| To The Members,
The Directors have pleasure in presenting the THIRTEENTH ANNUAL REPORT
on the business and operations of the Company together with the Audited
Accounts for the year ended 31st March 2012.The Revenues of the Company
was Rs. 172.14 Crores during the year under review.
FINANCIAL PERFORMANCE
A summary of the financial performance of your Company for the
Financial year ended March 31, 2012 is as under:
(Rs. In Lakhs)
Sr.
No. Particulars 2011-12 2010-11
1. Revenue from operations 17214.51 14726.37
2. Expenses 15488.00 11763.03
3. EBIDTA 1726.51 2963.34
4. Depreciation & Amortization 7.31 6.95
5. Finance Charges 309.58 80.57
6. Other Income 255.07 (134.22)
7. Profit from ordinary activities Before Tax 1664.69 2741.60
8. Provision for Tax 330.98 -
9. Profit After Tax 1333.71 2741.60
REVIEW OF OPERATIONS
The Revenue of our Company in the Financial Year 2011-12 was Rs. 17214.51
Lacs as compared to Rs. 14726.37 Lacs in the Financial Year 2010-11. On
an annualized basis, there has been increase of 16.89 % in the
Financial Year 2011-12.
The PBT of our company has decreased from Rs. 2741.60 Lacs in the FY
2010-11 to Rs. 1664.69 Lacs in the FY 2011-12. The Profit before Tax as
percentage of Sales has decreased to 9.67% as compared to 18.62% in
previous year. During the financial year 2011-12, the company has
experienced a stable growth in top line with decrease in margins due to
increasing costs because of depreciation of rupee vis-a-vis US dollar,
increased competition and other global macro economic variables
influencing global markets scenario.
A detailed discussion on the results of the operations and the
financial position is included in the "Management Discussion and
Analysis Report" section placed at Annexure - II.
UTILIZATION OF FUNDS THROUGH IPO / FUTURE PLANS
The Company has raised funds from the public through IPO in the year
under review . The Company had issued Prospectus dated 10th
0ctober,2011 for raising funds through the Initial Public
Offer(IPO)/Issue of equity shares. Accordingly, the Company had made
the IPO through 100% Book building route and raised Rs. 8250 Lacs by
issuing 55,00,000 Equity Shares of Rs. 10 each of the Company for cash at
a price of Rs. 150 per Equity share(including Securities Premium of Rs. 140
per Equity share).The total proceeds of IPO were planned with certain
objects ,as more particularly stated and described under section titled
'Objects of the Issue' on Page 36 of the Prospectus, as were
considered appropriate and necessary by the management at that point of
time and as detailed hereunder:-
S.
No. Particluars Planned
as per Utilization
upto Balance
pending
prospectus 31 March,
2012 Utilisation
Variations
1 Setting up a new SEZ
development center at
Hyderabad 914.83 - 914.83
2 Setting up a new SEZ
development center at Warangal 865.64 - 865.64
3 Acquisition and other
strategic initiatives 2,200.00 - 2,200.00
4 Financing Incremental
working capital 1,280.00 1,032.73 247.27
5 General Corporate Purpose 2,411.18 3,956.00 (1,544.82)
6 Public Issue Expenses 578.35 406.28 172.07
7 Investments (ICDs and
Fixed Deposits) - 2,800.00 (2,800.00)
8 Balance with Banks - 54.99 (54.99)
Total 8,250.00 8,250.00
The company has utilized Rs. 2300.00 lakhs of investments as above for
acquisition of GRC business of Rs. 2400.00laks in May 2012. There are
deviations in utilization of funds as explained as above due to shift
in focus and other prudent financial considerations.
The equity shares of the Company got listed and admitted to dealings on
the Bombay Stock Exchange Ltd and National Stock Exchange Ltd with
effect from 19th October,2011. The issued, subscribed and paid up
equity share capital of your company as on March 31, 2012 stood at Rs.
218,521,070/- comprising of 21,852,107 equity shares of Rs. 10/- each.
The Company already has presence in India and US. We propose to expand
our operations in Asia-Pacific markets and Middle Eastern countries.
SEBI's AD INTERIM ORDER dated 28th December, 2011
SEBI issued an ad interim ex-parte order dated 28th December 2011. Your
company filed a response to the SEBI order vide its letter dated 4th
Jan,2012. Subsequently, the Company has filed its detailed reply on12th
September, 2012. The matter is pending.
STRATEGIC ACQUISITIONS AND DEVELOPMENTS
We have acquired GRC (Governing,Risk and Compliance) business in May
2012 as it supplements and supports existing business of Wealth
Management Solutions and provides synergestic advantages through
seamless integration.
We will continue to explore opportunities for acquisitions or joint
ventures or alliances that leverage on the existing service offerings,
cater to new client relationships or give us a presence in
complementary markets.
WARANGAL DEVELOPMENT CENTER
Company has operationalised a development center at Warangal, a tier II
city.The company could provide employment to nearly 100 people.
Further, expansion of facilities at the center are on the anvil.
DIVIDEND
Your Directors recommend no dividend for the year under consideration.
In order to conserve the capital base to meet the increased business
operations of the company and to conserve cash outgo, the Board
recommends that it would be in the best interests of the Shareholders
of the Company that the distributable/disposable profits of the Company
for the year be retained/ ploughed back into business for huge
expansion plans.
EMPLOYEE STOCK OPTION SCHEME
Pursuant to the provisions of Guideline 12 of the Securities and
Exchange Board of India( Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines,1999, as amended, the details of
stock options under IBSS Techno Park Pvt Ltd ESOS ,2006 are as under :
equity shares of face value Rs.10/- each
Approved options - 8,00,000
Options granted - 3,20,000
Options lapsed - 2,70,000
Options exercised - Nil.
Total Number of options
in force - 50,000
CORPORATE GOVERNANCE
Your Company is committed to good corporate governance practices.The
Company's philosophy on Corporate Governance is included under the
Annexure I to this Report as per clause 49 of the Listing Agreement.
MANAGEMENT DISCUSSION AND ANALYSIS OUTLOOK AND NEW INITIATIVES
Management Discussion and Analysis as stipulated in Clause 49 of the
Listing Agreement is included under Annexure II to this Report.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of provisions of Section 217(2AA) of the Companies Act, 1956
as amended your Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards have been followed ;
2. They have, in the selection of the Accounting Policies, consulted
the Statutory and Internal Auditors and have applied them consistently
and made judgments and estimates that are reasonable and prudent so as
to give true and fair view of the state of affairs for the Company at
the end of the profit and Loss of the Company for that period;
3. They have taken proper and sufficient care to the best of their
knowledge and ability 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;
4. They have prepared the annual accounts on a 'going concern'
basis.
REPLY TO AUDITOR'S OBSERVATIONS PURSUANT TO SEC 217(3) OF THE
COMPANIES ACT,1956
The Board has duly reviewed the qualifications by auditor in its
Auditor's Report vide clause 3 and annexure to the auditors' report
vide clause XX pertaining to Note No. 34(a),(b),(c) and (d) of notes to
financial statements as below:
- a) Relating to Utilization of IPO Proceeds:
- The company has raised an amount of Rs. 82,50,00,000/- through
Initial Public Offer (IPO) which was subscribed by the public between
29-09-2011 to 04-10-2011. On the receipts of such IPO proceeds, company
was under an obligation to utilize the proceeds as per the prospectus
filed before SEBI. The SEBI had carried out an Investigation on the
issue of utilization of IPO proceeds. During the course of
investigation, the SEBI has come to a prima facie conclusion that the
proceeds of the IPO were utilized for the objects other than the
objects mentioned in the Prospectus.
- b) SEBI Order relating to Operative Instructions :
- Vide Order No. WTM/PS/IVD/ID8/43/Dec/2011 dated 28th December,
2011, SEBI has directed the company and directors in the following
ways:
- (i) The Company is prohibited from raising any further capital, in
any manner whatsoever, till further directions.
- (ii) The Company and its directors are prohibited from buying,
selling or dealing in securities in any manner whatsoever, till further
directions.
- c) SEBI Order relating to Calling back of IPO funds:
- Vide Order No. WTM/PS/IVD/ID8/43/Dec/2011 dated 28th December,
2011, SEBI has directed the company in the following ways:
- a) To call back the ICD placed with Silverpoint Infratech Limited
amounting to Rs. 23 Crores and place the proceeds in an interest bearing
escrow bank account opened with a scheduled commercial bank, till
further directions.
- b) Proceeds of IPO invested by the company in the India bulls
Mutual Fund-Liquid Fund; amounting to Rs. 5 Crores; shall also be
redeemed and transferred to the said escrow account, till further
directions.
- c) In addition, the Company shall deposit the proceeds of IPO still
remaining with it; as on the date of this Order; in the said escrow
account, till further directions. The confirmation for the same should
be given to stock exchanges where the company is listed; within 7days
from the date of this Order.
- d) SEBI Vide Order No. WTM/PS/IVD/ID8/43/Dec/2011 dated 28th
December, 2011 has made certain observations on matters relating to
disclosures etc.
The company has filed its reply to SEBI Order No.
WTM/PS/IVD/ID8/43/Dec/2011 dated 28th December, 2011 on 04th January
2012 by stating its stand to the SEBI Order. Subsequently, the company
has filed its detailed reply on 12th September, 2012 by submitting its
clarifications/explanations to the SEBI order.
The matter is pending and the company is expecting a favourable outcome
in the matter.
FIXED DEPOSITS
During the period under review, your Company has not accepted any
Deposits within the meaning of Section 58A of the Companies Act, 1956,
and the rules framed thereunder.
DIRECTORS
During the year under review Mr. N V Ramana, Mr.Vijay Kumar Devarakonda
and Mr.Pramod Chada resigned as directors w.e.f. February 13, 2012. The
Company places on record its appreciation for the excellent services
rendered by the directors during their tenure.
Mr. Narender Sirumalla and Mr.Ravi Kumar Bijjala were appointed as
additional directors w.e.f from 13th February,2012 and they were
regularized in Extra ordinary General Meeting held on 21st March 2012.
In accordance with the provisions of Section 256 of the Companies Act,
1956 and the Articles of Association of the Company, Mr. Ramaswamy
Kuchana, director of the Company, retires by rotation at the ensuing
Annual General Meeting and being eligible, offer himself for
re-appointment.
STATUTORY AUDITORS
P.Murali & Co., Chartered Accountants, the retiring Statutory Auditors
of your Company expressed their willingness to continue as Statutory
Auditors, if re-appointed at the ensuing Annual General Meeting to hold
the office until the conclusion of the next Annual General Meeting. The
Company has received from the Statutory Auditors a certificate to this
effect that their appointment if made, would be within the prescribed
limit under Section 224 (1B) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES
No employees are covered under Section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules 1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUT GO
The Information required under Section 217 (1)(e) of the Companies Act,
1956 read with Companies (Disclosure of particulars in the Report of
Board of Directors)Rules, 1988 regarding conservation of Energy,
technology absorption and foreign Exchange earnings and outgo is set
out in Annexure III annexed hereto and forms part of this Report.
ACKNOWLEDGEMENTS
Your Directors wish to express their gratitude for the continuous
support and assistance received from investors, Customers, Vendors,
bankers, all Statutory, Regulatory and Government authorities during
the year. Your Directors further place on record their appreciation for
the significant contribution made by the employees at all levels and of
their competence, perseverance, and hard work that have enabled the
Company to cross new milestones on a continual basis.
For and on behalf of the Board
Sd/-
Date: 12.11.2012 Pavan Kumar Kuchana
Place: Hyderabad Chairman & Managing Director |