ORG Informatics

1.  To the Members
 
 The Directors have pleasure in submitting the Annual Report and
 Audited Statement of Accounts for the year ended 31.3.2008.
 
 2.  Financial Results
 
 The financial Results of the Company on consolidated basis are
 summarized hereunder :-
                                                 2007-2008    2006-2007
                                                      TRs.         TRs.
 
 Income                                          2,468,115    3,144,858
 Expenditure                                     2,246,842    2,831,703
 Gross Profit                                      221,273      313,155
 Interest & Finance                                 73,843       43,567
 Charges
 Depreciation &                                     81,961       34,777
 Amortization
 Tax                                                41,708       59,344
 Prior Period Adjustments                           20,199        2,194
 Net Profit                                          3,562      173,272
 
 3.  Dividends
 
 The Directors feel that companys profits need to be plough back to
 accelerate the growth pace in the future which will ultimately increase
 the worth of the shareholders and therefore, your Directors are not
 recommending payment of any dividend for this year.
 
 4.  Operations
 
 Global uncertainty and adverse development across the sector has also
 impacted the Revenue and profit margin of the company compared to the
 previous year.  Your Company had reported last year that we were
 considering acquisition of Satellite Communication Business in Europe.
 It is our pleasure to inform you all that we have acquired the running
 Satellite Communication Business of M/s Belgacom, SA, Belgium by
 incorporating a wholly owned subsidiary company namely Belgium
 Satellite Services SA (BSS). The acquisition was funded by issue of
 Foreign Currency Convertible Bonds (FCCB) raised by company in
 November, 2007. During the year under review the new subsidiary BSS has
 contributed revenue of approximately INR 40.25 crores and profit of INR
 6.37 crores. The company is confident that in the coming year BSS will
 contribute significantly in the growth of ORG Group.
 
 5.  Subsidiaries
 
 The company has four wholly owned subsidiary companies namely, ORG
 Telecom Ltd., Unified Technologies Pvt. Ltd., ORG Singapore Pte. Ltd.
 (formally known as DGIT Solutions Pte. Ltd, Singapore) and Belgium
 Satellite Services SA (Belgium). The Belgium Satellite Services SA has
 been incorporated under the law of Belgium on 18th October, 2007 to
 acquire running business of M/s Belgacom SA. During the period under
 review the subsidiary has achieved revenue of INR 40.25 crores and
 earned a net profit of INR 6.37 crores. These are unaudited results as
 the first financial year of the subsidiary will be closed on 31st
 March, 2009, which is permissible under the Law of Belgium.
 
 Audited Balance Sheets, Profits & Loss accounts, Directors reports and
 auditors report of these subsidiary companies are not attached with
 this Annual Report as the company has taken the Central Government
 approval under section 212 of the Companies Act, 1956, except for the
 Belgium Setallite Services SA (Belgium) whose first financial year will
 be closed on 31st March, 2009.
 
 6.  Employees Stock Options Scheme
 
 Pursuant to permission granted by the shareholders of the Company to
 issue shares under ESOS to its employees, your Board of Directors has
 formed an ESOS Committee. As on date this Committee is consisting of
 Mr. Ajoy K. Khandheria; Mr. John Cornell, Mr. Kartikeya V. Sarabhai and
 Mr. B.V. Suryakumar, Directors of the Company.
 
 Pursuant to the ESOS scheme framed by the Company in accordance to the
 approval obtained from shareholders vide resolution dated August 30,
 2003, Company has got in principle approval for issuance of 1176000
 equity shares from the Stock Exchange, Mumbai. These shares could be
 issued by the ESOS Committee from time to time in accordance with the
 Scheme and SEBI Guidelines. The said ESOS Scheme was extended to the
 employees of Subsidiary Company i.e. ORG Telecom Ltd. also vide Special
 Resolution passed by the shareholders of the Company in their Annual
 General Meeting held on 30.8.2005.
 
 Following disclosures are being made in respect of the present ESOS
 Scheme and Options allotted pursuant thereto as per the requirement of
 Clause 12.1 of the SEBI (ESOS & ESPS) Guidelines, 1999:-
 
 I. (a) Options granted : 127500 (On May 17, 2004 to be vested over a
 period of 4 years equally at the rate of 25% each year).
 
 (b) The pricing formula : Par Value or Last One year average of the
 closing price whichever is high.
 
 (c) Options vested :
 
 (i) As on May 7, 2005- 30,000 Options were vested
 
 (ii) As on May 17,2006- 23,625 another Options were vested
 
 (iii) As on May 17,2007- 23,625 another Options were vested
 
 (iv) As on May 17, 2008- 23,625 another Options were vested
 
 (d) Options exercised : 
 
 (i) 29,250
 (ii) 23,625 
 (iii) 23,625 
 (iv) 11,750
 
 (e) (i) The total number of shares arising as a result of exercise of
 Option:
 
 (i) 29,250
 (ii) 23,625
 (iii) 23,625
 (iv) 11,750
 
 (f) Options lapsed : 
 
 (i) 750
 (ii) 5625
 (iii) Nil
 (iv) 11,875.
 
 (g) Variation of terms of Options: N.A. except inclusion of employees
 of Subsidiary of the Company (ORG Telecom Limited).
 
 (h) Money realized by exercise of Options :
 
 (i) Rs. 2,92,500
 (ii) Rs. 2,36,250
 (iii) Rs. 2,36,250
 (iv) Rs. 1,17500
 
 (i) Total number of Options in force: 11,76,000 Options
 
 (j) Employee wise details of Options granted to : Initially Options
 were granted to 15 persons including senior managerial personnel i.e.
 51500 Options were granted to these senior managerial personnel.
 
 9 personnel were granted 5% or more of Options out of the total Options
 granted in that year.
 
 Now, the 4 years equally vesting and exercise of Options under this
 tranche has been completed.
 
 II. (a) Options granted: 1,47,500 Options were granted to the Employees
 of ORG Telecom Limited ( a wholly owned subsidiary of your Company) and
 1,45,500 Options were granted to the Employees of ORG Informatics
 Limited on 30.8.2005 to be vested over a period of 4 years equally at
 the rate of 25% each year.
 
 Total Options granted : 2,93,000
 
 (b) The pricing formula : Par Value or Last One year average of the
 closing price whichever is high.
 
 (c) Options vested : (i) As on August 30,2006 - 36,875 Options were
 vested to the Employees of ORG Telecom Limited and 36,375 Options were
 vested to the Employees of ORG Informatics Limited.
 
 Total Options vested : 73,250
 
 (ii) As on August 30, 2007- 33,625 Options were vested to the Employees
 of ORG Telecom Limited and 36,375 Options were vested to the Employees
 of ORG Informatics Limited.
 
 Total Options vested : 70,000
 
 (d) Options exercised (i) 24,875 Options were exercised by the
 Employees, of ORG Telecom Limited and 17,200 Options were exercised by
 the Employees of ORG Informatics Limited.
 
 Total Options exercised : 42,075
 
 (ii) 23,025 Options were exercised by the Employees of ORG Telecom
 Limited and 13,625 Options were exercised by the Employees of ORG
 Informatics Limited.
 
 Total Options exercised : 36,650
 
 (e) The total number of shares arising as a result of exercise of
 Options:
 
 (i) 42,075 i.e. 24875 shares by Employees of ORG Telecom Limited and
 17,200 shares by Employees of ORG Informatics Limited.
 
 (ii) 40,200 i.e. 23,025 shares against exercise of current year Options
 and 3,500 shares against exercise of last years carried forward
 Options by the Employees of ORG Telecom Limited and 13,625 shares
 against exercise of current year Options and 50 shares against exercise
 of last years carried forward Options by the Employees of ORG
 Informatics Limited
 
 (f) (I) Options carried to next year:
 
 (i) 27,925 i.e. 8,750 Options were carried to next year by the
 Employees of ORG Telecom Limited and 19,175 Options were carried to
 next year by the Employees of ORG Informatics Limited.
 
 (ii) 45,250 i.e. 3,875 Options of the current year were carried to next
 year and 3,875 Options of the last years were also carried to next
 year by the Employees of ORG Telecom Limited and 18,750 Options of the
 current year were carried to next year and 18,750 Options of the last
 years were also carried to next year by the Employees of ORG
 Informatics Limited 
 
 (II) Options lapsed :
 
 (i) 3250 Options were Lapsed by the Employees of ORG TElecom Limited
 
 (ii) 1,375 Options of the last years carried forward Options were
 lapsed during the current year and 6,725 options were lapsed for the
 current year Options by the Employees of ORG Telecom Limited and 375
 Options were lapsed for the last year carried forward Options and 4,000
 Options were lapsed for the current year Options by the Employees of
 ORG Informatics Limited.
 
 (g) Variation of terms of Options: N.A.  except inclusion of employees
 of Subsidiary of the Company (ORG Telecom Limited).  
 
 (h) Money realized by exercise of Options :
 
 (i) Rs.  21,03,750 i.e. Rs. 12,43,750/- from the Employee of ORG
 Telecom Limited and Rs. 8,60,000/- from the Employees of ORG
 Informatics Limited.
 
 (ii) Rs.20,10,000 i.e. Rs.13,26,250 /- from the Employee of ORG Telecom
 Limited and Rs. 6,83,750/- from the Employees of ORG Informatics
 Limited.  
 
 (i) Total number of Options in force: 11,76,000 Options 
 
 (j) Employees wise details of options granted to: Initially, Options
 were granted to 39 persons of ORG Telecom Limited including 11 senior
 managerial personnel 83,000 Options were granted to these senior
 managerial personnel and 24 persons of ORG Informatics Limited
 including 7 senior managerial personnel 1,21,000 Options were granted
 to these senior managerial personnel.
 
 11 Personnel of ORG Telecom Limited and 5 personnel of ORG Informatics
 Limited were granted 5% or more of Options out of the total Options
 granted in that year.  
 
 III.  (a) Options granted: 3,96,000 Options were granted to the
 Employees of ORG Telecom Limited (a wholly owned subsidiary of your
 Company) and 50,000 Options were granted to the Employees of ORG
 Informatics Limited on 19.9.2006 to be vested over a period of 4 yeans
 equally at the rate of 25% each year.
 
 Total Options granted : 4,46,000
 
 (b) The pricing formula : Weighted average price of share of the
 Company over the last three years period in Bombay Stock Exchange.
 
 (c) Options vested : As on September 19, 2007 - 99,000 Options were
 vested to the Employees of ORG Telecom Limited and 12,500 Options were
 vested to the Employees of ORG Informatics Limited.
 
 Total Options vested : 1,11,500
 
 (d) Options exercised : 43,125 Options were exercised by the Employees
 of ORG Telecom Limited and 7,500 Options were exercised by the
 Employees of ORG Informatics Limited.
 
 Total Options exercised : 50,625
 
 (e) The total number of shares arising as a result of exercise of
 Options: 50,625 i.e. 43,125 shares by Employees of ORG Telecom Limited
 and 7,500 shares by Employees of ORG Informatics Limited.
 
 (f) (A) Options carried to next year : 53,375 Options were carried to
 next year by the Employees of ORG Telecom Limited.
 
 (B) Options lapsed: 7,500 i.e. 2,500 Options were lapsed by the
 Employees of ORG Telecom Limited and 5,000 Options lapsed by the
 Employees of ORG Informatics Limited.
 
 (g) Variation of terms of Options : N.A. except inclusion of employees
 of subsidiary of the Company (ORG Telecom Limited).
 
 (h) Money realized by exercise of Options : Rs. 31,38,750/- i.e. Rs.
 26,73,750/- from the Employee of ORG Telecom Limited and Rs.
 4,65,000/- from the Employees of ORG Informatics Limited.
 
 (i) Total number of Options in force : 11,76,000 Options
 
 (j) Employee wise details of Options granted to : Initially, Options
 were granted to 14 persons of ORG Telecom Limited including 14 senior
 managerial personnel i.e. 3,96,000 Options were granted to these senior
 managerial personnel and 2 persons of ORG Informatics Limited including
 2 senior managerial personnel i.e. 50,000 Options were granted to these
 senior managerial personnel.
 
 11 Personnel of ORG Telecom Limited and 2 personnel of ORG Informatics
 Limited were granted 5% or more of Options out of the total Options
 granted in that year.
 
 7.  Directors
 
 Mr. Anil Chawla has resigned as Director with effect from 24.4.2008.
 The Board placed on record its appreciation of the guidance received
 from him during his association with the Company.
 
 Mr. B. V. Suryakumar and Mr. Kartikeya V. Sarabhai retire by rotation
 and being eligible offer themselves for re-appointment.
 
 8.  Auditors Report
 
 The attached Auditors Report to the members of the company for the
 period under review is self explanatory except Clause 8 of the
 Annexure to the Auditors Re- port. The comments of Board of
 Directors on the afore- said point is as under:
 
 The board of directors have noted the observation of the Auditors that
 the internal audit was not commensu- rate with the size and nature of
 the companys busi- ness. The board assures the members that immediate
 steps will be taken to ensure that the internal audit is commensurate
 with the size and nature of business of the company.
 
 9.  General
 
 Particulars as required under Section 217(1)(e) of the Companies Act,
 1956 read with Rule 2 of the Companies (Disclosure of Particulars in
 Report of Board of Directors) Rules, 1988 is appended herewith and
 forms part of this report.
 
 There was no employee who withdrew the remuneration exceeding the
 limits specified under Section 217(2A) of the Companies Act, 1956 read
 with Companies (Particulars of Employees) Rules, 1975, as amended from
 time to time.
 
 10.  Directors Responsibility Statement
 
 Your Directors confirm that-
 
 (i) In preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures;
 
 (ii) The directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the company at the end of the financial year and of the profit or
 loss of the company for that period;
 
 (iii) The directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of Companies Act, 1956 for safeguarding the assets of the
 company and for preventing and detecting frauds and other
 irregularities;
 
 (iv) The directors have prepared the annual accounts on a going concern
 basis.
 
 11.  Corporate Governance
 
 The Report on Corporate Governance as required under Clause 49 of the
 Listing Agreement is given as an Annexure to this Report. A certificate
 from Practicing Company Secretaries regarding compliance of applicable
 conditions of Corporate Governance as stipulated under Clause 49 of the
 Listing Agreement is also attached to this report.
 
 12.  Acknowledgements
 
 The Board records its appreciation of the support which the Company has
 received from its bankers, customers, government organizations,
 overseas strategic alliance partners, staff and employees. The Board
 also appreciates the confidence reposed by the shareholders in the
 Company and its management.
 
                           For and on behalf of the Board of Directors
 Ajoy K. Khandheria                                    B.V. Suryakumar
 Managing Director & CEO                                      Director
 
 
 Gurgaon, Haryana
 July 31, 2008