Annual Reports : Edserv Softsystems Ltd
EDSSOF ( Information Technology >> Computer Education )
Directors Report Chairman's Speech Auditor's Report Raw Materials Finished Products  



Directors' Report




Your Directors have pleasure in presenting their report for the year ended 31st March 2012 together with the Balance Sheet as at 31st March 2012 and the Profit and Loss account for the year ended on that date.

Financial Highlights

(Rs.)in lakhs

Particulars Audited Financial Statement for the year ended March 31st 2012 Audited Financial Statement for the year ended March 31st 2011
TOTAL INCOME 10295.70 10777.29
TOTAL EXPENDITURE 9951.82 10219.95
Profit Before Tax 343.58 557.34
Less: Provision for Income Tax and Deferred Tax 929.78 334.70
Less: Provision for Fringe Benefit Tax - -
Profit / Loss After Tax -585.90 222.64

Fixed Deposit

During the year under review, the Company has not accepted any Fixed Deposit from the public.

Capital Issues During The Year (upto date of this report) & their utilization

1. Issued of 2500000 Equity Shares on preferential Basis to Non-Promoters for consideration otherwise than for cash:

During the year the company has issued 25,00,000 Equity Shares of face value Rs.10/- each at a premium of Rs. 130 per share aggregating to Rs. 35,00,00,000 to Prosel Ventures Private Limited for acquisition of Elearning online contents in animated format/ pre-recorded teaching content relating to Legal, accounts, finance and more particularly covering ACA/ ACS/ IFRS and other educational courses.

2. Issue of 700935 Equity Warrants to Non- Promoters:

During the year the company has issued 700935 Equity Warrants at a price of Rs. 214 per warrant of Rs. 10 each a premium of Rs. 204 per warrant aggregating to Rs. 15,00,00,090 on preferential basis to Non-Promoters i.e. D.B.Corp, a Body Corporate towards advertisement arrangement.

3. Issue of 93458 Equity Shares to Non- Promoters:

During the year the company has issued 93458 Equity Shares at a price of Rs. 214 per warrant of Rs.10 each a premium of Rs. 204 per share aggregating to Rs. 2,00,00,012 on preferential basis to Non-Promoters i.e., Jagran Prakashan Limited, a Body Corporate towards advertisement arrangement.

Subsidiary Company

Your directors are pleased to inform you that we have incorporated a wholly owned subsidiary on 30th December 2009 in the name of "Vidhyadhana Education Private Limited", the Academy of Excellence for Industry Demand Aligned Education, to enhance the quality of learning among students so as to find and map their interest and natural background to an appropriate career stream at their young age. Vidhyadhana encompasses fun-filled learning for primary education, improving the academic performance of students from primary to higher secondary, imparting the students with career orientation apart from improving the teachers' training skills and the overall quality of schools with better infrastructure and management. Leading Educationalist shall govern the Academy to monitor and improve the said objectives of the academy.

A school partnering with Vidhyadhana shall be directly managed by the Academy with the teachers and management on the rolls of the Academy. The school owner continues to own the school and gets an opportunity to also work for the school. A statement in respect of details of subsidiary company viz Vidhyadhana Eduction Private Limited pursuant to Section 212 of the Companies Act, 1956 is attached herewith to this report.

The directors of the company are Mr. S. Giridharan, Mrs. G. Gita and Mr. T. S. Ravichandran.

Performance Review

Your directors are happy to present the performance of the company for the year 2011-12. During the year of operations, your company opened up several initiatives including the brick-and-mortar training centers for students and job aspirants. Your company also made headways in new relationships in mobile solutions during the year.

EDSERV TRAINING INSTITUTE (ETI)

EdServ Training Institute (ETI), the first-of-its-kind Instructor-Led-Training using Franchisee network centers offering a rich Bouquet of academic support and vocational training courses that will include Tuition, Coaching, Test Prep and Job Oriented Training was launched during the year. EdServ already has a wide range of e-contents as part of its flagship LAMPSGLOW.com that shall power the brick-and-mortar learning services.

As part of the launch offering, each student enrolling into the ETI shall get a TABLET PC free with specific pre loaded course content. EdServ has tied up with A-Team Edutech Ltd, a TN based Tablet PC Company for the supply of Tablet PCs to the EdServ Training Institute.

The training courses will comprise of Coaching for CA, IITJEE, AIEEE, AIPMT exams, academic support tuition from KG right up to PG that include CBSE, Stateboard subjects as well as Engineering semester exam support, Job skills and Life skills training that include Spoken English, Softskills, IT Skills all under one roof in a Brick-and-Mortar training center with TABLET PC based extended learning support to every student.

While the morning and evening sessions will be targeted towards school and college students, the afternoon training sessions will be targeted at Housewives and Job Seekers. The day sessions will also be targeted at Children aged below 5years for whom ETI could serve as a pre-school joint where they could learn through fun filling Multimedia based education model including Pre-School concepts.

The physical presence of EdServ through the Training Institutes across the country is expected to drive faster growth of its flagship online (www.lampsglow.com) model. eLearning education students will now be able to have access both to Training Institute as well as the online training classes. All the ETIs will have lampsglow assisted Lab facility for the Students. In addition, the students will be able register for the eLearning Courses at any of the ETIs.

During the year of consideration, your company also announced that the company’s Mobile Education apps, HumThum, became available on Aircel, the country’s leading mobile operator with a strong presence in Tamil Nadu and Eastern India. As part of this, all mobile users of Aircel will be able to access the entire range of education content of EdServ through the HumThum apps on their mobile smart phones. This follows the agreement EdServ signed with Tata Docomo recently for their ‘Tutor on Mobile’ service.

With its education apps on Aircel, EdServ expects over 2million students to access its education content that includes Tuition, Test prep, Academics and Skill Development through the HumThum apps.

As part of its expansion into the Rs. 2000 cr CA training market in India, during the year, the company has also struck a partnership with CAClubIndia.com, the country’s biggest Online Platform for Finance Professionals with more than 6 lakh members. Around 70,000 professionals and students visit the site every day.

As per the partnership, CAClubIndia.com delivers EdServ’s CA coaching content to the 6lakh Student base. EdServ will provide training in web-based mode at affordable prices as compared to contact classes and ILT (Instructor Led Training) based classroom coaching. EdServ will also provide online access to expert classroom Videos and Assessments to CA aspirants. All subjects / papers will be covered through web based lectures as recorded in live classrooms including doubts classifications and video replays.

EdServ had earlier this year forayed into the online CA coaching services through a JV with Chennai based Sreeram Coaching Point (SCP), the first by a National branded player into the online CA training space. EdServ is also focusing on launching its CA coaching services in overseas markets like the Middle East. The company expects to generate revenues of Rs. 200cr from its overall CA Coaching services business that includes the current partnership with CAClub India.

During the year, the company raised funds through Global Depository Receipts (GDRs) to the tune of USD 23 million for its overseas expansion and global learning services purposes. The company has acquired the businesses and contents of a UAE based firm as an on-going entity out of GDR proceeds. This is part of its strategy to expand its business providing on-line learning and career solutions through mobile and tablet platforms. With this purchase and acquisition, the company is confident of penetrating deeper markets in Asia and Middle East, which would help the company to develop more greatly.

Future Outlook

The year ahead will see your company emerging to be an important player in School support solutions using the SchoolMATE ERP providing the crucial teacher and student empowerment through IT enabling. Your company has also plans to engage more into Government projects through PPP model to be part of the knowledge development of the society for our country in a bigger way.

Directors

Mr. Ilango Balakrishna, Director of the company, retire at the ensuing Annual General Meeting of the company pursuant to the provisions of Section 255 of the Companies Act, 1956 and he being eligible, seek reappointment. The Brief Profile of the aforesaid Director is given hereunder.

Dr.Ilango Balakrishna, aged (75 years), is an Independent Non-Executive Director of EdServ Softsystems Limited and is a Former Vice Chancellor, Bharathiar University, Coimbatore. He has completed his Bachelors Degree in Engineering, M.Sc., (Engineering) in University of Madras and Ph.D in Electrical Engineering in IIT Kanpur. He has received various awards from various organizations in India and Abroad and is a member of various Pristegious Committes including ISTE, Accreditation committee of NBA, AICTE etc.,.

During the year under review Ms.G.Gita, Managing Director had tendered her resignation from directorship w.e.f 10.10.2012 and the board placed its appreciation on record for the services rendered by her during her tenure as Managing Director

Mr.S.Giridharn’s designation was changed from Chairman & CEO to Chairman & Managing Director w.e.f. 10.10.2012, consequent to the resignation of Ms.G.Gita as mentioned above, subject to the approval of the Shareholders in the ensuing AGM.

Mr.K.T.Srinivasan has also been appointed as the Whole Time Director of the Company w.e.f. 15.11.2012 and his complete profile has been given elsewhere in this Annual Report, subject to the approval of the Shareholders in the ensuing AGM.

Auditors

The Statutory Auditors, M/s. Raj and Ravi, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment for the current financial year. The auditors have expressed their willingness to continue in office if re-appointed. Your Board recommends their re-appointment.

REPLY TO AUDITORS REMARKS

The reply to the remarks made by the auditors in their report are detailed in the Notes on Accounts. Since the information provided therein are self explanatory they do not call for any further comments by the Board of Directors.

Particulars as required under Section 217(1)(e) of the Companies Act, 1956 A) Conservation of Energy

Though the company has not carried on any manufacturing activities, it had taken steps to conserve energy in its office/godown use, consequent to which energy consumption has been minimized. No additional Proposals/Investments was made to conserve energy. Since the company has not carried on any industrial activities, disclosures regarding impact of measures on cost of production of goods, total energy consumption, etc. Are not applicable.

B) Technology Absorption

The company has not adopted/intend to adopt any technology for its business and hence no reporting is required to be furnished under the heading.

C) Foreign Exchange Earned & Used

Since the company has not carried on any export during the financial year under review, the disclosure requirement relating to exports , initiatives taken to increase exports: development of new export markets for products and services and export plans is not applicable to the company.

Foreign Exchange earned during the year : Rs. Nil(PY Rs. 31,16,02,000)

Foreign Exchange used during the year : Rs. Nil (PY Rs. 18,11,833)

Particulars of Employees Pursuant to Section 217(2A) of the Companies Act, 1956

As required under the provisions section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employee are set out in the Annexure to this report.

Directors' Responsibility Statement

The Directors confirm that

a) In the preparation of the annual accounts, the applicable accounting standards have been followed

b) Appropriate accounting policies have been selected and applied consistently and judgements and estimates made 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 the year ended 31st March, 2012

c) Proper and sufficient care have been taken 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.

d) The annual accounts have been prepared on a going concern basis.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report and Auditor' certificate regarding compliance of the same are made part of this Annual Report.

Acknowledgements

The Directors acknowledge with gratitude and wish to place on record their appreciation for the valuable support and kind co-operation extended to the company by the Company's Bankers, Financial Institutions, Government Authorities, Shareholders,

For and on behalf of the Board of Directors
Place: Chennai S.Giridharan
Date: 26.11.2012 Chairman & Managing Director

Annexure To Directors' Report

Statement of particulars of employees pursuant to section 217 (2A) of the companies act, 1956.

Name S. Giridharan
Designation Chairman & Managing Director
Remuneration received (Rs.) 60,09,360
Nature of employment, whether contractual or otherwise Resolution passed by the Board and the Members
Other terms and conditions As per the terms of resolution
Nature of duties To manage the day to day affairs
Qualifications and experience M.S. (System and Information)
Date of commencement of Employment 01.04.07
Age 49
Previous employment Onspec Technology Solutions Pvt. Ltd
The percentage of equity held 2.98% as on (31.03.2012)
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