ANNUAL REPORT 2000-2001
TATA INFOMEDIA LIMITED
CHAIRMAN'S SPEECH
Ladies and Gentlemen,
I extend a warm welcome to all of you who are attending the 46th Annual
General Meeting of your Company.
The Annual Report of the Company is already with you and I am confident
that this exquisitely produced report has provided you with information
about the Company's strategic thrust as well as its working during the year
ended March 31,2001.With a challenging environment prevailing for most of
the period, it is to the credit of your Company that, for the eleventh year
in succession, we were able to report higher profits. Turnover, Profit
Before Tax and Profit After Tax were all t record levels. Corporate Income
during the year grew by 12% from Rs.106.59 crores to Rs.119.68 crores.
Operating profit registered a growth of 13%.The Voluntary Retirement Scheme
accounted for Rs.2.38 crores resulting in a profit before tax of Rs.19.53
crores. In spite of a higher tax burden of Rs.8.10 crores and a complete
write off of VRS expenses, profit after tax has increased in the current
year to Rs.11.43 crores. The return on capital employed also increased from
20.50/o to 22.06%.
The Board of Directors are happy to recommend a dividend of 70%, which is a
hike of 10% over the previous year. The dividend will absorb an amount of
Rs.588.43 lakhs.
Gratified by the Company's performance, the Directors have also decided to
recommend an issue of Bonus Shares in the ratio of 1 :2. After the
capitalization of reserves, the Paid-up Share Capital of the Company will
be Rs.11.44 crores. You will recall that the last bonus issue was made in
1997-98 also in the ratio of 1 :2. Shareholders will appreciate that your
Company is amongst only a handful of companies which have declared two
Bonus Issues in a span of 4 years.
During the year under review, the value added products of your Company
continued to grow. The Yellow Pages division continued to show healthy
growth. During the year, the Company launched its Yellow pages for the
cities of Ludhiana and Indore. In the Special Interest Publications
division, a new magazine for the automobile industry, Auto Monitor, was
launched during the course of the year. You will be glad to know that all
our publications are leaders in their respective fields. Direct Edge had
another successful year. We look forward to Direct Edge playing an even
more important role in the coming years. Both Brightsparks and Touchstone
also had a successful year.
The Company implemented another Voluntary Retirement Scheme at its
manufacturing plant at Prabhadevi. As a measure of financial prudence, the
entire expense incurred for this scheme, amounting to Rs.2.38 crores, has
been charged off against the profit for the year as mentioned earlier.
You must be aware that the Reserve Bank of India issued a notification on
February 16,2001 prohibiting FIIs/OCBs/NRIs from purchasing shares of
companies engaged in the print media. Your company has strongly protested
against this move which considerably weakens the print media in relation
to other media where there are no such restrictions. The notification
appears all the more retrograde when viewed against the fact that foreign
direct investment has been allowed in areas like Defence and Civil
Aviation. We understand that the Reserve Bank of India is currently in
discussion with the Ministry of Information & Broadcasting and we are
hopeful that this decision will be reversed. In the meantime, the Registrar
of Newspapers for India has not been registering your Company's new titles
until the l&B Ministry issues a suitable clarification.
Shareholders may be aware that the print lobby in India is divided on the
issue of permitting FDI in the print media. The principal reason advanced
for the pursuit of such a restrictive policy is the protection of the
country's self interest that could be compromised by the perversion of t'-e
minds of readers by foreign investors. I submit that those who put forward
this argument hold an unjustifiably poor opinion of the Indian Public and
their ability to distinguish right from wrong and to reject subversive
coverage. Meanwhile, the principal beneficiaries of the present restrictive
practices are a group of media barons.
In the current year, your Company has launched its "Yellow Line" service
for Mumbai and Delhi. Your Company has also completed test marketing of a
Home Guide for Prabhadevi. It hopes to extend this concept to other areas
in Mumbai as well as in Delhi. Our Special Interest Publications division
will have more launches in the current year after the issue of FII holding
is resolved. We expect our Direct Marketing division, Direct Edge, to
benefit from the data warehousing project implemented last year.
The economic environment in the first half of 2001 has been extremely
challenging for most companies in the Indian market and recessionary
factors very evident. Advertising has also faced a cut and this has had
some impact on your Company's business. Accordingly, for the first three
months total income is more or less static at Rs.24.02 crores, W:-51 the
profit after tax down by 29%. Our expectations for top line and bottom line
growth are centered on an improvement of economic conditions in India in
the second half of the financial year.
Lastly, l would like to thank all our stake holders including shareholders,
customers and employees for their continuing support to the Company,
contributing to one more year of success in a difficult year. My special
thanks to my colleagues on the Board of your Company who have played an
active role as Directors and to the Managing Director under whose
stewardship the Company has changed its business profile and performed so
well.
Thank you.
Xerxes Desai
Chairman