| To the Members,
The Directors submits the Annual Report of the Company along with the
Audited Statement of Accounts for the financial year ended on
31.3.2011.
1. Financial Results
The Financial Results of the Company on Consolidated basis are
summarized hereunder :-
Particulars 2010-11 2009-10
TRs. TRs.
Income 1,657,929 2,130,764
Expenditure 1,545,787 1,935,962
Gross Profit 112,142 194,802
Interest and Fixed Financial Charges 41,718 166,294
Depreciation & Amortization 115,019 120,908
Tax 10,132 38,160
Prior Period Adjustments - -
Net Profit (54,727) (130,560)
2. Dividends
Based on the Company's performance and considering the losses incurred
by the Company in the previous financial years, your Directors do not
recommend payment of dividend for this financial year.
3. Transfer to Reserves
Considering the performance of the Company in the year under review,
the Board of Directors do recommend the amount of TRs. 634 for transfer
to Bond Redemption reserve as required under section 117C of the
Companies Act, 1956 read with General Circular No. 9/2000 dated
18.2000, However the Board do not recommend any amount to transfer to
General Reserve.
4. Company's Performance
There is marginal improvement in the Company's performance during the
year under review on standalone basis from the stage as reported in the
Director's Report dated 18th August, 2011 and Director's Report dated
03rd September, 2011 for the financial year ended on 31st March, 2009
and financial Year ended on 31st March, 2010 respectively. The company
has achieved consolidated revenue of TRs.1,657,929 and incurred losses
of TRs. 54,727 against revenue of TRs. 2,130,764 and incurred Losses of
TRs. 130,560 during the previous year.
The caused delay in finalization of Annual accounts for the year under
review is substantially due to the delay in finalization of financial
statements of the company for the financial years 2008-09 and 2009-10
(due to the reasons mentioned in the report for said period) which were
completed on 3rd September, 2011 only.
The Board is now concentrating on completion of the delayed large
System Integration projects to maintain business continuum, to develop
customer confidence and to generate new System Integration and services
business. We are now able to achieve major project milestones and
expect to close the ongoing projects very soon so that old pending
receivable may be collected and cash flow situation may eased. New
business acquisition is a challenge given the cash flow situation which
led to foregoing some new business in the recent past.
The Company is parallels pursuing restructuring of Bank liabilities
and amicable settlement with vendors.
5. Subsidiaries
The company has four Wholly Owned Subsidiary Companies namely, Belgium
Satellite Services S.A. (Belgium), Unified Technologies Pvt. Ltd., ORG
Telecom Ltd., ORG Singapore Pte. Ltd.
a) The Belgium Satellite Services, S.A. (BSS) has achieved the revenue
of EURO 20.09 million equivalent to INR 127.27 Cr. and incurred
marginal operational loss of EURO 0.02 million equivalent to INR 0.16
Cr. The company is performing well and will achieve new benchmarks in
the time to come.
b) Unified Technologies Pvt. Ltd. (TECHUNIFIED) the revenue generated
by the company during the year under review is Rs.21.91 Lakhs and
incurred losses of Rs.29.19 Lakhs. As reported earlier the Management
is focusing on reorganizing the company's operations around its product
portfolio and also diversifying into IT enabled services.
c) ORG Telecom Ltd. (OTL): OTL is now our follow on subsidiary company
as it become the subsidiary of BSS with effect from the financial year
under review. The company has generated revenue of Rs.104.35 Lakhs and
incurred losses of Rs.258.94 Lakhs. However as reported earlier BSS is
now focusing on satellite services business opportunity in India
through OTL as Special purpose vehicle.
d) ORG Singapore Pte. Ltd. (ORG Singapore):
There are no business operations during the financial year under review
in the company. However your company is trying to explore the new
business opportunity for this subsidiary like offshore IT enabled
services etc.
6. Employees Stock Options Scheme (ESOS) :
Pursuant to permission granted by the shareholders of the Company to
issue Shares under ESOS to its employees, your Board of Directors has
formed an ESOS Committee, with its current members consisting of Mr.
B.V. Suryakumar, Mr. R.L. Dube and Mr. Ketan K. Adhvaryu, Directors of
the Company.
Pursuant to the ESOS Scheme framed by the Company in accordance with
the approval obtained from shareholders vide resolution dated August
30, 2003, the Company has got in-principle approval for issuance of
1176000 equity shares from the Stock Exchange, Mumbai. These shares
could be issued by the ESOS Committee from time to time in accordance
with the Scheme and SEBI Guidelines. The said ESOS Scheme was extended
to the employees of Subsidiary Company i.e. ORG Telecom Ltd. also vide
Special Resolution passed by the shareholders of the Company in their
Annual General Meeting held on 30.8.2005.
Following disclosures are being made in respect of the present ESOS
Schemes and Options allotted pursuant thereto as per the requirement of
Clause 12.1 of the SEBI (ESOS & ESPS) Guidelines, 1999:-
ESOS -II* ESOS-III*
(2005)** (2006)**
(I) Optional Granted\ 2,93,000 4,46,000
to be vested over to be vested over a
a period of 4 years period of 4 years
equally at the rate equally at the rate
of 25% each year of 25% each year
(II) Pricing Formula Par value of the Par value of the share
share which which is Rs. 10/-
is Rs. 10/- or
or Average of Weekly
Average of Weekly High and Low of the
High and Low of the closing price of the
closing price of share quoted on the
the share quoted National Stock
on the National Exchange of India
Stock Exchange of Limited or Bombay
India Limited or Stock Exchange
Bombay Stock Limited where number
Exchange Limited of trading
quantity of
where number of shares are higher
during
trading quantity of the period of
last two
shares are higher months or as may be
during the period thinks fit by
the ESOS
of last two months Committee.
or as may be
thinks fit by the
ESOS Committee.
(III) Total Options
Vested 2,38,475 2,79,250
(IV) Total Option
Exercised 82,275 50,625
(V) Total No. of Shares 82,275 50,625
as a result of
exercise of Options.
(VI) Total Option 20,250 45,000
carried to next year
(VII) Total Options 1,90,475 3,50,375
Lapsed
(VIII) Variation of terms N.A. except N.A. except inclusion
of Options inclusion of of employees of
Subsidiary of Subsidiary of the
employees of Company (ORG
the Company Telecom Limited) and
(ORG Telecom revision in Pricing
Limited) and Formula.
revision in
Pricing Formula.
(IX) Money realized by Rs.41,13,750/- Rs.31,38,750/-
exercise of Options
(X) Total number of 11,76,000 11,76,000
Options approved
by Stock Exchanges
under the Scheme.
(XI) Employee wise
Details of Options :
(a) Granted to Senior 2,04,000 4,46,000
Management
(b) No. of Employees 16 13
Receiving 5% or
more of Options
out of the total
Option granted in
that year.
*Now, the 4 years vesting of Options under this tranches
have been completed.
** During the year under report, no option was exercised by any of the
employees out of their carried forward Options.
7. Directors
Mr. Manoj Gupta, Managing Director of the company, who was appointed on
18th August, 2009 has resigned on 19th August, 2010 and then Board has
appointed Mr. BV Suryakumar as Managing Director initially for a period
of one (1) year with effect from August 19th, 2010 and reappointed now
for another two (2) years, subject to approval of shareholders and
Statutory Authorities.
The brief of changes in the non executive Directors of the Company
during the period from 1.4.2010 to till date are as given below:
Sr. Name of
Directors Designation Date of Date of Remarks
No. Appointment Resignation
/Change of
Designation
1 Mr. Kalyan Director 06.11.2009 21.06.2010 Resignation
Mazumder
2 Brig. Jagjit
Singh Director 18.08.2009 01.08.2010 Resignation
Ahuja
3 Mr. Kartikeya Director 22.01.2007 11.04.2011 Resignation
V. Sarabhai
4 Mr. Sushil
Kumar
Chaturvedi* CEO & WTD 18.08.2009 12.05.2011 Resignation
5 Mr. B.V. Managing 19.08.2010 Continuing
Suryakumar Director
6 Mr. R.L.
Dube Director 06.07.2007 Continuing
7 Ms. Binu
Mehta Director 19.08.2010 Continuing
8 Mr. Anmol
Krishan Additional 12.05.2011 30.9.2011 Ceased
Sekhri Director
9 Mr. Ompal
Singh Additional 12.05.2011 30.9.2011 Ceased
Chadha Director
10 Mr. Ketan K. Director 03.08.2011 Continuing
Adhvaryu
Note : Mr. Sushil Kumar Chatruvedi continues as Chief Executive Officer
of the Company.
Mrs. Binu Mehta and Mr. R.L. Dube retire by rotation and being eligible
offer themselves for re-appointment has been reappointed in the thirty
fifth Annual General Meeting, 2011 held on 30th September, 2011.
8. Auditor's and Auditor's Report
The Sorab S. Engineer & Co., Chartered Accountants, who are the
Statutory Auditors of the company, retires on the conclusion of Annual
General Meeting, 2011 and are reappointed as Statutory Auditors of the
company till the conclusion of next Annual General Meeting.
The attached Auditor's Report to the members of the company for the
period under review is self explanatory except Clauses referred herein
below with clarifications/ comments of the board on the same for the
consideration of the members.
Clauses of Auditor's Report:
Clause-4: With respect to the contingent liabilities not provided for,
the Board is of the view that all the items report are not required to
make any provisions as the same are either subjoin, project milestone
achieved or appeal preferred etc. as the case may be. Regarding cash
crunch problem and redressal of the same kindly refer Point-4 of this
Report above.
Clause-5 (i): The provision of Rs.161,700 made for fall in value of
Investment in Unified Technologies Pvt. Ltd. was
because this Software Development Company has suffered severely during
the economic meltdown. Majority of employees had left the company. The
Management is now focusing on reorganizing the company's operations
around its product portfolio and also diversifying into IT enabled
services.
Clause-5(ii): Kindly refer Note No7, of the Notes to Accounts,
schedule-22 of the balance Sheet for clarification on the reported
item.
Clause-5(iii): The Board is of the view that considering the business
relationship with the such sundry debtors, the same is recoverable, may
be with some reasonable deductions, which can not be ascertained at
this stage.
Clause-5(iv): The balance confirmation for Banks account in Afganistan,
where company was handing project during the year 2004-05 could not be
obtained.
Clause-5 (v): The Company has taken all appropriate action to
recover/adjust the reported amount from vendors, business associate
companies.
Clause-5(vi): The Board is of the view, that there is possibility of
set off of carry forward CENVAT in future but this may be carry forward
to the extent permitted by the provision of relevant Act. Kindly refer
Note 10(a) of the Notes to Accounts, Schedule-22 of the Balance Sheet.
Clause-5(vii): The High Court of MP has passed the Order, quashing the
decision of MPSEDC to encash Tender Security submitted by the company.
However the Court has given an opportunity to MPSEDC to issue a show
cause Notice to the company before refund of such tender security and
such show cause notice has been served to the company which has been
replied by the company within the time provided. The Management is
hopeful to recover said amount of TRs.25000 from MPSEDC.
Clause-5(viii): Kindly refer Note No. 9, of the Notes to Accounts,
schedule-22 of the balance Sheet for clarification on the reported
item.
Clause-5(ix): During the year under review, with the approval of
shareholders, subject to approval of Statutory Authorities, the company
has appointed Mr. BV Suryakumar as New Managing Director after
resignation of Mr. Manoj Gupta as Managing Director on 19th August,
2010. The required statutory approval will be taken on removal of
procedural constraints faced by the company with the Ministry of
Corporate Affairs (online filing with MCA21). For further clarification
kindly refer Note No20.
Clause-5(x): The Management of the company in consultation with the
Board and Audit committee are of the view that no provisions be made
for the items reported there .Wherever appropriate they have been
disclosed in the Contingent liabilities. Kindly refer relevant Note in
the Notes to accounts for further clarification.
Clause-6(iv) Kindly refer Note-7, 9 and 10 of the Notes to accounts,
Schedule-22 of the Balance Sheet for clarification on the reported
Items.
Clauses of Annexure of Auditor's Report:
Clause-1&2: Considering the nature of business of the company, its not
possible to physically verify the Inventories, Stock spare etc. at
clients site.
Clause 3(b): Interest free loan is given to its wholly owned subsidiary
y companies only. The company is negotiating with suppliers to waive
off the Interest and commission claim made by them.
Clause-4 & 7: "The Board of Directors has noted the observation of the
Auditors that the internal audit & control was not commensurate with
the size and nature of the Company's business. The Board submitted that
due to severe cash crunch in the company it could not done during last
financial years and assures the members that immediate step will be
taken to ensure that the internal audit & control will be commensurate
with the business operation of the Company.
9. General
Particulars as required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
Report of Board of Directors) Rules, 1988 is appended herewith and
forms part of this report.
There were No employees who withdrawn the remuneration, during the
financial year under review, exceeding the limits specified under
Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975, as amended from time to time.
10. Directors' Responsibility Statement
Your Directors confirm that:- (i) In preparation of the annual
accounts, the applicable accounting standards have been followed along
with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the profit or
loss of the company for that period;
(iii) The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 1956 for safeguarding the assets of the
company and for preventing and detecting frauds and other
irregularities;
(iv) The directors have prepared the annual accounts on a going concern
basis.
11. Corporate Governance
The Report on Corporate Governance as required under Clause 49 of the
Listing Agreement is given as an Annexure-II to this Report. A
Certificate from Practicing Company Secretaries regarding compliance of
applicable conditions of Corporate Governance as stipulated under
Clause 49 of the Listing Agreement is also attached to this report.
12. Acknowledgements
The Board records its appreciation of the support which the Company has
received from its bankers, customers, government organizations,
overseas strategic alliance partners, staff and employees. The Board
also appreciates the confidence reposed by the shareholders in the
Company and its management.
For and on behalf of the Board of Directors
B.V. Suryakumar Binu Mehta
Managing Director Director
Vadobara
October 5, 2011
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