it people (india) ltd. 7 annual report 2006-2007 reports... · the company would gain immensely...

CORPORATE INFORMATION

BOARD OF DIRECTORSMr. Ketan Sheth Chairman & Managing DirectorMr. Adi Cooper Vice Chairman & Executive DirectorMr. Hemant Sonawala DirectorMr. H. R. Shah Director Mr. Kishore Hegde Director

COMPANY SECRETARYMr. C. R. Bhagwat

AUDITORSM/s. Gadgil & Co., Chartered Accountants, Mumbai

BANKERSICICI Bank Ltd.Abu Dhabi Commercial Bank Ltd.

REGISTERED OFFICE REGISTRARS AND TRANSFER AGENT‘IT People House’ Mondkar Computers Private LimitedA. K. Industrial Estate, 21, Shakil Niwas, Opp. Satya Saibaba Temple,Veer Savarkar Flyover, Mahakali Caves Road, Andheri (East),S. V. Road, Goregaon (West), Mumbai - 400 093Mumbai - 400 062. Tel. : +91-22-2825 7641/ 2836 6620Tel : +91-22-2878 6600 Fax : +91-22-2820 7207Fax : +91-22-2878 6601 E-mail : [email protected]: www.itpeopleltd.in

CONTENTS Pg.

Notice 3Directors' Report 6Management Discussion & Analysis 12Report on Corporate Governance 14Auditors Certificate on Corporate Governance 23Auditors' Report 24Balance Sheet 28Profit & Loss Account 29Schedules 30Cash Flow Statement 41Balance Sheet Abstract 42Attendance Slip and Proxy Form 43

1

IT People (India) Ltd. th 7 Annual Report 2006-2007

32

NOTICE

Notice is hereby given that the Seventh Annual General Meeting of the Members of IT People

(India) Limited will be held at EVENT BANQUET, Opposite Central Bank, Near Filmistan Studio, stS. V. Road, Goregaon (West), Mumbai - 400062, on Friday, the 21 day of September, 2007 at

10.00 a.m., to transact the following business: -

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet of the Company as on st31 March, 2007 and the Profit & Loss Account for the year ended on that date and the

Directors' and Auditors' Report thereon.

2. To appoint a Director in place of Mr. Kishore Hegde, who retires by rotation and being

eligible, offers himself for re-appointment.

3. To appoint Auditors to hold office from the conclusion of this Annual General Meeting till the

conclusion of the next Annual General Meeting and to fix their remuneration.

SPECIAL BUSINESS:

4. To consider and if thought fit, to pass, with or without modification, the following resolution

as an ordinary resolution:

“RESOLVED THAT Mr. Hemant Sonawala, who was appointed as an additional director of

the Company by the Board of Directors on October 12, 2006 and who holds office up to the

date of this ensuing Annual General Meeting of the Company in accordance with the

Section 260 of the Companies Act, 1956 and in respect of whom, the Company has

received a notice from a member under Section 257 of the said Act, proposing his

candidature for the office of Director, be and is hereby appointed as a Director of the

Company, liable to retire by rotation.”

By Order of the Board

For IT People (India) Limited

C. R. Bhagwat

Company Secretary

REGISTERED OFFICE:

‘IT People House’,

A.K. Industrial Estate, Veer Savarkar Flyover,

S. V. Road, Goregaon (West), Mumbai - 400 062

Place : Mumbai thDate : 25 July, 2007.


IT People (India) Ltd.

54

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO

ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A

MEMBER. However, instruments of the proxies in order to be effective must be deposited at

the Company's Registered Office at A.K. Industrial Estate, Veer Savarkar Flyover,

S.V. Road, Goregaon (West), Mumbai - 400 062 not less than forty-eight hours before

commencement of the meeting. A blank proxy form is annexed to this report.

2. Members/ Proxies are requested to bring their Attendance Slip duly filled in along with their

copy of Annual Report to the Meeting.

3. Corporate Members intending to send their authorized representatives to attend the meeting

are requested to send a certified copy of the Board Resolution authorizing their

representative to attend and vote on their behalf at the Meeting.

4. The Relative Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956

in respect of special business as set out in item No. 4 above is annexed hereto.

5. The Register of Members and Share Transfer Books of the Company will remain closed th stfrom the Wednesday, 19 September, 2007 to Friday, 21 September, 2007 (both days

inclusive).

6. Members are requested to address all the documents, transfer deeds, demat requests, and

other communications with respect to shares in physical mode to the Registrar & Share

Transfer Agent of the Company, M/s. Mondkar Computers Private Limited, directly quoting

their full name, Folio No. and Name of the Company.

7. Members are requested to advise immediately about any change of address:

a) To their Depository Participants (DPs) in respect of their electronic share accounts

b) To the Company's Registrar & Share Transfer Agent, M/s. Mondkar Computers Private

Limited in respect of their physical share folios, if any.

Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956:

Item No. 4

Mr. Hemant Sonawala was appointed as an Additional Director of the Company at the meeting

of the Board of Directors held on October 12, 2006, pursuant to Article 120 of the Articles of

Association of the Company. In terms of the provision of Section 260 and other applicable

provisions of the Companies Act, 1956, the Additional Director would hold office up to the date

of the ensuing Annual General Meeting and is eligible for appointment. The Company has

received notice under Section 257 of the Companies Act, 1956 along with a deposit of Rs. 500/-

from a member of the Company proposing his candidature for the office of Director.

The Company would gain immensely from the knowledge and experience of Mr. Hemant

Sonawala. A brief resume of Mr. Hemant Sonawala, nature of his expertise in specific functional

areas and names of companies in which he holds directorship and membership/ chairmanship

of Board Committees, as stipulated under clause 49 of the Listing Agreement with the Stock

Exchange, Mumbai is provided in the Report on Corporate Governance forming part of the

Annual Report.

Mr. Hemant Sonawala may be deemed to be concerned or interested in the resolution as it

relates to his own appointment.

The Board commends the Resolution set out at Item No. 4 of the Notice for your approval.

By Order of the Board

For IT People (India) Limited

C. R. Bhagwat

Company Secretary

REGISTERED OFFICE:

‘IT People House’,

A.K. Industrial Estate, Veer Savarkar Flyover,

S. V. Road, Goregaon (West),

Mumbai - 400 062


th 7 Annual Report 2006-2007

76

DIRECTORS' REPORT

Dear Members,

Your Directors have pleasure in presenting the Seventh Annual Report of your Company along stwith the Profit and Loss Account for the year ended on 31 March, 2007 and the Balance Sheet

as on that date and Auditors' Report thereon.

Financial Highlights

The highlights of your Company's financial results for the period April 1, 2006 and March 31,

2007 are as follows:

Operations

During the financial year 2006-07, your Company earned total revenue of Rs. 1,751.64 lakhs

compared with Rs.1108.76 Lakhs during the previous financial year 2005-06, registered a stgrowth of 58%. Operating Profit for the financial year ended 31 March, 2007 stood at Rs.

322.26 Lakhs as against Rs. 129.71 Lakhs in the previous year, which has been increased by

148%. The Company achieved net profit of Rs. 308.01 lakhs in the current year as against Rs.

51.96 Lakhs in the previous year, and registered a substantial growth in net profit by 493% for stthe year ended 31 March, 2007.

Dividend

To conserve the resources for future expansion of business, your Directors do not recommend

any divided on equity shares for the financial year under review.

(Rs. In Lakhs)

Particulars Financial Year ended Financial Year endedMarch 31, 2007 March 31, 2006

Income from operations 1751.64 1108.76

Less : operating Expenses 1429.38 979.05

Operating Profit 322.26 129.71

Less : Financial Expenses 30.41 23.67

Less : Depreciation / Deferred Revenue 86.73 50.51

Expenses

Profit Before Tax 205.12 55.53

Provision For Tax / Deferred Tax (113.08) 3.57

Provision / Earlier Year Expenses W/off 10.19

Profit/(Loss) after Tax 308.01 51.96

Profit/(Loss) brought forward from previous year (519.82) (571.79)

Balance carried to Balance Sheet (211.81) (519.82)

Business Outlook

The Company provides Human capital Solutions focusing on the global Information Technology

(IT) and ITES segment. The Company addresses vital requirements of the IT industry by

providing recruitment services to all segments with growth potential. The Company's website

www.itpeople.in is an IT focused job portal with unique search capabilities and a preferred jobs

website for IT professionals in India. The Company spent significant portion of its total income in

Fiscal 2006 on advertising and brand building and will continue to focus on building of its brand.

The Company plans to capitalize on its existing brand equity and the fast changing dynamics of

the IT Sector. The Company looks forward for technical feature and functional enhancement of

the product delivery system by adding newer feature and keeping updated with the on going

enhancement in the newer technology.

Further Public Issue of Equity Shares

The Company is proposing, subject to market conditions and other considerations, a further

public issue of equity shares aggregating to Rs. 4525 lacs through 100% book building process.

The Company has entered into a Memorandum of Understanding with the Managers to the

issue, viz - M/s. Khandwala Securities Limited & Religare Securities Limited. The Company has

also received in-principle approval from Bombay Stock Exchange Limited (BSE) vide letter

dated March 20, 2007 and the observations of Securities and Exchange Board of India (SEBI)

vide letter Ref. CFD/DIL/ PB/AC/98255/2007, dated July 9, 2007 in respect of the Draft Red thHerring Prospectus (DRHP) filed with SEBI and BSE on 14 February 2007. The Company has

also filed Red Herring Prospectus (RHP) with SEBI and Registrar of Companies (ROC),

Maharashtra, Mumbai.

Change in the terms & conditions of 5% Redeemable Optionally Convertible

Bonds

The Company has issued 7, 50,000 5% Redeemable Optionally Convertible Bonds (ROCB) to

IT People Private Limited by private placement pursuant to the authority given to the Board by

the Company at the Extra-Ordinary General Meeting of the shareholders of the Company held thon the 10 February, 2006 and subsequent to the resolution passed by the Board at its meeting

thheld on the 24 February, 2006.Thereafter IT People Private Limited requested the Company to

convert the said Bonds from 5% Redeemable Optionally Convertible Bonds to 5% Redeemable

Bonds vide its letter, dated. 30/09/2006. Accordingly, the Board has converted the Bonds from

5% Redeemable Optionally Convertible Bonds to 5% Redeemable Bonds, vide resolution th rdpassed on 12 October, 2006. The Bonds were repayable on 23 February, 2007 but the

Bondholder has confirmed and undertaken to extend the period of repayment for one more year stand the same now shall be re-payable on or before 31 March, 2008.

Withdrawal of Employees Stock Option Plan (ESOP) 2005

Your directors have withdrawn the Employees Stock Option Plan (ESOP) 2005, vide resolution


98

thpassed on 27 October, 2006 pursuant to the recommendations made by the ESOP Committee

and the sanctions so granted to the employees of the Company.

Listing

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai. The

Company has paid the Annual Listing Fees to the Stock Exchange for the year 2007-2008.

Director's Responsibility Statement

Your directors confirm the Directors' Responsibility Statement pursuant to Section 217 (2AA) of

the Companies Act, 1956, as under that:

sti. in preparation of the accounts for the financial year ended 31 March, 2007, the applicable

accounting standards have been followed along with proper explanation relating to material

departures;

ii. the Directors have selected such accounting policies and applied them consistently and

made judgments and estimates that were reasonable and prudent so as to give a true and

fair view of the state of affairs of the company at the end of the financial year and of the

profit of the Company for the year under review;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate

accounting records in accordance with the provisions of the Companies Act, 1956 for

safeguarding the assets of the Company and for preventing and detecting fraud and other

irregularities;

stiv. the Directors have prepared the accounts for the financial year ended 31 March, 2007 on a

'going concern' basis.

Cash Flow Statement

The cash flow statement for the year 2006 2007 is attached to the Balance Sheet.

Directors

Mr. Hemant Sonawala and Mr. M. R. Mondkar were appointed as Additional Directors of the thCompany pursuant to Section 260 of the Companies Act, 1956 with effect from 12 October

nd2006. However, Mr. M. R. Mondkar resigned from directorship w.e.f. 22 January, 2007 and from

the same date he was appointed as an Advisor to the Company. Your Directors wish to place on

record its appreciation of the valuable service and guidance given by Mr. M. R. Mondkar during

the tenure of his Directorship with the Company.

Mr. Hemant Sonawala would hold office of directorship up to the date of ensuing Annual General

Meeting and is eligible for appointment as Director. Mr. Kishore Hegde retires by rotation and

being eligible, offers himself for re-appointment in the ensuing Annual General Meeting.

Dematerialization of Shares

The shares of the Company are admitted with National Securities Depository Limited (NSDL)

and Central Depository Services Limited (CDSL). Accordingly the Shares of your Company are

available for dematerialization and can be traded in Demat mode.

Fixed Deposits

The Company has not accepted any Fixed Deposits under Section 58A of the Companies Act,

1956 during the year under review.

Employee Relations

Employee relations during the year at all levels of the organization were satisfactory. The Board

wishes to place on record its sincere appreciation of the devoted efforts put in by all the

Company's employees for achieving good results under challenging conditions.

Particulars of Employee

As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the

Companies (Particulars of Employees) Rules, 1975, as amended, the name and other

particulars of the employees drawing remuneration of Rs. 24 lacs per annum or Rs. 2 lacs per

month as the case may be is set out in the Annexure I to the Directors' Report.

Auditors/ Auditors' Report

M/s. Gadgil & Co., Chartered Accountants, the Auditors of the company would retire at the

ensuing Annual General Meeting and being eligible offer themselves for reappointment.

The observations made by the Auditors in their report and the notes on accounts referred to in

the Auditors' Report are self-explanatory and therefore do not call for any further comments.

Conservation of Energy

The activities of your Company require minimal energy consumption and every endeavor has

been made to ensure the optimal use of energy, avoid wastage and conserve energy as far as

possible.

Foreign Exchange Earnings and Outgo

The details of Foreign Exchange Earnings and Outgo are detailed in Schedule 13 Notes

forming a part of the Accounts.

Corporate Governance

The Company is taking adequate steps to ensure that the entire mandatory provisions of

Corporate Governance, as prescribed under the listing agreement with the Stock Exchange, are

complied with.


1110

Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with

the Stock Exchange in India forms part of the Annual Report.

A certificate from the Auditors of the Company, M/s. Gadgil & Co., Chartered Accountants,

confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid

clause 49, is annexed to this Report.

Management Discussion & Analysis

Management Discussion and Analysis Report for the year under review, as stipulated under

clause 49 of the listing Agreement with Stock Exchange in India, is presented as Annexure II to

the Directors Report.

Acknowledgments

Your directors take this opportunity to thank all the shareholders of the Company, the Bankers,

Registrars and Transfer Agents, Auditors, Customers, Vendors and executives of the respective

agencies, for their continued support during the year.

Your Directors place on record their appreciation of all the employees and consultants of the

company for their untiring personal efforts as well as their collective contribution to the

Company's significantly improved performance during the year.

For and on behalf of the Board

Ketan ShethChairman & Managing Director


ANNEXURE I

STATEMENT PURSUANT TO SECTION 217(2A) OF THE COMPNIES ACT, 1956 AND THE

COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975.

Personnel who are in receipt of remuneration aggregating not less than Rs.24,00,000 per

annum and employed throughout the year or Rs. 2,00,000 per month and employed for part of

the year

Notes:

1. The gross remuneration comprises salary, allowances and perquisites as applicable

prevailing rules of the Company.

2. The above does not include gratuity and leave encashment.

3. None of the above employees are related to any Directors of the Company

Sr. Name Age Designation Qualification Remuner- Experience Date of LastNo. (Yrs) ation (Yrs.) Commenc- Emplo-

F. Y. Ement yment06-07 (Rs)

st1. Adi Cooper 64 Vice B.Tech 30,00,000 40 1 Sept, 05 DLCChairman& ExecutiveDirector


1312

ANNEXURE II

Management Discussion and Analysis

Industry Structure and developments

A strong economic growth triggers a rise in employment and in increase in recruitment, directly linked to fortunes of online recruitment. The Indian Gross Domestic Product (GDP) has grown at a healthy rate of 6% over the period 2000-06 and Central Statistical Organization (CSO) estimates the GDP to grow at 7% Compounded Annualized Growth Rate (CAGR) for next 5 years.

According to National Association of Software and Service Companies (NASSCOM) estimates IT & ITES sector is expected to grow at 23.1% over 2005-2008 period. Growth of the online recruitment industry is very closely linked to the overall recruitment market, which in turn is dependant on the overall economic growth. Liberalization of India's economy and its rapid growth over the past decade has served as an important catalyst for the development of the human resource service industry. India's GDP increased at a compound annual rate of about 6% from 2000 to 2006. According to the CSO, India's GDP is expected to achieve approximately 7% compound annual growth rate over the next 5 years. Further, liberalization of the Indian economy and the gradual dismantling of the restrictions on business have led to an increase in the competitive intensity in industries to the need for improved human resource recruitment processes and management. Another factor which is expected to lead to a hiring requirement is a shortage of skilled manpower in industries across all sectors of the Indian Economy.

The growing services sector also helps the recruitment services provide in another way. The services sectors of the economy and, therefore, an increasing share of the service sector in the GDP is a positive for the online recruitment industry.

As MNC establish them in India, domestic companies are working hard to gain a competitive advantage to sustain their position. Human Resource is a critical factor providing the companies with an edge. This, along with the shortage of skilled human Resources has led to the rise in the importance of hiring requirement.

According to NASSCOM, the industries are expected to succeed USD 36 billion in Revenue in FY 2006. With less than 10% of the current addressable offshore market captured till date, there is ample headroom for the growth of the Indian IT /ITES industry. The IT/ITES sector accounts for a major share of the revenues of online recruitment industry and has witnessed a very rapid growth since its inception.

The offshore penetration of both IT and ITES-BPO services estimated at about 10%. With offshore adoption rising rapidly, demand for these services is expected to continue on its high growth trajectory. The NASSCOM McKinsey report, 2005, outlines a target of US$60 billion in exports to the Indian industry by 2009-10 representing an increased need for the recruitment services. If the Indian offshore operations are to maintain their cost advantage, e-recruitment offers the best possible solution.

Opportunities and Threats

Opportunities :

• Geographical advantage of India as the largest talented, competitive IT resource base.

• High growth industry and large portion of the other market is untapped and uncovered.

Threats:

• Significant competition from Indian and Foreign companies operating in the similar segment.

• Changes in laws regarding the use of internet can adversely affect the business operation.

Outlook

The Global IT industry is expected to grow at a CAGR of 7% for next 3 years. The offshore spending of the IT industry itself is expected to grow at CAGR more than 15%. The ITES/BPO is expected to grow at a much higher rate. The product engineering space appears to have a very large CAGR, but it is on a very small base. The ITES/BPO is expected to give rise to maximum off shoring opportunities in the near future.

Risk and Concerns

Appreciating rupee against the dollar and rising wage bill may affect the Company's bottom line. Besides increasing the client base, the Company needs to retain its current clients by providing timely quality services. The Company must also look for emerging business opportunity in the growing demand for IT professionals.

Internal control systems and their adequacy

The Company has in placed the internal control systems and procedures commensurate with the size and nature of its business. These procedures are designed to ensure that:

(a) All assets and resources are used efficiently and are adequately protected.

(b) All internal policies and statutory guidelines are complied with.

(c) There is accuracy and timing of financial reports and management information.

Audit Committee has been entrusted with detailed terms of reference to review and look into proper recording of transactions and preparation of financial statement. One of the important functions of the Audit Committee is to review the adequacy of internal control systems and compliance thereof.

Human Resource Development

The Company's progress is largely attributed to the wholehearted support from its manpower. The technical team were constantly challenged for quality performance and expected to work

stwith an entrepreneurial spirit on the project. The total number of employees as at 31 March, 2007 was 217.

For and on behalf of the Board of Directors

Ketan ShethChairman & Managing DirectorPlace : Mumbai

thDated : 25 July, 2007


1514

Name Category No. of Board Directorship Chairmanship/ Attendance

Meetings in other Membership in at theAttended companies committee of last AGM

Board of other heldCompanies

Mr. Ketan sheth Executive Chairman 6 6 2 Yes& Managing Director

Mr. Adi Cooper Vice Chairman & 6 2 Nil YesExecutive Director

Mr. Kishore Independent & Non- 6 1 2 YesHegde Executive Director

Mr. H. R. Shah Independent & Non- 0 1 1 NoExecutive Director

Mr. M. R. Independent & Non 1 2 1 N. A.Mondkar Executive Director(appointed w.e.f.12.10.06resigned on 22.01.07)

Mr. Hemant Independent & Non 3 11 1 N. A.Sonawala Executive Director(appointed w.e.f. 12.10.06)

REPORT ON CORPORATE GOVERNANCE

Your Board of Directors present the Corporate Governance Report for the year 2006-2007

based on the disclosure requirements under Clause 49 of the Listing Agreement existing as of

31st March, 2007.

1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

The Company believes in high degree of transparency and accountability in its business

operations and business practices and continues to adopt all measures to increase its level. The

Company respects the rights of all its stakeholders to information on the performance of the

Company. The Company is committed to maintain high standard of corporate governance

towards its shareholders, Government, clients, employees and society.

2. BOARD OF DIRECTORS

The Board is constituted in conformity with clause 49 of the listing Agreement with not less than

50% of the Board comprising of non-executive Directors and one third of the Board being

independent.

* The detailed Composition of the Board and other related information is as given below:

* This table does not include directorship/ membership/ chairmanship in foreign companies.

Number of Board Meeting held and dates of Board Meeting

During the financial year 2006-2007, the Board of Directors met 6 times. The time gap between

any two meetings was less than 120 days.

Brief resumes of the Directors proposed to be appointed/ re-appointed at the ensuing

Annual General Meeting are as under:

(I) Mr. Kishore Hegde, aged 36 years, is B.Com and Chartered Accountant and has more than

6 years experience in finance, accounts & taxation. He holds directorship positions in Orient

Information Technology Limited.

(II) Mr. Hemant Sonawala, aged 70 years, is B.E.from Sardar Vallabh Vidyapeeth, Vidyanagar,

Gujarat and M.S.E.E. from University of Washington. He is founder & chairman of Hinditron

Group of Companies. He has received various awards such as UDGOG RATTAN AWARD

by the Institute of Economic Studies, IEEE Millennium Medal, IEEE Bombay Section Silver

Jubilee Medallion, 'Kentucky Colonel' by the Governor of the Commonwealth. The Mayor of

the City of Baltimore has conferred upon him as the “Honorary Citizen of Baltimore City”.

The Governor and the Secretary of the State of Nebraska has conferred upon him as the

“Honorary Citizen of the Great State of Nebraska”, The Secretary of the State of

Washington has conferred upon him the “Honorary Citizenship of the State of Washington”

and Life Time Achievement Award, 2005 for IT awarded by Dataquest /Cyber media. He

holds directorship position in (1) Hinditron Service (P) Ltd., (2) Hinditron infosystems (P) Ltd.,

(3) Hinditron Cray super Computers (I) Private Ltd., (4) Parabola Technologies Ltd., (5)

Hemant Sonawala Holdings (P) Ltd, (6) Shantilal Sonawala Holdings (P) Ltd., (7) Spryance

(I) Private Ltd., (8) Exevo India Ltd., (9) Exevo Inc (10) Net Across Holdings & Investments

(P) Ltd. and (11) Transtech Services Partners, Inc.

3. AUDIT COMMITTEEstThe Audit Committee of the Company for the financial year ended 31 March, 2007 has been re-

constituted with three non-executive Directors. Composition of audit committee, meetings held stand attended during the financial year ended 31 March, 2007 were as follows:

thMr. C. R. Bhagwat acted as secretary of the audit committee w. e. f. 4 September, 2006

22.05.2006. 27.10.2006. 31.07.2006. 25.01.2007 12.10.2006. 31.01.2007.

Members Designation Meetings held Meetings attended

Mr. Kishore Hegde Chairman 4 4 Mr. Adi Cooper Member 4 4 Mr. H. R. Shah Member 4 Nil


1716

The major terms of reference includes: -

!Overseeing the Company's financial reporting process and the disclosure of its financial

information to ensure that the financial statements are correct, sufficient and credible;

!Recommending the appointment and removal of external auditors, fixation of audit fees and

also approval for payment for any other service;

!Reviewing with management the annual financial statements before submission to the Board.stThe following four meetings of the Committee were held during the year ended 31 March, 2007.

4. REMUNERATION COMMITTEEThe Remuneration Committee of the Company was constituted on June 28, 2005 with three

non-executive Directors to determine the Company's Policy on remuneration for

Directors/Managerial Remuneration. The Remuneration Committee has been reconstituted on th25 January, 2007 and consists of the following three members for the financial year 2006-07.

stThere was no committee meeting held during the financial year ended 31 March, 2007

i. Non Executive Directors

The Non-Executive Directors were paid sitting fees @ Rs. 5000/- for attending Board/Committee stMeeting. Payment of Non-Executive Directors for the year ended 31 March, 2007.

ii Executive Directors

Details of remunerations paid/payable to executive directors for the financial year ended st31 March, 2007.

Members Designation Mr. Kishore Hegde Chairman Mr. Hemant Sonawala Member Mr. H. R. Shah Member

Sr. No. Members Designation Sitting Fees (Rs.)

1 Mr. Kishore Hegde Director 70,000

2. Mr. Hemant Sonawala Director 15,000

3. Mr. M. R. Mondkar Director 15,000

Total 1,00,000

Sr. No. Members Designation Remuneration (Rs.)

1 Mr. Ketan Sheth Chairman & Managing Director Nil

2. Mr. Adi Cooper Vice Chairman & Executive 30,00,000Director

5. INVESTOR GRIEVANCE/RELATIONS COMMITTEE

rdThe Company constituted the Investor Grievance/ Relation Committee on 23 December, 2004

with three non-executive Directors. The Investor Grievance Committee has been reconstituted thon 12 October, 2006. The Details of composition of the Investor Grievance Committee,

stmeetings held and attended by the members for the financial year ended 31 March, 2007 were

as follows:

Composition of Meetings and attendance during the year:

th* Mr. C. R. Bhagwat has been appointed as Company Secretary w.e.f. 12 October, 2006

stThe following four meetings of the Committee were held during the year ended 31 March, 2006.

stQueries/Request received during the year ended 31 March, 2007

stOutstanding Complaints as on 31 March, 2007 were Nil.

6. ESOP COMMITTEE

ESOP Committee was duly constituted for the purpose of determining stock option grants to employees and directors of your company on 14th March, 2005. The composition was reconstituted on December 31, 2005 and March 31, 2006. The Composition, name of members

stand the Chairperson as on financial year ended 31 March, 2007 comprises of the following non-executive directors, the majority of whom are independent:

th stOne meeting, on 27 October, 2006, was held during the year ended 31 March, 2007

22.05.2006. 12.10.2006. 31.07.2006. 31.01.2007

Members Designation Meetings held Meetings attended Mr. Kishore Hegde

Chairman 4 4

Mr. Adi Cooper

Member

4

4 *Mr. C. R. Bhagwat

Secretary

4

2

22.05.2006. 12.10.2006. 31.07.2006. 31.01.2007

Nature of Queries/Request Received Cleared Non receipt of share certificates Nil Nil Non receipt of annual reports 1 1 Non receipt of fully paid stickers Nil Nil TOTAL

1 1

Members Designation Meeting held

Meeting Attended

Mr. Kishore Hegde Member 1 1 Mr. Adi Cooper Chairman 1 1 Mr. H.R.Shah Member 1 Nil


1918

7. DATE, VENUE AND TIME FOR THE LAST THREE ANNUAL GENERAL MEETINGS

At the last Annual General Meeting, there was no item on the agenda that needed approval by postal ballot.

8. DISCLOSURES

ã Disclosure on materially significant related party transactions, i.e. transaction of the

Company of materially nature with its promoters, Directors, relatives, subsidiary is that may

have potential conflict wit the interest of the Company at large.

Ans: The related party transactions have been given under 'Notes to the accounts' in the stSchedule 13 to the Balance Sheet as on 31 March, 2007 and there is no materially

significant transaction of such nature having potential conflict with the interest of the

Company.

ã Details of non compliance by the Company i.e. penalties and strictures imposed on the

Company by Stock Exchange or SEBI or any statutory Authority related to Capital Market

during last 3 years.

Ans: None

ã The Company has complied with all mandatory requirement as stated in clause 49 of Listing

Agreement and the non-mandatory requirement have been complied with to the extent

feasible

9. MEANS OF COMMUNICATION

The quarterly, un-audited financial results were generally published in Free Press Journal, the

English newspaper and in Navshakti, a regional language newspaper. These were not sent

individually to the shareholders.

The complete quarterly un-audited financial statements, press release and presentations made

to institution or analyst, if any, were posted on the company's web site at www.itpeopleltd.in.

The Management Discussions and Analysis Report forms part of this Annual Report

10.GENERAL SHAREHOLDER INFORMATION

i. The Financial Calendar for F. Y. 2007-2008

Audited Financial Results for the First Quarter Result

Unaudited Financial Results for the Second Quarter Result On or before 31st October,2007

Unaudited Financial Results for the Third Quarter Result On or before 31st January,2008

Unaudited Financial Results for the Forth Quarter Result OR On or before 30th April Audited Annual Result 2008 or 30th June, 2008

(Audited)

On or before 31st July, 2007

stii. Date, Time, Venue of AGM : Friday, 21 September, 2007, 10.00 A.M., Event Banquet, Opposite Central Bank, Near Filmistan Studio, S.V.Road,

Goregaon (West), Mumbai: 400062

thiii. Date of Book Closure : Wednesday, 19 September, 2007 to Friday, 21st September,

2007 (both days inclusive)

iv. The Shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai

v. Scrip Code:532342, ISIN code with NSDL and CDSL: INE354B01029

vi. Stock Market Data

Monthly high & low of the closing price at BSE during financial year 2006-2007:

Source:

BSE Website www.bseindia.com

Month and YearShare Price of


High Low(Rs.) (Rs.)

April, 2006 27.75 18.75

May, 2006 21.80 13.25

June, 2006 12.85 9.26

July, 2006 10.74 6.25

August, 2006 10.84 7.30

September, 2006 16.85 9.00

Month and YearShare Price of


High Low(Rs.) (Rs.)

October, 2006 13.65 10.75

November, 2006 20.70 12.32

December, 2006 24.50 18.70

January, 2007 32.20 22.15

February, 2007 39.55 25.05

March, 2007 28.70 21.20

Date Venue Time 27/09/2006 Event banquet, Opp. Central Bank, S. V.

Road, Goregaon (West), Mumbai 400 062 10.00 A.M

23/09/2005 Event banquet, Opp. Central Bank, S. V.

Road, Goregaon (West), Mumbai 400 062 10.00 A.M

30/09/2004 Event banquet, Opp. Central Bank, S. V.

Road, Goregaon (West), Mumbai 400 062 9.00 A.M.


2120

vii. Registrar and Share Transfer Agent :

MONDKAR COMPUTERS PVT. LTD.21, Shakil Niwas, Opp. Satya Saibaba Temple, Mahakali Caves Road, Andheri (East),

Mumbai 400 093.

viii. As on March 31, 2007, 5,26,26,080 equity shares representing 98.78% of the paid up

share capital of the Company have been dematerialized. The shares of the Company are

frequently traded.

ix Share Transfer System : The power to approve the transfer of shares has been delegated

by the Board to the share transfer agent. Share transfer requests are processed within an

average of 15 days from the date of receipt.

x The Company has not issued GDRs/ADRs. There are no outstanding warrants or any

convertible instruments.

xi Distribution Schedule:

stThe distribution of shareholding as on 31 March, 2007, was as follows:

xii Categories of Shareholders as on 31st March, 2007, were as follows :

Range

% to totalshareholders No. of Shares

1-500 1126 46.59 276338 0.52

501-1000 469 19.40 431585 0.81

1001-2000 258 10.67 396796 0.74

2001-3000 176 7.28 452796 0.85

3001-4000 42 1.74 150842 0.28

4001-5000 123 5.09 599701 1.13

5001-10000 87 3.60 639110 1.2

10001 – Above 136 5.63 50330332 94.47

Total 2417 100.00 53277500 100.00

No. of shareholders

% to totalshares

Category No. of shares held Percentage to total share capital

Promoters 3,36,53,060 63.17

Corporate Bodies 87,48,166 16.42

Flls/NRI/OCBs 40,10,492 7.53

Indian Public 68,20,404 12.80

Any other 45,378 0.08

Total 5,32,77,500 100.00

xiii Business Location and Address for correspondence : IT People (India) Limited, IT People House, A. K. Industrial Estate, Veer Savarkar Flyover, S.V. Road,

Goregaon (West), Mumbai 400 062. Tel. : 022-28786600, Fax : 022-2878 6601

Website: www.itpeopleltd.in

CERTIFICATE UNDER CORPORATE GOVERNANCE REPORT:

A. ANNUAL DECLARATION BY MANAGING DIRECTOR PURSUANT TO CLAUSE 49

(I)(D)(ii) OF THE LISTING AGREEMENT

This is to certify that as per Clause 49 of the Listing Agreement

1. The code of conduct has been laid down for all the Board Members and Senior

Management and the employees of the Company.

2. The code conduct has been passed on the website of the Company.

3. The Board members and Senior Management Personnel have affirmed the compliance with

the Company's code of conduct for the year 2006-07.


Ketan ShethChairman & Managing Director

Place : MumbaithDated : 25 July, 2007


2322

B. CERTIFICATE BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL

OFFICER ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE

GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT

To,The Board of DirectorsIT People (India) Limted.IT People House,A.K. Industrial Estate, Veer Savarkar Flyover, S. V. Road, Goregaon (West), Mumbai 400 062

We hereby certify that for the financial year 2006-07

a. We have reviewed financial statements and cash flow statements for the year end and that

to the best of our knowledge and belief :

i. These statements do not contain any materially untrue statement or omit any material fact

or contain statements that might be misleading

ii. These statements together present a true and fair view of the Company's affair and are in

compliance with existing accounting standards, applicable laws and regulations.

b. These are, to the best of our knowledge and belief, no transaction entered into by the

Company during the year which are fraudulent, illegal or violative of the Company's code of

conduct.

c. We accept the responsibility for establishing and maintaining internal control and that we

have evaluated the effectiveness of the internal control systems of the Company and we

have disclosed to the auditors and the Audit Committee, the deficiencies in the design or

operation of internal controls, if any, of which we are aware and the steps we have taken or

propose to take to rectify these deficiencies.

d. We have to state that:

i. There were no significant changes in the internal control during the year;

ii. There were no significant changes in accounting policies during the year and

iii. There were no instances of significant fraud or involvement therein of the management or

an employee having a significant role in the Company's internal control system.


Place : Mumbai Ketan Sheth Prakash MistrythDated : 25 July, 2007 Chairman & Managing Director Chief Financial Officer

AUDITORS CERTIFICATE ON COMPLIANCE WITH THE MANDATORY CONDITIONS AS

PER CLAUSE 49 OF THE LISTING AGREEMENT

To,

The Members of IT People (India) Ltd

Mumbai

We have examined the compliance of conditions of corporate governance by IT People (India)

Limited for the year ended on March 31, 2007 as stipulated in Clause 49 of the Listing

Agreement of the Company with the Stock Exchanges. The Compliance of conditions of

corporate governance is the responsibility of the management. Our examination was limited to

procedures and implementation thereof, adopted by the Company for ensuring the compliance

of the conditions of the Corporate Governance. It is neither an audit nor an expression of

opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us,

we certify that the Company has complied with the conditions of Corporate Governance as

stipulated in the above-mentioned Listing Agreements.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we

have to state that as per the records maintained by the Company, there were no investor

grievances remaining unattended/pending for more than 30 days.

We further state that such compliance is neither an assurance as to the future viability of the

Company nor the efficiency or effectiveness with which the management has conducted the

affairs of the Company.

For Gadgil & Co.,

Chartered Accountants

(D. A. Gadgil)Proprietor

M. No. 17795Place : Mumbai

thDate : 25 July, 2007


2524

AUDITORS’ REPORT

TO THE MEMBERS OF IT PEOPLE (INDIA) LIMITED

We have audited the attached Balance Sheet of IT PEOPLE (INDIA) LIMITED as at st31 March, 2007, together with the annexed Profit and Loss Account & Cash Flow Statement for

the year ended on that date annexed thereto. :

1. These Financial statements are the responsibility of the Company's management. Our

responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India.

Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used and significant

estimates made by management, as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central

Government of India in terms Sub-section (4A) of Section 227 of the Companies Act, 1956,

we enclose in the annexure a statement on matters specified in paragraph 4 and 5 of the

above said order.

4. Further to my comments in the annexure referred to in paragraph 3 above, We report that:

A. We have obtained all the information and explanation which to the best of our knowledge

and belief were necessary for the purpose of our audit;

B. In our opinion, proper books of accounts as required by law, have been kept by the

company so far as appears from our examinations of those books.

C. The Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt by this

report are in agreement with the books of account.

D. In our opinion, the Balance Sheet and Profit & Loss Account and Cash Flow Statement

dealt with by this report are in compliance with the Accounting Standards referred to in

Sub Section (3C) of Section 211 of the Companies Act, 1956, in so far as they are

applicable to the Company.

E. On the basis of written representations received from the Directors and taken record bystthe Board of Directors we report that none of the Directors is disqualified as on 31

March 2007 from being appointed as a Director in terms of clause (g) of sub-section (1)

of section 274 of the Companies Act, 1956.

F. In our opinion and to the best of our information and according to the explanations given

to us, the said accounts read together with Note No. B 5 referred to in Schedule 12

forming part of Accounts and also our comments in the Annexure referred to in

paragraph 1 above, give the information required by the Companies Act, 1956 in the

manner so required and give a true and fair view in conformity with the accounting

principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at March

31, 2007 and

(ii) In the case of Profit and Loss Account, of the Profits of the Company for the year

ended on that date.

(iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that

date.

For Gadgil & Co.


(Dushyant A.Gadgil)Proprietor

M.NO. 17795

Place : Mumbai

Date : April 10, 2007


26

ANNEXURE TO AUDITOR'S REPORT 2006-07

Statement referred to in paragraph 3 of our report of even date to the members of IT PEOPLE (INDIA) st

LIMITED on the accounts for the year ended 31 March,2007.

i. (a) The Company has maintained proper records showing full particulars including quantitative

details & situation of Fixed Assets.

(b) All the assets have not been physically verified by the management during the year but there

is a regular programme of verification which, in our opinion, is reasonable having regard to the

size and nature of it's assets. No material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off a major part of the Fixed Assets.

ii The Company being in the business of Software Development and Manpower recruitment

services is not having any inventory the question of its physical verification and maintenance

of records does not arise.

iii. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other

parties covered in the register maintained under Section 301 of the Act.

(b) The Company has taken loan from one company covered in the register maintained under

section 301 of the Companies Act, 1956. The maximum amount involved during the year was

Rs.48,300,000/- and the year end balance of loans taken from such party is Rs.22,200,000/-.

iv. In our opinion and according to explanations given to us, there are adequate internal control

procedures commensurate with the size of the Company and the nature of it's business with

regard to purchase of fixed assets and with regard to sale of Goods. During the course of our

audit, we have not observed any continuing failure to correct major weaknesses in the internal

controls.

v. According to information and explanation given to us, there are no transactions entered into by

the Company with the party listed in the register maintained under section 301 of the

Companies Act, 1956.

vi. In our opinion and according to the information and explanations given to us, the Company

has not accepted any public deposits and therefore the provisions of Section 58A & 58AA of

the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not

applicable to the Company.

vii. In our opinion the Company has an internal audit system commensurate with the size and

nature of it's business.

viii. We have been informed that the Central Government has not prescribed maintenance of cost

records under Section 209(1)(d) of the Companies Act, 1956.

ix. (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues

including provident fund, investor education protection fund, employee's state insurance,

income tax, sales tax, wealth tax, custom duty, cess and other material statutory dues

applicable to it.

b) According to information and explanation given to us, there are no dues of sale tax, customs stduty, excise duty and cess were in arrears, as at 31 March, 2007 for a period of more than six

months from the date they became payable.

(c) According to information and explanation given to us, there are no dues of sales tax, income

tax, customs duty, wealth tax, excise duty and cess, which have not been deposited on

account of any dispute.

x. In our opinion the accumulated losses of the Company are not more than fifty percent of it's

net worth. The Company has not incurred cash losses during the financial year covered under

the audit.

xi. The company has not taken any loans from financial institutions, bank or issued any

debentures.

xii. The Company has not granted any loans and advances.

xiii. In our opinion the company is not a chit fund or a nidhi / mutual benefit fund/ society.

Therefore the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are

not applicable to the company.

xiv. In our opinion the company is not dealing in or trading in shares, securities debentures and

other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor's

Report) Order, 2003 are not applicable to the company.

xv. The Company has not taken any loan from banks or financial institutions. Therefore the

provisions of clause 4 (xv) of the Companies (Auditor's Report) Order, 2003 are not applicable

to the company.

xvi. The Company has not raised any term loan. Therefore the provisions of clause 4 (xvi) of the

Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xvii. During the Year the Company has not raised any funds. Therefore the provisions of clause 4

(xvii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xviii. According to the information and explanations given to us, the company has not made any

preferential allotment of Shares to the parties and companies covered in the register

maintained under section 301 of the Act.

xix. According to the information and explanations given to us, the company has not issued any

debentures during the period covered by our audit report.

xx. During the year covered by our audit no money has been raised by Public issue & therefore

the provisions of clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 are not

applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has

been noticed or reported during the course of our audit.

For Gadgil & Co.


(Dushyant A.Gadgil)Proprietor

M.NO.17795

27


Place : Mumbai


Particulars Sch. As At31.03.2007

Amount (Rs.)

1

2

3134,207,175(50,900,349)

4 29,208,0855 1,657,3496 2,206,948

33,072,3827 (6,617,179)

8

106,555,000

3,194,000

82,200,000

191,949,000

83,306,82646,383,007

11,500,000

26,455,203

3,123,075

21,180,890

191,949,000

12

I Sources of Funds

Shareholder's Funds

Reserve & SurplusCapital Reserve (Re-issue of Forfeited Shares)

Loan Funds

Total

II Application of Funds

Fixed AssetsGross BlockLess : Depreciation

Net BlockAdd: Capital WIP

Deferred Tax (Asset)

Current Assets, Loans & AdvancesSundry Debtors Cash & Bank BalancesLoans & Advances

Less: Current Liabilities & ProvisionsNet Current Assets

Misc. Expenditure

(To the Extent Not W/off)

Profit & Loss Account (Dr. Balance)

Total

Accounting Policies Notes to the Accounts 13

As At31.03.2006

Amount (Rs.)

106,555,000

204,749,000

133,155,309(42,227,604)

(20,581,722)

204,749,000

3,194,000

95,000,000

90,927,70536,550,481

-

32,778,4769,695,6093,396,285

45,870,370

25,288,648

-

51,982,166

stBalance Sheet as on 31 March, 2007

In terms of my report of even date

For Gadgil & Co. For & on behalf of the Board


Dushyant A.Gadgil Ketan ShethAdi CooperProprietor Chairman & Managing DirectorVice - Chairman & M.NO. 17795Executive DirectorC.R. Bhagwat

Place : Mumbai


Company Secretary

2928

Particulars Sch Year Ended

Amount (Rs.)31.03.2007

stProfit & Loss Account for the Year ended 31 March, 2007




Dushyant A.Gadgil Ketan ShethAdi CooperProprietor Chairman & Managing DirectorVice - Chairman & M.NO. 17795Executive DirectorC.R. Bhagwat

Place : Mumbai


Company Secretary

A IncomeIncome From Operations 175,102,094 110,876,293Other Income 61,637 -

Total Income 175,163,731 110,876,293

B ExpenditureOperating Expenditure 9 142,938,029 97,905,154

Operating Profit 32,225,702 12,971,139

Financial Expenses 10 3,041,066 2,366,680Depreciation 8,672,744 4,105,218Miscellaneous Expenditure W/Off 11 - 9,45,717

11,713,810 7,417,615

Profit Before Tax 20,511,891 5,553,524

Provision for Tax (FBT) 191,656 356,760 Deferred Tax (Credit) (11,500,000) -

(11,308,344)

Profit /( Loss ) after tax before Extraordinary Items 31,820,235 5,196,764

Provision/Earlier Year Expenses W/off 1,018,959 -

Profit /( Loss ) after Extraordinary Items 30,801,277 5,196,764

Add : Balance brought Forward (51,982,166) (57,178,930)

Balance Carried to Balance Sheet (21,180,890) (51,982,166)

Accounting Policies 12Notes to the Accounts 13

Year Ended

Amount (Rs.)31.03.2006


3130

stSchedules forming Part of Balance Sheet as on 31 March, 2007

Current Year31/03/2007

Amount (Rs.)

Previous Year31/3/2006

Amount (Rs.)

Schedule - 1

Share Capital

Shareholder's FundsAuthorised :

7,50,00,000 Equity Shares of Rs. 2/- Each and Rs.10,00,00,000/- unclassified shares .

Issued and Subscribed & Paid-Up :

5,32,77,500 Equity Shares of Rs.2/- Each Fully Paid in Cash.

Total Shareholder's Funds

Unsecured Loans

1 7,50,000 5% Redeemable Bonds of Rs.80/- Each

2From Corporates

Total Loan Funds

(Unsecured Considered Good)

Debts outstanding for a period exceeding six Months Sundry Debtors (Less than six months)

Total Debtors

Schedule - 4

Sundry Debtors

Schedule - 2

Loan (Fund)

250,000,000

106,555,000

106,555,000

60,000,000

22,200,000

82,200,000

- 29,208,085

29,208,085

250,000,000

106,555,000

106,555,000

60,000,000

35,000,000

95,000,000

- 32,778,476

32,778,476

Particulars


SR

.P

AR

TIC

UL

AR

SD

EP

R.

RA

TE

As o

n

Ad

dit

ion

sD

ed

ucti

on

sA

s o

n

Op

en

ing

To

tal

01.0

4.2

006

31.0

3.2

007

Fo

r th

e Y

ear

En

ded

1B

uild

ing

3.3

4%

- -

2C

om

pute

rs

50.0

0%

204,5

00

111,0

00

3E

lect

rica

l Inst

ala

tion

25.0

0%

41,6

83

-

4F

urn

iture

& F

ixtu

res

8.0

0%

20,2

09

133,3

63

5O

ffic

e E

quip

ments

25.0

0%

680,7

00

5,0

00

6S

oftw

are

Deve

lopm

ent

45.0

0%

- -

7S

oftw

are

Purc

hase

s45.0

0%

226,0

05

-

8C

om

pute

rs A

ccess

ories

50.0

0%

70,1

32

-

9Jo

b P

ort

al

8.3

3%

58,0

00

-

Gra

nd

To

tal

48,2

40,6

91

9,6

07,8

84

1,4

80,3

19

4,3

96,5

21

1,5

82,2

62

19,3

52,5

00

252,3

30

249,6

52

47,9

93,1

50

133,1

55,3

09

1,3

01,2

29

249,3

63

48,2

40,6

91

9,7

01,3

84

1,5

22,0

02

4,2

83,3

67

2,2

57,9

62

19,3

52,5

00

478,3

35

319,7

84

48,0

51,1

50

134,2

07,1

75

9,3

91,9

19

8,0

21,3

02

1,2

43,5

17

1,7

15,4

75

1,1

34,3

83

19,3

52,5

00

36,1

34

61,8

32

1,2

70,5

43

42,2

27,6

05

1,6

11,2

39

1,5

50,4

92

243,5

87

360,8

64

562,8

40

-

198,6

86

146,4

00

3,9

98,6

37

8,6

72,7

44

11,0

03,1

58

9,5

71,7

94

1,4

87,1

04

2,0

76,3

39

1,6

97,2

23

19,3

52,5

00

234,8

20

208,2

32

5,2

69,1

80

50,9

00,3

49

37,2

37,5

33

129,5

90

34,8

98

2,2

07,0

28

560,7

39

-

243,5

15

111,5

52

42,7

81,9

70

83,3

06,8

25

G R

O S

S B

L O

C K

D E

P R

E C

I A

T I O

N

Sch

ed

ule

"3"

Sch

ed

ule

of

Fix

ed

Assets

As o

n 3

1st

Marc

h, 2007

As O

n

31.0

3.2

007

N E

T B

L O

C K

(Am

ou

nt

in R

up

ees)

38,8

48,7

72

1,5

86,5

82

236,8

02

2,6

81,0

46

447,8

79

-

216,1

96

187,8

20

46,7

22,6

07

90,9

27,7

04

As O

n

31-M

ar-

06

32

Issue Expenses

Schedule - 8

Miscellaneous Expenditure (To the extent not Written Off)

stSchedules forming Part of Balance Sheet as on 31 March, 2007


Amount (Rs.)


Amount (Rs.)

Particulars

1 Cash On Hand (including Petty Cash)(As Certified by the Management)

2 Balance With Scheduled Banks - Syndicate Bank

Syndicate Bank (Escrow A/c)

ICICI Bank

Syndicate Bank (Fixed Deposit A/c)

3

Balance With Other Banks:-Citi Bank

Abu Dhabi Commercial Bank of IndiaTotal Cash & Bank Balances

Schedule - 6

Loans & Advances

1

Advances recoverable in cash or in kind or for value to be received

2

Deposits

Total Loans & Advances

1 Sundry Creditors2 Outstanding Liabilities

Total Current Liabilities & Provisions

Schedule - 5

Schedule - 7

Cash & Bank Balances

Current Liabilities & Provisions

-

-

140,824

11,212

4,724,000

4,250,516

437,500

121,557

10,0009,695,609

2,172,785

1,223,500

3,396,285

12,957,2987,624,424

20,581,722

3,123,075

3,123,075

98,184

-

-

809,582

437,500

91,819

220,265 1,657,349

2,040,005

166,943

2,206,948

2,873,707 3,743,472

6,617,179

st Schedules forming Part of P & L A/C for the Year ended 31 March, 2007

Current Year31/03/2007Amount (Rs.)

Previous Year31/3/2006 Amount (Rs.)

Particulars


33

Staff Cost & Services Rendered by Business Associates & Others

Personnel CostSalary & WagesP.F. Adm.ChargesP.F Cont.(Employer)Staff Welfare ExpensesLeave EncashmentRewards & RecognitionTraining & Development

Business Promotion Expenses

Legal & Secretarial Charges

Administrative & Other OverheadsCommunication Expenses Repair & MaintenanceDomian Registration ChargesE-Filing ChargesOffice ExpensesBooks & PeriodicalsComputer ConsumablesConveyanceDirector Seating FeesElectricity ChargesEntertainment Exp.General ExpencesInsurancePostage & Courier ChargesPrinting & StationeryProfession Tax-CompanyRecruitment ChargesSecurity ChargesSundry Balances Written Off/(Back)Transportation ChargesVehicle ChargesWater ChargesInfrastructure CostMembership & subscriptionProfessional Fees Rent,Rates & TaxesTravelling Cost

Operating ExpenditureSchedule - 9

Auditors Remuneration - For Audit - For Legal Matters - For Taxation - Others

Total

69,478,557

12,209,697

3,451

61,084

321,978

-

-

341,355

1,299,627

3,324,618

1,195,267

244,970

-

-

766,050

24,410

32,751

634,091

20,000

880,257

-

20,357

136

121,659

718,641

-

74,837

84,852

23,651

-

-

54,266

1,528,559

-

-

1,746,206

2,443,829

-150,00010,00040,00050,000

97,905,154

113,829,060

15,024,347

5,820

63,932

127,226

204,69610,000

119,900

3,319,040

117,902

762,370

488,3307,500

140548,44614,365

120,570

460,559

100,000

892,644

10,213

63,137

44,793

162,532

540,744

2,500

146,990

70,221

(46,768)

17,272

72,779

66,307

1,798,190

74,203

1,108,844943,065

1,396,163

150,00010,00040,00050,000

142,938,029

Total

3534

stSchedules forming Part of P & L A/C for the Year ended 31 March, 2007


Amount (Rs.)


Amount (Rs.)

Particulars

Interest ExpensesBank Charges

Total Financial Expenses

Preliminary ExpensesPublic Issue ExpensesRegistration Chgs for Increase in Authorised Share CapitalStamp Duty for Increase in Authorised Share CapitalTotal Miscellaneous Expenses

Schedule - 11Miscellaneous Expenses Written Off

Financial ExpensesSchedule - 10

2,355,824 10,856

2,366,680

145,692 100,025 500,000 200,000 945,717

3,000,000 41,066

3,041,066

- - - - -

SCHEDULE “12”

SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Accounting & Recognition of Income & Expenditure.

i. The Financial Statements are prepared under the historical cost convention in

accordance with the generally accepted Accounting principles and the provisions of the

Companies Act, 1956.

ii. The Company follows mercantile system of accounting and recognizes significant items

of income and expenditure on accrual basis.

B. Fixed Assets

1. Fixed assets are stated at cost less accumulated depreciation. Cost comprises the

purchase price and other attributable costs.

2. Gains/Losses arising on foreign exchange liabilities incurred for the purpose of acquiring

fixed assets are adjusted in the carrying amount of the respective fixed assets.

3. During the Year the Company has continued the development of it's BPO Portal. The

Company has capitalized, the cost incurred for the creation of BPO Portal, in

accordance with the Accounting Standard AS-26 issued by the Institute of Chartered

Accountants of India. The cost, incurred till 31St March, 2007 in respect of the BPO

Portal, which is still in progress, is carried forward under the head Capital-Work- In

Progress.

4. Till 31st March 2003 Depreciation on Fixed Assets has been provided on straight-line

method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,

1956.

5. Keeping in view the wear and tear and the actual realizable value of the fixed asset, the

Company has provided depreciation on Straight Line Method at the rate in respect of the

fixed assets as under.


3736

Particulars Depreciation Rate as per Companies Act %

Depreciation Rate as per Books %

Depreciation as per Act(Rs)

Depreciation as per Books (Rs)

Computer 16.21 50.00 1,499,868 1,550,492

Electrical Installations 4.75 25.00 238,091 243,587

Furniture & Fixtures 6.33 8.00 287,339 360,864

Office Equipments 4.75 25.00 465,672 562,840

Software Purchases 4.75 45.00 20,972 198,686

Computer Accessories 16.21 50.00 47,463 146,400

Job Portal 4.75 8.33 2,280,135 3,998,637

As a result of the above change in the Depreciation Rates, the Depreciation provision is

higher by Rs. 2,221,965/- and consequently the Profit for the year is lower by Rs.

2,221,965/-.

C. Sundry Debtors and Advances

Specific debts and advances identified as irrecoverable or doubtful are written-off or

provided for respectively.

D. Revenue Recognition

i. Income from software services is recognized on dispatch/delivery of the concerned

goods/services.

ii. Other income is accounted on accrual basis, except in respect of income, which is not

certain to realize.

E. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date

of transaction. Monetary assets and liabilities denominated in foreign currency are

translated at the rates of exchange at the balance sheet date and resultant gain or loss is

recognized in the profit and loss account.

F. Miscellaneous expenditure/Amortization

Preliminary, Pre-Operative and Public issue expenses are written off over a period of five

years.

G. Employment benefits

i. The Company's contribution to provident fund is accounted on accrual basis and is

charged to the profit and loss account.

ii. No provision has been considered necessary towards gratuity since none of the

employee have put in the qualified number of years of service with the Company.

H. Provision for Deferred Tax

Deferred tax assets and liabilities are recognized, subject to consideration of prudence, on

timing difference, being the difference between taxable incomes and accounting income that

originated in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets arising on account of unabsorbed depreciation/carry forward of losses

under tax laws are recognized only to the extent that there is virtual certainty supported by

convincing evidence that sufficient future taxable income will be available against which

such deferred tax asset can be realized in terms of Para 17 of the Accounting Standard 22

issued by the Institute of Chartered Accountants of India.


3938

SCHEDULE “13”

NOTES FORMING PART OF ACCOUNTS

1. The Company is engaged in the Information Technology Services and Human Capital

Solution Services, which cannot be expressed in any generic unit. Hence it is not possible

to give quantitative details of sales and certain information as required under paragraphs 3,

4C and 4D of part II of Schedule VI to the Companies Act, 1956.

2. Earnings in Foreign Exchange during the year :

Amount in Rs.

2006-07 2005-06

Information Technology Services 164,570,828 107,321,342

__________ _________

TOTAL 164,570,828 107,321,342

========= =========

3. Expenditure in Foreign Currency :

Amount in Rs.

2006-07 2005-06

Expenditure in relation to overseas 113,829,060 69,478,557

Information Technology Services __________ _________

TOTAL 113,829,060 69,478,557

========= =========

4. In the opinion of the management, Current Assets, Loans and advances are realizable at

the values represented in accounts.

5. Break up of Repairs & Maintenance is as under :

Repairs & Maintenance Building Rs. NIL

Repairs & Maintenance Office Equipment Rs. 14538/-

Repairs & Maintenance Computer Rs. 10796/-

Repairs & Maintenance Air Conditioner Rs. 60000/-

Repairs & Maintenance Others Rs. 402996/-

6. As per the information available with the Company, there are no small-scale industrial undertakings to whom an amount of Rupees one lakh or more was outstanding for more than 30 days.

7. Related Party Disclosures :-

A. Particulars of related parties :

Sr. No. Name of Related Party Nature of Relationship I IT People Pvt. Ltd. Associate Company – Share Holding II

Group Company

III Mr. Ketan Sheth Key Managerial Person Mr. Adi Cooper -------------do--------------- Mr.Ranjit Prabhu -------------do-------------- Mr. M.R. Mondkar Mr. Kishore Hegde

IV The Company has no subsidiaries

Subsidiaries

B. Transactions with related parties :

Sr. No.

Name of Related Party

Relationship Nature ofTransaction

Amount Rs. Outstanding Balance as on 31.03.07 Amt. Rs.

Outstanding Balance as on 31.03.06 Amt. Rs.

1 IT People Pvt. Ltd.

Associate Company – Share Holding

Loan 48,300,000 22,200,000/-

20,000,000/-



Interest onLoan

NIL N.A. 1,292,000/-



5% Redeemable Bonds

N.A. 60,000,000/-

60,000,000/-



Interest onBonds

NIL 3,000,000/- 288,000/-

5 Adi Cooper

Vice-Chairman & ExecutiveDirector

Remuneration 3,000,000/- NIL 250,000/-

Orient Information Technology Ltd.


AdvisorIndependent Director

4140

8. Earnings per Share

A. The amount used as the numerator in calculating basic and diluted earnings per share is

the Net Profit for the period disclosed in the Profit and Loss Account.

B. The weighted average number of equity shares used, as the denominator in calculating

earning per share is 53,277,500 for the year 2006-07 and 51,291,834 for the year

2005-06.

9. Previous Year's figures are regrouped/ restated wherever necessary to confirm with this

year's classification.

SIGNATURES TO SCHEDULE “1 To 13”

A) CASH FLOW FROM OPERATING ACTIVITIES :Net Profit as per Profit & Loss 30801277 5,196,764 Adjustments for :Depreciation 8,672,744 4,105,218 Deferred tax credit (11,500,000)

Miscellaneous Expenses Written Off -

945,717

Interest and other charges 3,041,066

2,366,680

213,810

7,417,615 OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 31,015,087

12,614,379

Adjustments for Increase/Decrease in :Trade Receivables 3,570,390

(15,547,663)

Loans and Advances 1,189,337

(3,016,260)

Current Liabilities (13,964,543)

(9,910,723)

(9,204,816)

(28,474,646)

CASH GENERATED FROM OPERATIONS 21,810,271

(15,860,267)

NET CASH FROM OPERATING ACTIVITIES 21,810,271

(15,860,267)

B) CASH FLOW FROM INVESTING ACTIVITIES :Purchase of Fixed Assets (1,051,865)

(50,781,287)

Capital W.I.P. (9,832,526)

(9,025,481)

Miscellaneous Expenditure (3,123,075)

(700,000)

NET CASH USED IN INVESTING ACTIVITIES (14,007,466)

(60,506,768)

C) CASH FLOW FROM FINANCING ACTIVITIES :Interest and other charges (3,041,066)

(2,366,680)

Re-issue of Forfeited Shares - 4,724,000

Receipt of Unsecured Loans (12,800,000)

81,861,341

NET CASH FROM FINANCING ACTIVITIES (15,841,066)

84,218,661

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) (8,038,261)

7,851,626

Opening Balance of Cash and Cash Equivalents 9,695,610

1,843,984

Closing Balance of Cash and Cash Equivalents 1,657,349

9,695,610

Notes : 1. All figures in brackets are outflow 2. Previous years figures have been regrouped wherever necessary 3. Cash and Cash equivalent is Cash & Bank Balances as per Balance Sheet.

stCASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2007

31 March 2007st

31 March 2006st

Particulars

Rs. Rs.Rs. Rs.




Dushyant A.Gadgil Ketan Sheth

Proprietor Chairman & Managing Director

M.NO. 17795

Adi Cooper

Vice - Chairman &

Executive Director

C.R. Bhagwat

Place : Mumbai


Company Secretary





Dushyant A.Gadgil Ketan Sheth

Proprietor Chairman & Managing Director

M.NO. 17795

Adi Cooper

Vice - Chairman &

Executive Director

C.R. Bhagwat

Place : Mumbai


Company Secretary

42

I Registration Details :

Registration No. 11-123796State Code 11Balance Sheet Date

st31 March 2007

II Capital raised during the year (Amount in Rs. Thousands)

Public Issue NILRight Issue NILBonus Issue NILPrivate Placement NIL

III Position of Mobilisation and Deployment of Funds

(Amount in Rs. Thousands)

Total Liabilities 191,949Total Assets 191,949

Sources of Funds :

Paid up Capital 106,555Reserves & Surplus 3,194Secured Loans -Unsecured Loans 82,200

Application of Funds

Net Fixed Assets 83,307Capital W.I.P. 46,383Investments -Deferred Tax Asset 11,500Net Current Assets 26,455Misc.Expenditure 3,123Accumulated Losses 21,181

IV Performance of Company (Amount in Rs. Thousands)

Turnover 175,164Total expenditure 154,652Profit / (Loss) before tax 20,512Profit / (Loss) after tax 30,801Earnings per Share in Rs. 0.58Dividend Rate @ % NIL

V Generic Names of Principal Products, Services of the company(as per monetary terms)Item Code No. (ITC Code) Not ApplicableProduct Description Not Applicable

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

The Companies Act (1 of 1956) SCHEDULE VI - PART IV IT PEOPLE (INDIA) LIMITEDRegd. Office: A. K. Industrial Estate, Veer Savarkar Flyover, S. V. Road, Goregaon (West), Mumbai 400 062

ATTENDANCE SLIP FOR ANNUAL GENERAL MEETING

I/ We hereby record my/ our presence at the 7th Annual General Meeting held at EVENT BANQUET, Opposite Central Bank, Near Filmistan Studio, S. V. Road,

stGoregaon (West), Mumbai - 400062 at 10.00 A. M. on Friday , 21 September, 2007

DP ID No.*:

L. F. No.:

Client ID No.*:

No. of Shares held:

Name and address of the Shareholder(s) If Shareholder(s), Please sign here If Proxy, Please sign here

* Applicable for investors holding shares in electronic form

PROXY FORM

IT PEOPLE (INDIA) LIMITEDRegd. Office: A. K. Industrial Estate, Veer Savarkar Flyover, S. V. Road, Goregaon (West), Mumbai 400 062.

DP ID No.*:

L. F. No.:

Client ID No.*:

No. of Shares held:

I /We _______________________________ o f ______________________________

being a Member/Members of IT People (India) Limited hereby appoint___________________________

of ____________________________ or failing him ________________________________

of ____________________________ or failing him _______________________________

of____________________________ as my/ our proxy to attend and vote for me /us and on my/our behalf stat the Annual General Meeting of the Company scheduled to be held on Friday, 21 September, 2007, at

10.00 A. M. and at any adjournment thereof .

Signed this _______________ day of _____________2007.

Affix 1 Rupee

Revenue Stamp

NOTES:

1. The form should be signed across the stamp as per specimen signature(s) registered with the Company.

2. The proxy form must be deposited at the registered office of the company not less than forty-eight hours before the

commencement of the meeting.

3. A proxy need not be a member

* Applicable for Investors holding shares in electronic form

#

Sign.

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