it1-27
TRANSCRIPT
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May I help you? 1
IT MICROSYSTEMS (INDIA) LIMITED
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2
contentsChairmans letter 2
Financial highlights 26
Corporate information 27
Directors report 28
Annexure to the directors report 31
Management discussion and analysis 32
Corporate governance 36
Auditors certificate 43
Auditors report 44
Annexure to the auditors report 45
Finance section 46
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1
May I help you?
EJOICE
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Dear shareholders,What started as a dream five years ago is on the threshold of becoming
a reality. Let me take you through this dream.
We started as a software company in the year 2000 and have today
become the building block of a much bigger enterprise - an integrated
hospitality company? under which we plan to offer hotels, restaurants,
franchisee outlets and much more, with plans to convert our in-house
centralized IT operations which cater to our own chain of hotels and
restaurants into a BPO services outfit for the hospitality sector - thelast leg of our service offering.
We were mainly a software company till 2003, essentially developing
software for various companies, with minor customisation. Some of the
software developed by us include HR Pro - which streamlines the HR
function by maintaining data on employees, a Payroll Management
Software that helps manage payroll-related accounts, Habitat - a
Society Management/Accounting Software, a custom-designed
software to manage Sales and Distribution networks, a Restaurant
Billing Software and MLM - a Multi-level Marketing/Network
Marketing Software.
Today, the Indian economy has consolidated its position as a major
growth economy, second only to China. The contribution of the Indian
software and IT-enabled services industry to GDP is expected to
increase to 10 per cent by 2008.
The trend is already evident from the performance of the industry in
2004-05. Due to favourable government policies and demand growth,
the IT sector witnessed huge escalation in profitability over the previous
year. The software and services sector grew by 32 per cent and exports
grew by 44 per cent.
Just being in the industry helped us participate in the boom. Volumes
increased as also did operational efficiencies. And in 2004-05, IT
Microsystems' revenues and profits increased by 44 per cent and 42 per
cent, respectively.
Diversification: Around the year 2003, we diversified into hotels. At that
time, the hospitality sector was witnessing a lot of traction and we
believed, given the outsourcing boom across sectors and in the face of
changing demographics and rising income levels, this industry would be
the next growth driver: International tourism receipts in 2004 reached a
new record value of US$ 622 bn as expressed in absolute figures and
International tourists' movements have touched an all time high nearly
at 800 mn due to the increased availability of less expensivedestinations across the globe.
"We are targeting to set up 100 hotels in a span of
three years and 1,000 in a frame of 5-7 years, of
which, majority of the hotels will be acquired and
operated in the US."
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r3
EVIEW
Driven by foresight and vision, we entered the hospitality business
when the company identified hotels as a fast-growing and promising
business to be in. For the next three years, hotels have the potential to
register an average annual growth of over 20-25%. Room rates for FY05on an annual basis were up 21%, though the average annual growth in
occupancy level was just 7%. Though, we believe, occupancy levels too
are set to move up in the coming years. With the genesis being the
acquisition of the Red Roof Inn in the US, (later rechristened as United
Inn), we acquired properties worth $21 mn over an 18-month period.
The initial success of the Red Roof Inn acquisition model was soon
replicated through a series of acquisitions such as United Inn, Quality
Inn, Comfort Inn, Sai Bless Inn, Graciano Cottages, Sai Sahavas, Sai
Motels, Georgian Resort, Sagar Kinara and Holiday Inn (proposed).
Geographic presence: A McKinsey survey revealed that twenty six percent of the Indian respondents believe that the US will generate more
sales for a company than any other country over the next five years.
Based on this research, of our ambitious target to set up 100 hotels in a
span of three years and 1,000 in a frame of 5-7 years, we plan to
acquire and operate a majority of the hotels (mix of chains and
standalones) in the US. To attain success in this segment aggressive
marketing efforts are being undertaken. The initiatives undertaken
would include creating a strong brand for our hotels across the
geography under the United Inn brand name, embark on aggressive
marketing and branding initiatives to strengthen visibility and recall forthis brand and finally expand our reach and presence by adopting the
franchisee model.
Asset value: In future, our focus will be to acquire mid-sized franchised
and non franchised properties that are operating and generating profits.
We are looking to touch an asset value of $ 125 mn (25 hotels valued at
5mn each.) with a total room capacity for 3,000-4,000 by 2007.
Franchising: Franchising would be a priority tool for global growth? A
quick way to grow the numbers without eroding capital earmarked for
investment in the must-have destinations. We intend to adopt the
franchising growth model by 2006, with the help from iFranchisee
Consultants. In the first year we are targeting 25 hotels, second year
100 hotels and in the third year 250 hotels under the franchisee mode.
Additional Revenues: Apart from our regular stream of revenues from
the hotel business, we also plan to keep churning our portfolio. If we
see that property prices have peaked in a particular region or find that a
particular mid-sized hotel is not doing well, and it is more profitable to
sell it, we would rather book our profit and move elsewhere. The capital
gain that the company would make from the deal would then be
invested in another more-profitable property.
The way ahead: In the near future, we are planning to launch our multi
cuisine lounge bar Area 51in Pune in December 2005 and TheCountry's Best Yogurt (TCBY) in the first quarter of 2006, the first step
in providing a holistic experience to our customers.
With regard to TCBY and Nathan's Place we are adopting a observant
approach, we first intend to test waters and see if we customise them
as per the Indian palette, and then plan to expand and scale this
venture in a phased manner. Our strategy for this would be, first to
establish this model in a small way, understand the nuances of the
business, create brand loyalty and then scale up operations.
Our future plans also include setting up a tourism agency and providing
BPO services to the hospitality and tourism industry.
With this business model in place, we are optimistic to grow from an
USD 4.02 mn company into a USD 150 mn hospitality conglomerate bythe year 2008, in the process giving our dreams shape and size and
taking them beyond the realm of reality.
Sudhir Moravekar
Chairman, Panoramic Group
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4
A taxing life, a polluted environment,
a busy lifestyle. All this takes a tollon you.
So the perfect way to unwind is to step into our world. A world where we
promise to re-energise the senses, rejuvenate the mind, revitalize the soul
and relax the body.
All this, made possible by our credo 'May I help you? '
A credo which is not just true of our service. But rather an intangible that
encompasses every aspect of our hospitality business:
By ensuring that you are comfortable, right from the moment you
step in,
By making you feel at home, even when you're miles away,
By promising to bring in the local beauty, magic and flavour, right
into your room,
By creating an ambience which is a perfect mix of luxury and
comfort.
By ensuring that no compromises are made when it comes to taking
care of our guests: be it a honeymoon couple, a family of six or a
business group.
And, be it your purpose leisure or business, making sure your stay
with us is memorable.
With ten hotels already under our belt and thousands of contented
customers looking at us for happy moments, we look forward to taking
them to the next level of leisure and comfort by providing a complete
entertainment experience: an experience spanning from homely hotels to
specialty restaurants, to theme-based one of its kind lounge bars, to a
complete package tour, to bringing the world's cuisine at their doorstep.
At IT Microsystems, we look forward to offering you a holistic and
enriching experience, provided by no one else in the country.
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rMay I help you? 5
Hotels
Specialty Foods
Entertainment/ Recreation
BPO
Tourism
Nathan's Place
TCBY
Area 51 - Pune
Segments
Destinations
Europe
India
USA
New Zealand/ Australia
Luxury Hotels
Mid-sized Hotels
IT MICROSYSTEMS
ELAX
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Cool waters. Sprawling gardens.
Invigorating Yoga sessions.Almond-oil massages.Aromatherapy.
Just some of the many facilities we offer across our hotels to help
you relax.
The Georgian Resort, New York, USA
Total number of rooms - 164
Total asset value - $ 7.5 mn
Our most priced possession. Located on the banks of Lake George,
this hotel stands class apart. It provides you a special facility whereby
you can come by your boat and park at our private beach. Even therooms provided to you are different. You can pick and choose from
courtyard, presidential, lake view, shoreline and poolside jacuzzi
suites.
To keep you entertained we provide a gamut of facilities which include
wedding and corporate banquet facilities, theatre performances at
Georgian Dinner Theatre, lounge bars, golf and ski facilities.
So come enjoy your stay with us and experience something new.
Holiday Inn, Hudson, Ohio*
Total number of rooms - 239
Total asset value - $ 6.5 mn
Situated at 240 Hines Hill road, Hudson, his two-storied building
boasts of facilities like conference rooms, ball rooms, an indoor pool,
an outdoor pool, a restaurant, lounge bar, tennis courts to name a few.
Close proximity to tourist destinations makes this a real success with
customers.
* propsed acquisition
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United Inn, North Carolina, USA
Total number of rooms - 125
Total asset value - $ 2.8 mn
Strategically located at a very important exit on Interstate 40,
United Inn, is placed less than a mile from the Burlington Outlet
Mall and a half hour drive away from the Piedmont TriadInternational Airport. The hotel draws business from the travellers
on the interstate, local student population, local businesses and
truckers.
ESTORErComfort Inn, North Carolina, USA
Total number of rooms - 126
Total asset value - $ 3.95 mn
Located at 2001 Veasley Street, Greensboro, North Carolina with
close propinquity to Koury Convention Center and the Coliseum, this
motel surely attracts the business traveller. We make sure that
attention is paid to even the minutest details. No wonder we are AAA
approved.
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Quality Inn, New York, USA
Total number of rooms - 142
Total asset value - $ 4.25 mn
Strategically located at 1308, Buckley Road, Syracuse, New York
13212, the crossroads' of the northeast, it's the apt place for a
stopover. Picture this : Just 2 miles away from Carousal Mall, 6 milesfrom Syracuse Hancock International Airport, 8 miles from Syracuse
University and 8 miles from New York state Fair grounds, making our
motel a convenient tourist destination. We strive to give our guest the
best quality at the most competitive rates. So come unwind with us.
Sai Bless Inn, New York, USA
Total number of rooms - 135
Total asset value - $ 1.95 mn
Situated at 65 Front Street, Binghamton, this hotel is targeted
towards corporate executives as it is in close proximity to Bingham
University, IBM and Universal Instruments. Our rooms are designedkeeping your requirements in mind as we also offer business class
suites, handicap and pet rooms. Our complimentary services
include free stay for children under 18, car/bus parking, local calls
plus voice mails, local internet access, expanded cable TV with HBO
and continental breakfast.
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Luxury rooms
Massage centre
Conference Hall
Swimming Pool
Card Room
Go-karting
Battery operated Car
Gymnasium
Discotheque
Yoga
Snooker
Video Games
Sai motels, New Zealand
Total number of rooms - 22
Total asset value - $ 3.5 mn
Placed in the heart of Auckland city on 385, Great South Road, Green
lane, the facilities offered encompass tea and coffee making facilities,
microwaves, refrigerators and a colour television The hotel offers alicensed bar, Sky Television and an eating space which serves mouth
watering Continental and Indian food.
rMay I help you? 9EVIVIFY
Sai Sahavas, Shirdi
Total number of rooms - 46
Total asset value - $ 2 mn
Situated at a divine place - people from all over the world, with varied
religious background come to seek blessings. The hotel is situated at
close proximity to the "Sai Baba Temple" which adds an element ofconvenience for our guests who visit the temple. A life size idol
present in our hotel premises allows you to offer your prayers the first
thing in the morning and last thing before you close your eyes.
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Graciano Cottages, Goa
Total number of rooms - 22
Total asset value - $ 1 mn
Located in the vicinity of the southern commercial capital Margao it is
just eight kilometers, from the Margao railway station. Set amidst
fifty-six acres of lush gardens, Graciano cottages are the perfectgetaway for tranquility. If you are booked with us rest assured, you
will hear the rhythm of the waves; experience the sand beneath your
feet, church bells chiming and the palms whispering even when you're
asleep.
Equipped with all amenities and elegantly decorated rooms, this place
enables you to enjoy the luxury of sheer silence.
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Hotel Sagar Kinara, Malvan
Total number of rooms - 16
Total asset value - $ 0.75 mn
Placed on the beach at Somwar Peth, Malvan City, the hotel is
opposite the famous Sindhudurg Fort. It acquires a formidable historic
connotation and significance and is the only family hotel boasting 16
spacious rooms in Malvan City which are equipped with full-fledged
amenities. The food lovers can enjoy a multi-cuisine meal. You can
take your pick from delicacies in Moghlai, Punjabi, South Indian and
Chinese besides, special Maharastrian dishes in Malvani style.
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The experience does not end here.
Whether it your child's birthday celebrations or looking at capturing the
magical moments of your wedding anniversary or simply catching with
friends at a kitty party, we ensure you do it in the most special way.
Be it weddings, corporate meetings, training sessions, church group
meetings, parties, student events, commercial shows, bridal shows,
automotive events, union and corporate annual meets, all are welcome here.
EJUVENATErMay I help you? 11
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r13EFRESH
Hotels are flourishing business today due to the boom in tourism
which can be gauged from the following - world wide tourism results
for 2005 show a continuation of the overall positive trend of 2004,
with international tourist arrivals growing on average by 8 per cent in
the first four months, according to the WTO World Tourism
Barometer (June edition).
In-bound tourism: Over the last decade, the hospitality industry has
been booming. Tourist arrivals in India have been growing at the rate
of 10 per cent sequentially. In the last one year the number of tourist
arrivals in India soared from 550 mn to 763 mn. And looking at
trends, over the last two quarters, one can say that 2006 would
further accelerate this growth. Today, with $ 4.81 bn foreign exchange
earnings, tourism is the third largest foreign exchange earner in the
country. Condneste Traveler, the bible of tourism, reports India as
among the five most favored tourist destinations in the world. This
explains our presence in India.
Out-bound tourism: Similarly, with the outsourcing boom, the number
of Indians travelling overseas, especially the US, has also increased.
In 2005, as many as 153 mn Indians/Asians travelled to the US.
International tourists' movements have touched an all time high
nearly at 800 mn and international tourism receipts reached a new
record value of US$ 622 bn in 2004. With our understanding of
Indian culture and cuisine, we feel we are best placed to capitalise
on this opportunity.
Occupancy: The current industry growth rate in terms of
occupancies is 6%. Indian properties are growing at 10%. The
occupancy level of hotels ranges from 50% to 100% depending on
the season, events and weather.
To capitalise on the expected surge in the hospitality space, we
intend to ramp up our operations by moving from five hotels in the
US to acquiring 100 hotels in a three-year time-frame which will be
further scaled up to 1,000 hotels over the next seven years. All of
which will be primarily located in the US.
Our US strategy: The company's US-focus is based on the fact that
today, USA is one of the biggest markets in the world whether it isPharmaceuticals, InfoTech, Finance or Education. Almost every
Indian company with an aspiration to be global is looking at
establishing a presence in this market. Further, according to MKG
Consulting Report, the American economy hotels have emerged as
the most dynamic sector, with the North American market recording
the strongest growth, particularly in the budget hotels sector.
With properties in the US appreciating at a rapid pace, amply
reflected in the fact that properties acquired by the company at a
valuation of US$ 2.5 mn over the last two years, are currently worth
three times their acquisition price, further vindicates our US-centricpresence and strategy. Once we establish and consolidate ourselves
in the US, we plan to foray and expand into other geographies.
Lastly, upto 100 per cent availability of finance for hotel acquisitions
coupled with clean deals and efficient regulations makes US a
preferred geography to operate in.
Our India strategy: Indian hospitality sector is booming. The glum
100 plus hotels. More grand, more lavish. Exclusive facilities. Exemplarycustomer service.
May I help you?
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rENERGISE
look of 2001 has disappeared. Occupancies have improved
tremendously; they are touching an average of 85 per cent in the
peak season and dipping just by 10 percent in the lean season.
India's share of world tourist arrivals is 2.64 mn translating into
$ 3.2 bn in world tourism receipts. Today, India's growing recognition
as an exciting place to visit following the 'Incredible India' campaign
has helped boost the country 's image as a leisure destination. With
India also emerging as the fastest growing economy, the business
travel segment is growing at a phenomenal rate and is the most
important source of revenue and profitability for the hotel industry in
India. The WTTC has identified India as one of the world's foremost
tourist growth centres in the coming decade. According to WTTC,
after Turkey, India is expected to achieve the fastest rate of growth
at 9.7 % per annum over the next ten years. So, in order to encashon these opportunities we are planning to establish our presence is
India as well.
Our acquisition strategy: Our acquisitions will comprise mid-sized
hotels (100-120 rooms), valued at $4-5 mn per hotel with another
$200,000 to $500,000 allocated for renovation and interior
decoration. In addition, we plan to acquire a chain of hotels rather
than standalone properties as the former will lend us a stronger
brand recall, faster and deeper penetration and rationalise marketing
costs incurred to raise visibility for our hotels.
Rationale behind acquisitions: The Company's core rationale for its
inorganic growth strategy is based on the following ground realities:
Construction of properties involves a high gestation period,
wherein it can take anywhere between three to four years to
construct and commence operations whereas with acquisitions
one can start generating revenues immediately.
Besides, construction blocks valuable resources: time, money
and manpower - right from acquiring land, red tapism,
bureaucracy and corruption, to seeing the project through from
inception to completion.
The way ahead: At the close of 2005-06, we expect to increase the
number of our properties from 5 to 10 in the US, with the assets
valued at US $ 65-70 mn. In future we intend to have a presence in
both the mid-sized (asset value in the range of US $ 3-4 mn) and
luxury hotels segment (US $ 5 mn+ asset value). From our initial
foray into the mid-sized segment, we have already moved up the
value chain and are in the final stages of acquiring a luxury hotel -
Holiday Inn, Hudson, Ohio - which is targeted at the upper middle
class (a rapidly growing customer segment). With unique facilitiesand more comforts, this luxury hotel is likely to deliver higher
margins and improved profitability. Post acquisition, we intend to
focus on hotels with an asset value of US $ 5 mn + (compared to
our earlier hotels which were in the range of US $ 3-4 mn).
Funding: The funds for expansion would be raised through GDR and
ADR, IPOs of subsidiaries in the US, private equity, loans and
internal accruals. The EEFC funds generated from the company's
InfoTech business have also been invested in hotels. The debt equity
ratio post expansion would most likely be 70:30 which makes
eminent sense in today's low-interest rate scenario.
With acquisition of 100 properties by 2008 with an average
price per property priced at $ 5 mn, we expect to have a total asset
value of 500 mn. With annual turnover from these properties pegged
at one-third of the asset value, we are optimistic of reporting
revenues worth $ 150-175 mn and profitability of 10 per cent by
end, 2008.
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Brand building & Franchising - a
scalable and sustainable growth modelA smiling receptionist. Luxurious rooms. Consistently outstanding
cuisine.
Some of the things you will always remember about our hotels. That's
the magic of a brand.
Today, it's the era of emotional branding. Greet customers well,
exchange a few pleasantries, custom-make a drink exactly to their
taste, whip up an incomparable entre or offer them a complimentary
wine, and they will be your customers for life.
Who does not feel special when someone in a hotel welcomes you by
your name!
In our experience, branding represents one of the fastest ways to
spread presence and grow in this sector. With no visible Indian brand
in the US, branding our hotels will be a path breaking move in the
hospitality space, which once established, will allow us to adopt the
franchising model to further expand our presence in newer states
across the US and operate more properties in any state: a sustainable
and scaleable growth model.
To create a strong brand in the hospitality segment, we intend toembark on the following initiatives:
Appoint experienced marketing managers at each of our
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rMay I help you? 17ESUSCITATE
locations, who will be responsible for understanding from a
customer's perspective the critical parameters (quality, service,
interiors, decors, cuisine, and reception) that create the right
impression about the hotel.
Study customer responses at one of our hotels in the US -
'United Inn'. Based on the feedback, this brand name and
experience will be further extended to other existing and future
hotels which we plan to acquire.
We have selected "United Inn" as the mother brand name as it
connects well with customers in the US thereby leading to a
positive response towards our hotels.
Undertake renovations and improvements to give it a modern
and contemporary look, an effort aimed at attracting the
younger generation.Appoint franchisees, who will impart a local flavour and culture
to the hotels - right from the ambience, to the cuisine, to the
artifacts, so that guests can take back with them an experience
completely unique to that destination.
Lastly, with a strong brand in place, we expect to franchise 25 hotels
in the first year, 100 in the second year and more than double that
number to 250 in the third year. All of this will help consolidate our
position in this business and help us emerge as one of the largest
mid-sized Indian hotel brands in the US.
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A one-of-its-kind revolving multicuisine lounge bar - theArea 51*,has been designed especially to giveyou an out-of-the-world experience.
Roughly 13.4 mn working hours were lost in 2003 due to stress,
depression or anxiety compared to 6.5 mn working hours in 1995.
Enter Area 51. The perfect getaway for the entire family.
To revitalise your life, the proposed lounge bar, Area 51will beshaped like a space ship, with every detail looked into - right from its
interiors to the sound and lights, to the ambience, ensuring that
customers reminisce the evening even after its long over.
Expected to be launched in December 2005 in Pune, we believe that
while, it would prove a big draw for children and families, the
Area 51 is being targeted at premium customers belonging to theage group of 18-40.
With an increase in urban population, income and aspiration levels,
and the desire to experiment with different places, this restaurant is
expected to emerge as a new and 'happening' destination.
* Although currently this project is under other group company, IT Microsystems expects
to acquire this project in the future.
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EVITALISErMay I help you? 19
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ELISH
Hearty helpings. Delicious flavours. Lip-smacking recipes.
India is a multi-cuisine country. A potpourri of different ethnicities
and cultures. So whether it's Italian or Chinese or Thai or American
fast food, there's always room for more on the Indian palate. With
American culture seeping into Indian lifestyle, thanks to the
numerous BPOs that have come up, fast food is fast gaining
popularity.
To cater to the growing market for healthy fast food, IT
Microsystems has signed a Memorandum of Understanding (MOU)
and also has plans to tip up with Nathan's Place, a popular fast food
outlet in the US.Nathan's Place will offer high-quality fast food: food that is made
from the best ingredients, food that is made by people having
longstanding expertise in this field and food that has brand recall in
all parts of the world. These include:
Kenny Rogers Roasters - the world's greatest wood-fire roasted
chicken.
Miami's Sub Grill - high quality food in fun and casual
atmosphere.
Arthur Treacher's - fish and chips.
To bring this food into the country, IT Microsystems has already
signed a Memorandum of Understanding (MOU) with Nathan's
Place.
This unique combination of extraordinary cuisine and unmatched
service is what will set Nathan's Place apart from every other dining
experience.
Specialty Foods
The ideal way to conclude a meal is to have something sweet.
IT Microsystems has come up with the perfect solution - The
Country's Best Yogurt (TCBY), for all sweet lovers which at the
same time keep a tight check on calories, thus appealing to the
health conscious. Already available in 70 countries, it offers frozen
yogurt in lip smacking flavours.
With its manufacturing unit in place at Silvassa, TCBY shall be
launched in first quarter of 2006. Having acquired the master
franchising rights for TCBY India, the first store shall be opened in
Mumbai where it will be strategically located opposite the popular
Sterling theatre in Mumbai. Based on the outcome of the first store,
the company will decide on its future strategy.
The future strategy for TCBY comprises:
Localisation of tastes and flavours as per the Indian taste.
Setting up of 50 outlets in the country within a span of two
years.
Setting up franchisees across India - strong focus in
Maharashtra and Gujarat.
Strategic tie-ups with gymnasiums, dieticians, hospitals anddoctors, as they represent the best way to reach out to health
conscious population.
And aggressive brand-building through intensive marketing
efforts, which would encompass advertising and promotional
campaigns.
Ensuring that you take home with you a huge helping of sweet
memories!
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rMay I help you? 23
Tourism is a booming business. People today are more adventurous -
they want to explore the world. Today's working population comprises
of the urban youth who swear by the motto "work hard and party
harder". They want to indulge in water sports, trekking, late night
shopping, eating out, celebrating or just a getaway from the pollutedenvironment. And thanks to the increase in purchasing power, today
people have more income at their disposal. Reduction in airline fares
and loans for taking off on a holiday have also led to an overall
increase in overseas travel.
At IT Microsystems, we plan to custom-make the perfect holiday for
you by offering a one-stop solution in tourism: right from arranging
visas, to organising tickets, to booking hotels and giving you the
special treatment that you always wanted. Not only do we promise to
simplify your life, but we intend to take care of all your holiday needs
at a cost that is well within your budget, as there will be nointermediaries. Our 1000 + hotels in the long term will serve as the
ideal destinations in the itinerary with our tie-ups with prominent
travel and tourism agencies further increasing our basket of service
offerings by helping you travel across more destinations.
Statue of Liberty. Niagara Falls.
Universal Studios. Disneyland.We promise to show you all of thisand much more.
EVIVE
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rMay I help you?
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Strong MIS. Streamlined processes. Efficient operations.
ENEW
The main objective of setting up a BPO centre in India is handling
specific processes of our international hotels such as maintaining
books of accounts, reconciliation, generating MIS for the top
management, cost-analysis, keeping a track on out-bound and in-
bound invoices etc. Initially this tourism BPO initiative would
function as a 'cost-control' centre where all processes of ourinternational hotels would be done at the BPO centre, which would
help reducing processing and accounting costs to a significant
extent.
Currently, we have employed senior accountants and account
assistants to carry out this initiative and have installed MARS 2000
software for this purpose. The benefits that would accrue to the
company by setting up the BPO centre are discussed briefly:
Significant cost savings: The monthly expense incurred by the
company for hiring an accountant in the US is approximately
US $ 5,000 per month. The model that the company plans to
put in place involves having centralised administrative facilities,
including accounting and booking. Much like a BPO, the
company's back-office functions will be handled out of India,
wherein accountants in India would handle its US operations or
its operations anywhere else in the world out of the Indian back
office. Further, it would also substantially reduce its skilled
manpower requirements and lead to better utilisation of
manpower.
Streamlining processes: For any hotel to function effectively, a
strong MIS system and well-defined processes are absolutely
critical to keep a tab on inventory levels, pilferage of stock,
effective money collection etc. Having common software at the
BPO centres to handle accounts of all international hotels,
would result in effective MIS generation and streamlining
processes of critical functions.
Future source of revenue generation: At the initial stage, this
BPO centre would function as a cost-controlling initiative rather
than a revenue generating function. But down the line, once
expertise is gained and our own software is developed, we
intend to sell such synchronised MIS and software packages toother hotels. Our franchisee network would serve as another
source of revenue generation as we undertake their accounting
work as well at our BPO centre.
Thus, with a strong MIS system in place, it would enable us to
manage information systems and compute resources proficiently.
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2004 2005 2004 2005
Total revenues (Rs mn) PAT (Rs mn) EPS (Rs)PBDIT (Rs mn)
(Rs. '000)
PARTICULARS AUDITED AUDITED AUDITED AUDITED AUDITED
MAR-01 MAR-02 MAR-03 MAR-04 MAR-05
Paid up Share Capital 50,100 50,100 50,100 50,100 64,788
Reserves (excluding revaluation reserve) 8,140 41,160 73,729 189,062 268,825
Total Revenues 48,615 87,716 111,635 127,463 183,479
PBDIT 32,082 59,540 62,939 48,941 67,927PBIT 31,585 58,206 61,058 46,179 65,267
PBT 31,585 58,111 60,769 45,969 65,174
PAT 31,455 58,070 60,730 45,969 65,174
EPS 6.28 5.80 6.06 3.55 5.03
2004 20052004 2005
183.
48
127.
47
65,
17
45.
97
5.
03
3.
55
67,
93
48,
94
Financials Highlights
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Corporate Information
BOARD OF DIRECTORS
Mrs. Vidya Moravekar Chairperson & Managing Director
Mr. Arun Tari Wholetime Director
Mr. Siddhartha Moravekar Director
Mr. Bhupendra Patel Director
Mr. Vilas Mitbawkar Director
Mr. Mehul Parekh Director
Ms. Hemlatha Sawant Director
COMMITTEES OF THE BOARD
Audit Committee Remuneration Committee Investors Grievance Committee
Parekh M. Chairman Parekh M. Chairman Parekh M. Chairman
Sawant H. Member Sawant H. Member Moravekar S. Member
Mitbawkar V. Member Mitbawkar V. Member Tari A. Member
Shah K. Secretary Shah K. Secretary Shah K. Complianceofficer
COMPANY SECRETARY AUDITORSMr. Kiranchandra Shah M/s. H. H. Topiwala & Co.
Chartered AccountantsBRANCHES
USA, New Zealand, STOCK EXCHANGE(S)United Arab Emirates The Bombay Stock Exchange
BANKERS REGISTERED OFFICEABN AMRO Bank 114, Kalyandas Udyog Bhavan,ICICI Bank Ltd. Near Century Bazaar,HDFC Bank Prabhadevi, Mumbai 400 025Bank of Maharashtra Maharashtra
REGISTRAR & SHARE TRANSFER AGENTS ANNUAL GENERAL MEETINGM/s. Sharex Dynamic (India) Private Ltd. The 30th September 2005 at 11.30 hrs.17/B, Dena Bank Building, 2nd Floor, at 114, Kalyandas Udyog Bhavan,Horniman Circle, Fort, Near Century Bazaar, Prabhadevi,
Mumbai 400 001. Mumbai 400 025.