24th Annual Report 2011-2012...Gurpreet Singh Sawhney 2-0 Sh. Sanjeet Malik(MD) 5 Yes 0 Sh. Vijay...

HARTRON COMMUNICATIONS LIMITED

24th Annual Report2011-2012

2

BOARD OF DIRECTORS

CONTENTS

Notice for Annual General Meeting 3

Directors' Report 4

Auditors' Report 9

Balance Sheet 11

Profit & Loss Statement 12

Notes on Accounts 14-25

Proxy Form & Attendance Slip 27

R. S. MALIK

NIRMALA MALIK

NISHA MALIK

PARMANAND SHARMA

GURPRIT SINGH SAWHNEY

KULDEEP SANDHU

VIJAY SINGH KADAN

DEVENDRA KUMAR VASHISHTHA

NEERU SANDHU

SANJEET MALIK

CHANDERJEET SINGH

AUDITORSVinod Kumar & AssociateChar tered Accountants

BANKERSPunjab & Sind BankKotak Mahindra BankCorporation Bank

REGD. OFFICEValley EstateMansa Devi Road,Panchkula, Haryana.

WORKS :B-7, Sector 32,Gurgaon, Haryana

Chairman

Managing Director

Executive Director


NOTICENOTICE is hereby given that the Twenty fourth Annual General Meeting of the members of the Company will be held at Hotel Red Bishop Sector 1 Panchkula at 11.30 A.M. on 29th September, 2012 to transact the following business:ORDINARY BUSINESS:1. To receive, consider and adopt the audited Balance Sheet of the Company as at 31st March, 2012, Profit & Loss

statement for the year ended on that date and reports of Directors and Auditors thereon. 2. To appoint a Director in place of Sh Kuldeep Sandhu who retires by rotation being eligible offers himself for re-

appointment. 3. To appoint a Director in place of Devendra Kumar Vasishtha who retires by rotation being eligible offers himself for re-

appointment. 4. “RESOLVED THAT pursuant to section 224 (1) of the Companies Act 1956 M/s Vinod Kumar & Associates, Chartered

Accountants, Chandigarh be and are hereby appointed as Auditors of the Company to hold office from the conclusion of this meeting till the conclusion of the next Annual General Meeting at such remuneration as may be settled by the Board of Directors.

For and on behalf of the Boardfor Hartron Communications Limited

Place : Panchkula Sanjeet MalikDate : 23/08/2012 Managing Director

NOTES1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and

the proxy need not be a member. 2. The proxy in order to be effective must be lodged at the Registered Office of the Company at least 48 hours before the

commencement of the meeting.3. Members are requested to bring their copies of the Annual Report to the Meeting.4. The registered of Members and the share transfer Books of the company remain closed from 25th September 2012 to

28th September 2012 (both days inclusive).5. Members are requested to notify the change of their address if any, quoting folio no. 6. Notice for Postal ballot resolutions along with the postal ballot form and self addressed envelope are being dispatched

along with this annual report of the company.

3

DIRECTORS’ REPORT 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. The Directors feel pleasure in presenting twenty forth Annual

Report along with the audited accounts for the year ended 4. That the annual accounts for the financial year ending 31st march 2012. 31st March, 2012 have been prepared on a going

concern basis.FINANCIAL RESULTFIXED DEPOSITSThe Directors have pleasure to inform you that the company

has earned about 22% more cash profit as compared to last Company has not accepted any deposits during the year nor year. The export income from the BPO business has also there are any unclaimed deposits due for repayment at the increased by about 82% as compared to last year . The close of the financial year.company has also started the business activity in the field of SUSPENSION OF TRADING OF SHARES ON BSEreal state and also made profit from it in the current year. Your Directors are constantly following up the matter with The summarized operating results are as under:- BSE so that the suspension in trading of shares is revoked at FINANCIAL HIGHLIGHTS the earliest.

(Rs. In Lacs) REAL ESTATE BUSINESSKeeping in view the emerging opportunities in real estate the AS ON 31.3.2012 AS ON 31.3.2011company has started real estate business and have also SALES & OTHER INCOME 2138.93 1344.97earned profit from the same.OPERATING PROFIT 913.28 844.64AUDITOR'SINTEREST 242.33 184.15M/s. Vinod Kumar & Associates, Chartered Accountants hold DEPRECIATION 136.26 129.45office till the conclusion of ensuing annual general meeting

PROFIT AFTER TAX 484.01 481.49 and being eligible, offer themselves for reappointment.Profit of the company has increased from Rs 481.49 lacs to Notes refer to in Auditor's report are self explanatory.Rs 484.01 lacs. The company expect's that the results for the

EMPLOYEESfinancial year 2012-13 will be even better.Particular of employees as required under section 217(2A) RETIRING DIRECTORSo f t h e c o m p a n i e s A c t 1 9 5 6 r e a d w i t h t h e

Mr Kuldeep Sandhu and Devendra Kumar Vashistsh retire by companies(Particular of employees)Rules 1975 as rotation and have offered themselves for reappointment. amended are given in the schedule of notes of accounts.Mr Vineet Malik, Director, has resigned from Directorship of Yours Directors wish to place on record the appreciation for Hartron Communications Ltd on 22/08/2012 the dedication and hard work put in by the employees at all DIRECTOR'S RESPONSIBILITY STATEMENT levels.Pursuant to section 217(2AA) of the Companies Act 1956, CORPORATE GOVERNANCEyour Directors confirm that:- A certificate from the auditors of the company regarding 1. In the preparation of annual accounts, the applicable compliance of conditions of corporate governance as

accounting standards have been followed except the stipulated in the clause 49 of listing agreement is attached to following. this report.• A.S. 15 regarding accounting for retirement benefit. ACKNOWLEDGEMENT

The provision of gratuity has been made. As regards Your Directors place on record their appreciation of the the other benefits same will be accounted for on sincere contributions by our bankers i.e Punjab & Sind Bank, payment basis as it is not possible to value the same. IDBI and Corporation Bank and other Government

Further, so far as reconciliation statements with various departments for their support.debtors, suppliers & banks are concerned, the same are Your Directors also acknowledge with thanks the continued in process and will be finalized soon. confidence and valued cooperation extended by the

2. That appropriate accounting policies have been selected business constituents and shareholders of the company.and applied consistently, and judgments and estimates that are reasonable and prudent so as to give a true and

For and on behalf of the Board fair view of the state of affairs of the company as at 31st For Hartron Communications Limited March 2012 and profit of the company for the year ending

on that date.3. That proper and sufficient care has been taken for the Place : Panchkula R S Malik

maintenance of adequate accounting records in Dated : 23/08/2012 Chairmanaccordance with the provisions of the Companies Act,

4

CORPORATE GOVERNANCE REPORT FOR THE YEAR 2011-2012Corporate governance is important for the existence of a company as it develops confidence and trust which ultimately leads to a more stable and sustained resource flows and long term partnerships with its investors and other stakeholders.The detailed report on implementation by the company of the corporate governance code as incorporated in clause 49 of the listing agreement with the stock exchange is set out below:-A. MANDATORY REQUIREMENTSCOMPANY'S PHILOSOPHY ON CODE OF GOVERNANCEHartron Communications vision on good corporate governance is a combination of business practices that results in enhancement of the value of the company to the shareholders and simultaneously enables the company to fulfill obligations to other stakeholders such as customers, vendors and to the society at large.The company has and will continue to focus its resources, strength and strategies in order to achieve this vision. The company believes that good corporate governance practices enable the management to have transparency in all dealings and providing better service with honesty and accountability, which are fundamental to the company.B. BOARD OF DIRECTORSThe composition of the Board of the Directors is governed by the provision of the Companies Act, 1956. Sh. R.S Malik is the Chairman of the company.The Board has 6 independent Directors viz.

1. Sh. Parmanand Sharma2. Sh. Gurprit Singh Sawhney3. Sh. Vijay Singh Kadan4. Sh. Devendra Kumar Vashishta5. Sh. Kuldeep Sandhu6. Mrs. Neeru Sandhu

Remaining Directors represent the private promoters on the Board of the Company except Mr Chanderjeet Singh.The names and categories of the Directors on the Board, their attendance at the board meetings during the year and at the last annual general meeting as also the number of Directorship and committee membership held by them in other companies are given below:-

Name No. of board attended during 2011-2012

meetings

Whether AGM held on 30th

attended

September 2011

No. of Directpublic companies

orship in other

No. of positions held inother public companies

committee

Sh. R.S Malik(chairman)

5

Yes

3

Smt. Nirmala Malik

2

-

1

Sh. Vineet Malik

0

-

3

Smt. Nisha Malik

5

Yes

0

Sh. Parmanand Sharma

3

-

1

Sh. Gurpreet Singh Sawhney

2

-

0

Sh. Sanjeet Malik(MD)

5 Yes 0

Sh. Vijay Singh Kadan

5 - 0

Sh. Devendra Kumar Vashishta

0 - 0

Sh. Kuldeep Sandhu

3 - 0

Smt. Neeru Sandhu

0 - 0

Sh Chanderjeet Singh

1 - 0


5

Five board meetings were held during the year 2011-2012 and the gap between two meetings did not exceed 4 months. The dates on which the board meetings were held were as follows 20.4.2011, 6.06.2011, 26.08.2011, 25.10.2011, 21.02.2012Particulars of Directors retiring by rotation and seeking the re-appointment along with their particulars have been given in the notice convening the 24th Annual General Meeting.C. ANNUAL GENERAL BODY MEETINGSLocation and time where last three annual general meetings (AGMs) were held:The last three AGMs were held as per details below:-AGM Year ended Venue Date Time

23rd 31.03.2011 Hotel Red Bishop, Sector 1, Panchkula 30.09.2011 11.00A.M

22nd 31.03.2010 Hotel Red Bishop, Sector 1, Panchkula 30.08.2010 9.30A.M

21st 31.03.2009 Hotel Red Bishop, Sector 1, Panchkula 23.09.2009 9.30A.M

a. Two special resolution were put through postal ballot in the last year . The results of these resolutions has been declared on dated 21.10.2011

b. There was no court convened meetings during the last three years.

D. COMPOSITION OF THE BOARD

1. AUDIT COMMITTEE

The audit committee of the company provides assurance to the board on the adequacy of the internal control system, financial disclosure and ensures that generally accepted accounting principles are observed by the company.

COMPOSITION

The audit committee presently comprises of two non executive Directors and Managing Director and the financial consultants.

ATTENDANCE

During the financial year ended 31st March 2012, four meetings of the audit committee were held on 6.06.2011.26.08.2011, 25.10.2011, 21.02.2012

The necessary quorum was present at the meetings.

Name of the Director No. of meetings attended

Mr. Parmanand Sharma 4

Mr. Sanjeet Malik 4

Mr. Gurprit Singh Sawhney 4

The terms of reference of the audit committee broadly are as under:-

a) To hold periodic discussions with the statutory auditors and financial consultants of the company, concerning the accounts of the company, internal control system, scope of audit.

b) To review compliance with internal audit report.

c) To review the quarterly, half yearly and annual results of the company before submission to the board.

d) To make recommendation to the board on any matter relating to the financial management of the company including the audit report.

e) Recommending the appointment of statutory/internal auditors.

2. REMUNERATION COMMITTEE

The remuneration committee comprises of three non executive independent Directors namely:-

a). Sh. Vijay Singh Kadan

b). Sh. Gurprit Singh Sawhney

c). Sh. Parmanand Sharma

Two meetings of the remuneration committee were held during the year on dated 6.6.2011 and 25.10.2011

6

CORPORATE GOVERNANCE

SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE

The Board of the company has constituted a complaint and Investor's Grievances Committee comprising of Sh. Parmanand Sharma, Sh. Sanjeet Malik and Sh. R.S Malik. The committee monitors redressal of complaints from shareholders in relation to transfer of shares, non receipt of balance sheet etc. The company has attended to all the investor's grievances/correspondence within a period of 30 days from the date of receipt.

The company's shares are in physical forms which are lodged at registered office of the company. The requests are processed within a maximum period of 30 days from the date of receipt. All share transfers are approved by Sh. Sanjeet Malik, Managing Director who has been authorised by the board in this regard.

MEANS OF COMMUNICATION

QUARTERLY RESULTS

The quarterly financial results were not sent to each shareholder. However, these were published in Financial Express (English) and Jansatta (Hindi).

GENERAL SHARE HOLDER INFORMATION

Annual general meeting of the company shall be held on the 29.09.2012 at 11.30A.M. at Hotel Red Bishop, sector-1, Panchkula.

FINANCIAL CALENDAR

Results for quarter ending 30th June, 2012 4th week of July

Results for quarter ending 30th Sept, 2012 4th week of October

Results for quarter ending 31st Dec., 2012 4th week of January

Results for quarter ending 31st March, 2013 4th week of April

Date of book closure 25.09.2012 to 28.09.2012

Dividend payment date Not applicable

STOCK MARKET DATA

No trading of shares were done at Bombay Stock exchange during the last year. Shareholding pattern as on 31st March 2012 is as under:-

Sr. No. Particulars No. of shares %age

1 Promoter, Director & Associates 6268790 70.44

2 FIs & Mutual Funds 100 -

3 Bodies Corporate 14300 0.16

4 NRI - -

5 General public 2616810 29.40

TOTAL 8900000 100

DISTRIBUTION OF SHARE HOLDING AS ON 31ST MARCH 2012

Range of Equity Shares held No. of share holders % Share amount %

1-5000 15937 98.407 23708100 26.638

5001-10000 191 1.179 1532000 1.721

10001-20000 36 0.222 562000 0.631

20001-30000 7 0.043 179000 0.201

30001-40000 1 0.006 32000 0.036

40001-50000 1 0.006 50000 0.056

50001-100000 4 0.025 268000 0.301

100001 & above 18 0.111 62668900 70.414

16195 100.00 89000000 100.00


7

AUDITOR’S CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER CLAUSE 49 OF LISTING AGGREEMENTS.

TO

THE MEMBERS OF HARTRON COMMUNICATIONS LTD.

We have examined the compliance of conditions of corporate governance by Hartron Communications Ltd. (“the company”) for the year ended 31st March, 2012 as stipulated in clause 49 of the listing agreement of the company with the stock exchange.

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 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 agreement.

We state that no investor grievances are pending for period exceeding one months except where disputed or sub-judice, as per the records maintained by the Shareholders/Investors Grievance Committee.

We further state that such compliance is not an assurance as to the future viability of the company for the efficiency or effectiveness with which the management has conducted the affairs of the company.

For VINOD KUMAR & ASSOCIATES CHARTERED ACCOUNTANTS

Place : Chandigarh Pardeep Diwan Dated : 23/08/2012 (PARTNER)

M.No. 86687FRN 00234N

8

AUDITOR’S REPORT representations relating to disclosures regarding impairment of assets as stated in To Note No. – 8 in Schedule to the Balance Sheet. The Share Holders

iii. Debit & credit balances in the accounts of HARTRON COMMUNICATIONS LTD. debtors, suppliers and few banks are subject to

PANCHKULA. t h e i r r e s p e c t i v e c o n f i r m a t i o n a n d 1. We have audited the attached Balance Sheet of M/s. reconciliation (Note –5).

HARTRON COMMUNICATIONS LTD., Panchkula as at e) On the basis of written representations from all the 31st March 2012 and the Profit & Loss Statement and directors, taken on record by the board of directors, none also the Cash Flow Statement for the year ended on of the directors is disqualified as on 31.03.2012 from that date annexed thereto. These financial statements being appointed as a director under section 274 (i)(g) of are the responsibility of the company's management. The Companies Act, 1956.Our responsibility is to express an opinion on these

f) Subject to above, we report that in our opinion and to the financial statements based on our audit except point best of our information and according to the no.4 (d) of the audit report as discussed in the following explanations given to us, the annexed accounts read paragraph.together with notes thereon give the information as

2. We have conducted our audit in accordance with required by the Companies Act, 1956 in the manner so auditing standards generally accepted in India. These required and give a true and fair view in conformity with standards require that we plan and perform the audit to the accounting principles generally accepted in India. obtain reasonable assurance about whether the

i) in the case of Balance Sheet of the state of affairs financial statements are free of material misstatements. of the company as at 31st March, 2012, and An audit includes examining on a test basis evidence

ii) in the case of Profit and Loss Statement of the supporting the amounts and disclosures in the financial Profit of the company for the year ended on that statements. An audit also includes assessing the date.accounting principles used and significant estimates

made by management, as well as evaluating the overall iii) in the case of the cash flow statement of the cash financial statement presentation. We believe that our flows for the year ended on that date. audit provides a reasonable basis for our opinion.

3. As required by the companies (Auditor's Report) order For VINOD KUMAR & ASSOCIATES 2003 issued by the Central Government of India in terms

CHARTERED ACCOUNTANTSof Sub. Section (4A) of section 227 of the companies PLACE : CHANDIGARH Parner Act, 1956, we enclose in the Annexure a statement on DATED : 23/08/2012 Pardeep Diwanthe matters specified in paragraphs 4 and 5 of the said

order to the extent applicable. M. No. 0866874. Further to our comments in the Annexures referred to in FRN 00234N

paragraphs (3) above : -

a) We have obtained all the information and explanations ANNEXURE TO THE AUDITOR’S REPORTwhich to the best of our knowledge and belief were

(Referred in the paragraph (3) of our report of even date). necessary for the purpose of our audit.i.a) The Company has maintained proper records showing b) In our opinion proper books of accounts have been kept

full particulars including quantitative details and by the Company as required by law so far as it appears situation of fixed assets. from our examination of these books.

b) As per the information and explanations given to us, the c) The Balance Sheet the Profit & Loss Statement and fixed assets have been physically verified by the cash flow statement dealt with by this report are in management during the year and to the best of our agreement with the books of account.knowledge no material discrepancies between the

d) In our opinion, the Balance Sheet and the Profit & Loss book records and physical inventory verification has Statement comply with the mandatory accounting been noticed during the year. standards referred to in section 211(3) © of Companies

c) The company has not disposed off any substantial part Act, 1956 except : of fixed assets during the year.

I. AS-15 regarding accounting for retirement iia) The management has conducted physical verification benefits i.e. provision for retirement benefits

of inventory at reasonable intervals. has not been made (Refer Note I (1.7)). b) The procedure of physical verification of stock followed ii. Further we have relied upon the management

AUDITORS' REPORT


9

by management is reasonable & adequate in relation to financial year under report and the immediately the size of the company & nature of its business. preceding financial year.

c) No significant discrepancies between the book records xi) On the basis of the records examined by us and the & physical inventories have been noticed. information & explanation given to us the company has

not defaulted in repayment of dues to bank and iii.a.) The company has not granted any loans, financial institution.secured/unsecured to other parties covered in the

register maintained under section 301 of the Act. xii) As explained to us the company has not granted any loan and advances on the basis of security by way of b. Not applicable.pledge of shares, debentures or any other security.

c. Not applicable.xiii) In our pinion the company is not a chit fund or a

d. Not applicable.Nidhi/Mutual benefit fund/Society. Therefore the

e & f. The company has not taken any interest free provisions of clause 4(xiii) of the companies (Auditor's) unsecured loan from directors & other parties covered Report 2003 are not applicable to the company. in the register maintained under section 301 of the Act

xiv) According to the information and explanation given by during the year where the terms and conditions are not

the management the company is not dealing in or prima-facie prejudicial to the interests of the company.

trading in shares, securities, debentures and other As informed to us as no written agreement has been

investments.entered into between the company & the lenders. There

xv) In our opinion the company has not given any are four such parties from whom loan has been guarantees for loans taken by associate concerns. accepted. The amount involved is Rs.249236/-.

xvi) In our opinion & on the basis of information & g. These loans are repayable on demand & as informed to explanation given to us, term loan raised during the us the payments are made as & when demanded. year has been used for purpose for which these were

iv.a) In our opinion and according to the information and raised.

explanations given to us, there are adequate internal xvii) The company has not been raised any short term control procedures commensurate with the size of the

unsecured loans. company and the nature of its business for the purchase of inventories plant & machinery and other xviii) During the year The company has not made assets and for the sale of goods & services. preferential allotment of shares to parties covered in

the register maintained Under Section 301 of the Act. b. As there are no major weaknesses in the internal control procedures so question of correcting them does xix) During the financial year the company did not issue any not arise. debentures. Hence the provisions of clause 4 (xix) of

the companies (Auditors Report) order 2003 is not v.a) The particulars of contracts or arrangements referred applicable to the company. to in Section 301 of the Act have been entered in the

register required to be maintained under that section. xx) The company has not raised any money by way of public issue during the year. Accordingly the provisions b. Not applicable.of clause 4 (xx) of the Companies (Auditor's Report)

vi) The company has not accepted any deposits from the order 2003 on the end use of money are not applicable

public within the preview of section 58A, 58AA & any to company.

other relevant provisions of the Companies Act, 1956 xxi) According to information and explanation given to us, and the rules framed thereunder.

no fraud on or by the company has been noticed or vii) The company has internal audit system commensurate

reported during the course of our audit. with its size and nature of its business.

viii) As informed to us, the Central Govt. has not prescribed the maintenance of cost records under section 209(1) (d) of The Companies Act, 1956 to the company. For Vinod Kumar & Associates

ix) As explained to us there are no disputed statutory dues CHARTERED ACCOUNTANTSoutstanding for a period of more than 6 months. The company has been regular in depositing undisputed

PLACE : CHANDIGARH Partner statutory dues i.e. P.F, ESI, Service tax & other statutory

DATED : 23/08/2012 Pardeep Diwandues with appropriate authorities except delay on few occasions. M.No. 086687

x) The company has no accumulated losses at the end of FRN. 00234Nthe financial year. It has not incurred cash losses in the

10

BALANCE SHEET AS AT 31ST MARCH, 2012

PARTICULARS NOTE NO. AS AT AS AT31.03.2012 31.03.2011

(Rs) (Rs)

EQUITY AND LIABILITIESSHARE HOLDER'S FUNDS Share Capital 1 88741500 88741500Reserves & Surplus 2 174584609 126183548NON-CURRENT LIABILITIESLong-term borrowings 3 247811412 211318741Long-term provisions 4 10776782 10507382CURRENT LIABILITIESTrade payables 5 2850863 2499202Other current liabilities 6 66616382 34868515Short-term provisions 7 19894752 21943057

TOTAL 611276300 496061945ASSETSNon-current assetsFixed assetsTangible assets 8- Gross Block 475656864 470935990- Less: Depreciation 58093801 55527870Net Tangible Assets 417563064 415408120Deferred tax assets (net) 8814079 4744548Long-term loans and advances 9 4469433 5545568Other non-current assets 10 380200 0Current assetsInventories 11 42100414 322256Trade receivables 12 6337822 7717144Cash and cash equivalents 13 93425269 19872282Short-term loans and advances 14 13390935 11723099Other current assets 15 24795086 30728928

TOTAL 611276300 496061945

FOR AND ON BEHALF OF THE BOARDAUDITOR'S REPORT

In terms of our separate report of even Chanderjeet Singh date annexed. (EXECUTIVE DIRECTOR)Sanjeet Malik (MANAGING DIRECTOR) For VINOD KUMAR & ASSOCIATESR S Malik CHARTERED ACCOUNTANTS(CHAIRMAN)

Pardeep Diwan(PARTNER)

Place : Chandigarh M.No. 86687Dated : 23/08/2012 FRN 00234 N


11

PROFIT & LOSS STATEMENTFOR THE YEAR ENDED 31st MARCH, 2012

NOTE NO. AS AT AS AT31.03.2012 31.03.2011

(Rs) (Rs)

I. Revenue from operations 16 211708070 132841847II. Other Income 17 2184514 1655622Total Revenue (I + II) 213892584 134497469IV. ExpensesCost of Material Consumed 18 54310 0Purchase of Stock in Trade 82528658 0Changes in inventories of finished goods, 19 -41832468 0and work-in-progressEmployee benefits expense 20 36306343 23489919Financial Expenses 21 24233467 18415323Depreciation and amortization expense 8 13626062 12945463Other expenses 22 45507730 26543040Total Expenses 160424101 81393744Profit/-Loss Before exceptional and 53468483 53103725extraordinary items and tax (III - IV)Exceptional items 0 0Profit/-Loss before extraordinary 53468483 53103725items and tax (V - VI)Extraordinary items 0 0Profit before tax 53468483 53103725Tax expense:Provision for Taxes 9223462 10671290Provision for Deferred Tax Charge Written Back 4069530 5716981Prior year adjustment for Income Tax 86510 0Profit/ (Loss) for the year 48401061 48149416Earning Per Share:(1) Basic(2) Diluted 5.44 5.41

THE NOTES REFERRED TO ABOVE FORM AN INTEGRAL PART OF THE ACCOUNTS





12

CASH FLOW STATEMENT FOR THE YEAR ENDING 31.3.2012CURRENT PREVIOUS

YEAR YEAR A. CASH FLOW FROM OPERATING ACTIVITIES

Net profit after tax 44331534 42432435Add:- Adjustment forDepreciation 13626062 12945463Provision for income tax 9223462 10671290Interest Expenses 24233467 18415323

91414525 84464510Less:- Other Income 2184514 1655622Operating profit before working capital changes 89230011 82808888Less/Add :- Increase (decrease) in working capitalAdd:-Decrease in trade & other receivables 0 12744237Unsecured loans 0 800000Increase in current liabilities 0Less:-Increase in trade & other receivables 35436894 0Unsecured loans 0 0Decrease in liabilities 3927723 13271569Net Cash Flow From Operating Activities 49865394 83081556

B. CASH FLOW FROM INVESTING ACTIVITIESInflowOther Income 2184514 1655622Sale of Fixed Assets 415453 0Less:- OutflowFixed Assets Purchased 16196459 4321446

-13596492 -2665824

C. CASH FLOW FROM FINANCING ACTIVITIESInflowIssue of shares 0 0Receipts from Term Loans 63292552 0Less:- OutflowInterest paid 24233467 18415323Repayment of Term Loans 0 53543581Repayment of Un- Secured Loans 1775000 0Net Cash Received from Financial Activities 37284085 -71958904Net Changes in cash & cash equivalents 73552987 8456828Csah & Cash equivalents (opening balance) 19872282 11415454Csah & Cash equivalents (closing balance) 93425269 19872282

Chanderjeet Singh Sanjeet Malik R S MalikExecutive Director Managing Director Chairman

Auditor's ReportThe Board of Directors, Hartron Communication Ltd., Panchkula.Dear Sir,We have examined the above cash flow statement of Hartron Communication Ltd. for the year ended 31st March,2012. The statement has been prepared by the company in accordance with the requirements of listing agreements clause no.31 with several stock exchanges and is based on and in nagreements with the corresponding Profit & Loss Account and Balance Sheet of the Company covered by our report of even date to the members of the company.

For VINOD KUMAR & ASSOCIATESCHARTERED ACCOUNTANTS

Pardeep DiwanPlace : Chandigarh (PARTNER)Dated : 23/08/2012 M.No. 86687

FRN 00234 N


13

NOTE ON FINANCIAL STATEMENT AND PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31ST MARCH, 2012

1. SIGNIFICANT ACCOUNTING POLICES

The significant accounting policies followed are stated below : -

1.1 Basis of Accounts

The financial statements have been prepared in accordance with applicable accounting standards, except as stated in the notes and relevant presentational requirements of the Companies Act, 1956. The financial statements are based on the historical convention & has been prepared on the basis of going concern.

1.2 Fixed Assets

Fixed assets are stated at the original cost including taxes duties freight and other incidental expenses relating to the acquisition and installation of Fixed Assets less accumulated deprecation.

1.3 Depreciation

Depreciation on fixed assets has been provided on straight line method on prorata basis at rates as prescribed in Schedule “XIV” of the companies Act, 1956.

1.4 Inventories

Stock of goods/land has been valued at cost.

1.5 Investments

The company has not made any investments during the year.

1.6 Recognition of Income/Expenditures

All revenues and expenses are accounted for on accrual basis except for processing charges (Export income), interest on calls in arrears, listing fee and leave encashement which are accounted for on cash basis.

1.7 Retirement Benefits

The provision for Gratuity has been made as per the Payment of Gratuity Act in respect of only those employees who have put in continuous minimum five years of service.

1.8 Taxation

Provision for Income Tax comprises of current tax and deferred tax charge. Current year's provision for Income Tax has been made as per the provisions of Income Tax Act, at the prevailing rates applicable for the year.

Deferred tax is recognised subject to consideration of prudence, on timing differences being difference between taxable and accounting income/expenditure that originate in the period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is `Virtual Certainty' that sufficient future taxable income will be available against which such deferred tax assets will be realised.

1.9 Foreign Currency Transactions

Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of their occurrence in case of expenditure and on the date of realization in the case of BPO Income.

1.10 Earning per Share

Basic earning per share are calculated by dividing net profit or loss for the period attributable to equity shareholders.

2. Contingent Liabilities - NIL

3. The paid up share capital and calls in arrear are pending for reconciliation. There is a difference of Rs. 27000/- between the amount as per financial books and amount as per secretarial records. No interest provision on unpaid calls have been made.

14

4. Payment made to statutory auditors : -

i) For Statutory Audit Fee Rs. 100000.00 (Prv. Year Rs. 66180.00)

5. Debit and credit balances in the accounts of debtors & suppliers and other parties are subject to their respective confirmation and reconciliation.

6. All the previous year figures have been regrouped, rearranged & recast wherever necessary.

7. The Company has written off bad debt amounting to Rs. 1.04 lacs during the year.

8. On the basis of physical verification of assets & cash generation capacity of these assets in the management perception, there is no impairment of assets as on date.

9. The company has not transferred the unpaid share application refund amount balance outstanding for more than 8 years in Investor Education & Protection Fund.

10. Related party disclosures :

i) Related Parties

a) Related enterprises

i) Panchkula Agro Foods Ltd.

ii) Aravali Engineers Pvt. Ltd.

b) Key Managerial personal

i) Mr. R.S. Malik

ii) Mr. Sanjeet Malik

iii) Mrs. Nirmala Malik

ii) Transaction with related parties

i) Rent paid to Panchkula Agro Foods Ltd. Rs. 4800000/-.

ii) Rent paid to Mrs. Nirmala Malik Rs. 1080000/-.

iii) Security given to Panchkula Agro Foods Ltd. Rs. 1263865/-(Previous year 2500000/-)

iv) Remuneration to Mr. Sanjeet Malik Managing Director

Particulars Current Year Previous Year

Salary Rs. 3600000/- Rs. 3600000/-

LIC Premium Rs. 120108/- Rs. 120010/-

P.F. Rs. 432000/- Rs. 432000/-

v) Remuneration R.S. Malik Chairman – Salary Rs. 3500000/-.

vi) Interest free unsecured loans : -

i) Mr. Sanjeet Malik Amount received Rs. NIL and repaid Rs. 800000/-.

ii) Aravali Engineering (P) Ltd. amount received Rs. NIL and repaid Rs. 975000/-.

11. i) The company follows deferred tax method of accounting. The company has accounted the cumulative net deferred tax liability written back in respect of timing differences between book & tax profits as on 31.3.2012. Further, written down value of buildings and depreciation thereon has not been considered for the purpose of calculating deferred tax liabilities due to permanent difference which is not capable of reversal.


15

ii) Deferred tax assets & liabilities are attributable to the following items.

Deferred tax assets Deferred tax Assets Deferred tax Assets (liability) as on 31.3.2012 as on 31.3.2011

Due to difference in WDV 8814079.00 4744548.00

12. The income from BPO Service Rs.3,80,97,942/- (Previous Year Rs. 2,0861481/-) thereon in foreign currency has been booked on the basis of the Indian currency realised.

13. The directors have foregone their sitting fee for Board meetings & various committee meetings.

14. Additional information pursuant to the provisions of paragraph 3, 4C, 4 D of part II of Schedule VI to the companies Act, 1956.

A. Major Raw Material Consumed and net of sales

Items Current Year Unit Quantity Value

(Rs.)

Previous Year Unit Quantity Value

(Rs.) -----NIL-- --NIL-- B.Value of imported & indigenous raw material stores and spares consumed.

Particulars Raw Material Consumed

%of the total Consumption

Stores & spares consumed


Raw Material Consumed





Imported

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NILIndgenous

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NILNIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

C. Detail of Raw Material Purchased & soldParticulars

Opening Stock

Purchase

Sale

Closing Stock

ACB RSU X RC x 00-100

2

0

2

0 ACBE RSU x RN 01-000

2

0

2

0

ACBE RSU x RN 02-000

2

0

2

0 ACB MXXX BPT

1

0

1

0

AC MAX RMD X X

4

0

4

0

D.Product wise detail of sales

Current Year

Quantity Nos. Amount

(Rs.)

Previous Year

Quantity Nos. Amount

(Rs.)

Miscellaneous

---

---

--

----

Sr. No.

Particulars Current years ending on 31.03.2012

Previous years ending on 31.03.2011

NIL

NIL

NIL

NIL

E

F. EXPENDITURE IN FOREIGN CURRENCY EQUIVALENT IN IRS

Current Year

Previous Year

Travelling Expenses

Director

1371783.59

Other

1637855.00

16

17991111223880

Expenditure on employees in receipts of aggregate of remuneration –Not less then Rs. 6000000/- p.a. (Previous years Rs. 6000000/- p.a.) if employed throughout the year –Not less then Rs. 500000/- p.m. (Previous years Rs. 500000/- p.m.) if not employed throughout the year

H) INCOME IN FOREIGN CURRENCY EQUIVALENT IN IRS

Processing Claims etc. 38097942.00 20861481.00

15. SEGMENT REPORTING Business Segment have been considered as the primary segment. The company is organised into 3 business segments namely.

I) Rent Income ii) Office back up operations iii) Real Estate Segment Revenue, result, assets & liabilities have been accounted for on the basis of their relationship to the operating activities of the segment & amounts allocated on a reasonable basis. Particulars Rent Income Office Back Production Real Total

Up Operations EstateRevenue External 1241.13 380.97 0.15 494.50 2117.24Internal 0.00 0.48 0.00 0.00 0.00Unallocable revenue 0.00 0.00 0.00 0.00 21.68Total : 1241.13 381.46 0.15 494.50 2138.92Result Segment Result 877.07 -141.73 -3.07 90.21 822.48Unallocable -287.80Corp. Expenditure 534.68(Net of unallocable revenue)Net Profit before Tax 534.68Other Information Segment Assets 3963.32 89.83 0.00 0.00 4053.15(Net of Depreciation)Unallocatable 122.49Corp. Assets 1937.12Total Assets 6112.76Other Information Segment Liabilities 2991.02 15.62 0.00 25.97 3032.61Unallocable 446.61Corp. Liabilities 2633.54Total Liabilities 6112.76Capital Expenditure 20.00 51.28 0.00 0.00 71.28Unallocable Capital Exp. 90.69Depreciation 104.34 18.55 0.00 0.00 122.89-On unallocable assets 13.38Non Cash Expenses 0.00 0.00 0.00 0.00 0.00other than DepreciationDebited to Profit & Loss A/c.






17

NOTES ON ACCOUNTNOTE '1' SHARE CAPITAL

PARTICULARS CURRENT YEAR PREVIOUS YEAR

AUTHORISED 9000000/- Equity Shares of Rs. 10/- each 90000000 90000000

ISSUED SUBSCRIBED, CALLED & PAID UP8900000 Equity Shares of Rs. 10/- each 89000000 89000000

Less : Call in Arrears 258500 258500

TOTAL SHARE CAPITAL: 88741500 88741500

Disclosure pursuant to Note no. 6(A)(d) of Part I of Schedule VI to the Companies Act, 1956

Particulars Equity Shares Preference SharesNumber Number Number Rs. 31.3.212 31.3.2011

Shares outstanding at the beginning of the year 8900000 8900000 NIL NILShares Issued during the year 0 0Shares bought back during the year 0 0Shares outstanding at the end of the year 8900000 8900000 NIL NIL

Disclosure pursuant to Note no. 6(A)(g) of Part I of Schedule VI to the Companies Act, 1956

Name of Shareholder As at 31 March 2012 As at 31 March 2011No. of Shares held % of Holding No. of Shares held % of Holding

HARTRON TECHNOLOGIES PVT LTD 1580000 17.753 1580000 17.753

SANJEET MALIK 1490165 16.743 964215 10.834

NISHA MALIK 660000 7.416 0 0

R S MALIK 548400 6.162 548400 6.162

VINEET MALIK 532850 5.987 0 0

NOTE ‘2’ RESERVES & SURPLUS


General Reserve 1730000 1730000

Previous Year Profit b/f 124453548 76304132

Add:Profit/(Loss) during the year 48401061 172854609 48149416 124453548

TOTAL RESERVES & SURPLUS 174584609 126183548

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18



TERM LOANS- From Banks-- Secured:- Punjab & Sind Bank 131321074 97519505(Secured against future rentals & equitable mortgage of property at Plot 244-45 Udyog Vihar Phase -IV, Gurgaon)ICICI bank -Car Loan II 0 0(Secured against Hypothecation of Vehicle)Daimler Finance -Car Loan 4466102 0(Secured against Hypothecation of Vehicle)

135787176 97519505

Term Loan from P& S Bank (Secured against future rentals & equitable mortgage of property at Plot 244-45 Udyog Vihar Phase -IV, Gurgaon)Name of the Bank Description Period of Amount of Year of Start Year of Ending

Instalment Loan of Instalment of Instalment Punjab & Singh Bank Term Loan -I 9 years 2450.00 lacs 2008-09 2016-17Punjab & Singh Bank Term Loan -II 7 years 1500.00 lacs 2010-11 2016-17

Car Loan(Secured against Hypothecation of Vehicle)Name of the Description Period of Amount of Principal Interest Date of Date of Institution Instalment EMI per Amount Amount Start of Ending of

month EMI EMIDaimler Financial Car Loan 3 years 245250 7500000 1329000 11.12.11 11.11.14Services (India) Pvt. Ltd.

OTHER LOANS AND ADVANCESUnsecured:Loans from Directors 249236 1049236

Loans from Body Corporates 0 975000

Security Deposits(Rent) 111775000 111775000

TOTAL 112024236 113799236

TOTAL LONG-TERM BORROWINGS 247811412 211318741

NOTE "4" LONG TERM PROVISIONS


Provision for Gratuity 2174700 1905300Provision for House Tax 8602082 8602082

10776782 10507382

NOTE "3" LONG TERM BORROWINGS

19

NOTE "5" CURRENT LIABILITIES


TRADE PAYABLESTrade payables (material & services) 2850863 2499202TOTAL TRADE PAYABLES 2850863 2499202

NOTE "6" OTHER CURRENT LIABILITIES


(a) Current maturities of long-term debts

Term Loans

- From Banks-

- Secured:-

Punjab & Sind Bank 55334000 32258000ICICI bank -Car Loan II 0 367250

(Hyp.of vehicle )- From Other Parties-

- Secured:

Daimler Finance 2316132 0

-Car Loan

(Hyp.of vehicle )Total Current maturities of long-term debts 57650132 32625250.00

Term Loan from P& S Bank (Secured against future rentals & equitable mortgage of property at Plot 244-45 Udyog Vihar Phase -IV, Gurgaon)Car Loan

(Secured against Hypothecation of Vehicle)(b) Other Payables:

Expenses Payable 4885738 1580623

TDS Payable 984965 220560

ESI Payable 27689 0

PF Payable 80620 106230

Advance from Customers 2745183 124235

Other payables 242055 211617

Total other payables 8966250 2243265TOTAL OTHER CURRENT LIABILITIES 66616382 34868515

NOTE "7" SHORT TERM PROVISIONSPARTICULARS CURRENT YEAR PREVIOUS YEAR

Provision for Income Tax AY(2010-11) 0 11271767



TOTAL SHORT TERM PROVISIONS 19894752 21943057

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20


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NOTE "9" NON CURRENT ASSETS


Long term loans and advancesSecurities:Security-Telephone/internet 188000 28000Security-Electricity 1805280 1805280Security-Rent 1263865 2500000Security-Others 1212288 1212288TOTAL Long term loans and advances 4469433 5545568

NOTE "10" OTHER NON - CURRENT ASSETS


Trade receivable 380200 0Total other non -current assets 380200 0

NOTE "11" INVENTORIES


- Finished goods 0 207676- Raw Materials 0 54310- Work-in-process 0 60270- Land 42100414 0 TOTAL INVENTORIES 42100414 322256

NOTE "12" TRADE RECEIVABLES


-- Less than six months 6312119 3704909- Others 25703 4012235TOTAL TRADE RECEIVABLES 6337822 7717144.51

NOTE "13" CASH & CASH EQUIVALENTS


- Cash-in hand 348510 346576- Balance with Banks in C\A 84276759 5525706- Balance with Scheduled Banks in FDR 0 14000000- Cheques in Hand 8800000 0TOTAL CASH & CASH EQUIVALENTS 93425269 19872282

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22

NOTE "14" SHORT TERM LOANS AND ADVANCES


- Advance to Suppliers/service providers 504728 8330767- Advance for Land 10500000 0- Advance - Others 2386207 3392332TOTAL SHORT TERM LOANS AND ADVANCES 13390935 11723099

NOTE "15" OTHER CURRENT ASSETS


Pre-Paid Expenses 249376 197898Staff Imprest/Advance 80078 0Tax Deducted at Source AY(2010-11) 0 19276629Tax Deducted at Source AY(2011-12) 11103373 11103373Tax Deducted at Source AY(2012-13) 12716831 0ESI recoverable 80509 80508FBT refundable (2005-06) 63015 63015Service Tax Recoverable 501905 7504TOTAL CURRENT ASSETS 24795086 30728928

NOTE "16" REVENUE FROM OPERATIONS


(a) Rent Income 124113023 111980366(b) Export Earning From BPO 38097942 20861481(c) Domestic Earning From BPO 47605 0(d) Sale of Land 49449500 0TOTAL REVENUE FROM OPERATIONS 211708070 132841847

NOTE "17" OTHER INCOME


Interest On FDR 1229037 0Interest On Income Tax Refund 525938 1423330Income Relating To Prior Period 0 225360Exchange Rate Fluctuation 381243 0Amount Written Off 33296 6932Other Income 15000 0TOTAL Other Income 2184514 1655622GRAND TOTAL 213892584 134497469

NOTE "18" MATERIAL CONSUMED


Opening Stock 54310 54310Add:Purchase 0 0Less:Closing Stock 0 54310Total Material Consumed 54310 0


23

NOTE "19" INCREASE/DECREASE IN STOCK


Opening StockManufactured Goods- Finished goods 207676 207676- Work-in-process 60270 60270

267946 267946Trading goods 0- Land 267946 267946Closing StockManufactured Goods- Finished goods 0 207676- Work-in-process 0 60270Trading goods 0 267946- Land 42100414 0

42100414 267946(Increase)/Decrease in Stock -41832468 0

NOTE "20" EMPLOYEE BENEFITS EXPENSES


Salary & Wages and allowances 24675325 16224634Director's Salary 7220108 4967361Staff Welfare expenses 2956576 1431476Bonus 865000 189000Contribution to PF 514128 677448Contribution to ESI 55116 0Medical Expenses 20090 0TOTAL Employee benefits expenses 36306343 23489919

NOTE "21" FINANCIAL EXPENSES


Bank charges 89415 43961

Bank Interest 23871569 18003195

Interest On Vehicle Loan 272483 82184

Exchange Rate Fluctuation 0 285983

TOTAL FINANCIAL EXPENSES 24233467 18415323

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24

NOTE "22" OTHER EXPENSES


Administration & Selling Expenses

Repair & Maint -Building 3094718 8706773

Travelling & Conveyance 3299162 3155908

Rent 5880000 2880000

Legal & Professional Charges 2022538 1280790

Cab/Bus Hire Charges 3184622 1232498

Internet Expenses 1379265 1201659

Insurance Expenses 632714 371073

Donation 31000 551000

Business Promotion \Entertainment Exp 1415839 504402

Computer Running & Maintenance 275755 397134

Telephone & Mobile Expenses 347573 211634

Conveyance Expenses 168833 400794

Festival Expenses 702158 261800

Office Maintenance Expenses 707368 343201

Postage & Courier Charges 738053 440945

Printing & Stationary Expenses 216046 279702

Vehicle Running & Maintenance Expenses 626881 336539

Contractors salary 3037108 346949

Repair & Maint - Electricals 896410 263159

Rate, Fee & Taxes 164682 196099

Software Expenses 439768 121659

Bad Debts Written Off 10397761 0

Maintenance Charges (HSIDC) 20000 86548

Audit Fee 100000 66180

Fees & Subscription 89605 54468

Repair & Maint - Others 185206 96220

Advertisement Expenses 73758 41998

TDS/Service Tax and interest 1848265 32559

Staff Recruitment Expenses 127165 43293

News paper & Periodicals 35710 30052

Listing Fees 561572 19503

Expenses Pertaining to Previous Year 0 47089

Amount Written Off 40090 33296

Loss On Sale Of Fixed Assets 188454 0

Truck & Crane Hire Charges 282650 0

Generator Running & Maintenance Expenses 885199 1466876

Water & Electricity 1411803 1041240

TOTAL OTHER EXPENSES 45507730 26543040

25


BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI) REGISTRATION DETAILS

Registration No. 05-30379 State Code Balance Sheet Date 31st March, 2012 05

Ii) Capital Raised during the year (Amount Rs. in lacs)Public Issue NIL Bonus Issue NIL Right Issue NIL Private Placement NIL

Iii) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount Rs. in Thousands)Total Liabilities Total Assets

611276 611276

Sources of Funds Paid-Up Capital Reserves & Surplus

88741 174585Non Current Liability Current Liability

258589 89361

Application of Funds Net Fixed Assets Long Term Loans

417563 4469Current Assets Misc. Expenditure

180050 -Non Current Assets Deferred Tax Assets

380 8814

Iv) Performance of Company (Amount in Thousands)Turnover Total Expenditure 213893 160424

Profit before Tax Profit after Tax53469 48401

Earning Per Share in Rs. Dividend 5.44 NIL

V) GENERAL NAMES OF THREE PRINCIPAL PRODUCTS/ SERVICES OF COMPANY (AS PER MONETARY TERMS)

AUDITORS REPORTIn terms of our separate report of even date annexed.

26

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HARTRON COMMUNICATIONS LIMITEDRegd. Office : Valley Estate, Mansa Devi Road

Panchkula, Haryana.

(In case the Member is unable to be present in person at the meeting this form may be used.)

I/We of _______________________________________________________________________________being a

member/members of Hartron Communications Limited hereby appoint Mr./ Mrs. /Miss __________________________

of __________________________ or failing him/her/, Mr./Mrs./Miss of as my/our proxy to attend and to vote for me/us

and on my/our behalf at the TWENTY FOURTH ANNUAL GENERAL MEETING of the Company to be held on 29th

September, 2012 at 11.30 A.M. at Hotel Red Bishop, Sector 1, Panchkula, Haryana and at any adjournment thereof.

Signed this ____________________day of ____________________________ 2012

Regd. Folio No.______________________________________

Signature __________________

NOTE :

1. The Proxy must be deposited at the Registered Office of the Company at least 48 hours before the time for holding

the meeting.

2. A proxy need not be a member of the Company.

HARTRON COMMUNICATIONS LIMITEDRegd. Office : Valley Estate, Mansa Devi Road, Panchkula, Haryana.

ATTENDANCE SLIP(To be handed over at the entrance of the Meeting Hall)

Name of the Attending Member (In Block Letters) Regd. Folio No.

No. of Shares

Name of the Proxy (IN BLOCK LETTERS)

[To be filled in if the Proxy attends instead of the Member (s)]

I hereby record my presence at the TWENTY FOURTH ANNUAL GENERAL MEETING of the Company held on 29th

September, 2012 at 11.30 A.M. at Hotel Red Bishop, Sector 1, Panchkula.

Member's/Proxy's Signature

(To be Signed at the time of handing over this slip)

NOTE : Additional Copies of Annual Report will not be made available at the Meeting. Therefore, the copy of the

Annual Report may please be brought to the Meeting Hall.

Proxy Form

Re.1

Revenue

Stamp


BO

OK

PO

ST

(Printed M

aterial)

If undelivered, please return to:H

AR

TR

ON

CO

MM

UN

ICA

TIO

NS

LTD

.V

alley Estate, M

ansa Devi R

oadP

anchkula-134 114, Haryana.

SATYADEEP OFFSET PRINTERS(P) LTD, Chd. Ph. : 0172- 4616343, 5079707

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The management of Hartron Communications Ltd. presents its analysis report. The report containsexpectations of the Company’s business based on current environment. The Company was incorporatedon 7th October, 1988. The Company is a leading offshore business process outsourcing company locatedin Delhi/ NCR region, India with a state-of-the-art infrastructure and has been in the business of providingMedical Billing and Healthcare related services to Doctors, Hospitals, Clinics, Diagnostic centers, MedicalBilling Companies in United States of America since 2001.And As per the planning of last year to makean entry into Real Estate Business the company has started business activities in the field of real stateand the earned a small profit during the current year.

Hartron Employs more than 95 billing specialists and has expertise in handling 20+ specialties. Ourprimary focus is to speed up the billing process and increase the collections. We take a phased approachthat will work for our business and deliver on our promises.

Industry Structure

Hartron is an embedded communications solutions company, that helps businesses across thecommunications value chain accelerate product development life cycles. The global mega trends in theembedded space have a strong bearing on the addressable opportunity of Hartron. The currentaddressable opportunity for India in embedded systems in across the 8 verticals as assessed by a studycarried out by NASSCOM is huge and approximately US $ 50 billion. The company has a diversifiedcustomer base. Considering the severe competition and dominance of MNCs in this sector, the companyis continuously looking for diversification of its customer’s base as well as products. The same is beingdone by exploring emerging business segments or by introducing new products or by acquiring newtechnologies.

The company is exploring thrust areas like defence, green energies etc. and making efforts to generatehigher revenue from these segments. Simultaneously the company has entered into Real Estate industry.At present, the real estate sector is playing a crucial role in the overall development of India’s coreinfrastructure.

Outlook

Industry Outlook

FY2012 is a landmark year – while the Indian IT-BPO industry weathered uncertainties in the global

business environment, this is also the year when the industry is set to reach a significant milestone –

aggregate revenue for FY2012 is expected to cross USD 100 billion. Aggregate IT software and services

revenue (excluding hardware) is estimated at USD 88 billion.

Software and services revenues (excluding Hardware), comprising nearly 87 per cent of the total industry

revenues, expected to post USD 87.6 billion in FY2012; estimated growth of about 14.9 per cent over

FY2011.Within Software and services exports, IT services accounts for 58 per cent, BPO is nearly 23 per

cent and ER&D and Software Products account for 19 per cent.

COMPANY PERFORMANCE

Financial Year 2012 there is an increase in overall revenue of the company to the extent of 59.36% over

the last year. The export income from the BPO business has been increased to the tune of 82.62% over

last year.

Opportunities

Within the global sourcing industry, India was able to increase its market share from 51 per cent in 2009,

to 58 per cent in 2011, highlighting India’s continued competitiveness and the effectiveness of India-

based providers delivering transformational benefits. As a proportion of national GDP, the sector

revenues have grown from 1.2 per cent in FY1998 to an estimated 7.5 per cent in FY2012.The industry’s

share of total Indian exports (merchandise plus services) increased from less than 4 per cent in FY1998

to about 25 per cent in FY2012.While the global macroeconomic scenario remained uncertain, the

industry exhibited resilience and adaptability in continually reinventing itself to retain its appeal to clients.

Embracing emerging technologies, increased customer-centricity, deepening focus on new markets,

adopting new business models are some successful growth strategies followed by the industry

Threats and Risks

Continuously evolving market place increases product churn and reduces timelines. This increases

business risks and puts pressure on companies to continuously innovate and explore investments into

new markets and products.

Policy framework and a perceived purchaser bias in India results in skewed playing field in favour of

MNC’s which Indian telecom manufactures find difficult to match.

Financial Review

Operating Results

(A) Sales and other income:During the financial year 2011-2012, the Sales have increased from Rs. 1344.97 lacs toRs.2138.93 lacs and operating profit from Rs.844.64 lacs to Rs.913.28 lacs.

(B) Expenditure Analysis:

(a)Employee Benefit ExpensesDuring the current year, the Employee Benefit expenss has been increased to Rs36.30 lac as compaired to 23.48 lac in the previous year.

(b)Operating Administrative and other expenses:The expenses have been increased to Rs. 455.07 lacs as compared to Rs. 265.43lacs in the previous year.

(c)Financial Expenses:The financial charges increased Rs.242.33 lacs as compared to Rs 184.15 lacs in theprevious year.

(d)Depreciation:Depreciation increased to Rs.136.26 lacs as compared to Rs.129.45 lacs in theprevious year.

(e)Net Profit:During the current financial year, the company has earned a net profit of Rs. 484.01lacs as against net profit of Rs.481.49 lacs during the last year.

Human Resources / Industrial Relations

The employees of Hartron are the backbone and this resource is very efficiently utilized. The Companynurtures its employees through greater knowledge, opportunity, responsibility, accountability, innovationand discipline. All the policies concerning the employees are made keeping in view the fact thatmanpower is the most precious resource for the company.

The company is equipped with qualified and professional staff. The employees are groomed througheffective system of assessment, performance appraisal, training including sharing of lectures throughlocal area network. The company frames its HR policies keeping in mind that human resource is corestrength of the company. Good HR policies not only lead to contentment of employees by providing themwith equal opportunities to grow but also help in achieving the laid down objectives effectively.

The Company provides its employees with congenial atmosphere to work as a cohesive team. The effortsof all the employees are synchronized and coordinated towards achieving common objectives. Further allemployees are encouraged to participate in the decision making process. During the year 2010-11 theemployee management relations remained cordial and positive.

Adequacy of Internal controls

The Company has a proper and adequate system of internal controls to ensure that all assets aresafeguarded and protected against loss from unauthorized use or disposition and those transactions areauthorised, recorded and reported correctly.

The Company has an extensive system of internal controls which ensures optimal utilization andprotection of resources, IT security, accurate reporting of financial transaction and compliance withapplicable laws and regulations as also internal policies and procedures.

The internal control system is supplemented by extensive internal audits, regular reviews bymanagement, and well-documented policies and guidelines to ensure reliability of financial and all otherrecords to prepare financial statements and other data.

For and on behalf of the Board of Directors


SD/- SD/- SD/-

CHANDERJEET SINGH SANJEET MALIK R S MALIK

EXECUTIVE DIRECTOR MANAGING DIRECTOR CHAIRMAN

PLACE CHANDIGARH

DATED 23.08.2012

24th Annual Report 2011-2012...Gurpreet Singh Sawhney 2-0 Sh. Sanjeet Malik(MD) 5 Yes 0 Sh. Vijay...

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