ITC INFOTECH INDIA LIMITED REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2014 Your Directors submit their Report for the financial year ended 31st March, tabulated below: 2014. ITC Infotech (USA), Inc ITC Infotech Limited, UK FINANCIAL RESULTS Consolidated(*) Your Companys consolidated and standalone financial results are tabulated (millions) (millions) below: US$ ` US$ ` GBP ` GBP ` Consolidated(*) Standalone Year Ended March 31, 2014 2014 2013 2013 2014 2014 2013 2013 (` Lakhs) (` Lakhs) Total Revenue 70.61 4230.81 63.20 3431.12 25.29 2523.21 25.03 2057.92 Year Ended March 31, 2014 2013 2014 2013 Net Profit 0.17 10.38 0.91 49.67 1.18 118.22 1.86 152.94 Total Revenue 127875 101780 92591 70665 (*) including Pyxis Solutions, LLC, its wholly owned subsidiary. Total Expenditure 113541 92310 77503 61613 The Board of Directors of ITC Infotech Limited, UK have recommended the Profit before Tax 14334 9470 15088 9052 interim dividend of GBP 2,057,445 (` 20.53 crores), declared on 20th February, 2014, as the final dividend for the financial year 2013-14 (previous Provision for Tax 5708 2777 4968 2179 year GBP 2,057,445 - ` 16.92 crores). Profit after Tax 8626 6693 10120 6873 During the year under review, Pyxis Solutions, LLC, declared and paid US$5,00,000 (` 3.00 crores) as dividend for the financial year 2013-14 (*) including ITC Infotech Limited, UK and ITC Infotech (USA), Inc.(I2A), (previous year - Nil) by way of distribution to its Sole Member i.e. ITC wholly owned subsidiaries of the Company, and Pyxis Solutions, LLC, USA, Infotech (USA), Inc. a wholly owned subsidiary of I2A. TALENT MANAGEMENT BUSINESS REVIEW The economic recovery, though slow, visible in the US and European The global IT industry was expected to grow by approximately 1.6% in markets, emergent demand from new markets and evolving new generation 2013 (based on reports of analysts) due to slower economic recovery in technological skills, have reinforced the need to ensure a seamless supply the US and European markets. In contrast, the Indian IT Industry was chain of skilled resources. Your Company has broadened its channels of expected to grow by 13% in 2013-14 (as per estimate figures released by sourcing quality talent and has strengthened its capability building processes NASSCOM in February, 2014) with both global multinationals and Indian through college affiliations, technology incubation cells and employee IT companies driving offshoring for cost and price competitiveness. The ideation panels. Further, demand for talent is expected to rise and retention favourable exchange rates in India have also benefitted the Indian IT Industry of critical talent continues to be a high priority and focus area. Your Company which is largely export oriented. makes a constant endeavour to enhance employee engagement, invest in employee friendly policies and enable facilitation for smooth transition of Your Company's consolidated Total Revenue grew by 25.6% to ` 1279 talent across various geographies. A recent internal employee satisfaction crores, well above the industry average, while Net Profit grew by 28.9% survey indicates a response level of greater than 80% as well as a significant to ` 86.3 crores. This robust performance demonstrates the success of the level of engaged employees which vindicates the efforts of your Company focused strategies adopted by the Company in (i) identifying and investing in this area. Your Company is confident of meeting the increasing in new technology based growth drivers, (ii) striving to create cutting edge requirements for skilled manpower. world-class capabilities in each of its existing service lines, (iii) building solutions and capabilities around the products of global software vendors DIRECTORS RESPONSIBILITY STATEMENT and partnering with them to take such products to the market, (iv) offering As required under Section 217(2AA) of the Companies Act, 1956, your new and value additive service lines to existing customers with high potential, Directors confirm: (v) focusing on geographical expansion to develop new markets and acquire customers, (vi) cost management and resource optimization in managing (i) that in the preparation of the Annual Accounts for the financial year a balance with growth led investment imperatives, and (vii) creating a pool ended 31st March, 2014, the applicable accounting standards have of skilled talent. been followed and there are no material departures; During the year your Company created an independent business unit (ii) having selected such accounting policies and applied them consistently focused on Treasury and Capital Markets related IT technologies, aligned and made judgements and estimates that are reasonable and prudent with a global Independent Software Vendor (ISV); the unit has already so as to give a true and fair view of the state of affairs of your Company gained traction amongst banking customers and is expected to become at the end of the financial year and of the profit of your Company for a future pillar of growth. that period; The customer list of your Company includes several marquee customers, (iii) that proper and sufficient care has been taken for the maintenance of some of whom feature in the leaders category in their respective business adequate accounting records in accordance with the provisions of the segments. The revenues of your Company reflect billing engagements with Companies Act, 1956, for safeguarding the assets of your Company 258 customers compared to 232 customers in the previous year. and for preventing and detecting fraud and other irregularities, and Your Company consolidated its focus on Middle-East, Africa, India and the (iv) that the Annual Accounts for the financial year ended 31st March, larger Asia-Pacific region. It has expanded its sales force in each of these 2014, have been prepared on a going concern basis. regions which has, within a short period, generated a healthy business OTHER INFORMATION pipeline. There has also been significant traction in new customer acquisition, particularly in Australia, India and Middle-East. As part of a consolidation I. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION exercise, your Company has decided to close the branch office in South In view of the nature of activities that are being carried on by your Korea (Republic of Korea). Company, particulars as required under Section 217(1)(e) of the Companies Act, 1956 and Rules 2A and 2B of the Companies (Disclosure The service delivery capability of your Company continued to earn global of Particulars in the Report of Board of Directors) Rules, 1988 concerning recognition. Your Company has featured for the 8th consecutive year conservation of energy and technology absorption, respectively, are amongst the Leaders Category in the 2013 Global Outsourcing Top 100 not applicable to your Company. by the International Association of Outsourcing Professionals (IAOP). Your Company also featured for the 9th consecutive year in the Global Services Your Company being a software solution provider requires minimal 100 survey conducted by Global Services and Neo Advisory. Your Company energy consumption and every endeavour has been made to ensure was re-certified under ISO 9001 for all its locations and obtained ISO/IEC the optimal use of energy. 20000-1:2011 certification for its IT Infrastructure Managed Services for During the year under review, your Company continued to implement external clients. Enthalpy based Air conditioning system thereby leading to energy Going forward, your Company will continue to review and reinforce its saving. strategies and action plans to rapidly scale up its global footprint by II. FOREIGN EXCHANGE EARNINGS AND OUTGO leveraging the network of branch offices set up in the last few years. Building additional technology niches continues to be a key focus area, with SMAC The foreign exchange earnings (on accrual basis) of your Company (Social media, Mobility, Analytics and Cloud computing) at the forefront during the year were ` 76008.76 lakhs (previous year- ` 56041.85 of the technology ecosystem. Your Company has established a focus group lakhs) while the outgoings (on accrual basis) were ` 18707.29 lakhs to tap the emerging opportunities in this space. (previous year- ` 15323.98 lakhs). The outlook for the Indian IT industry is positive with NASSCOM predicting III. PARTICULARS OF EMPLOYEES a growth rate of 13% in the forthcoming year. However, your Company The particulars of employees in terms of Section 217(2A) of the expects to grow significantly through execution of its strategies, which it Companies Act, 1956 read with Companies (Particulars of Employees) continues to refine, to ensure differentiated solutions, domain expertise, Rules, 1975, as amended, are given in Annexure A. strong delivery capabilities and above all, a superior customer experience. DIRECTORS WHOLLY OWNED SUBSIDIARIES - FINANCIAL RESULTS Mr. S. Puri resigned as a Director of your Company with effect from close The financial results of your Companys wholly owned subsidiaries are of business on 8th August, 2013. Your Board of Directors places on record 125 ITC INFOTECH INDIA LIMITED its appreciation of the contribution made by Mr. Puri during his tenure as offered themselves for re-appointment as Statutory Auditors. In accordance Director of your Company. with Section 139 of the Companies Act, 2013, your Directors have recommended for your approval the appointment of M/s. Lovelock & Lewes In accordance with the provisions of Section 152 of the Companies