Press Releases
Thursday
July 11, 2002
Rolta - clarification
Mumbai: Rolta India Limited India's premier CAD/CAM/GIS solutions and services provider recorded a sales turnover of over Rs.300 crores for the financial year 2001. These sales included Rs.76.03 crores being cost of self-assembled and / or integrated capital equipment transferred to the company's own divisions.
Rolta is a hi-tech company and it needs to continuously add specialized computer systems / tools / equipments on an on-going basis for its production facilities. Over the years the Company has acquired substantial expertise, which the company utilizes for in-house development, integration and customization to its advantage. The Company would have incurred substantially higher cost besides long delivery cycle for procuring similar systems from external sources. This inter-division sale represents direct cost of materials, labour and overheads and no profit element is involved and hence the bottom line is not affected. The same has been capitalized as computer plant under the head fixed assets and depreciation has been provided accordingly. Apart from the above, addition to gross block also includes other directly procured standard computer parts, peripherals networking, etc which have been cost effectively procured from the market. Thus, the total addition to gross block is much higher than the amount of inter division sales. During 2000 the inter division sales was Rs.45.09 crores and during 2001 it increased to Rs.76.03 crores due to the major expansion programme.
The Company has correctly and rightly reflected this addition to fixed assets in the cash flow statements since it involves outflow of cash by way of payment for material and overheads. The Company has been following this practice uniformly in the past and proper disclosures have been made in the Annual Accounts every year. This business practice is also followed by other major large corporates in India.
The Company has exhaustively covered the point on debtors in the management discussion and analysis section of its Annual report 2001. The Company's overseas projects executed from its facilities in Mumbai are typically spread over one to three years. The payments for such projects are milestone based and major portion of these are received when project gets accepted and approved. Even in the domestic market the Company is dealing with various Government / Semi -Government agencies, in offering turnkey solutions and services and these contracts involve a significant amount of value-addition and are spread over long periods resulting in long payment cycles. The Company factors these delays into the pricing of its solutions and services since the business is conducted with established and credit worthy customers. The company's prudent client selection is reflected in the fact that there were no bad debts arising in the year 2001or earlier years.
Company Background: Rolta is an Indian multinational organization well equipped to provide knowledge-based software / IT services to customers across the world. By judiciously combining resources from worldwide facilities, Rolta is able to meet customer needs cost- effectively. Since 1982, Rolta has been a pioneer in computer graphics, mapping and engineering software and has consistently being ranked as India's #1 CAD/CAM/GIS solution provider. Rolta is amongst the top Geo-Engineering software conversion service vendors worldwide and is fast emerging as an end-to-end provider of e-business solutions and services. Rolta was recently named among the best 200 companies worldwide by Forbes Global (companies with sales upto US$ 500 million).
For additional information
Mr.V L Ganesh
Director-Finance & Chief Financial Officer
Rolta India Limited
Telephone: 832 6666 / 826 2222 Extn: 1501
E-mail: vlganesh@rolta.com
www.rolta.com
