantsofIndia.

Basedonourauditandonconsiderationofreportsofotherauditorsonseparatefinancialstatementsandontheotherfinancialinformationofthecomponents,andtothebestofourinformationandaccordingtotheexplanationsgiventous,weareoftheopinionthattheattachedconsolidatedfinancialstatementsgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

1. inthecaseoftheConsolidatedBalanceSheet,ofthestateofaffairsofthecompanyasatMarch31,2008;

2. inthecaseoftheConsolidatedProfitandLossAccount,oftheprofitfortheyearendedonthatdate;and

3. inthecaseofConsolidatedCashFlowStatementofthecashflowsfortheyearendedonthatdate.


78

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2008Rs.InLakhs

Schedule

As at 31.03.2008

SOURCES OF FUNDS: SHAREHOLDERS’FUNDS

ShareCapital A 2,923.89AdvancetoShareCapital 54.14Reserves&Surplus B 2,976.32

LOANFUNDS SecuredLoans C 2,495.99UnsecuredLoans D 217.16MinorityInterest (56.67)DeferredtaxLiability 22.23

Total 8,633.06 APPLICATION OF FUNDS:

FIXEDASSETS Goodwillonconsolidation I 3,228.16GrossBlock E 1,724.53Less:Depreciation 548.22NetBlock II 1,176.31

INVESTMENTS InMutualFunds III F 10.50

CURRENTASSETS,LOANS&ADVANCES a.Inventories G 609.80b.SundryDebtors H 4,274.63c.Cash&BankBalances I 1,761.84d.Loans&Advances J 557.34e.Othercurrentassets K 177.65

7,381.26LESS:CURRENTLIABILITIES

a.CurrentLiabilities L 2,772.05b.Provisions M 470.04

NetCurrentAssets IV 4,139.17MISCELLANEOUSEXPENDITURE

Preliminary&IssueExpenses(totheextent neitherwrittenoffnoradjusted) V N 78.92

Total = I + II + III + IV + V 8,633.06Notes on Accounts U

Place :Chennai AsperourreportofevendateDate :08.08.08 forK.S.REDDYASSOCIATES CharteredAccountants Sd/- K. Subba Reddy (Proprietor) M.No.208754ForandonbehalfofInfo-DriveSoftwareLimited Sd/- Sd/- Sd/- Sd/- Sd/-K. Shivakumar N. T. Shiv Kumar V. N. Seshagiri Rao V. Gopal Rao ANL Madhavann

Jt.ManagingDirector WholetimeDirector&COO Director Sr.VicePresident&CompanySecretary ChiefFinancialOfficer

Consolidated Financial Statements

79



CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2008Rs.InLakhs

Schedule 2007-2008

INCOME

Incomefromoperations O 19,316.15

OtherIncome P 94.21

19,410.36

EXPENDITURE

Increase/DecreaseinStockintrade Q 14,688.60

PaymentstoEmployees R 2,014.92

Administrative,Selling&OtherExpenses S 1,108.68

FinanceCharges T 283.77

Depreciation E 202.66

18,298.63

Profitfortheyearbeforetaxation 1,111.73

Less:Goodwillwrittenoff 18.34

1,093.39

Less:ProvisionforTaxationincludingDeferred&FBT 320.96

772.43

Less:Provisionfordividendincludingdividendtax 174.95

597.48

Less:MinorityinterestinsubsidiaryCompanies (128.54)

726.02

Less:Minorityinterest 53.32

672.70

Less:Lossbroughtforwardfrompreviousyear 523.27

BalancecarriedtoBalanceSheet 149.43

Notes on accounts U


ForandonbehalfofInfo-DriveSoftwareLimited Sd/- Sd/- Sd/- Sd/- Sd/-K. Shivakumar N. T. Shiv Kumar V. N. Seshagiri Rao V. Gopal Rao ANL Madhavann


80

SCHEDULES FORMING PART OF CONSOLIDATED BALANCE SHEETRs.InLakhs

31.03.2008

SCHEDULE - A

SHARECAPITAL

Authorised:

6,00,00,000equitysharesofRs.10/-each 6,000.00

Issued,SubscribeandPaidup:

2,92,38,890equitysharesofRs.10/-eachfullypaidup 2,923.89

31.03.2008

SCHEDULE - B

RESERVES&SURPLUS

SharePremiumAccount 1,562.11

ProfitandLossOpeningBalance 1,264.78

Add:Profitfortheyear 149.43

2,976.32

SCHEDULE - C 31.03.2008

SECUREDLOANS

a.Frombanks&FinancialInstitutions 2,495.99

2,495.99

SCHEDULE - D 31.03.2008

UNSECUREDLOANS

a.LoansfromOthers 125.33

b.OptionallyConvertibleDebentures 27.56

c.LoansfromDirectors 64.27

217.16

31.03.2008

SCHEDULE - F

INVESTMENTS

InMutualFunds 10.50

10.50


81



Rs. i

n L

akh

s

82

SCHEDULES FORMING PART OF CONSOLIDATED BALANCE SHEETRs.InLakhs

31.03.2008

SCHEDULE - G

INVENTORIES

ClosingStock 609.80

(AsValuedandcertifiedbytheManagement) 609.80

31.03.2008

SCHEDULE - H

SUNDRYDEBTORS

(Unsecuredandconsideredgood)

a.Dueformorethan6Months 895.15

b.Dueforlessthan6Months 3,379.48

4,274.63

31.03.2008

SCHEDULE - I

CASH&BANKBALANCES

a.Cashonhand 8.85

b.WithScheduledBanks-inCurrentAccount 275.44

c.WithScheduledBanks-inFixedDeposits 1,477.55

1,761.84

31.03.2008

SCHEDULE - J

LOANSANDADVANCES(Unsecured)

Advances(Recoverableincashorkindorforvaluetobereceived)

a.DepositswithGovernmentDepartments 1.70

b.OtherAdvances 387.34

c.RentalDeposit 16.00

d.StaffAdvances 1.15

e.Taxdeductedatsource 11.14

f.IntercorporateLoans 127.16

g.SecuritydepositwithBSE 12.00

h.FringeBenefittaxpaid 0.85

557.34


83



83

SCHEDULES FORMING PART OF CONSOLIDATED BALANCE SHEET Rs.InLakhs

31.03.2008

SCHEDULE - K

OTHERCURRENTASSETS

Deposit-EarnestMoneywithothers 177.65

177.65

31.03.2008

SCHEDULE - L

CURRENTLIABILITIES

SundryCreditors

-Trade&Others 1,935.35

-Advancereceivedforsupplyofservices 147.25

-OutstandingLiabilities 183.01

-OtherLiabilities 506.44

2,772.05

31.03.2008

SCHEDULE - M

PROVISIONS

-Provisionfortaxation 288.62

-ProvisionforFBT 10.38

-Provisionfordividend 146.19

-Provisionfordividendtax 24.85

470.04

31.03.2008

SCHEDULE - N


RightIssueExpenses

-ROCFeespaid 24.00

-IssueExpenses 61.38

85.38

Less:Writtenoffduringtheyear 6.46

78.92

84

SCHEDULES FORMING PART OF CONSOLIDATED PROFIT AND LOSS ACCOUNTRs.InLakhs

31.03.2008

SCHEDULE - O

INCOMEFROMOPERATIONS

Sales&Otherrelatedincome 19,316.15

19,316.15

31.03.2008

SCHEDULE - P

OTHERINCOME

InterestIncome 51.29

OtherIncome 28.07

ExchangeFluctuation (0.23)

Discountonpurchase 4.12

Profitonsaleofinvestments 9.78

Incomefrommutualfunds 1.18

94.21

31.03.2008

SCHEDULE - Q

INCREASE/DECREASEINSTOCK

OpeningStock 542.01

Add:Purchases 14,756.39

Less:ClosingStock 609.80

14,688.60

31.03.2008

SCHEDULE - R

PAYMENTSTOEMPLOYEES

StaffSalaries 1,855.20

Employer’scontributiontoPF&ESI 93.96

StaffWelfare&recruitment 65.76

2,014.92


85



SCHEDULES FORMING PART OF CONSOLIDATED PROFIT AND LOSS ACCOUNTRs.InLakhs

31.03.2008

SCHEDULE - SADMINISTRATIVE,SELLING&OTHEREXPENSES

Rent 209.78

Rates&Taxes 25.28

Subscription,Books&Periodicals 5.48

BusinessPromotion 34.68

Postage,Printing&Stationery 54.94

TelephoneExpenses 87.09

Commissionpaid 70.68

ConveyanceExpenses 54.22

EntertainmentExpenses 12.06

Donations 0.14

ElectricityExpenses 51.16

Insurance 11.07

IssueExpenseswrittenoff 6.83

AuditFees 15.89

Internet&Broadbandexpenses 10.88

Repairs&Maintenance -VehicleMaintenance 3.65-OfficeMaintenance 18.58-Plant&Machinery 7.71-Others 18.04

Advertisement 13.48

Discounts 8.43

FilingFees&ListingFees 3.09

FolioMaintenanceCharges 0.27

SecurityCharges 15.56

CarHireCharges 4.41

Conference&MeetingExpenses 6.58

Legal&ProfessionalExpenses 159.83

TravellingExpenses 111.60

Transportation&Freight 39.89

Generalexpenses 27.28

Baddebtswrittenoff 19.25

Lossonsaleofassets 0.28

ProjectExpenses 0.57

1,108.68

SCHEDULE - T 31.03.2008

FINANCECHARGES

Interest&BankCharges 283.77

283.77

86

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2008 Rs.InLakhs

2007-2008A. Cash flow from operating activities

NetProfitbeforetaxesandwrite-off 1,111.73Adjustments for

Depreciation 202.66Miscellaneousexpenseswrittenoff 6.71InterestIncome (93.07)Interestpaid 283.01

Goodwillwrittenoff (18.34)

Otherincome (1.20)Operatingprofitbeforeworkingcapitalchanges 1,491.50

Adjustments for increase/ (-) decrease in SundryDebtors (1,064.92)Loans&advances (456.48)Inventories (121.54)CurrentLiabilities&Provisions 878.89Cashgeneratedfrom/(usedin)operations 727.47InterestIncome 93.07Otherincome 1.20Taxespaid (178.72)

Net cash from operating activities A 643.00B. Cash flow from investing activities:

InvestmentinSubsidiaryCompanies (3,466.19)PurchaseofFixedAssets (753.59)Sale/withdrawalofFixedAssets -Withdrawalofdepreciation -Net cash flow from/(used in) investing activities B (4,219.78)

C. Cash flow from financing activities: Longtermborrowings(Net) 817.36Shorttermborrowings(Net) 23.80ShareIssue 4,932.01Interestpaid (283.00)Issuerelatedexpenses (43.19)Dividend&Dividendtax (174.96)

Net cash from financing activities C 5,272.02Net increase/decrease in cash and cash equivalents 1,695.24

Cash&Cashequivalents(OpeningBalance) 66.60Cash&Cashequivalents(ClosingBalance) 1,761.84


Auditor’s Certificate: TheabovecashflowstatementhasbeenpreparedonthebasisofAuditedAccountsbytheBoardofDirectors’andisinagreementwiththeProfit&LossAccountandBalanceSheet. forK.S.REDDYASSOCIATES CharteredAccountantsPlace :Chennai Sd/-Date :08.08.08 K. Subba Reddy (Proprietor) M.No.208754


87



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SCHEDULE - U 1. GENERAL INFORMATION Info-Drive Software Limited (the Company) is a juristic person under the Companies

Act,1956. The address of its Registered Office and principal place of business isBuhari Buildings, No.3, Moores Road, Chennai: 600006. The principal activities of theCompany and its subsidiaries (the Group) are IT services & products, including BPOservices.

2. REPORTING STANDARDS PresentationofFinancialStatementshaverequiredthetitleoftheGroup’sstatementof

changesinequitypresentedonthesefinancialstatementstobechangedtotheStatementofRecognisedIncomeandExpense,buthavehadnoimpactontheamountsreportedinthatstatement.

3. SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared under the historical cost convention in

accordancewiththegenerallyAcceptedaccountingprinciplesinIndiaandtheprovisionsoftheCompaniesAct,1956andonthegoing-concernbasis.

ThefinancialstatementsarepreparedinaccordancewiththeprinciplesandproceduresrequiredforthepreparationandpresentationofConsolidatedFinancialStatementsaslaiddownundertheAccountingStandardonConsolidatedFinancialStatementsissuedbytheICAI.

a) Basis of Consolidation The consolidated financial statements incorporate the financial statements of

theCompanyandentitiescontrolledbytheCompany(itssubsidiaries).Control isachievedwheretheCompanyhasthepowertogovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.

Theresultsofsubsidiariesacquiredordisposedofduringtheyearareincludedintheconsolidatedincomestatementfromtheeffectivedateofacquisitionoruptotheeffectivedateofdisposal,asappropriate.

Wherenecessary,adjustmentsaremadetothefinancialstatementsofsubsidiariestobringtheiraccountingpoliciesintolinewiththeholdingcompanyandbyothermembersofthegroup.

All intra-group transactions, balances, income and expenses are eliminated onconsolidation.

Minority interests in the net assets of consolidated subsidiaries are disclosedseparatelyintheBalanceSheet.

b) Business Combinations The acquisition of subsidiaries is accounted for using the purchase method. The

costoftheacquisitionismeasuredattheaggregateofthefairvalues,atthedateofexchange,ofassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissuedbytheGroupinexchangeforcontroloftheacquiree,plusanycostsdirectlyattributabletothebusinesscombination.Theacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesthatmeettheconditionsforrecognitionarerecognisedattheirfairvaluesattheacquisitiondate.

Goodwillarisingonacquisitionisrecognisedasanassetandinitiallymeasuredatcost, being the excess of the cost of the business combination over the Group’sinterest in the net fair value of the identifiable assets, liabilities and contingentliabilitiesrecognised.

88

c) Goodwill Goodwillarisingontheacquisitionofasubsidiaryrepresentstheexcessofthecost

ofacquisitionovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilities and contingent liabilities of the subsidiary or jointly controlled entityrecognised at the date of acquisition. Goodwill is initially recognised as an assetat cost and is subsequently measured at cost less any accumulated impairmentlosses.

For the purpose of impairment testing, goodwill is allocated to each of theGroup’s cash-generating divisions expected to benefit from the synergies of thecombination. Cash-generating units to which goodwill has been allocated aretestedforimpairmentannually,ormorefrequentlywhenthereisanindicationthattheunitmaybeimpaired.Iftherecoverableamountofthecash-generatingunitislessthanthecarryingamountoftheunit,theimpairmentloss isallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtotheunitandthentotheotherassetsoftheunitpro-rataonthebasisofthecarryingamountofeachassetintheunit.Animpairmentlossrecognisedforgoodwillisnotreversedinasubsequentperiod.

On disposal of a subsidiary or a jointly controlled entity, the amount of goodwillattributableisincludedinthedeterminationoftheprofitorlossondisposal.

d) Revenue Recognition Revenue ismeasuredat the fairvalueof theconsideration receivedor receivable

andrepresentsamountsreceivableforgoodsandservicesprovidedinthenormalcourseofbusiness,netofdiscounts.

Revenues from contracts priced on time and material basis are recognised whenservicesarerenderedandrelatedcostsareincurred.

Software Services Where theoutcomeofa turnkeycontractcanbeestimatedreliably, revenueand

costsarerecognisedbyreferencetothestageofcompletionofthecontractactivityatthebalancesheetdate,asmeasuredbytheproportionthatcontractcostsincurredforworkperformedtodatebeartotheestimatedtotalcontractcosts,exceptwherethiswouldnotberepresentativeofthestageofcompletion.

e) Foreign Currencies The individual financial statements of each group entity are presented in the

currency of the primary economic environment in which the entity operates (itsfunctionalcurrency).Forthepurposeoftheconsolidatedfinancialstatements,theresultsandfinancialpositionofeachentityareexpressedinCurrencyUnits,whichis the functionalcurrencyof theCompany,andthepresentationcurrency for theconsolidatedfinancialstatements.

In preparing the financial statements of the individual entities, transactions incurrencies other than the entity’s functional currency (foreign currencies) arerecorded at the rates of exchange prevailing on the dates of the transactions. Ateach balance sheet date, monetary items denominated in foreign currencies areretranslatedattheratesprevailingonthebalancesheetdate.Non-monetaryitemscarriedatfairvaluethataredenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthedatewhenthefairvaluewasdetermined.Non-monetaryitems that are measured in terms of historical cost in a foreign currency are notretranslated.

Exchange differences arising on the settlement of monetary items, and on theretranslation of monetary items, are included in profit or loss for the period.Exchangedifferencesarisingontheretranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptfordifferencesarisingon the retranslation of non-monetary items in respect of which gains and losses

Notes

89



are recognised directly in equity. For such non-monetary items, any exchangecomponentofthatgainorlossisalsorecogniseddirectlyinequity.

For the purpose of presenting consolidated financial statements, the assets andliabilitiesoftheGroup’sforeignoperations(includingcomparatives)areexpressedinCurrencyUnitsusingexchangeratesprevailingonthebalancesheetdate.Incomeandexpenseitems(includingcomparatives)aretranslatedattheclosingexchangeratesfortheyear.Exchangedifferencesarising,ifany,werenotsignificantduringtheyear.

Goodwillandfairvalueadjustmentsarisingontheacquisitionofaforeignoperationare treated as assets and liabilities of the foreign operation and translated at theclosingrate.

f) Retirement Benefits Shorttermemployeebenefitsaremeasureatcost.

Payments made to state-managed retirement benefit schemes are dealt with aspaymentstodefinedcontributionplanswheretheGroup’sobligationsundertheplansareequivalent to thosearising inadefinedcontributionretirementbenefitplan.

g) Taxation

i) Income Tax Incometaxexpenserepresentsthesumofthetaxcurrentlypayable. Thetaxcurrentlypayableisbasedontaxableprofitfortheyear.Taxableprofit

differs fromprofitasreported inthe incomestatementbecause itexcludesitemsofincomeorexpensethataretaxableordeductibleinotheryearsandit further excludes items that are never taxable or deductible. The Group’sliabilityforcurrenttaxiscalculatedusingtaxratesthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

ii) Deferred Tax Deferredtax is recognisedondifferencesbetweenthecarryingamountsof

assets and liabilities in the financial statements and the corresponding taxbasesusedincomputationoftaxableprofit,andisaccountedforusingthebalancesheetliabilitymethod.Deferredtaxliabilitiesaregenerallyrecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedtotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhich deductible temporary differences can be utilised. Such assets andliabilitiesarenotrecognisedifthetemporarydifferencearisesfromgoodwillorfromtheinitialrecognition(otherthaninabusinesscombination)ofotherassetsandliabilitiesinatransactionthataffectsneitherthetaxableprofitnortheaccountingprofit.

Deferredtaxliabilitiesarerecognisedfortaxabletemporarydifferencesarisingoninvestmentsinsubsidiariesandassociates,andinterestsinjointventures,except where the Group is able to control the reversal of the temporarydifferenceanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.

The carrying amount of deferred tax assets is reviewed at each balancesheet date and reduced to the extent that it is no longer probable thatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.

Deferredtax iscalculatedat thetax rates thatareexpectedtoapply in theperiodwhentheliabilityissettledortheassetrealised.Deferredtaxischarged

90

orcreditedtoprofitorloss,exceptwhenitrelatestoitemschargedorcrediteddirectlytoequity,inwhichcasethedeferredtaxisalsodealtwithinequity.

DeferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupintendstosettleitscurrenttaxassetsandliabilitiesonanetbasis.

h) Property, Plant and Equipment PlantandMachinery,Fixturesandequipmentarestatedatcarryingamounts less

accumulateddepreciationandanyaccumulatedimpairmentlosses.

Depreciationischargedsoastowriteoffthecostorvaluationofassets,otherthanlandandpropertiesunderconstruction,overtheirestimatedusefullives,usingthestraight-linemethod.

Thegainorlossarisingonthedisposalorretirementofanitemofproperty,plantandequipmentisdeterminedasthedifferencebetweenthesalesproceedsandthecarryingamountoftheassetandisrecognisedinprofitorloss.

i) Patents and Trademarks Therearenopatentsandtrademarksownedbythecompany

j) Impairment of Tangible and Intangible Assets Excluding Goodwill Ateachbalancesheetdate,theGroupreviewsthecarryingamountsofitstangible

andintangibleassetstodeterminewhetherthereisanyindicationthatthoseassetshave suffered an impairment loss. If any such indication exists, the recoverableamountoftheassetisestimatedinordertodeterminetheextentoftheimpairmentloss (if any). Where it is not possible to estimate the recoverable amount of anindividualasset,theGroupestimatestherecoverableamountofthecash-generatingunittowhichtheassetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value in use.Inassessingvalue inuse, theestimated futurecash flowsarediscounted to theirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,thecarryingamountoftheasset(cash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentlossisrecognisedimmediatelyinprofitorloss,unlesstherelevantassetiscarriedatarevaluedamount,inwhichcasetheimpairmentlossistreatedasarevaluationdecrease.

Where an impairment loss subsequently reverses, the carrying amount of theasset(cash-generatingunit) is increasedtotherevisedestimateofitsrecoverableamount,butsothatthe increasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedfortheasset(cash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognisedimmediatelyinprofitorloss,unlesstherelevantassetiscarriedatarevaluedamount,inwhichcasethereversaloftheimpairmentlossistreatedasarevaluationincrease.

k) Inventories Inventoriesarestatedatthelowerofcostandnetrealisablevalue.Costcomprises

directcostsandthoseoverheadsthathavebeenincurredinbringingtheinventoriestotheirpresentcondition.Netrealisablevaluerepresentstheestimatedrealisationlessallestimatedcostsofcompletionandcoststobeincurredinmarketing,sellinganddistribution.

Notes

91



l) Financial Instruments FinancialassetsandfinancialliabilitiesarerecognisedontheGroup’sbalancesheet

whentheGroupbecomesapartytothecontractualprovisionsoftheinstrument.

InvestmentsinMutualFundsarestatedatthelowerofthecostandfairvalue.

m) Trade Receivables Tradereceivablesaremeasuredatinitialrecognitionatcost.Appropriateallowances

forestimatedirrecoverableamountsarerecognisedinprofitorlosswhenthereisobjectiveevidencethattheassetisimpaired.

n) Cash and Cash Equivalents Cash and cash equivalents comprise of cash on hand and demand deposits and

othershort-termhighlyliquidinvestmentsthatarereadilyconvertibletoaknownamountofcashandaresubjecttoaninsignificantriskofchangesinvalue.

o) Financial Liabilities and Equity Financial liabilities and equity instruments issued by the Group are classified

accordingtothesubstanceofthecontractualarrangementsenteredintoandthedefinitions of a financial liability and an equity instrument. An equity instrumentis any contract that evidences a residual interest in the assets of the Group afterdeductingallofitsliabilities.Theaccountingpoliciesadoptedforspecificfinancialliabilitiesandequityinstrumentsaresetoutbelow.

p) Trade Payables Tradepayablesareinitiallymeasuredatfairvalue.

q) Equity Instruments EquityinstrumentsissuedbytheCompanyarerecordedattheproceedsreceived,

netofdirectissuecosts.

r) Provisions ProvisionsarerecognisedwhentheGrouphasapresentobligationasaresultofa

pastevent,anditisprobablethattheGroupwillberequiredtosettlethatobligation.Provisionsaremeasuredatthedirectors’bestestimateoftheexpenditurerequiredtosettletheobligationatthebalancesheetdate.

s) Share-Based Payments TheGrouphasnotissuedanyequity-settledandcash-settledshare-basedpayments

toanyemployee.

t) Critical Judgements in Applying the Entity’s Accounting Policies Intheprocessofapplyingtheentity’saccountingpolicies,whicharedescribedin

thenotes,managementhasmadethefollowingjudgementsthathavethemostsignificanteffectontheamountsrecognisedinthefinancialstatements(apartfromthoseinvolvingestimations,whicharedealtwithbelow).

u) Impairment of Goodwill Determining whether goodwill is impaired requires an estimation of the value in

useofthecash-generatingunitstowhichgoodwillhasbeenallocated.Thevalueinusecalculationrequirestheentitytoestimatethefuturecashflowsexpectedtoarisefromthecash-generatingunitandasuitablediscountrateinordertocalculatepresent value. The carrying amount of goodwill at the balance sheet date wasRs.32.28 Crores. No impairment has been recognised in view of estimated futurecashflowsfromtheactivitiestowhichthegoodwillhasbeenallocated.

92

4. BUSINESS AND GEOGRAPHICAL SEGMENTS

a) Business Segments AstheCompanyisdealingwithonlyonesegmentviz.InformationTechnologyand

InformationTechnologyenabledservicessegment, thesegment reportingasperAccountingStandard(AS–17“SegmentReporting”)isnotrequiredtobedisclosed.

b) Geographical Segments ThegroupsoperationsarelocatedinIndia,Singapore,Dubai,USAandMalaysia.

5. INCOME TAX EXPENSES DomesticIncometaxiscalculatedattheeffectiverateof33.99%ontheassessableprofitfor

theyear.Taxationforotherjurisdictionsiscalculatedattheratesprevailingintherelevantjurisdiction.

6. EARNINGS PER SHARE The calculation of the basic and diluted earnings per share from continuing operations

attributabletotheordinaryequityholdersoftheparententityisbasedonthefollowingdata

Earnings figures are calculated as follows:Year ended 31.03.2008

Rs.

Profitfortheyearattributabletoequityholdersoftheparent 847.65Lakhs

Numberofshares 2,92,38,890

Earningspersharebeforeextraordinaryitems 2.96

Earningspershareafterextraordinaryitems 2.90

7. SUBSIDIARIES DetailsoftheCompany’ssubsidiariesat31stMarch,2008areasfollows:

Name of the Subsidiary

Place of Incorporation & Operation

Place of Ownership &

InterestType of Business

PrecisionInfomatic(Madras)PvtLtd India 51% ComputerConsulting,hardwareandsoftware

Info-DriveSystemsSdnBhd. Malaysia 100% ComputerConsulting,hardwareandsoftware

Info-DriveSoftwareInc. USA 100% ComputerConsulting,hardwareandSoftware

Info–DriveSoftwarePteLtd. Singapore 100% ComputerConsulting,hardwareandSoftware

InfodriveSoftwareLLC Dubai 80% ComputerConsulting,hardwareandSoftware

Thedirectorsconsiderwiththecarryingamountoftradeandotherreceivablesapproximatetherefairvalue.Nointerestischargedontradereceivablestillthedateofrecovery.

Thedirectorsconsiderthatthecarryingamountoftradeandotherreceivablesapproximatestheirfairvalue.

Notes

93



a) Bank Balances and Cash Bank balances and cash comprise cash held by the Group and bank deposits.

Thecarryingamountoftheseassetsapproximatestheirfairvalue.

b) Credit Risk TheGroup’sprincipalfinancialassetsarebankbalancesandcash,tradeandother

receivables.

TheGroup’screditriskisprimarilyattributabletoitstradereceivables.Theamountspresented in the balance sheet are net of allowances for doubtful receivables.Anallowanceforimpairmentismadewherethereisanidentifiedlosseventwhich,basedonpreviousexperience,isevidenceofareductionintherecoverabilityofthecashflows.

TheGrouphasnosignificantconcentrationofcreditrisk,withexposurespreadoveralargenumberofcounterpartiesandcustomers.

8. TRADE AND OTHER PAYABLES Tradecreditorsandaccrualsprincipallycompriseamountsoutstandingfortradepurchases

andongoingcosts.

Thedirectorsconsiderthatthecarryingamountoftradepayablesapproximatestheirfairvalue.

9. CONTINGENT LIABILITIES Therearenocontingentliabilities.

10. SHARE-BASED PAYMENTS

a) Equity-Settled Share Option Scheme The Company does not have a share option scheme for any employees of the

Group.

11. RELATED PARTY TRANSACTIONS The transactions between the company and its wholly subsidiaries which are related

partiesofthecompanyhavebeeneliminatedonconsolidationandnotdisclosedinthisnote.Besidestheabovetherearenoothertradingtransactionswithrelatedparties.

12. RECLASSIFICATION OF ACCOUNTS Certainaccountsinthefinancialstatementsfortheyearended31stMarch,2007havebeen

reclassifiedtoconformtothepresentationinthefinancialstatementsfortheyearended31stMarch,2008.

13. APPROVAL OF FINANCIAL STATEMENTS ThepresentfinancialstatementsdrawninaccordancewithGenerallyAcceptedAccounting

Principles in Indiawereapprovedby theboardofdirectorsandauthorised for issueon8thAugust,2008.

Place :Chennai AsperourreportofevendateDate :08.08.08 forK.S.REDDYASSOCIATES CharteredAccountants Sd/- K. Subba Reddy (Proprietor) M.No.208754ForandonbehalfofInfo-DriveSoftwareLimited Sd/- Sd/- Sd/- Sd/- Sd/-K. Shivakumar N. T. Shiv Kumar V. N. Seshagiri Rao V. Gopal Rao ANL Madhavann


97



Affix1Rupee

RevenueStamp

INFO-DRIVE SOFTWARE LIMITEDRegd.Office:SecondFloor,BuhariBuilding,

No.3,MooresRoad,Chennai–600006.India.

PROXY FORM

RegdFolio : DPID* :

No.ofSharesHeld : ClientID :

I/We

Of

being a member(s) of Info-Drive Software Limited hereby appoint Mr./Ms. or

failing him/her of as my/our proxy

tovoteforme/usandonmy/ourbehalfattheTwentieth Annual General MeetingoftheCompanyon Tuesday, the

23rd September 2008oratanyadjournmentthereof.

Signedthis dayof 2008.

Signature (PleasesignacrosstheStamp)

Note: 1.TheProxyneednotbeamember. 2.TheProxymustbereturnedsoastoreachtheRegisteredOfficeoftheCompanynotlessthan48hoursbeforethecommencementoftheMeeting. 3.*ApplicableforInvestorsholdingsharesinelectronicform.

INFO-DRIVE SOFTWARE LIMITEDRegd.Office:SecondFloor,BuhariBuilding,

No.3,MooresRoad,Chennai–600006.India.

ATTENDANCE SLIP

RegdFolio : DPID* :

No.ofSharesHeld : ClientID :

Mr./Ms.:

I Certify that I am a registered shareholder/proxy for the registered shareholder of the Company. I hereby record my

presenceattheTwentieth Annual General MeetingoftheCompanyheldat‘TheKasthuriSrinivasanMiniHall’,The Music

Academy,NewNo.168,TTKRoad,Chennai–600014,at 10.30 a.m. on Tuesday, the 23rd September 2008.

Member’s/Proxy’sName(InBLOCKletters) Member’s/Proxy’sSignature

Note:PleasecompletethisattendanceslipandhandoverthesameattheentranceoftheMeetingHall.

98

Notes

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