Debt provision, investment write-offs affect Polaris bottomline

Venkatachari Jagannathan
31 May 2003

Chennai: Post-merger with OrbiTech Solutions, Polaris Software Lab, the city-based software company, has declared a lower after tax profit of Rs 19.94 crore on a turnover of Rs 155.92 crore for the quarter ended 31 March 2003.

The net further goes down to Rs 13.03 crore if one takes into account extraordinary write-offs like the Rs 6.39-crore provision for diminution in value of investments and the Rs 51-lakh loss made by associate companies.

For the previous quarter ended 31 December 2002, Polaris had declared a turnover of Rs 145.03 crore and an after-tax profit of Rs 28.13 crore. After taking into account the Rs 5.28-crore provision for doubtful debt, the net was Rs 22.85 crore. The Polaris-OrbiTech merger got effective from 1 November 2002.

For the full year ended 31 March 2003, the consolidated revenue of Polaris is Rs 428.27 crore and the net profit is Rs 54.52 crore (after taking into account extraordinary provisions and write-offs of Rs.14.22 crore — diminution in investment value: Rs.6.39 crore; loss made by associate companies: Rs.51 lakh; provision for doubtful debts: Rs 7.32 crore).

For the year 2001-02 (prior to the merger with OrbiTech) Polaris had declared a net profit of Rs 58.85 crore on a total revenue of Rs.283.98 crore. The company board has recommended a dividend of 35 per cent.

Last year the software development expenses as a percentage of business revenues stood at 58.7 per cent (Rs 251.35 crore) as against 61.7 per cent during the previous year. On the other hand, the selling and marketing expenses showed an 1.1-per cent increase to 6.1 per cent (Rs 26.17 crore). At the end of the last financial year the total number of software professionals with Polaris stood at 4,248.