Zensar Technologies (504067) Q4 98/99 earnings summary

Executive summary

• Restructuring initiated in 1996 was completed after the sale of the Systems and Engineering Services business; operations were reduced to holding an investment in a software subsidiary.

• The SES business was sold as a going concern for Rs. 1,134.35 lakhs, effective 1 Jan 1999; the legal transfer took place on 11 Oct 1999.

Financial highlights

• Sales, rental and other services were Rs. 901 lakhs versus Rs. 3,829 lakhs; results are not comparable because SES contributed only three months in 1998-99.

• Profit before tax was Rs. 82.78 lakhs versus Rs. 107.33 lakhs; profit after tax was Rs. 227.78 lakhs versus Rs. 125.37 lakhs, including a Rs. 145 lakh prior-year tax adjustment.

• SES disposal loss was Rs. 220.02 lakhs; miscellaneous income of Rs. 1,500.34 lakhs included subsidiary dividends of Rs. 636.87 lakhs and old credit balances written back of Rs. 625.53 lakhs.

• Other income of Rs. 941.36 lakhs included profit on sale of land and buildings of Rs. 815.86 lakhs and profit on sale of investments of Rs. 125.50 lakhs.

Outlook and guidance

• Management considered the holding entity a going concern, citing the underlying value and expected cash flows of its software-subsidiary investment and anticipated access to funds to meet borrowings and liabilities.

• With SES divested and Pune land disposed, the restructuring plan was described as complete and its strategic objectives fully realised.