Home  »  Company  »  Acropetal Technologi  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Acropetal Technologies Ltd.

Mar 31, 2015

The Directors are pleased to present 14th Directors' Report of the Company along with the Audited financial Statements for the year ended 31st March 2015.

in lakhs

Particulars 2015 2014

Total revenue 2510.53 11879.98

Total expenses 20942.01 19266.48

Profit / (loss) before tax (18431.48) (7386.50)

Provision for deferred tax 598.08 (26.13)

Net Profit / (loss) carried (17833.40) (7412.64) to Balance Sheet

The Company has drastically reduced its export business where the payments are delayed abnormally and where the Profit margins are low. During the year the company has made an export turnover of Rs. 1075.07 lakhs. The total revenue of the Company from operations, for the year ended 31st March, 2015 was Rs. 1841.23 lakhs, the total revenue of the previous year was Rs. 10655.32 lakhs. The gain on foreign exchange fl fluctuations accounts majorly for the difference. The company has written off receivables as bad debts which are pending and the company has initiated legal proceedings to recover the amount. The net loss booked for the year under review is Rs. 18431.48 as compared to Rs. 7386.50 lakhs during the previous year.

Future Outlook

The company is now in the process of streamlining and stabilizing the business activities. The Indian market is very conducive but the Company intends to focus and increase the business stage by stage in the years to come.

Dividend

In view of the loss incurred during the year, your directors are not recommending any dividend for the year ended 31st March, 2015.

Disclosures of amounts, if any, transfer to any reserves

It is not proposed to carry any amount to any reserves from the profit of the Company. Hence, disclosure under Section 134 (3) (j) of the Companies Act, 2013 is not required.

Directors

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ravi Kumar D is retiring by rotation at the conclusion of the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Dr. Subramanya Reddy and Dr. Madhu Sudhana Reddy M continued to be the Independent Directors in accordance with the provision of Section 149, 150 & 152 of the Companies Act, 2013 and they are not liable to retire by rotation.

Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. K. Gopalakrishnan & Co, Chartered Accounts, #120, Infantry Road, Bangalore 560 001, were appointed as statutory auditors of the Company from the conclusion of the Thirteenth annual general meeting (AGM) of the Company held on September 29, 2014 till the conclusion of the Sixteenth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

Auditors' Report

The Statutory Auditors in their report and in its annexure have reported inter-alia as follows.

The Statutory auditors have expressed in their Report that the following events cast a doubt on going concern as per para 10 SA 570 'Going Concern'. However, the company is of the view that the issues may have created this doubt in the accounting perspective but in the business perspective these issues have strong and valid reason behind and some of these are due to the strategies adopted by the company. The issues creating the doubt of going concern for the auditors are given below in italics and our views are given thereunder.

1. (a) As referred in Note 7(a) to the Financial Statements, company is facing difficulties in paying the statutory dues such as Service Tax and TDS amount of Rs.3,34,42,351 and Rs.3,72,09,345 on 31.03.2015 out of which Rs.1,72,27,765 and Rs.3,30,82,033 outstanding for more than one year.

The company's cash flow from operations was better than previous year because of the strategies adopted by the company to recover the company. With the cash flow available, the company could address some of the dues to the extent of Rs. 326.73 lakhs and also continue to pay during the current financial year as well. The collateral securities given to the bank are auctioned by the banks as the facilities availed from them are classified as Non-Performing Assets. The company is planning to address the remaining dues to the government departments from the surplus cash left from the sale of properties after settling the banks' dues. The company has been paying salary and has paid in full to its existing employees

(b) Note 2(c) in the financial statements which indicates that the company has accumulated losses and its net worth has been substantially eroded, the company incurred a net loss during the current year (Rs.178.33 crores) and previous year (Rs.74.12 crores) and, the company's current liabilities (Rs.158.41 crores) exceed its current assets (Rs.10.25 crores) as at the balance sheet date. These conditions indicate the existence of a material uncertainty that may cast signifi cant doubt about the company's ability to continue as a going concern. However, the financial statements of the company have been prepared on a going concern basis.

The company has written off some of the debtor receipts which are pending for a very long time and are disputed by the clients. Due to this, the company has been booking losses in the last two years. For this loss, the net worth has been eroded and the current assets have come down drastically and the current liabilities have exceeded the current assets. However, the net worth and the current assets are expected to improve in the coming years.

2. Out of the unsecured advances given to staff & ex-employees referred in Note 10(d) of the financial statements, there is uncertainty about recover of about Rs. 22,78,206 as there is no recovery during the year and these are outstanding for more than a year.

The company has advanced this amount to one of its ex-employee for foreign travel. He did not settle the accounts for this advance amount and the company owes his settlement amount. While doing his full and final settlement, the amount will get accounted automatically.

3. During the year the company has written off Rs.139.87 crores as Bad debts referred in Note 11 of the financial statements of the company which are outstanding for more than a year and the management is not confident of realization from its customers.

The company has witnessed an unprecedented high employees' attrition in the previous years due to the severe cash flow strain the company was paying. Several employees engaged in the projects left abruptly without proper knowledge transfer. Because of this, we could not continue some of the projects and this has created some gaps which we could not resolve immediately. The customers have not only stopped our payments for these projects but also stopped the payments to the other projects where there are no issues. The company wrote off some of the export debtors but the company has initiated legal actions against these clients to recover the dues which are rightfully receivable by the company.

4. The company borrowings outstanding to the tune of Rs. 10,455.51 lakhs (with accrued interest) has been classified as Non-Performance Assets by the financial institutions and has become payable in full.

This is due to the sequential effect of the cash flow crisis faced by the company during the past three years. But, all the borrowings are properly secured by collateral securities by way of land & buildings. The market value of these properties are much more than the banks' outstanding. The banks have initiated recovery actions by auctioning the properties. The company is hopeful of getting these banks' dues addressed soon.

5 . During the quarter, the parent company has written off Rs. 1123.62 Lakhs paid to its subsidiary for development of product.

One of the debtor receipts wrote off by the company is from a client in Dubai. The wholly owned subsidiary company in Dubai is also having business relations with this client. The common client to both the parent and subsidiary companies gone insolvent and the receivables from this client could not be recovered by both the companies. This has resulted in a huge loss for both the companies and got into severe cash flow crisis. In this circumstance, it would be highly impossible to continue the development of product by the subsidiary company which was assigned by the parent company. Hence, the amount received from the parent company for developing the product has been written off in the books of subsidiary and the same way in the books of parent company.

6. During this quarter intangible assets worth of Rs.713.62 lakhs has been transferred to reserves account, since it has served its economic life.

Net asset value of the computer software (Rs.713.62 lakhs) has been transferred to the Reserves Account as per the Schedule II of the Companies Act, 2013. These software have already served its economic life.

7. The company declared dividend in FY2011- 12, out of the declared amount partial amount has been paid and the balance is still to be paid.

Due to the financial difficulties, the company could not pay the balance declared dividend amount to its shareholders. Majority of the outstanding is only to the promoters, friends and relatives. However, this amount will also be paid once the auctioning of the properties get through, which we expect to happen in the current financial year.

Fixed deposits

Your company has not accepted any deposits during the year within the meaning of Section 73 of the Companies Act, 2013 and Rules made thereunder.

Directors' responsibility statement

Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors confirm:

i. That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

ii. That they had selected such accounting policies and applied them consistently, and made judgements 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 loss of the Company for that period;

iii. That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. That they had prepared the annual accounts on a going concern basis;

v. That they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Change in the nature of business

There is no change in the nature of business of the Company during the year.

Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which these financial statements relate and the date of the report No material changes and commitments affecting the

financial position of the Company occurred between the end of the fi financial year to which these financial statements relate on the date of this report.

Secretarial auditor and secretarial audit report

The Board has appointed Mr. Naman G Joshi, Company Secretary in whole time practice, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2014- 15. The report of the Secretarial Auditor is annexed to this report as Annexure-B.

The Secretarial Auditor has observed that the Company

1. The Company has not appointed a women director pursuant to section 149 of the Companies Act, 2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

The company has been undergoing lots of issues, in the present situation bringing any director particularly the women director may not be possible. However, the company is looking for a women director to comply the statutory requirement and hopefully will happen in the coming year. It is not out of place to mention that the company had women director in the past and we will have in future also.

2. The Company has not appointed Chief Financial Officer pursuant to section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The company is struggling on various fronts and bringing a CFO on board would be difficult for twin reasons i) the company is not in a position to pay salary to existing employees and for a high Profile the cost would be more and obviously will not be able to meet out until the existing issues are resolved and ii) no one would willing to join the company as CFO considering the issues it presently has. Moreover, the company's business has drastically come down and even during the current year the business is on the down stride. Once the company improves its business, we will hire CFO as per the statutory requirement.

3. The Company has not filed certain forms and returns with the Registrar of Companies.

There has been rapid attrition of employees during the past few years due to the financial crisis. There was not proper handing over of documents by the left employees that has created some gaps in the continuity of the works even in the support functions. Now the past dues are being handled by the external consultants who were subsequently hired to address. The pending forms & returns with Registrar of Companies will be duly complied in the coming months.

4. The Company has not paid Dividend pertaining to financial year 2011-12.

Due to the financial difficulties the company could not pay the balance declared dividend amount to its shareholders. Majority of the outstanding is pertaining to the promoters, friends and relatives. However, this amount will also be paid once the auctioning of the properties get through, which we expect to happen in the current fi financial year.

5. The Company has not submitted to the Reserve Bank through the designated Authorized Dealer, Annual Performance Report in Part III of Form ODI in respect of Wholly Owned Subsidiary outside India.

There has been rapid attrition of employees during the past few years due to the financial crisis. There was not proper handing over of documents by the left employees that has created some gaps in the continuity of the works even in the support functions. Now the past dues are being handled by the external consultants who were subsequently hired to address. The pending forms & returns with Registrar of Companies will be duly complied in the coming months.

6. The Company has not submitted annual return on Foreign Liabilities and Assets (FLA) as stipulated under A. P. (DIR Series) Circular No.45 dated March 15, 2011.

There has been rapid attrition of employees during the past few years due to the financial crisis. There was not proper handing over of documents by the left employees that has created some gaps in the continuity of the works even in the support functions. Now the past dues are being handled by the external consultants who were subsequently hired to address. The pending forms & returns with Registrar of Companies will be duly complied in the coming months.

7. The Company is not regular in publication of financial results in newspapers as stipulated under Clause 41 of the Listing Agreements.

The company is financial position is very weak at the moment and is not able pay the amount for publication of financial results. However, these results are published in our website.

8. The Company has not paid Annual Listing fees to Bombay Stock Exchange.

Due to the financial difficulties the company could not pay the Annual Listing fees to Bombay Stock Exchange, we will pay this amount as soon as the cash flow position improves.

Extract of annual return

Pursuant to the Section 92(3) of the Companies Act, 2013 extract of the Annual Return is annexed to this report as Annexure-C.

Green initiative in corporate governance

The ministry of corporate affairs has undertaken a green initiative in corporate governance and allowed companies to send documents such as annual reports, notice, quarterly results etc to the email ids of the shareholders. We have arranged to send the soft copies of the notices of the 14th AGM and the Annual Report to the email ids of the shareholders made available by Depositories. In case, any of the shareholder would like to receive physical copies of these documents, the same shall be forwarded on request either to the company or to the Registrar M/s. Sharex Dynamics (India) Private Limited.

Management discussion and analysis

The Management Discussion and Analysis Report pursuant to the Corporate Governance Clause of the Listing Agreement is annexed to this report as

Annexure- E.

Corporate Social Responsibility

A Corporate Social Responsibility Committee (CSR committee) is required to be constituted under the provisions of the Section 135 of the Companies Act, 2013, if the Company fulfill the criteria prescribed under the said section.

The Board of every company covered the criteria prescribed under section 135 of the Companies Act, 2013 shall ensure that the company spends at least two percent of the average net Profits of the company made during the three immediately preceding financial years and if the Board fails to spend such amount, it shall in its report to shareholders specify the reasons for not spending the amount.

The Company has constituted a Corporate Social Responsibility Committee. The Company has not incurred any expenditure on Corporate Social Responsibility during 2014-15 as required under Section 135 of the Companies Act 2013. The average net Profits of the Company made during the three immediately preceding financial years is negative. Your management is however committed to the CSR initiative and expects to incur CSR expenditure as applicable. Your management wants to ensure that the fund so earmarked reaches out to the needy and is in the process of outlining a program to benefit the needy local populace.

Corporate Governance Report

The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report is annexed to this report as Annexure-F. The requisite certificate from the Company Secretary in practice confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49 is attached to the Report on corporate governance.

Particulars of remuneration to directors/KMP/employees

There were no employees during the year 2014- 15 covered under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as 'Annexure-A' which forms part of this report.

Number of meetings of the board and Audit Committee

The details of the number of Board and Audit committee meetings of your Company are provided in the Corporate Governance Report which forms an integral part of this report. The intervening gap between the Meetings was in compliance with the Companies Act, 2013.

Declaration by independent directors

All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(7) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

i. Details of Conversation of Energy: Your Company's operations consume very low levels of energy. It is pleasure to announce that your Company's technology center has latest technology energy management system based on human occupancy. As the cost of energy consumed by the Company forms a very small portion of the total costs, the impact of changes in energy cost on total costs is insignificant.

ii. Technology absorption, adaption and innovation

The Company continues its endeavour for developing new technologies and for absorption and adaptation of new technologies developed all over the world. The Company's strategic plans are to provide improved offerings to the fast changing market needs, resulting in strong client relationship. Continuous efforts are made to improve service delivery modules, thereby enabling better project execution, reduction in costs and at the same time guaranteeing enhances business values both for the Company and for its clients. This is through improving our own productivity and quality of services. For this it would also be necessary for the Company to enter into partnerships, alliances and tie ups with global leaders. However availability of required funds at a right time is a challenge, which the Company continues to combat.

The Company as a result is able to provide improved solutions to its customers , which would be relevant and appropriate to their Business needs and at the same time suits their financial feasibility. This in turn will reduce costs to our customers and improve our revenues and returns.

Research and development

The company is always open to innovations and has to make investments in R&D.

The R & D activities of the company have enabled it to innovate new ideas and processes and make offerings at competitive prices, to achieve growth plans.

The company plans to focus its R&D in design thinking and problem solving and in the emerging areas such as Mobility by investment in developing prototype. Cloud Technologies, Big Data Analytics, Social Networking are also proposed to be covered.

However, the R&D in the existing lines of business of the company will also be continued to be focused.

As explained above, the R&D is carried on by the company as part of ongoing business activity and the expenditure thereof is considered as part of operating expenditure and hence cannot be shown separately.

iii. Foreign exchange earnings and outgo

The company had a foreign exchange earnings of Rs.10,60,39,805 and outgo of Rs. Nil during the year.

Listing The shares of your Company are listed in the BSE & NSE.

Code of conduct

The Company has adopted a uniform Code of Conduct for Directors, Senior Management Personnel and other Executive level officers to ensure proper ethical standards and further ensure due compliance to such established standards.

Subsidiaries

in crores

Particulars 2015 2014

Total revenue 13.19 135.73

Total expenses 46.39 245.90

Profit before tax (33.20) (105.96)

Provision for deferred tax (2.80) 0.25

Net loss carried to (30.40) (106.22) Balance Sheet

The subsidiaries of the company are in the same line of business as that of the holding company.

Your company has resolved to utilise the general exemption granted by the Ministry of Corporate Affairs, Government of India vide its General Circular No. 2/2011 dt. 8th February 2011 from attaching the Balance Sheet, Profit and Loss Account, Directors' Report and Auditors' Report and other related documents of the subsidiary companies and accordingly, the said documents of the subsidiary companies of your company are not attached to the Balance Sheet of your company. However, requirements which your company is required to meet under the said circular, will be complied with. Your company undertakes that the annual accounts and the related detailed information of your company's subsidiary companies will be made available to the shareholders of the company and its subsidiaries, who seek such information at any point of time. The annual accounts of subsidiary companies will also be kept open for inspection by any shareholders at the Registered Office of your company and of the subsidiary companies. The company shall furnish a hard copy of accounts of the subsidiaries to any shareholders on demand. The financial performance of subsidiaries is set out as Annexure G to this report.

Statement concerning development and implementation of risk management

The Company has comprehensive risk assessment and minimization procedure which are reviewed by the Board.

The Company identifies risks and control systems to mitigate them are in place. In the opinion of the Board, at present there are no risks which may threaten the existence of the Company.

Related Party Transactions

During the financial year 2014-15, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Defi nitions Details) Rules, 2014, which were in the ordinary course of business and on arms' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Clause 49 of the Listing Agreement. During the financial year 2014-15, there were no transactions with related parties which qualify as material transactions under the Listing Agreement.

The details of the related party transactions as required under Accounting Standard - 18 are set out in Point 19 of the notes to the standalone financial statements forming part of this Annual Report. The Form AOC-2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure D to this Report.

Particulars of loans, guarantees or investments made under section 186 of the companies act, 2013

Details of loan outstanding

The company has given trade advances to its associate companies M/s. Acropetal, Inc and M/s. Binary Spectrum Softech Private Limited. The loan amount outstanding as of 31st March 2015 against these companies are Rs. 14.47 lakhs and Rs. 476.95 lakhs respectively.

Guarantees

The company has given corporate guarantee to UPS Capital Business Credit for the loan (outstanding amount as of 31st March 2015 - Rs. 4155.39 lakhs) availed by its wholly owned subsidiary M/s. Vision Info Inc.

The company has also provided a corporate guarantee to ICICI Bank for the loan (outstanding amount as of 31st March 2015 is Rs. 267.50 lakhs) availed by its wholly owned subsidiary M/s. Mindriver Information Technologies Private Limited.

Investments

in lakhs

Subsidiaries:

Vision Info Inc 1.36

AcropetalInc 5622.79

Mindriver Information Technologies 950.43 Private Limited

Kinfotech Private Limited 480.00

Associate companies:

Binary Spectrum Softech Private Limited 420.00

Total investments made by the company as of 31st March 2015 are as follows:

Particulars of contracts or arrangements made with related parties

All the related party transactions are entered on arm's length basis and in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the listing agreement.

The details of the transactions with related parties are provided in the Notes to the financial statements Adequacy of internal financial controls with reference to financial statements

The Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weakness in the design or operation were observed.

The details of directors or key managerial personnel who were appointed or have resigned during the year There are no appointments or resignations of directors or Key Managerial Personnel during the year.

Mr. Vijayendra R, Company Secretary of the Company has resigned with effect from 26th June, 2015.

Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report.

The names of companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year During the year no company has become or ceased to be a subsidiary or joint venture or associate company of Company.

Reporting Under Sexual Harrasement Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company has in place Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Number of complaints of sexual harassment received in the year is Nil.

Acknowledgements

Your Directors express their gratitude for the support and co-operation extended by Government Authorities, Bankers, Shareholders, Investors, Customers and Vendors.

Your directors place on record their sincere appreciation for the continuous support and sustained efforts put in by the employees of the company at all levels through their hard work, sense of belonging and dedication.

For and on behalf of the Board of Directors,

Ravi Kumar D

Chairman and Managing Director

Date : 16th September, 2015

Place: Bangalore


Mar 31, 2014

The members of Acropetal Technologies Limited.

The directors are pleased to present the 13th Directors'' Report of your Company along with the audited Balance Sheet and Profit and Loss Account for the year ended March 31, 2014.

Rs in crores

Particulars 2014 2013

Total Income 118.79 155.68

Total Expenses 196.95 145.02

Profit before Tax(Loss) (78.16) 10.66

Prior period adjustment 4.29 -

Provision for Taxation

Deferred Tax 0.26 2.71

Current Tax - 2.81

Profit after Tax(Loss) (74.13) 5.14

Amount Transferred to General Reserve . - 0.51

Profit Transferred to Balance Sheet - 4.63

Your Company has achieved income of Rs.118.79 crores for the year ended 31st March, 2014 on standalone basis. After providing a sum of Rs.196.95 crores for expenditure, provision for taxes and depreciation and considering the prior period adjustment of Rs.4.29 Crores, the company has incurred a net loss of Rs.74.13 crores for the year ended 31st March, 2014 and in view of the loss incurred during the year no amount could be transferred to General Reserves.

There are no material changes and commitments affecting the financial position of the Company between 31st March, 2014 and the date of this report.

Dividend

In view of the loss incurred during the year, Your Directors are not recommending any dividend for the year ended 31st March, 2014.

Directors

Mr. Ramdas Janardhana Kamath, Dr. Mathew James Manimala and Mr. Mohan Hosahalli Ramakrishna resigned from the board on 20th September 2013, 9th December, 2013 and on 14th May, 2014 respectively. The board placed on record their appreciation of the services, during their tenure as directors of the company and also as the chairman and as members of Board Committees.

Mr. Ravi Kumar D is retiring as director by rotation at the forthcoming Annual General Meeting and being eligible offer himself for re- appointment. The Board recommends his re-appointment.

Dr. Subramanya Reddy and Dr. Madhu Sudhana Reddy M are proposed to be appointed as Independent Directors upto 31st March, 2019 in accordance with the provisions of Section 149,150 and 152 of the Companies Act, 2013 and they are not liable to retire by rotation.

Subsidiaries

The Company as on 31st March, 2014 had following subsidiary companies.

1. Vision Info Inc. - UAE

2. Acropetal Inc. - USA

3. Mindriver Information Technologies Private Limited - India

Taking into account the performance of these subsidiary companies, the performance of the Company on consolidated basis is summarized as under

Rs in crores

Particulars 2014 2013

Total Income 135.73 225.44

Total Expenses 245.90 215.43

Profit before Tax(Loss) (105.96) 10.01

Provision for Taxation Deferred Tax 0.25 3.21

Current Tax - 3.34

Profit after Tax(Loss) (106.22) 3.46

Share of Profit / (Loss) of associates (19.77) 0.92

Proposed Dividend 0.00 0.00

Provision for Dividend Tax 0.00 0.00

Amount T ransferred to General Reserve - 0.51

Profit Transferred to Balance Sheet - 3.87

The subsidiaries of the Company are in the same line of business as the holding company.

Your Company has resolved to utilize the general exemption granted by The Ministry of Corporate Affairs, Government of India vide its General Circular No.2/2011 dated 8th February, 2011 from attaching the Balance Sheet, profit and loss account, Directors'' Report and Auditors'' Report and other related documents of the subsidiary companies and accordingly, the said documents of the subsidiaries of your Company are not attached to the Balance Sheet of your Company. However, requirements which your Company are required to meet under the said circular, will be complied with. Your Company undertakes that the annual accounts and the related detailed information of your Company''s subsidiary companies, will be made available to the shareholders of the Company and its subsidiaries, who seek such information at any point of time. The annual accounts of subsidiary companies, will also be kept open for inspection by any shareholders at the Registered Office of your Company and of the subsidiaries. The Company shall furnish a hard copy of the accounts of the subsidiaries to any shareholder on demand.

Fixed deposits

Your Company has not accepted any fixed deposits from public during the year and, as such, no amount of principal or interest was outstanding.

Auditors

M/s. K. Gopalakrishnan & Co, Chartered Accountants, #120, Infantry Road, Bangalore - 560 001, who were appointed as Statutory Auditors of the Company shall retire at the ensuing Annual General Meeting of the Company. They have expressed their willingness to continue as statutory auditors. Accordingly, it is proposed to pass a resolution for appointing them as statutory auditors from the conclusion of ensuing annual general meeting till the conclusion of sixteenth annual general meeting, subject to ratification of appointment at every annual general meeting. Your Directors recommend their reappointment.

Auditors'' Report

The Statutory Auditors in their Report and in its Annexure have reported inter-alia as follows.

a) that they are not able to express an opinion on the sundry debtors of Rs.75.99 Crores outstanding over a period of one year

b) The Branch Accounts of Acropetal USA are not audited and the financial are incorporated as unaudited.

c) The Company is not regular in depositing the undisputed statutory dues and repayments of loans to Banks

The Directors would like to explain as follows.

a) Due to the high attrition in the financial year 2011- 12, the Company could not deliver the projects on time. This has caused serious concerns to the clients especially in the US and Middle East regions who has doubted our capability of delivering the projects on time. Performance guarantee were insisted for the release of payments, which the Company could not provide and this has resulted in unprecedented debtors receivables in the last two years. During the last financial year the Company undertook lot of measures to regain the customer confidence and employee satisfaction initiatives. These have certainly yielded results and the customers are releasing payments to the extent of employee/consultants salary who are working in their projects.

b) Acropetal Technologies Limited, USA is the Branch of the parent Company, Acropetal Technologies Limited in India. The branch is taking care of the on site activities and is working as a extended arm of the parent company. The accounting year for this US subsidiary is January to December and the accounts are audited and tax returns are filed by the CPA before the due date. Since the parent company has the accounting period as April to March, the accounts related to April to December and January to March are not separately audited as this branch is very small in financial size. They are consolidated with the parent company as unaudited accounts for the financial year end reporting.

c) The Company has been facing working capital strain during the financial year. Due to this, the Company has defaulted some of its commitments. However, the Company has taken some strategies to come out of the aberrations, as a result all the dues would be addressed shortly.

Directors'' responsibility statement

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm:

i. That in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii. That 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 as on 31st March, 2014 and of the loss of the company for that period.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv. That the directors have prepared the Annual Accounts on a going concern basis.

Green Initiative in corporate governance

The Ministry of Corporate Affairs has undertaken a green initiative in corporate governance and allowed companies to send documents such as annual reports, notices, quarterly results etc to the e- mail IDs of shareholders. We have arranged to send the soft copies of the Notice of the 13th AGM and the Annual Report to the e-mail IDs of shareholders made available

by Depositories. In case, any of the shareholder would like to receive physical copies of these documents, the same shall be forwarded on request either to the Company or to the Registrar i.e M/s Sharex Dynamics (India) Private Limited.

Management discussion and analysis report

The management discussion and analysis report pursuant to corporate governance provisions of the listing agreements is attached to this report and forms a part of this report.

Corporate Social Responsibility

A Corporate Social Responsibility Committee (CSR Committee) is required to be constituted under the provisions of Section 135 of the Companies Act, 2013, if the Company fulfill the criteria prescribed under the said Section.

The Board of every company covered the criteria prescribed under Section 135 of the Companies Act, 2013 shall ensure that the company spends at least two per cent of the average net profits of the company made during the three immediately preceding financial years and if the Board fails to spend such amount, it shall in its report to the shareholders specify the reasons for not spending the amount.

Your Board has a proposal to constitute the CSR Committee and will ensue compliance with the applicable provisions relating Corporate Social Responsibility, the details of which will be reported to the shareholders in the subsequent directors report.

Corporate governance

Your Company is committed to good Corporate Governance practices and accordingly has implemented all the stipulations prescribed under Corporate Governance clause and Corporate Governance compliance certificate for the year ended 31st March, 2014, issued by practicing Company Secretary, in line with Clause 49 of the Stock Exchange Listing Agreement is attached to this report. and forms a part of this report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 as amended is as follows.

Conservation of energy

The business operations of the Company are not manufacturing and hence not energy intensive and therefore energy requirement of the Company is

low. However the Company has undertaken energy conservation measures. The lightings, computers and other equipment used by the Company are technologically advanced and energy efficient. Audio /video conferences and discussion has increased resulting indirectly in reduction in the travel cost of the employees. Use of CFL Lights, energy saving LCD monitors, air-conditioners with star rating for energy saving are some of the measures undertaken for conservation of energy. Older computer systems are replaced with power efficient versions and an efficient computer power management system is also in place. Also proposals are there to utilize renewable energy like Solar Energy and photovoltaic cells. Water efficiency and conservation programme are also planned. The cost of energy consumed when compared to the total cost is very small and hence financial impact of the above measures undertaken cannot be quantified. As on the date of this report, the board has no proposal to make any additional investment for reduction of consumption of energy.

Technology absorption, adaption and innovation

The Company continues its endeavour for developing new technologies and for absorption and adaptation of new technologies developed all over the world. The Company''s strategic plans are to provide improved offerings to the fast changing market needs, resulting in strong client relationship. Continuous efforts are made to improve service delivery modules, thereby enabling better project execution, reduction in costs and at the same time guaranteeing enhances business values both for the Company and for its clients. This is through improving our own productivity and quality of services. For this it would also be necessary for the Company to enter into partnerships, alliances and tie ups with global leaders. However availability of required funds at a right time is a challenge, which the Company continues to combat.

The Company as a result is able to provide improved solutions to its customers , which would be relevant and appropriate to their Business needs and at the same time suits their financial feasibility. This in turn will reduce costs to our customers and improve our revenues and returns.

Research and development

The Company continues to conduct Research and Development work (R&D) as one of the important key driver to achieve growth, which is always clients aligned. The R & D is carried on as an integral part of the business operations of the Company and encompasses all its major business operations. The object is to develop intelligent business solutions to cater to the needs of the ever increasing demands of our clients. This is planned to be achieved by continuously making efforts to bridge the gap between

the requirements of the customers and our current offerings.

The Company is always open to innovations and has to make investments in R&D

The R&D activities of the Company have enabled it to innovate new ideas and processes and make offerings at competitive prices, to achieve growth plans.

The Company plans to focus its R&D in design thinking and problem solving and in the emerging areas such as Mobility by investment in developing prototype. Cloud Technologies, Big Data Analytics, Social Networking are also proposed to be covered.

However the R&D in the existing lines of business of the Company will also be continued to be focused.

As explained above the R&D is carried on by the Company as a part of ongoing business activity of the Company and expenditure thereof is considered as part of operating expenditure and hence expenditure on R&D cannot be shown separately.

Foreign exchange earnings and outgo and exports

Net Foreign Exchange Earnings

The net foreign exchange of the Company for the year 2013-14 stand at Rs.54.67 crores. The Company had a foreign exchange earnings of Rs.97,43,42,503/- and a foreign exchange outgo of Rs.42,76,57,212/- during the financial year.

Particulars of employees

There are no employees who was in receipt of remuneration either for the whole year or for a part thereof which is above the limit mentioned under Section 217(2A) of the Companies Act 1956.

Acknowledgements

Your Directors express their gratitude for the whole- hearted assistance and persistent co-operation received from various Government and Semi- Government authorities, Bankers, Shareholders, Investors, Vendors, and Customers.

Your Directors place on record their sincere appreciation for the continuous support, and sustained efforts put in by the employees of the Company at all

levels through their hard work, sense of belongingness and sheer dedication.

For and on behalf of the Board of Directors, Ravi Kumar D Chairman and Managing Director

Date: 14th August, 2014 Place: Bangalore


Mar 31, 2013

The members of Acropetal Technologies Limited.

The directors are pleased to present the 12th Directors’ Report of your Company along with the audited Balance Sheet and Profit and Loss Account for the year ended March 31, 2013.

Intcrore Financial performance for the year ended March 31,

Particulars 2013 2012 Total income 155.68 203.68

Total expenses 145.02 176.04

Profit Before Tax 10.66 27.64

Provisions for taxation

Deferred tax 2.71 (5.73)

Current tax 2.81 4.33

Profit After Tax 5.14 29.04

Proposed dividend 0.00 4.67

Provision for dividend tax 0.00 0.78

Amount transferred to General Reserve 0.51 2.90

Profit transferred to Balance Sheet 4.63 20.69

Your Company has achieved income of Rs.155.68 crores for the year ended 31st March, 2013 on standalone basis. After providing a sum of Rs.150.54 crores for expenditure, provision for taxes and depreciation, the company made a net profit of Rs.5.14 crores. An amount of Rs.0.51 crores is proposed to be transferred to General Reserves.

Material changes and commitments

As reported in the previous year report, The scheme of amalgamation of Kinfotech Private Limited and Mindriver Information Technologies Private Limited with Acropetal Technologies Limited was pending with the Hon’ble High Court of Karnataka. But subsequently there was a change in the business strategy of the Company. Therefore it was decided at the Board Meeting held on 29th May, 2013 to withdraw the pending application from Hon’ble High Court of Karnataka. Accordingly, the Company has made application with the Hon,ble High Court of Karnataka for withdrawal of the said scheme of amalgamation. The Hon’ble High Court of Karnataka, on 12th July, 2013 passed orders that our petitions are disposed off as Withdrawn.

Also 3% shareholdings in Kinfotech Private Limited was divested as decided at the Board of Directors meeting held on 29th May, 2013. With this divestment, Kinfotech Private Limited ceased to be a subsidiary of your Company.

Initial public offering

Shareholders of the Company at their 11th Annual General Meeting had approved and ratified the revised utilization of IPO proceeds made by the Company. The revised utilisation of IPO proceeds and its ratification and the approval by the shareholders were informed to the Registrar of Companies (through e filing) and to the Stock Exchanges.

Dividend

Your Directors feel that it is prudent to plough back the profits for future growth of the Company and therefore do not recommend any dividend for the year ended 31st March, 2013.

Directors

During the year under review, Mr. Ashok Kumar Gopal Rao Jultha, resigned from the board on 13th August, 2012. The Directors place on record their appreciation of his services during his tenure as Director.

Mr. Ramdas Janardhana Kamath resigned from the board on 20th September 2013. The board placed on record their appreciation of his services, during his tenure as a director of the company and also as the chairman of the audit committee and as a member of the remuneration committee.

Dr. Subramanya Reddy D K is retiring as director by rotation at the forthcoming Annual General Meeting and being eligible to offer himself for re-appointment. The Board recommends his re-appointment.

Dr. Madhu Sudhana Reddy M was appointed as an additional Director with effect from 12th November

2013. The company recieved a notice under section 257 of the Company''s Act 1956, signifying his intention to propose the appointment of Dr. Madhu Sudhana Reddy M as the Director of the company at the 12th Annual General Meeting and the same has been included in the agenda of the said Annual General Meeting.

Subsidiaries

The Company as on 31st March, 2013 had following subsidiary companies.

1. Vision Info Inc. - UAE

2. Acropetal Inc. - USA

3. Kinfotech Private Limited - India

4. Mindriver Information Technologies Private Limited - India

Taking into account the performance of these subsidiary companies, the performance of the Company on consolidated basis is summarized as under intcrore Financial performance for the year ended March 31,

Particulars 2013 2012

Total income 225.44 343.15

Total expenses 215.43 294.57

Profit Before Tax 10.01 48.58

Provisions for taxation

Deferred tax 3.21 (3.17)

Current tax 3.34 6.86

Profit After Tax 3.46 44.89

Minority Interest (0.92)

Proposed dividend 0.00 4.67

Provision for dividend tax 0.00 0.78

Amount transferred to General Reserve 0.51 2.90

Profit transferred to Balance Sheet 3.87 36.54

The subsidiaries of the Company are in the same line of business as the holding company.

Your Company has resolved to utilize the general exemption granted by The Ministry of Corporate Affairs, Government of India vide its General Circular No.2/2011 dated 8th February, 2011 from attaching the Balance Sheet, profit and loss account, Directors’ Report and Auditors’ Report and other related documents of subsidiary companies and accordingly, the said documents of the subsidiaries of your Company are not attached to the Balance Sheet of your Company. However, requirements which your Company is required to meet under the said circular, will be complied with. Your Company undertakes that the annual accounts and the related detailed information of your Company’s subsidiary companies, will be made available to the shareholders of the Company and its subsidiaries, who seek such information at any point of time. The annual accounts of subsidiary companies, will also be kept open for inspection by any shareholders at the Registered office of your Company and of the subsidiaries. The Company shall furnish a hard copy of the accounts of the subsidiaries to any shareholder on demand.

Fixed deposits

Your Company has not accepted any fixed deposits from public during the year and, as such, no amount of principal or interest was outstanding.

Auditors

M/s. K. Gopalakrishnan & Co, Chartered Accountants, #120, Infantry Road, Bangalore - 560 001, who were appointed as Statutory Auditors of the Company shall retire at the ensuing Annual General Meeting of the Company. The auditors have confirmed that the re-appointment, if made, will be in accordance with the provisions of Sec.224 (1B) of the Companies Act 1956. Your Directors recommend their reappointment.

Auditors’ Report

The Statutory Auditors in the annexure to their Report under Clause 13(a) and 15 have mentioned that the Company is not regular in depositing the undisputed statutory dues including PF, Service Tax, Income Tax, TDS and repayment of loans to Banks.

In this connection your directors would like to explain that the company has been facing working capital strain during the financial year. Due to this, the company has defaulted many of its commitments. However, the company has taken some strategies to come out of the aberrations, some of them have helped to address the defaulted payments in the subsequent period.

Directors’ responsibility statement

Pursuant to Section 217(2AA) of the Companies

(Amendment) Act, 2000, the Directors confirm:

i. That in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii. That 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 as on 31st March, 2013 and of the profit of the company for that period.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. iv. That the directors have prepared the Annual Accounts on a going concern basis.

Management discussion and analysis report

The management discussion and analysis report pursuant to corporate governance provisions of the listing agreements is attached to this report and forms a part of this report.

Corporate governance

Your Company is committed to good Corporate Governance practices and accordingly has implemented all the stipulations prescribed under Corporate Governance clause and Corporate Governance compliance certificate for the year ended 31st March, 2013, in line with Clause 49 of the Stock Exchange Listing Agreement is attached to this report. and forms a part of this report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 as amended is as follows.

Conservation of energy

The business operations of the Company are not energy intensive and therefore energy requirement of the Company is low. However the Company has undertaken energy conservation measures. The lightings, computers and other equipment used by the Company are technologically advanced and are also energy efficient. Use of CFL Lights, energy saving LCD monitors, air-conditioners with star rating for energy saving are some of the measures undertaken for conservation of energy. The cost of energy consumed when compared to the total cost is very small and hence financial impact of the above measures undertaken cannot be quantified. As on the date of this report, the board has no proposal to make any additional investment for reduction of consumption of energy.

Technology absorption, adaption and innovation

The Company continues its endeavour for developing new technologies and for absorption and adaptation of new technologies developed all over the world. The Company’s strategic plans are to provide improved offerings to its business customers with respect to the Business Technology Solutions. For this it would also be necessary for the Company to enter into partnerships, alliances and tie ups with global leaders. However availability of required funds at a right time is a challenge, which the Company plans to combat.

The Company as a result is able to provide improved solutions to its customers globally, which would be relevant and appropriate to their Business needs and at the same time suits their financial feasibility. This in turn will reduce costs to our customers and improve our revenues and returns.

Research and development

The Company has identified Research and Development work (R&D) as one of the important key driver to achieve growth and excellence and to have competitive edge in all its offerings. The R & D is carried on as an integral part of the business operations of the Company and encompasses all its major business operations. The object is to develop intelligent business solutions to cater to the needs of the ever increasing demands of our customers. This is planned to be achieved by continuously making efforts to bridge the gap between the requirements of the customers and our current offerings.

The Company is always open to innovations and has to make investments in R&D

The R&D activities of the Company have enabled it to innovate new ideas and processes and make offerings at competitive prices, to achieve growth plans. The Company has been able to make entry into intellectual property areas as a result of its R&D among others.

The Company plans to focus its R&D in the emerging areas such as Mobility by investment in developing prototype. Cloud Technologies, Big Data Analytics, Social Networking are also proposed to be covered.

However the R&D in the existing lines of business of the Company will also be continued to be focused.

As explained above the R&D is carried on by the Company as a part of ongoing business activity of the Company and expenditure thereof is considered as part of operating expenditure and hence expenditure on R&D cannot be shown separately.

Foreign exchange earnings and outgo

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and Export Plans

The Company is mainly engaged in Export of Technology Services and Export contributes a major portion of its income. The Exports are made to USA, Middle East and other countries.

The Company has initiated many strategic plans to increase exports. Developments of intellectual property, marketing efforts to increase overseas customers and to penetrate into new geographies, acquisitions of overseas companies are some of the initiatives.

The Company has plans to establish more offices in USA, UK, Middle East, and in Singapore to supplement our existing set-up and explore business opportunities.

b) Net Foreign Exchange Earnings

The net foreign exchange of the Company for FY 2013 stand at `73.47 crores. The Company had a foreign exchange earnings of `131,61,96,263/- and a foreign exchange outgo of `58,14,48,979/- during the financial year.

Particulars of employees

The particulars of the employees in receipt of remuneration above the limit mentioned under Section 217 (2A) of the Companies Act 1956 are given in the annexure A

Acknowledgements

Your Directors express their gratitude for the whole-hearted assistance and persistent co-operation received from various Government and Semi-Government authorities, Bankers, Shareholders, Investors, Vendors, and Customers. Your Directors place on record their sincere appreciation for the continuous support, and sustained efforts put in by the employees of the Company at all levels through their hard work, sense of belongingness and sheer dedication.

For and on behalf of the Board of Directors, Ravi Kumar D

Chairman and Managing Director

Date: 12th November, 2013

Place: Bangalore


Mar 31, 2012

To, The Members of Acropetal Technologies Limited,

The Directors take pleasure in presenting the 11th Annual Report together with the audited Balance Sheet and Profit and Loss Account for the year ended 31st March, 2012 along with the Report of Auditors thereon.

PERFORMANCE AT A GLANCE

(Rs. in crores)

Particulars 31st March, 31st March, 2012 2011

Revenue from operations 187.49 141.65

Other Income 16.19 0.13

Total Income 203.68 141.78

Total Expenses 176.04 118.68

Profit before tax 27.64 23.10 Provisions for taxation

Deferred Tax (5.73) 2.18

Current Tax 4.33 0.25

Profit after tax 29.04 20.67

Proposed Dividend 4.67 4.67

Provision for Dividend Tax 0.78 0.79

Amount transferred to General Reserve 2.90 2.07

Profit transferred to Balance Sheet 20.69 13.14

Your Company has achieved total income of Rs.203.68 crores for the year ended 31st March, 2012 recording a growth of 43.66% over previous year on standalone basis. After providing a sum of Rs.176.04 crores for expenditure, and making provision for taxes, the company made a net profit of Rs.29.04 crores recording a growth of 40.49% over the previous year. An amount of Rs.2.90 crores is proposed to be transferred to General Reserves.

MATERIAL CHANGES SUBSEQUENT TO THE YEAR UNDER REVIEW Acquisition of Companies

In consonance with the management philosophy of growth with the blend of organic and inorganic, we have acquired the following companies.

Serial Name of the Company acquired % of holding No. acquired

1 LineBeyond Inc. USA* 100%

2 Optech Consulting Inc. USA 70%

3 Kinfotech Private Limited 51%

4 MindRiver Information Technologies Private Limited 100%

*Name has been changed to Acropetal Inc., USA.

Subsequent to the year under review, we have acquired the remaining 30% in Optech Consulting Inc., (hitherto held by Vision Info Inc. UAE) thus making it a wholly owned subsidiary of the company. Name of the company LineBeyond Inc. has been changed to Acropetal Inc.

At a later date both the overseas wholly owned subsidiaries i.e. LineBeyond Inc., (Acropetal Inc.) and Optech Consulting Inc. have been merged according to the rules and regulations of the laws of the United States of America and the merged entity is now called Acropetal Inc., USA.

Approval for the Scheme of Amalgamation of Kinfotech Private Limited and MindRiver Information Technologies Private Limited with Acropetal Technologies Limited is pending with the Honorable High Court of Karnataka. As per the directions of the

Honorable High Court of Karnataka the meetings of Shareholders, Secured Creditors and Unsecured Creditors of the company were convened and held on 28th July 2012 and approvals obtained for the said Scheme.

The appointed date for the Scheme of Amalgamation, on approval from the Honorable High Court of Karnataka, will be 1st October 2011. Pending approval, the impact of the merger/ amalgamation of Kinfotech Private Limited and MindRiver Information Technologies Private Limited with the Company is not taken into account in the financial statements of the Company.

Other than the above, there are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of the report.

POST IPO (INITIAL PUBLIC OFFERING)

As you are aware, the company made its maiden Public Offer in the month of February 2011 and received a total sum of Rs.170.13 crores and allotted 1,88,90,358 shares. Your Company started its journey as an Engineering Design Services company in 2001 and later branched into Software Services in 2004. A Key shift now is the Attraversiamo Transformation Program, which is transforming the company from a Pure Play Services provider into a Business Technology Solutions Company. This is a unique positioning for the Company entering into developing IP and deploying customer contextual business technology solutions.

In view of this shift in the focus and other prudent financial considerations, the Company utilized IPO proceeds more for working capital purposes by reducing the utilization for other purposes mentioned in the prospectus. Details are furnished in the Corporate Governance Report.

The details of the utilizations of issue proceeds have been intimated to the Stock Exchanges along with the unaudited/audited financial results and also published in Newspapers.

Also Resolution seeking the approval of the shareholders of the Company is being placed at the ensuing Annual General Meeting of the Company for revision in the utilization of the IPO proceeds in terms of the applicable provisions of the Companies Act, 1956 and other Rules and Regulations.

DIVIDEND

Your Directors recommend a dividend of Rs.1.20/- per share of Rs.10/- each for the year ended March 31st, 2012. The outflow for the payment of dividend would be Rs.5.45 crores, including tax on dividend Rs. 0.78 crores.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report has been provided separately in this annual report and forms a part of Directors' Report.

DIRECTORS

Dr. Mathew James Manimala and Mr. Mohan H Ramakrishna are retiring as directors by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointments.

Mr. Ashok Kumar Jultha has resigned and ceased to be a director effective from 13th August, 2012. The Board places on record its appreciation for services of Mr. Ashok Kumar Jultha during his tenure as a director on the Board.

SUBSIDIARIES

The Company as on 31st March, 2012, had the following subsidiary companies:

1. Vision Info Inc., UAE

2. LineBeyond Inc., USA

3. Optech Consulting Inc., USA

4. Kinfotech Private Limited, India

5. MindRiver Information Technologies Private Limited, India

Taking into account the performance of these subsidiary companies, the performance of the Company on consolidated basis is summarized as under.

(Rs. in crores)

Particulars 31st March, 31st March, 2012 2011

Revenue from operations 323.79 201.47

Other Income 19.36 0.13

Total Income 343.15 201.60

Total Expenses 294.57 165.74

Profit before tax 48.57 35.86

Provisions for taxation

Deferred Tax (3.17) 2.18

Current Tax 6.86 0.25

Profit after tax (including minority interest) 44.88 33.43

Proposed Dividend 4.67 4.67

Provision for Dividend Tax 0.78 0.79

Amount transferred to General Reserve 2.90 2.07

Profit transferred to Balance Sheet 36.53 25.90

The company has been able to achieve a better turnover and a higher profit comparec to the previous year.

Your Company has decided to utilize the general exemption granted by The Ministry of Corporate Affairs, Government of India vide its General Circular No.2/2011 dated 8th February, 2011 from attaching the Balance Sheet, Profit and Loss Account, Directors' Report and Auditors Report and other related documents of subsidiary companies and accordingly, the said documents of subsidiaries of your Company are not attached to the Financial statements of your Company.

Your Company undertakes that the annual accounts and the related detailed information of your Company's subsidiary companies, will be made available to the shareholders of the Company and its subsidiaries, who seek such information at any point of time. The annual accounts of subsidiary companies, will also be kept for inspection by any shareholders at the Registered office of your Company and of the subsidiaries. The Company shall furnish a hard copy of the accounts of the subsidiaries to any shareholder on demand.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits from the public during the year.

AUDITORS

M/s. K. Gopalakrishnan & Co, Chartered Accountants, # 120, Infantry Road, Next to Balaji Plywood, Bangalore - 560 001, who were appointed as Statutory Auditors of the Company shall retire at the forthcoming Annual General Meeting of the Company. The auditors have confirmed that the re-appointment, if made, will be in accordance with the provisions of Sec.224 (IB) of the Companies Act 1956. Your Directors recommend their reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm

i. That in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii. That 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 as on 31st March, 2012 and of the profit of the company for that period.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv. That the directors have prepared the Annual Accounts on a going-concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 as amended is as follows.

Conservation of Energy

The Company is well-equipped with appliances and devices that consume less power. The Company's Electricity power requirement is almost negligible. As on the date of this report, the board has no proposal to make any additional investment for reduction of consumption of energy.

Technology absorption, adaption and innovation

In an endeavour to stay abreast of the most recent advancements across the technology spectrum, your Company has entered into partnerships, alliances and tie-ups with major global players in the I.T. Industry. This helps the Company to harness the latest and the best of technologies in its field, upgrade itself in line with the latest technologies in the world and absorb technology wherever feasible, relevant and appropriate. The Company continues to use the latest technologies for improving the productivity and quality of its services and products. We have a strong pipeline of 7 IPs. These steps will lead us to greater innovation and adaption of new technologies.

Foreign Exchange Earnings & Outgo

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and Export Plans

The Company is mainly into the business of exporting software services. While continuing our focus to grow the existing line of business, we are presently concentrating on Intellectual Property development which has huge potential, especially in the USA. The Company has plans to initially tap the potential business opportunities in the education sector of USA and then penetrate to other sectors and other markets.

b) Net Foreign Exchange earnings and outgo:

Foreign Exchange earnings : Rs.1,58,65,04,524/- Foreign Exchange Outgo : Rs.65,09,13,898/-

RESEARCH AND DEVELOPMENT

Research and Development is the key driver of our business operations. The prime focus of research team is on delivering key insights and outcomes to be used by various teams in the Company to develop and deliver on intelligent, on-demand business technology solution across the lines of innovation and lines of intelligence we operate in. The company is continuously investing on innovation by supporting and providing infrastructure to new products and ideas. The research team employs all three types of methodolgies - Empirical, Analytical and Experiential - to conduct its research. This approach helps us in finding the gaps in the industry by analyzing the current voice of the customers. This gap analysis is then used to understand the type of needs, wants and demands which exist in the market and which can be fulfilled.

As explained above the R&D is carried on by the Company as a part of ongoing business activity of the Company and expenditure thereof is considered as part of operating expenditure and hence expenditure on R&D cannot be shown separately.

PARTICULARS OF EMPLOYEES

The particulars of the employees in receipt of remuneration above the limit mentioned under Section 217 (2A) of the Companies Act 1956 are given in the annexure A of the Directors' Report.

CORPORATE GOVERNANCE

Your Company continues to commit itself to good Corporate Governance practices and has implemented all the stipulations of corporate governance prescribed under the listing agreements. Corporate Governance report and Corporate Governance compliance certificate for the year ended 31st March, 2012, in line with Clause 49 of the Stock Exchange Listing Agreement have been provided separately in this Annual Report, and forms a part of Directors' Report.

ACKNOWLEDGEMENTS

Your directors would like to place on record their gratitude for all the guidance and co-operation received from all its clients, vendors, bankers, financial institutions, business associates, advisors, regulatory and government authorities.

Your directors also take this opportunity to thank all its shareholders and stakeholders for their continued support and all the employees of the company for their valuable contribution and dedicated service.

For and on behalf of the Board of Directors,

Place: Bangalore D. Ravi Kumar R.J. Kamath

Date: 14th August, 2012 Chairman and Managing Director Director

 
Subscribe now to get personal finance updates in your inbox!