Compucom Software

The Directors have the pleasure in presenting their report on the
 business and operations of the Company for the year ended on March
 31st, 2008.
 
 FINANCIAL RESULTS: 
                                                       Rs. in lacs
 
 Particulars                             31.03.2008     31.03.2007
 
 Total Income                               2000.71       2,382.68
 
 Total Expenses                             1174.40       1,577.16
 
 Operating Profit (PBDIT)                    826.31         805.52
 
 Interest                                      4.41           1.52
 
 Depreciation                                186.98         199.56
 
 Profit Before Tax                           634.92         604.43
 
 Provision for Income-tax 
 including Deferred Tax                      149.46          70.46
 
 Net Profit After Tax                        485.46         533.97
 
 Appropriations
 
 Dividend                                     75.37         150.75
 
 Dividend Tax                                 12.80          25.61
 
 Transfer to General Reserve                 100.00         100.00
 
 Total Appropriations                        188.17         276.36
 
 Earning per Share: Basic & 
 Diluted (in Rupees)
 
 Considering Extraordinary Item                9.66          10.63
 
 Without Considering Extraordinary 
 Item                                          9.66          10.63
 
 Results of operations - Total revenues earned during the year amounted
 to Rs. 2000.71 lacs as compared to that of Rs.  2382.68 lacs in the
 previous financial year. The profit before tax earned has increased
 from Rs. 604.43 lacs in the previous financial year to Rs.639.35 lacs
 in the current financial year. During the year under review, the income
 from operation was Rs.1817.48 lacs compared to Rs. 2234.28 lacs in the
 previous year. This reflects a decline of Rs. 416.80 lacs, which is
 mainly due to the decline of income from learning solution segment.
 
 The profit before interest, depreciation and tax during this period is
 Rs. 826.31 lacs as compared to the previous year PBIDT i.e. Rs 805.52
 lacs.
 
 As required by AS - 21, consolidated Financial Statements are provided
 in the later sections of the Annual Report.
 
 Business Review
 
 (i) Software Services: During the year the Company focused on areas
 where higher margins were available with low risk factors. The revenue
 generated from the software segment during the FY 2007-08 was Rs.
 999.24 lacs as against Rs.1134.34 lacs during the last financial year.
 This reflects an decrease of 11.91% i. e. Rs. 135.10 lacs.
 
 Profit earned from this segment amounts to Rs. 233.53 lacs as compared
 to that of Rs. 324.60 lacs during the previous financial year, which
 has resulted in a decrease of 28.06%. The ratio of segmental profit to
 segmental revenue has decreased 5.24% from 28.61% to 23.37% as compared
 to the previous financial year.
 
 During the year JDVVNL and JVVNL have further extended their contract
 for providing and operating IT enabled call center service at Bikaner
 and Kota for next six months up to 30th September 2008 and 30th
 November 2008 respectively.
 
 (ii) ITneer Inc., USA: ITneer Inc. is a wholly owned subsidiary of
 Compucom Software Limited. It has earned total revenue of US $ 1383445
 during the financial year 2007-08. This reflects an increase of approx
 8.01% compared to the previous financial year. The Net profit of the
 company has decreased from US$ 110950 to US$ 43859. The copy of Audited
 Accounts, together with Independent Auditors Report, is provided in a
 separate section of this Annual Report.
 
 (iii) Learning Solutions: The school project at Rajasthan concluded on
 30th June, 2007. The company witnessed a successful closure of the
 project.
 
 During the year under review revenue generated from Learning Solution
 Business amounts to Rs. 588.79 lacs while the revenue generated in the
 previous financial year was Rs. 889.47 lacs. Hence there is a decline
 of Rs. 300.68 lacs i.e.33.80 %.The decline is mainly due to successful
 completion of the school project in Rajasthan and Chandigarh during the
 year.
 
 Profit earned from this segment has increased by 311.97 % to Rs. 157.25
 lacs in comparison to Rs. 38.17 lacs in the previous financial year,
 which is mainly due to the execution of high profit margin projects
 like Vocational training institute, FMS and Grace Project of RajComp.
 In terms of ratio of segment profit to segment revenue has increased to
 22.42% .Profit generated from this segment is 26.71% as compared to
 4.29% of the previous financial year.
 
 Although the Company has witnessed the successful completion of the
 BOOT education-projects in Chandigarh and Rajasthan, it has witnessed
 bright future prospects by acquiring new projects to fill the void that
 is created by the completion of these education projects, and is
 continuing to do so.
 
 The Company has acquired two new big educational project, First is an
 ICT project by Secondary Education Department Rajasthan for providing
 Computer Education on BOOT basis in 2292 Govt. Schools of Rajasthan
 over a period of four years, contract value is worth Rs 142 Crores
 (approx). Under this project the company will provide Computer
 Education to around one million students. The company has massive plans
 for capturing the advantage of Indian Education Expenditure planned
 through Govt. Promoted PPP model across India fueled by SSS ( Sarva
 Shiksha Abhiyan) of Govt, of India and the Second is an IT project on
 BOO basis in 568 Govt, schools of Delhi over the period of four year,
 contract value is Rs 15 crores (approx).
 
 (iv) Wind Power Generation:The Company had set up 5 (five) Wind Power
 Generation Plants of 0.6 MW each at Jaisalmer and Sikar, Rajasthan and
 Tumkur (Karnataka).
 
 The operation and maintenance of the Wind Power Project has been
 out-sourced to Enercon India Ltd.
 
 The revenue generated from this segment amounted to Rs. 229.46 lacs in
 the current year as compared to Rs. 210.48 lacs during the previous
 year ended on 31st March 07. This reflects an increase of 9.01%, which
 is mainly due to successful commissioning of windmill at site CK-5 in
 Karnataka.
 
 Enercon India Ltd. guarantees a minimum generation of 15 lacs units per
 annum per machine for the first 3 years for Sikar and Jaiselmer and 17
 Lacs units per annum per machine for the first year for unit situated
 at site CK-5, Karnataka In case of any shortfall in generation Enercon
 shall compensate the Company for the same. As a result of the guarantee
 clause, the Company had claimed an amount of Rs. 49.86 lacs from
 Enercon India Ltd. in lieu of shortfall in generation of wind power as
 against the guaranteed generation during the current financial year.
 
 - Guarantee of the 2 (two) wind power plants in Jaisalmer ends on 30th
 April 07.
 
 - Guarantee for 2 (two) wind power plants in Sikar have been extended
 for a further period of 2 years according to their agreement, because
 there has been is a shortfall in generation of the guaranteed number of
 units in the initial 3yrs.
 
 - Guarantee of the wind Power Plant plant in Karnataka will come to an
 end on 30th April, 2008.
 
 (v) Treasury Activities: Treasury income includes capital gains,
 dividends from mutual funds and shares, interest on FDRs etc. \ During
 the year, the revenue generated from Treasury operations has increase
 by 34.84 lacs. During the year most of the funds had been invested in
 debt fund where returns are lower but safe margins are available in
 comparison to Equity oriented funds.
 
 Employee Stock Options: In 1999 the Company issued 1,00,000 Equity
 Shares, at par, to Compucom Software Limited Employee Welfare Trust,
 for benefit of the employees, by creating a stock option plan. These
 shares have been irrevocably granted to the trust and are to be used
 for the benefit and welfare of employees. As on 31st March, 2008, the
 trust has in its ownership 9,46,855 shares which were unutilized.
 
 No fresh Stock Options were issued by the Company, during the Financial
 Year 2007-08.
 
 Directors Responsibility Statement: Pursuant to Section 217 (2AA) of
 the Companies Act, 1956, Directors state therein:
 
 (a) In preparation of the annual accounts, the applicable Accounting
 Standards have been followed along with proper explanations and
 disclosures relating to material departures.
 
 (b) The relevant accounting policies are applied consistently and the
 Directors have made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view to the state of affairs of
 the Company as on March 31, 2008 and of the Profit of the Company for
 the period;
 
 (c) Proper and sufficient care has been taken in the maintenance of
 adequate accounting records in accordance with the provision of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 (d) The annual accounts have been prepared on a going concern basis.
 
 Dividend -The Board of Directors had also declared and distributed an
 Interim Dividend of 15% @ Rs. 0.30 per share for the financial year
 ended on 31st March 2008. Record date for purpose of payment of Interim
 dividend was kept 4th feb 2008.  Dividend declared during last 9 years
 
 Financial Year      Dividend Rate
 
 1999-2000                20%
 
 2000-01                  25%
 
 2001-02                  10%
 
 2002-03                  25%
 
 2003-04                  25%
 
 2004-05                  25%
 
 2005-06                  30%
 
 2006-07                  30%
 
 2007-08                  15%
 
 Book Value Per Share : Details of Book Value during the last 9 years is
 as under:
 
 Financial Year      Book Value Per Share
                          (in Rs.)
 
 1998-99                     18.59
 
 1999-2000                   42.28
 
 2000-01                     55.74
 
 2001-02                     65.60
 
 2002-03                     69.00
 
 2003-04                     79.90
 
 2004-05                     90.79
 
 2005-06                     98.73
 
 2006-07                    105.89
 
 2007-08                    113.97
 
 Fixed Deposits - During the financial year 2007-08, your Company has
 not accepted any fixed deposits falling within the definition of
 Section 58 A of Companies Act, 1956.
 
 Directors- In accordance with the provisions of Articles of
 Association of your company, Mr. R.P Udhawat and Mr. Shiv K. Vijay
 retires by rotation- Auditors and Auditors Report - S. Misra &
 Associates, Chartered Accountants, Statutory Auditors of the Company,
 retire at the forthcoming Annual General Meeting and have confirmed
 their eligibility and willingness to accept the office, if reappointed.
 Accordingly, the said Auditors are proposed to be re-appointed as
 Statutory Auditors of the Company at the ensuing Annual General
 Meeting.
 
 Sub-division of Shares -The Company has Sub-divided its Equity Share
 Capital from 1 (one) Equity Share of Rs.10/- (Rupees Ten) each, into 5
 (five) Equity Shares of Rs.2 (Rupees Two) each in Financial year
 2007-08 and also has done the necessary amendments to the Capital
 Clause of the Memorandum of Association of the Company, and necessary
 resolution had been passed in previous Annual General Meeting.
 
 Conservation Of Energy, Research & Development, Technology Absorption,
 Foreign Exchange Outgo-Disclosure under Section 217(1)(e) of the
 Companies Act, 1956, read with the Companies (Disclosure of Particulars
 in the Report of Board of Directors) Rule. 1988 are given in the
 Annexure A
 
 Particulars of Employees - As required by the provisions of sub-section
 217(2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975, no employee is drawing
 remuneration at or above the limits mentioned therein.
 
 Human Resource Management and Employee Relation- Employees are vital
 assets of the Company. The Company has created a favorable
 work-environment that encourages innovation and nurturing of commercial
 and managerial talents in its operations. The Company also provides
 sharing in ownership of the Company through Employee Stock Option
 Scheme, wherein stock options are granted based on the cadre of the
 employees and the policy prevailing in the organization.  The Company
 continues to have cordial relation with its employees
 
 Quality Assurance - Your Company is an ISO 9001:2000 Company, certified
 by Det Norske Veritas (DNV). These norms enable us to identify risks at
 the initial planning stage of the project. The Company firmly believes
 in the pursuits of excellence to compete in this emerging and growing
 software market. Our focus has been on providing quality products and
 services to our customers. We have been maintaining ISO 9001
 certification since 1999. This Year Company is pursuing for CMMI
 level-3 certification which is to be accomplished it by September 30th
 2008. Compucom would be among the very few Companies in Rajasthan to
 have achieved this level.
 
 Corporate Governance - As required under the Listing Agreement with the
 Stock Exchange, a report on Corporate Governance is given in a separate
 section in this Annual Report.
 
 Acknowledgments - The Directors sincerely appreciates the
 contributions made by all employees, associates and business partners
 who have contributed towards the success of the Company. The Directors
 are also thankful for the co-operation, support and assistance received
 from banks, investors, customers, Central and State Government
 Departments, local authorities, vendors, Strategic Alliance Partners,
 stock exchanges and all others associated with the activities of the
 Company.  The Directors would also like to acknowledge the continuous
 support of the Companys shareholders.
 
                                  For and on behalf of the Board
 
                           Shubh K Surana      Surendra K Surana
                                 Chairman      Managing Director
 
 Jaipur, 
 July 31, 2008