Oracle (OFSS) BPO Services Limited Directors` Report Dear

Transcription

Oracle (OFSS) BPO Services Limited
Directors’ Report
Dear Members,
Your Directors take pleasure in bringing you the Annual Report of your Company along with the
Audited Accounts for the financial year from April 01, 2010 to March 31, 2011.
Financial Highlights
Revenue
Income from operations before depreciation &
amortization
Depreciation & amortization
Interest/other income/(expenses)
Income before taxes
Provision for tax
Net income
Balance brought forward
Balance carried forward
(All amounts in millions
of Indian Rupees)
Year ended March Year ended March
31,2011
31,2010
277.229
424.448
58.544
(6.187)
15.528
67.884
(5.712)
62.172
26.878
89.050
153.084
(9.076)
(38.608)
105.400
(3.574)
101.826
(74.948)
26.878
Performance
During the year, the Company earned income of Rs.294.426 million (previous year Rs. 432.858
million) and incurred a total expenditure of Rs. 226.541 million (previous year Rs.327.458
million).
Dividend
The directors do not recommend any dividend for the year ended March 31, 2011.
Transfer to reserves
The Company does not propose to transfer any amount to the General Reserve.
Share Capital
The Nominal Capital of the Company is Rs.10,00,00,000/- (Ten Crores only) divided into
1,00,00,000 equity shares of Rs.10/- each and paid-up capital is Rs.5,81,93,600/- divided into
58,19,360 equity shares of Rs.10/- each fully paid.
Your company is a subsidiary of ISP Internet Mauritius Company. The Company has no
subsidiary company.
Directors
Mr. Don Ganguly and Mr. Mahesh Rao, Directors of the Company, retire by rotation at the
ensuing Annual General Meeting of the Company and being eligible offer themselves for
re-appointment.
The Board recommends to the members the resolutions for re-appointment of Mr. Don Ganguly
and Mr. Mahesh Rao as the Directors of the Company.
Employee particulars
Information pursuant to Section 217(2) (A) of the Companies Act, 1956, (‘the Act’) read with
the Companies (Particulars of Employees) Rules, 1975 forms part of this Report. As per the
provisions of Section 219 (1) (b) (iv) of the Act, the Directors’ Report and the Accounts are
being sent to the members excluding the statement giving particulars of employees under Section
217 (2A) of the Act.
Any member interested in obtaining a copy of the statement, may write to the Company
Secretary at the Registered Office of the Company.
Fixed Deposits
During the financial year 2010-2011, the Company has not accepted any fixed deposits within
the meaning of Section 58 A of the Companies Act, 1956, and as such no amount of principal or
interest was outstanding as on the date of the Balance Sheet.
Repayment of loan
Oracle Financial Services Software Limited had granted a loan of Rs.50 crores to the Company.
During the year the Company has repaid Rs.20 crores.
Auditors
M/s S. R. Batliboi & Associates, the present Statutory Auditors of the Company, hold office till
the ensuing Annual General Meeting and have confirmed their eligibility and willingness to
accept office, if re-appointed.
Audit Committee
The Audit Committee comprises of following persons as its members:
1. Mr. Avadhut Ketkar
2. Mr. V. Srinivasan
3. Mr. Mahesh Rao
Audit Committee has the relevant powers pursuant to provisions of Section 292A of the
Companies Act, 1956.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
a. Conservation of energy
The operations of the Company are not energy-intensive. The Company, however, takes
measures to reduce and optimize energy consumption by using energy efficient computers, CFL
bulbs and ballast based lighting. Further, offices have been designed to maximize the use of
ambient lighting while conserving the air-conditioning. The expenses on power in relation to
income is nominal and under control.
b.
Technology absorption
Since business and technologies are changing constantly, investment in research and
development activities is of paramount importance. Your Company lays a great emphasis on
knowledge management and has an institutionalized process for absorption of new technologies.
Your Company continued its focus on quality up-gradation of the software development process
and software product enhancement.
c. Foreign exchange earnings and outgo
Foreign exchange earnings Rs.227.229 million (Previous Year Rs.424.448 million)
Foreign exchange outgo Rs.0.334 million (Previous Year Rs. 0.795 million)
Directors Responsibility Statement
As required under section 217 of the Companies Act, 1956 the Directors hereby 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 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 this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
(iv)
The Directors have prepared the annual accounts on a ‘going concern’ basis.
Acknowledgements
Your Directors take this opportunity to thank the Company’s customers, shareholders, vendors
and bankers for their continued support during the year. Your Directors also wish to thank the
Government of India and its various agencies, Departments and other local Government Bodies
for their support and look forward to their continued support in the future.
Your Directors also place on record their appreciation for the contribution made by all
employees of the Company.
For and on behalf of the Board,
Makarand Padalkar
Chairman
May 10, 2011
BALANCE SHEET AS AT MARCH 31, 2011
(Amounts in thousands of Indian Rupees)
Schedules
March 31, 2011
March 31, 2010
SOURCES OF FUNDS
Shareholders' funds
Share capital
Profit & Loss Account
1
2
58,194
89,050
58,194
26,878
Loan fund
Unsecured loan
3
300,000
500,000
447,244
585,072
121,588
114,771
6,817
121,348
108,584
12,764
267,762
186,181
15,087
48,505
517,535
410,967
190,167
1,003
38,538
640,675
40,304
36,804
77,108
40,684
27,683
68,367
440,427
572,308
447,244
585,072
APPLICATION OF FUNDS
Fixed assets
Cost
Less: Accumulated depreciation and amortisation
Net book value
4
Current assets, loans and advances
Sundry debtors
Cash and bank balances
Other current assets
Loans and advances
5
Less: Current liabilities and provisions
Current liabilities
Provisions
6
Net current assets
Notes to accounts
10
The schedules referred to above and notes to accounts form an integral part of the balance sheet.
(0)
(1)
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
(Amounts in thousands of Indian Rupees, except share and per share data)
Schedules
March 31,
2011
Revenue
Cost of revenue
Gross profit
Operating expenses
General and administrative expenses
Depreciation and amortisation
Income from operations
Non-operating income (expenses)
Exchange Gain (loss)
Interest income
Other income
Profit before provision for taxes
Provision for taxes
Current tax (Refer note 11 of Schedule 10)
Net profit for the year
277,229
424,448
7
(135,211)
142,018
(180,900)
243,548
8
(83,475)
(6,187)
52,356
(90,464)
(9,076)
144,008
(1,669)
16,752
445
67,884
(47,018)
7,923
487
105,400
(5,712)
62,172
(3,574)
101,826
9
Basic and diluted profit per share (Nominal value of shares Rs.10 each)
Weighted average number of shares used in computing profit per share
Notes to accounts
2010
10
The schedules referred to above and notes to accounts form an integral part of the profit and loss account.
10.68
17.50
5,819,360
5,819,360
Schedules annexed to and forming part of the accounts as at March 31, 2011
(Amounts in thousands of Indian Rupees, except share and per share data)
March 31, 2011
March 31, 2010
100,000
100,000
58,194
58,194
Schedule 1: Share capital
Authorised:
10,000,000 (March 31, 2010 - 10,000,000) equity shares of Rs 10/- each
Issued, subscribed and fully paid up:
5,819,360 (March 31, 2010 - 5,819,360) equity shares of Rs10/- each
(a) Of the above, 5,808,660 (March 31, 2010 - 5,808,660) equity shares of Rs 10/- each are held by ISP Internet (Mauritius) Company
Limited ("ISP").
Schedule 2: Reserves and surplus
Profit and loss account
Balance, beginning of the year
Add: Net Profit for the year
Balance, end of the year
26,878
62,172
89,050
(74,948)
101,826
26,878
Schedule 3: Unsecured Loan
Loan from Oracle Financial Services Software Limited (Refer Note 7 of Schedule 10)
300,000
500,000
Loan taken from Oracle Financial Services Software Limited ('OFSS') had a conversion option in equity shares of the Company which
was exercisable till March 31, 2009. The conversion option was extended till November 30, 2010. During the year ended March 31,
2011, the Company has signed a settlement agreement with OFSS while repaying Rs.200,000 along with an interest waiver on the same.
Further to this, an interest free loan of Rs.300,000 outstanding as on balance sheet date will be repaid in 10 equal annual instalments
effective November 2010. The first installment is due in March 2012.
Schedule 4: Fixed assets
Gross block
Particulars
Tangible assets:
Improvement to leasehold premises
Computer equipments
Office equipments
Furniture and fixtures
Intangible assets:
Computer software
As at
01.04.2010
26,250
76,751
4,414
4,971
Additions Adjustment Deletion
17,491
74,843
3,014
4,274
-
8,962
8,962
-
-
121,588
108,584
640
217
121,348
99,690
8,962
121,348
240
As at March 31, 2010
120,071
2,134
As at
01.04.2010
26,250
76,751
4,581
5,044
167
73
Total
As at
31.03.2011
For the year Adjustment Deletion
3,841
1,136
597
613
As at
31.03.2011
Net book value
As at
As at
31.03.2011 31.03.2010
-
-
21,332
75,979
3,611
4,887
4,918
772
970
157
8,759
1,908
1,400
697
-
-
8,962
-
-
6,187
-
-
114,771
6,817
12,764
9,076
-
182
108,584
12,764
March 31, 2011
March 31, 2010
109,410
-
243,796
12,930
158,352
267,762
167,171
(12,930)
410,967
250,238
407,764
144
236
10,482
175,000
555
186,181
428
189,000
503
190,167
2,316
12,771
15,087
1,003
1,003
9,591
1,156
7,979
29,748
31
48,505
8,544
881
4,379
24,506
228
38,538
-
-
-
862
Schedule 5: Current assets, loans and advances
(a) Sundry debtors (unsecured and considered good)
Debts outstanding for a period exceeding six months
Considered good
Considered doubtful
Other debts - considered good
Less: Provision for doubtful debts
Amount due from Oracle (OFSS) BPO Services Inc. (formerly i-flex Processing Services Inc,)
USA, a company under the same management as defined under section 370(1B) of the
Companies Act, 1956 ('the Act')
(b) Cash and bank balances
Cash in hand
Balances with scheduled banks:
Other current accounts
Deposit accounts
Margin money deposits
(c) Other current assets
Interest accrued on Bank deposits
Unbilled revenue
(d) Loans and advances (unsecured, considered good)
Advances recoverable in cash or in kind or for value to be received:
Premises and other deposits
Prepaid
p expenses
p
Advance tax, net of provision for taxes
MAT Credit Entitlement
Other advances
Amount due from i-flex Processing Services Limited, a company under the same management
as defined under section 370(1B) of the Act
Maximum amount outstanding during the year from i-flex Processing Services Limited, a
company under the same management.
Schedule 6: Current liabilites and provisions
(a) Current liabilities
Employees related Liabilities
Accrued expenses
Accounts payable
Other current liabilities
Amounts due to Micro, Medium and Small Enterprises
(The identification of Micro, Medium and Small Enterprises are based on Management's
knowledge of their status)
(b) Provisions
Provision for gratuity
Provision for compensated absence
9,247
24,460
3,017
3,580
40,304
-
15,103
15,797
4,690
5,094
40,684
-
20,238
16,566
36,804
15,459
12,224
27,683
Schedules annexed to and forming part of the accounts for the year ended March 31, 2011
March 31,
2011
2010
Schedule 7: Cost of revenue
Employee costs
Travel related expenses
Recruitment expenses
115,782
19,267
162
135,211
154,624
25,714
562
180,900
27,527
42,029
12,919
(12,919)
2,872
5,588
1,722
1,004
1,815
918
83,475
45,166
30,476
462
5,370
3,651
2,093
1,254
1,601
391
90,464
445
445
1
486
487
Schedule 8: General and administrative expenses
Employee costs
Rent expenses
Bad debts
Provision for doubtful debts
Repairs and maintenance
Power expenses
Legal and professional expenses
Communication expenses
Other expenses
Travelling expenses
Schedule 9: Other Income
Profit (loss) on sale of fixed assets, net
Miscellaneous income
(All amounts in thousands of Indian rupees)
`
Schedule 10: Notes to accounts
1.
Background and nature of operations
Oracle (OFSS) BPO Services Limited (‘the Company’) was incorporated in India with limited
liability on November 7, 2002. The Company is principally engaged in the business of providing
business process outsourcing services to the mortgage industry.
The Company is a subsidiary of ISP Internet Mauritius Company (“ISP”) which has 99.82%
ownership interest in the Company as at March 31, 2011. Effective December 22, 2004, Oracle
Financial Services Software Limited acquired all shares in ISP and consequently the Company has
become a public company under section 3(1)(iv)(c) of the Companies Act, 1956 (the ‘Act’).
2.
Operational outlook
During the year the company has earned a net profit after Tax (PAT) of Rs 62,171. The Company has
accumulated profit of Rs.89,050 as on March 31, 2011. As at March 31, 2011, these financial
statements have been prepared under the going concern assumption.
3.
Summary of significant accounting policies
(a) Basis of presentation
The financial statements are prepared under the historical cost convention, on the accrual basis of
accounting, in conformity with accounting principles generally accepted in India and complying in all
material respects the notified Accounting Standards by Companies (Accounting Standards) Rules,
2006 (as amended) and the relevant provisions of the Companies Act, 1956 (the ‘Act’). The
accounting policies applied by the Company are consistent with those used in the previous years. The
financial statements are presented in the general format specified in Schedule VI to the Act.
The significant accounting policies adopted by the Company, in respect of the financial statements are
set out as below:
(b) Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities at the date of the financial statements and the
results of operations during the reporting year end. Although these estimates are based upon
management’s best knowledge of current events and actions, actual results could differ from these
estimates.
(c) Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation and amortisation. The Company
capitalises all direct costs relating to the acquisition and installation of fixed assets. Advances paid
towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of fixed
assets not ready to use before such date are disclosed under ‘Capital work-in-progress and advances’.
The Company purchases certain specific-use application software, which is in ready to use condition,
for internal use. It is estimated that such software has a relatively short useful life, usually less than
one year. The Company, therefore, charges to income the cost of acquiring such software.
`
Depreciation and amortization are computed using straight-line method, at the rates specified in
Schedule XIV to the Act or based on the estimated useful life of assets, whichever is higher. The
estimated useful life considered for depreciation of fixed assets is as follows:
Asset description
Tangible assets
Leasehold improvement
Computer equipments
Office equipments
Furniture and fixtures
Intangible assets
Computer software
Asset life (in years)
Lesser of estimated useful
life (7 years) or lease term
3
7
7
3
Assets costing less then Rs. 5,000 are depreciated fully in the year of purchase.
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal / external factors. An impairment loss is recognised wherever the
carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of
the assets net selling price and value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value at the weighted average cost of capital. After impairment,
depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
(d) Foreign currency transactions
Foreign currency transactions during the year are recorded at the exchange rates prevailing on the date
of the transaction. Foreign currencies denominated monetary items are translated into rupees at the
closing rates of exchange prevailing at the date of the balance sheet. Non-monetary items, which are
carried in terms of historical cost denominated in a foreign currency, are reported using the exchange
rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or
on reporting company’s monetary items at rates different from those at which they were initially
recorded or reported in previous financial statements are recognised as income or expenses in the year
in which they arise.
(e) Revenue recognition
Business process outsourcing services comprise of back-office administration, data management, call
centre and other information technology enabled services including systems integration and facility
management. Depending upon the terms of the arrangement, revenue from back-office administration,
data management, call centre and other information technology enabled services is recognized on a
per employee, per transaction, number of hours worked or cost-plus basis. Revenue is recognized only
when persuasive evidence of an arrangement with final customer exists, services have been rendered,
the fee is determinable and collectibility is reasonably assured.
Reimbursable expenses for projects are invoiced separately to customers and although reflected as
sundry debtors to the extent outstanding as at year end, are not included as revenue or expense.
Interest income is recognised on a time proportion basis taking into account the amount outstanding
and the rate applicable.
`
(f) Employee benefits
The Company’s employee benefits primarily cover provident fund, gratuity and compensated
absences.
Retirement benefit in the form of Provident fund is a defined contribution scheme and the Company
has no further obligation beyond the contribution made to the fund. Contributions are charged to
profit and loss account in the year in which they accrue.
Gratuity liability is a defined benefit obligation and is recorded based on actuarial valuation on
projected unit credit method made at the end of the year. The gratuity liability and net periodic
gratuity cost is actuarially determined after considering discount rates, expected long term return on
plan assets and increase in compensation levels. All actuarial gains/losses are immediately recorded to
the profit and loss account and are not deferred.
Short term compensated absences are provided for based on estimates. Long term compensated
absences are provided for based on actuarial valuation. The actuarial valuation is done as per
projected unit credit method.
(g) Operating leases
Leases of assets under which all the risks and rewards of ownership are effectively retained by the
lessor are classified as operating leases. Lease payments under operating leases are recognised as an
expense on a straight-line basis over the lease term.
(h) Income-tax
Tax expense comprises of current income tax. Current income tax is measured at the amount expected
to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income
taxes are recognised for the future tax consequences attributable to timing differences between the
financial statement determination of income and their recognition for tax purposes. Deferred tax is
measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet
date. Deferred tax assets are recognised and carried forward only to the extent that there is a virtual
certainty that sufficient future taxable income will be available against which such deferred tax assets
can be realized.
Deferred tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if
there is virtual certainty that such deferred tax assets can be realized against future taxable profits.
Unrecognised deferred tax assets of earlier periods are re-assessed and recognised to the extent that it
has become virtual certain that future taxable income will be available against which deferred tax
assets can be realized.
The Company has not recognized deferred tax assets in respect of carried forward business losses and
unabsorbed depreciation due to no virtual certainty for realization of deferred tax assets.
Minimum Alternate Tax ('MAT') credit is recognised as an asset only when and to the extent there is
convincing evidence that the Company will pay normal income tax during the specified period. In the
year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the
recommendations contained in guidance note issued by the Institute of Chartered Accountants of India
('ICAI'), the said asset is created by way of credit to the profit and loss account and shown as MAT
Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the
carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to
the effect that the Company will pay normal income tax during the specified period.
`
(i) Earnings per share
The earnings considered in ascertaining the Company’s earnings per share comprise the net profit
after tax. The number of shares used in computing basic earnings per share is the weighted average
number of shares outstanding during the year. The number of shares used in computing diluted
earnings per share comprises the weighted average number of shares considered for deriving basic
earnings per share, and also the weighted average number of shares, if any which would have been
issued on the conversion of all dilutive potential equity shares.
(j) Provision and contingencies
A provision is recognised when an enterprise has a present obligation as a result of past event and it is
probable that an outflow of resources will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its present value and are determined
based on management estimate required to settle the obligation at the balance sheet date. These are
reviewed at each balance sheet date and adjusted to reflect the current management estimates.
(k) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.
4.
Capital commitments
Contracts remaining to be executed on capital account and not provided for (net of advances)
aggregates to Nil as at March 31, 2011 (March 31, 2010 - Rs Nil).
5.
Operating lease
The Company has taken an office premise under an operating lease for 54 months with an option to
renew the same for further period of 54 months. Gross rental expenses for the year ended
March 31, 2011 aggregated to Rs 18,119 (March 31, 2010 - Rs 16,150). The minimum rental
payments to be made in future in respect of these leases are as follows:
Not later than one year
Later than one year but not later than five years
Later than five years
March 31, 2011 March 31, 2010
18,119
18,119
43,788
60,397
61,907
78,516
`
6.
Employee Benefit Obligation
Defined contribution plan – provident fund
During year ended March 31, 2011 and 2010, the Company contributed Rs – 1,774 and Rs 2,338
respectively to provident fund.
Defined benefit plan – gratuity
The amount recognised in the profit and loss account for the year ended March 31, 2011 and 2010 are
as follows:
Year ended March 31,
Particulars
2011
2010
2,955
1,760
Current service cost
Interest cost
627
422
Expected return on plan assets
Recognised net actuarial loss
2,981
2,821
Past Service Cost
2,488
Total included in ‘employee benefit expenses’
6,563
7,491
Actual return on plan assets
-
-
The amounts recognised in the balance sheet are as follows:
Particulars
Present value of unfunded obligations
Unrecognized past service cost
2011
2010
20,238
15,459
-
Net liability
20,238
15,459
Changes in present value of defined benefit obligation representing reconciliation of opening and
closing balances thereof are as follows:
Particulars
Defined benefit obligation at beginning of the year
Current service cost
Interest cost
Actuarial loss
Past Service Cost
Benefit Paid
Defined benefit obligation at end of the year
2011
2010
15,459
8,065
2,955
1,760
627
422
2, 981
2, 821
2,488
(1,784)
(97)
20,238
15,459
`
The assumptions used in accounting for the gratuity plan are set out as below:
Particulars
Discount rate
Salary Escalation Rate
Particulars
Withdrawal rates
2011
2010
7.60%
4.30%
6.00%
6.00%
2011
2010
Age (Yrs)
Rates
Age (Yrs)
Rates
21-30
86%
21-30
71%
31-34
54%
31-34
31%
35-44
34%
35-44
46%
11%
38%
45-57
45-57
The Company contribution to the fund for the year ended March 31, 2012 is expected to be Rs.11,219.
The estimates of future salary increase, considered in actuarial valuation, take account of inflation,
seniority, promotions and other relevant factors such as supply and demand in the employment
market.
The Company evaluates these assumptions annually based on its long-term plans of growth and
industry standards. The discount rates are based on current market yields on government bonds
consistent with the currency and estimated term of the post employment benefits obligations.
Present value of the defined benefit obligation, fair value of the plan assets, deficit and experience
adjustments in the plan and liabilities for the current year and previous two years are as follows:
Particulars
Present value of defined
benefit obligation
Fair value of plan assets
Deficit
Experience adjustment
On plan liabilities
On plan assets
7.
2011
2010
2009
2008
2007
(20,238)
(15,459)
(8,065)
(2,735)
(2,787)
(20,238)
(15,459)
(8,065)
(2,735)
(2,787)
5,319
-
2,524
-
3,923
-
(1,996)
-
70
Related party disclosure
a) Names of related parties and description of relationship
Relationship
a) Holding company
b) Holding company of ISP
c) Fellow subsidiaries
Name of the related party
ISP Internet Mauritius Company (“ISP”)
Oracle Financial Services Software Limited
Oracle (OFSS) BPO Services Inc. USA
(Formerly i-flex Processing Services Inc.)
Oracle (OFSS) Processing Services Limited
Oracle Financial Services Software B.V.
-
`
d) Key Managerial Personnel (‘KMP’)
For the financial year 2010-2011
Mr Mahesh Rao, Whole-time Director
For the financial year 2009-2010
Mr Mahesh Rao, Whole-time Director
Mr Makarand Padalkar, Director
Mr Don Ganguly, Director
Mr V Srinivasan, Director
Mr Avdhut Ketkar, Director
Mr K V Subramanian, Chief Financial Officer
b) The transaction and balance outstanding with these parties are described below:
Particulars
Revenue
Oracle
(OFSS)
BPO
Services
Inc.(formerly
i-flex
Processing
services Inc. [Note A]
Oracle Financial Services Software
BV.
Transactions
2011
2010
Amount receivable (payable)
As at March 31,
2011
2010
276,857
424,448
250,238
407,764
371
-
-
-
Sub-contracting cost
Limited
-
-
(1,428)
(1,428)
Re-imbursement of expenses
i-flex Processing Services Limited
-
70
-
-
Sale of fixed assets
i-flex Processing Services Limited
-
36
-
-
200,000
-
(300,000)
(500,000)
Key Managerial Personnel
Remuneration
-
6,652
-
-
Relative of KMP
Car hire charges
-
780
-
-
Loan outstanding
Limited- Amount repaid by the
Company during the year
Note A:
Oracle Financial Services Software Limited, the ultimate holding company, has committed to Oracle
(OFSS) BPO Services Inc. (formerly i-flex Processing Inc.) for any funding requirements in the
future, accordingly the Company believes that the above stated amount is fully recoverable.
`
8.
Segmental reporting
Business segments
The primary reporting of the Company has been performed on the basis of business segments. The
Company has only one business segment, which is providing business process outsourcing services.
Accordingly, the amounts appearing in these financial statements relate to this primary business
segment.
Geographical segments
Geographical segment disclosures based on location of the Company’s customers are summarised
below:
Segment Revenue based on location
United States
United Kingdom
Total
2011
2010
276,858
424,448
371
277,229
424,448
Carrying amount of segment assets
United States
India
Total
9.
Year ended March 31
2011
2010
263,009
394,924
261,342
258,515
524,351
653,439
Unhedged foreign currency exposure
As of the balance sheet date, the Company’s net foreign currency exposure that is not hedged is
Rs.263,009 (March 31, 2010- Rs.407,764)
10
Supplementary information
(a)
Aggregate expenses
Following are the aggregate amounts incurred on certain specific expenses that are required to be disclosed under Schedule VI to the Act:
Salaries and bonus (Refer Note 12)
Contribution to provident fund
Staff welfare expenses
Travel related expenses
Rent expenses
Bad debts
Repairs and maintenance:
Leasehold premises
Computer equipments
Power expenses
Professional fees
Other expenses
Insurance-staff
Communication expenses
Recruitment expenses
(b)
(c)
Managerial remuneration
Salary and incentives
Payments to auditor *
As auditor:
Statutory audit
Tax audit
Out-of-pocket expenses
Year ended March 31
2011
2010
138,982
193,109
1,774
2,338
1,283
2,833
20,185
26,105
42,029
30,476
12,919
(12,919)
462
1,639
1,233
5,588
1,722
1,815
1,270
1,004
162
218,686
3,260
2,110
3,651
2,093
1,601
1,510
1,254
562
271,364
-
-
441
110
38
590
303
83
20
406
277,229
424,448
334
334
795
795
-
-
* Included in legal and professional expenses
(d)
(e)
(f)
Earnings in foreign currency (on accrual basis)
Service revenue
Expenditure in foreign currency (on accrual basis)
Travelling
Value of imports on CIF basis - capital goods
31-Mar-11
10,954
(5,242)
5,712
11
Current tax expneses
Current tax
Less : MAT credit entitlement
Net current tax liability
12
Employer's cost for the year ended March 31, 2011 are net of Rs.9,000 pertaining to write- back of bonus provision of earlier
year no longer required due to changes in compensation policy of the Company.
13
Prior year comparatives
Prior year amounts have been reclassified, where necessary to conform with current year's presentation.
31-Mar-10
20,373
(16,799)
3,574
STATEMENT OF CASH FLOW FOR THE YEAR ENDED MARCH 31, 2011
2011
2010
Cash flows from operating activities
Income before provision for taxes
67,884
105,400
6,187
(12,919)
12,919
(16,752)
57,319
9,076
462
(1)
(7,923)
107,014
143,205
(13,896)
8,741
195,369
(14,554)
180,815
8,240
1,033
(10,487)
105,800
(30,802)
74,998
Cash flows from investing activities
Additions to fixed assets including capital work-in-progress
Proceeds from sale of fixed assets
Margin Money placed
Bank fixed deposits having maturity of more than 90 days booked
Bank fixed deposits having maturity of more than 90 days realised
Interest received
Net cash (used in) investing activities
(240)
(51)
(395,000)
270,000
15,438
(109,853)
(1,495)
36
(27)
926
7,286
6,726
Cash flows from financing activities
Loan repaid
Net cash provided by (used in) financing activities
(200,000)
(200,000)
-
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year (Note 1)
(129,038)
189,664
60,626
Note 1 :
Component of cash and cash equivalent
2011
2010
Adjustments to reconcile income before provision for taxes to
cash (used in) provided by operating activities :
Bad Debts
Profit on sale of fixed assets, net
Interest income
Changes in assets and liabilities
(Increase) decrease in sundry debtors
(Increase) Decrease in loans and advances
(Decrease) Increase in current liabilities and provisions
Cash from operating activities
Payment of domestic and foreign taxes
Net cash (used in) provided by operating activities
Cash and bank balances
Less:
Bank deposits having maturity of more than 90 days
Margin money deposit
Cash and cash equivalents at the end of the period
81,724
107,940
189,664
186,181
190,167
(125,000)
(555)
60,626
(503)
189,664

Oracle (OFSS) BPO Services Limited Directors` Report Dear

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