information memorandum

Transcription

HTMT GLOBAL SOLUTIONS LIMITED
INFORMATION MEMORANDUM
(FORMERLY HTMT GLOBAL SOLUTION LIMITED)
The Company was incorporated as Tele Video Communications India Pvt. Limited on 13th
January 1995 under the Companies Act, 1956 and was converted into a public limited
company on 20th May 1996. The name of the Company was changed to HTMT
Technologies Limited and then to HTMT Global Solutions Limited vide fresh Certificates of
Incorporation consequent upon change of name dated 11th July 2006 and 12th March
2007 respectively issued by the Registrar of Companies, Maharashtra, Mumbai.
Regd. Office: IN CENTRE, 49/50, MIDC, 12TH ROAD, ANDHERI (EAST), MUMBAI 400093
Tel No.: 66910945 Fax No.: 66910988 Website: www.htmtglobal.com
Contact Person: Mr. Somnath Majumdar, Senior Vice President and Head – Legal &
Secretarial (Company Secretary and Compliance Officer);
Email: somnath@htmt.soft.net
INFORMATION MEMORANDUM FOR LISTING OF 20538003 EQUITY SHARES OF
RS. 10/- EACH FULLY PAID UP BEING SHARES ISSUED PURSUANT TO THE
SCHEME OF ARRANGEMENT AND RECONSTRUCTION BETWEEN THE COMPANY
AND HINDUJA TMT LIMITED AND THEIR RESPECTIVE SHAREHOLDERS AND
CREDITORS.
GENERAL RISKS
Investment in equity and equity related securities involve a degree of risk and investors
should not invest any funds in the equity shares of HTMT Global Solutions Limited unless
they can afford to take the risk of losing their investment. Investors are advised to read
the risk factors carefully before taking an investment decision in the shares of t h e
Company. For taking an investment decision, investors must rely on their own examination
of the Company including the risks involved. The securities have not been recommended or
approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the
accuracy or adequacy of this document. Specific attention of investors is invited to the
statement of risk factors on pages 8 to 10 of this Information Memorandum.
ABSOLUTE RESPONSIBILITY OF HTMT GLOBAL SOLUTIONS LIMITED
HTMT Global Solutions Limited having made all reasonable inquiries, accepts
responsibility for, and confirms that this Information Memorandum contains all
information with regard to the Company which is material, that the information contained in
this Information Memorandum is true and correct in all material aspects and is not
misleading in any material respect, that the opinions and intentions expressed herein are
honestly held and that there are no other facts, the omission of which makes this
document as a whole or any of such information or the expression of any such opinions
or intentions misleading in any material respect.
LISTING
The Equity Shares o f HTMT Global Solutions Limited are proposed to be listed on the
Bombay Stock Exchan ge Limited (BSE) and National Stock Exchange of India Limited (NSE).
The Company has submitted this Information Memorandum with BSE and NSE and the
same
has
been
made
available
on
the
Company’s
website
viz.
www.htmtglobal.com . The Information Memorandum would also be made available on the
website of BSE viz. www.bseindia.com and on the website of NSE viz. www.nseindia.com.
1
REGISTRAR AND SHARE TRANSFER AGENT:
SHAREPRO SERVICES (INDIA) PVT. LTD. 912, Raheja Chambers, Free Press
Journal Road, Nariman Point, Mumbai 400021
Tel : (91-22) 22884526;Fax : (91-22) 22825484;
Contact Person : Ms. Mazrine Wadia; E-mail: mazrine@shareproservices.com
2
TABLE OF CONTENTS
Sr.
No.
I
Particulars
Page No.
Definitions, Abbreviations and Industry related terms
4
II
Risk Factors
8
III
Summary
11
IV
General Information
13
V
Capital Structure
15
VI
Scheme of Arrangement
27
VII
Statement of Tax benefits
33
VIII
Business
43
IX
History of the Company
47
X
Management
51
XI
Promoters
70
XII
Management Discussion and Analysis
73
XIII
Financial Information
78
XIV
Outstanding Litigations and Material Developments
120
XV
Government Approvals
134
XVI
Regulatory and Statutory Disclosures
135
XVII
Description of Equity Shares and Terms of the Articles of Association
140
XVIII
Documents for Inspection
153
XIX
Declaration
154
3
I
DEFINITIONS, ABBREVIATIONS AND INDUSTRY RELATED TERMS
Act
AGM
Articles / AOA
Appointed Date /
Demerger Appointed
Date
Bankers to the
Company
Board
BPO
BSE
BTO
CDSL
Company / HTMT
Global/Resulting
Company
Demerged Company
Demerged
Undertaking
The Companies Act, 1956 as amended from time to time
Annual General Meeting
Articles of Association of HTMT Global Solutions Limited
Opening of business on 1st October 2006
Bankers of HTMT Global Solutions Limited
Board of Directors of HTMT Global Solutions Limited
Business Process Outsourcing
Bombay Stock Exchange Limited
Business Transformation Outsourcing
Central Depository Services (India) Limited
HTMT Global Solutions Limited
(formerly known as HTMT
Technologies Limited)
Depositories Act
Depository
See “Hinduja TMT Limited” below
The whole of the IT/ITES Business of the Demerged Company in
India and abroad, on a going concern basis, as defined in Clause
6(C) read with Clause 1 of the Scheme
Transfer by way of demerger of the Demerged Undertaking of the
Demerged Company to the Resulting Company, and the consequent
issue of equity shares of the Resulting Company to the shareholders
of the Demerged Company as set out in the Scheme
The Depositories Act, 1996 as amended from time to time
A Depository registered with SEBI under the SEBI (Depositories
Directors
DP
EPS
& Participants) Regulations, 1996 as amended from time to time
Directors on the Board of HTMT Global Solutions Limited
Depository Participant
Earnings Per Share {EPS = Profit After Tax / No. of Equity
Demerger
Shares}
Equity Shares
Fully paid-up equity shares of Rs.10/- each of HTMT Global
Solutions Limited
Equity Shareholders Equity Shareholders of HTMT Global Solutions Limited
Effective date
7th March 2007, being the date of coming into effect of the Scheme
FEMA
Foreign Exchange Management Act, 1999 read with rules and
regulations there under and amendments thereto
FI
Financial Institution
FII(s)
Foreign Institutional Investor(s) registered with SEBI under
applicable laws
Hinduja TMT Limited Hinduja TMT Limited having its registered office at In Centre,
/ Hinduja TMT /
49/50, MIDC, 12th Road, Andheri (East), Mumbai 400093 .
Holding Company /
Demerged Company
HTMT Global
See “Company” above
4
Information
Memorandum
I T Act
IT/ITES Undertaking
KPO
MOA
NA
NAV
NSDL
NSE
P/E Ratio
PAT
RBI
Record Date
This Information Memorandum
Income Tax Act, 1961 as amended from time to time
Means and includes the Informati on Tec hnology/Information
Technology Enabled Services Undertaking of Hinduja
TMT Li mi ted transferred and vested in HTMT Global Solutions
Limited as a going concern in terms of the Scheme and more particularly
defined in Clause 6(C) read with Clause 1 of the Scheme.
Knowledge Process Outsourcing
Memorandum of Association of HTMT Global Solutions Limited
Not Applicable
Net Asset Value {NAV = Net worth / No. of equity shares}
National Securities Depository Limited
The National Stock Exchange of India Limited
Price/Earnings Ratio
Profit After Tax
Reserve Bank of India
9th April 2007, being the date fixed by the Board of Directors
of HTMT Global Solutions Limited and Hinduja TMT Limited
pursuant to Clause 23 of the Scheme.
Registrar and Share Sharepro Services (India) Pvt. Ltd. having its Registered Office at
Satam Estate, 3rd Floor, Above Bank of Baroda, Cardinal Gracious
Transfer Agent /
Registrars / Sharepro Road, Chakala, Andheri (East), Mumbai 400099 and office at 912,
Raheja Chambers, Free Press Journal Road, Nariman Point,
Mumbai 400021.
Resulting Company See “Company” above
ROC
Registrar of Companies, Maharashtra, Mumbai
Scheme / Scheme of Scheme of Arrangement and Reconstruction under Sections
100, 391 to 394 and other applicable provisions of the Companies
Arrangement and
Act, 1956 between HTMT Global Solutions Limited and Hinduja TMT
Reconstruction
Limited and their respective Shareholders and Creditors for the
Demerger of the Information Technology/Information
Technology Enabled Services (IT/ITES) Undertaking of
Hinduja TMT Limited into HTMT Global Solutions Limited
(with Appointed Date being 1 s t October 2006) and
Reduction of the Issued, Subscribed and Paid up share
capital of HTMT Global Solutions Limited, as sanctioned
by the Hon’ble High Court of Judicature at Bombay vide its Order
dated 23rd February 2007, which was filed with the Registrar
of Companies, Maharashtra on 7th March 2007, which is the
Effective Date of the Scheme.
SEBI
SEBI Act
SEBI Guidelines
Security(ies)
Securities and Exchange Board of India
Securities and Exchange Board of India Act, 1992
Extant Guidelines for Disclosure and Investor Protection issued by
the Securities and Exchange Board of India, constituted under
the Securities and Exchange Board of India Act, 1992 (as
amended), called Securities and Exchange Board of India
(Disclosure and Investor Protection) Guidelines, 2000, as
amended, including instructions and clarifications issued by SEBI
from time to time.
Equity Share(s)
5
Share Certificate(s)
Stock Exchange
Equity Share Certificate(s)
Bombay Stock Exchange Limited and The National Stock Exchange
of India Limited
CURRENCY OF PRESENTATION
In the Information Memorandum all reference to ‘Rs’ refer to Rupees, the lawful currency of
India, reference to one gender also refers to another gender and the word ‘Lakh’ or ’Lac’
means ‘one hundred thousand’ and the word ‘million’ means ‘ten lakhs’ and the word ‘crore’
means ‘ten million’.
CERTAIN CONVENTIONS; USE OF MARKET DATA
Unless stated otherwise, the financial data in this Information Memorandum is derived from
the company’s restated financial statements. The fiscal year commences on April 1 and ends
on March 31 of each year, and unless otherwise stated, references to a particular fiscal year
are to the twelve-month period ended March 31 of that year. In this Information Memorandum,
any discrepancies in any table between the total and the sums of the amounts listed are due
to rounding. All references to “India” contained in this Information Memorandum are to the
Republic of India. All references to “Rupees” or “Rs.” are to Indian Rupees, the official
currency of the Republic of India. For additional definitions, please see the section titled
“Definitions, Abbreviations and Industry Related Terms” of this Information Memorandum.
Unless stated otherwise, industry data used throughout this Information Memorandum has
been obtained from the published data and industry publications. Industry publications
generally state that the information contained in those publications has been obtained from
sources believed to be reliable but that their accuracy and completeness are not guaranteed
and their reliability cannot be assured. Although we believe that industry data used in this
Information Memorandum is reliable, it has not been independently verified .The information
included in this Information Memorandum about other Companies is based on their respective
Annual Reports and information made available by the respective companies.
FORWARD- LOOKING STATEMENTS
This Information Memorandum may contain words or phrases such as “will”, “aim”, “will likely
result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”,
contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar
expressions or variations of such expressions, that are “forward looking statements”. Similarly,
statements that describe the Company’s objectives, plans or goals also are forward-looking
statements. Actual results may differ materially from those suggested by the forward looking
statements due to risks or uncertainties associated with the Company’s expectations with
respect to, but not limited to:
• General economic and business conditions in India and other countries;
• Regulatory changes and the Company’s ability to respond to them;
• The Company’s ability to successfully implement its strategy, growth and expansion
plans;
• Technological changes;
• The Company’s exposure to market risks, general economic and political conditions in
India which have an impact on its business activities or investments;
• The monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence
in interest rates, foreign exchange rates, equity prices or other rates or prices, the
performance of the financial markets in India and globally;
• Changes in domestic and foreign laws, regulations and taxes and changes in
competition in the industry.
6
For further discussion of factors that could cause the actual results to differ, please see the
section titled “Risk Factors” of this Information Memorandum. By their nature, certain market
risk disclosures are only estimates and could be materially different from what actually occurs
in the future. As a result, actual future gains or losses could materially differ from those that
have been estimated.
The Company does not have any obligation to, and does not intend to, update or otherwise
revise any statements reflecting circumstances arising after the date hereof or to reflect the
occurrence of underlying events, even if the underlying assumptions do not materialize.
7
II
RISK FACTORS
An investment in equity shares involves a high degree of risk. Investors should carefully
consider all of the information in this Information Memorandum, including the risks and
uncertainties described below. If any of the following risks actually occur, the Company’s
business, financial condition and results of operations could suffer and may cause the trading
price of the Company’s Equity Shares to decline, and investors may lose all or part of their
investment.
Internal:
1.
Human Resources: The Company's future success will depend in part on its
continued ability to hire, assimilate and retain qualified personnel. Competition for
such personnel is intense, and management may not be successful in attracting or
retaining such personnel. The loss of any key employee, the failure of any key
employee to perform in his or her current position or 'the Company's inability to
attract and retain skilled employees, particularly technical and management, as
needed, could harm the Company's business. The loss of the services of any
executive officer or other key technical or management personnel could also harm
the Company's business.
2.
Competition risk: The market in which the Company operates is highly
competitive and subject to rapid technological change, regulatory developments
and emerging industry standards that the Company expects will continue. This
could result in lower margins in future for the Company and could also result in
increased pricing pressures. Certain of the Company's competitors have
substantially greater financial, technical, marketing and other resources than the
Company, and competitors of the Company make and continue to make
significant investments in construction of new facilities.
3.
Contractual risks: A significant portion of the Company's contracts with its
customers are on a non-exclusive, project-by-project basis. The customers,
with or without cause, may terminate the contracts by providing an advance
notice usually varying between 30 to 90 days. Further, these contracts do not
carry a commitment of future volume of business. The Company's business is
therefore dependent on the decisions and actions of the customer, which is
outside the Company's control, and which may result in the termination of the
said contracts. These actions could include:
•
Financial difficulties for the Clients
•
Demand for reduction in prices.
•
Takeover of the customer by another company/group.
Contractual Risk will also pertain to liquidated damages and other penalties
associated with the non-fulfillments of contractual obligations either with
customers or with other parties. In addition the Company gives guarantees on
behalf of its subsidiaries. The Company makes sufficient provision for warranties
to cover such eventualities wherever required. The Company also has insurance
cover for 'errors and omissions'.
4.
Customer retention: Customer retention is an important factor in the amount
and predictability of revenue and profits in the Company's businesses. The
Company's ability to retain customers will depend on a number of factors,
including:
•
customer satisfaction;
•
service offerings by competitors;
•
customer service levels; and price.
8
External:
1. Regulatory risks: The Company operates in various countries around the world and
is required to comply with rules, regulations and laws in these countries. Noncompliance may expose the Company to penal and or monetary repercussions
besides generating negative publicity. The Company is advised by legal counsel and
consultants in the various countries where it operates to ensure compliance with their
respective regulations.
2. Geographic concentration risk: The Company’s major operating revenues are
derived from the US, which makes it susceptible to adverse market conditions and
events that might exist in the US and thus affect the Company's revenues. To counter
this, more clientele in other geographies are pursued to reduce the dependence of the
Company on US based customers.
3. International operations risk: The Company has international operations in Philippines,
Mauritius, US and Canada. International operations are subject to various risks which
could adversely affect those operations or the business as a whole, including:
•
•
•
•
costs of customizing services for foreign customers;
difficulties in managing and staffing international operations;
the burdens of complying with a wide variety of foreign laws; and
exposure to local economic conditions.
4. Overseas tax obligation risk: The Company is required to comply with various state level
legislation / statutes in the US, Canada, Philippines, and Mauritius. Based on legal opinion
the Company provides for the Income / Sales taxes in the various states in the US,
Canada, Philippines, and Mauritius where it has operations. In the event of dispute with the
state authorities, the actual tax liability may be higher than that recognized hitherto by the
Company. The Company’s tax consultants and legal advisors in the US, Canada,
Philippines, and Mauritius suitably verify the tax calculation and provision so as to mitigate
these risks
5. Mergers & Acquisitions: One of the Company's growth strategies is to make
acquisitions of and investments in complementary businesses, technologies that
would enable the Company to add services for the Company's core customer base
and for adjacent markets, and to expand geographically. The Company's ability to
make these acquisitions and investments depends on:
• the availability of suitable acquisition candidates and investments at acceptable
costs;
• ability to compete effectively. for these acquisition candidates and investments;
• the availability of capital to complete these acquisitions and investments.
Also, from an accounting perspective, acquisitions and investments may involve nonrecurring charges that could affect operating results. Also given the financial
characteristics of the Company's businesses, it may be difficult to avoid making
acquisitions that would dilute earnings per share.
6. Foreign exchange fluctuation risk: As over 65% of the Company's operating
revenues are currently accrued in foreign currency, it is exposed to currency
fluctuations and volatility against the Indian rupee. Principal currencies dealt
with by the Company include the US Dollar and the Philippine Peso. To the
extent that there is a significant appreciation of the rupee, it will affect the
Company’s earnings negatively. Such volatility would also affect the
Company’s assets located at various locations in terms of their carrying value.
A rupee depreciation will affect the Company's import policy especially
covering capital items thereby increasing its liability and cost. Conversely a
rupee appreciation will affect the Company's revenue streams and will also
reduce the carrying value of current assets especially accounts receivable.
These risks are hedged by the purchase of forward covers.
9
7. Capital expenditure risk: Significant resources are required for acquisition of
capital equipment especially for the Company's BPO business. The Company
is generally able to meet its requirement through internal accruals. However,
the Company may need to borrow from external financial agencies at uncompetitive rates of interest.
This section should also be read in conjunction with the section titled “Outstanding
Litigations and Material Developments.”
DIVIDEND POLICY
Since
incorporation, the
Company
has
not declared any dividend. The
declaration, recommendation and payment of dividend by the Board of Directors and the
shareholders, would be at their discretion, which will depend on a number of factors,
including but not limited to the Company’s earnings, capital requirements and overall
financial condition.
10
III
SUMMARY
INDUSTRY SUMMARY
As per a Nasscom McKinsey report, the global offshore BPO industry has grown rapidly at a
43% CAGR from $ 2.3 billion in 2001 to $ 11.4 billion in 2005. The Indian ITES-BPO exports
have grown at a CAGR of 53% from $ 0.6 billion in 2000 to $ 5.1 billion in 2005. This report
has estimated that the addressable Global Offshore BPO is approximately $ 150 billion.
Another report by IDC shows that the BPO market achieved revenue of $ 382 billion in 2004
and is expected to grow to $ 641 billion by 2009 with a 10.9% CAGR.
From these estimates of reputed research houses, it becomes clear that this industry has
enormous potential to grow because only 10% of the addressable market of $ 150 billion BPO
potential is exploited till date. Approximately 35-40% of the addressable market is likely to be
captured in the next 4 years as the BPO market is expected to increase in size and gain in
stature with $ 55 billion expected to be offshored to low cost offshore locations by 2010.
Knowledge Process Outsourcing (KPO) is the next frontier for Global Sourced BPO which
requires application of knowledge, judgment and experience in particular lines of business.
The KPO potential is expected to be around USD 17 billion by 2010 and India is at present
dominating with 71% market share (source: Evalueserve). Several KPO opportunities like
Legal services, Engineering R&D, Content Development, Market Research, Analytics are
emerging.
BUSINESS SUMMARY
The Company was incorporated on 13th January 1995 as Tele Video Communications India
Pvt. Limited. The Company was converted into a public limited company on 20th May 1996.
The name of the Company was changed to HTMT Technologies Limited and then to HTMT
Global Solutions Limited vide fresh Certificates of Incorporation consequent upon change
of name dated 11th July 2006 and 12th March 2007 respectively issued by the Registrar
of Companies, Maharashtra, Mumbai. At the time of incorporation, the main objects of the
Company were the carrying on of activities relating to Media business. The objects of the
Company
were
amended
by
introducing
objects
relating
to
Information
Technology/Information Technology Enabled Services (IT/ITES) pursuant to the possible
demerger of the IT/ITES undertaking of Hinduja TMT Limited into the Company vide Special
Resolution passed by the shareholders at the Extra Ordinary General Meeting held on 31st
March 2006 and confirmed by the Registrar of Companies, Maharashtra on 19th May 2006.
The Company entered into the Scheme of Arrangement and Reconstruction under
Sections 391 to 394 and other applicable provisions of the Companies Act, 1956 wi th
Hinduja TMT Limited and their respective Shareholders and Creditors (“Scheme”) for the
demerger of t h e IT/ITES Undertaking of Hinduja TMT Limited into the Company on a
going concern basis and reduction of the issued, subscribed and paid up share
capital of the Company. The Appointed Date for the demerger as per the Scheme was
1st October 2006. The Scheme was sanctioned by the Hon’ble High Court of Judicature at
Bombay vide its Order dated 23rd February 2007, which was filed with the Registrar of
Companies, Maharashtra on 7th March 2007, which is the Effective Date of the Scheme.
Clause 27 of the Scheme, as sanctioned by the Hon’ble High Court of Judicature at Bombay
provides that the equity Shares of the Resulting Company, viz. HTMT Global Solutions Limited
11
shall, subject to the execution of the listing agreement and payment of the appropriate fee, be
listed on the National Stock Exchange of India Limited, the Bombay Stock Exchange Limited
and on such other recognized stock exchange(s) in India, if any, as may be decided by the
Board of Directors of the Resulting Company on consideration of all relevant factors.
The business model of the Company ranges from being an India offshore centric vendor to
the Global Delivery offshoring partner having capabilities to provide outsourcing services from
onshore, near shore & offshore locations both in BPO and call centres.
The Company has positioned itself to offer Business Transformation Outsourcing (BTO)
solutions in key verticals like Healthcare, Telecom, Banking and Financial Services, Consumer
Electronics & Packaging and Transportation & Logistics. The Company’s positioning is line
with its Vision “To be a globally preferred Business Transformation Partner for our clients
through innovative outsourcing solutions”. The Company expects to achieve this by having its
total focus in making its customers competitive.
The Company has an employee strength of around 9500 with offices in North America,
London & Paris in Europe and 20 delivery centers in Bangalore, Mysore, Mumbai, Chennai &
Hyderabad in India, Lyndhurst, Peoria, St Louis, Waterloo, El Paso in the United States,
Montreal & Toronto in Canada, Cyber City in Mauritius and Manila in Philippines who
constantly engage in delivering a wide range of high quality outsourcing services to over 65
leading companies across the world. The 20 delivery centres in 5 countries across the world
makes the Company a true international player having Global Delivery capabilities. The
Company has pioneered the art of opening up operations in Tier II and Tier III locations. The
Company will leverage on this strength to continuously provide cost arbitrage to its customers
and to scale up its employee talent base. The Company will also plan to strengthen its Global
Delivery by having alternate delivery locations across the globe to focus on new markets,
opportunities and to reduce the country risk in consistently delivering to its Customer.
The Company manages processes across several verticals including Telecom,
Healthcare Insurance, Banking & Financial Services, Consumer Electronics, Products Energy
& Utilities etc. The Company has proven expertise in acquiring, integrating and growing the
acquired entities. This enabled the Company to grow very significantly in the past five years.
The Company will continue to inorganically grow its business so as radically transform itself to
provide Business Transformation Solutions to its Customers.
12
IV
GENERAL INFORMATION
HTMT Global Solutions Limited (formerly HTMT Technologies Limited) was incorporated
on 13th January 1995 under the Companies Act, 1956 with the name Tele Video
Communications India Pvt. Limited.
Address of the Registered Office of the Company:
HTMT Global Solutions Limited
In Centre, 49/50 MIDC, 12th Road, Andheri (East), Mumbai 400093
Tel No.: 66910945 Fax No.: 66910988
Registration Number:
U92199MH1995PLC084610
Address of Registrar of Companies where the Company is registered:
The Registrar of Companies, Mumbai, Maharashtra
100, Everest Building, Marine Lines, Mumbai 400002
Board of Directors as on the date of filing of the Information Memorandum:
Sr. No.
1
2
3
4
5
6
Name
Mr. Ramkrishan P. Hinduja
Mr. Dheeraj G. Hinduja
Mr. Anil Harish
Mr. Rajendra P. Chitale
Mr. Somabrata Mandal
Mr. Kailash Chandra Samdani
Designation
Chairman
Director
Director
Director
Director
Director
For further details of the Board of Directors of the Company, please see the Section
titled “Management”
Company Secretary & Compliance Officer:
Mr. Somnath Majumdar, Senior Vice President and Head – Legal & Secretarial.
In Centre, 49/50 MIDC, 12th Road, Andheri (East), Mumbai 400093
Tel No.: 66910945 Fax No.: 66910988 Email ID: somnath@htmt.soft.net
Banker to the Company:
IndusInd Bank Limited
IndusInd House
425, Dadasahed Bhadkamkar Marg,
Mumbai 400 004
13
Auditors:
Price Waterhouse, Chartered Accountants,
252, Veer Savarkar Marg, Shivaji Park, Dadar,
Mumbai 400028
Tel No. 66691000 Fax No. :66547800
Registrar and Share Transfer Agent:
Sharepro Services (India) Pvt. Limited
912, Raheja Chambers, Free Press Journal Road, Nariman Point, Mumbai 400021
Tel : (91-22) 22884526;Fax : (91-22) 22825484; Contact Person : Ms. Mazrine Wadia;
E-mail: mazrine@shareproservices.com
Disposal of Investor’s Grievances:
Complaints, if any, received in respect of the Shares will be attended to by the
Registrar and Share Transfer Agent in coordination with the Company expeditiously and to
the satisfaction of the shareholders.
Stock Market Data for Equity Shares of the Company:
The Equity Shares of the Company are presently not listed on any stock exchanges. The
Company is seeking approval for listing of its shares on BSE and NSE.
14
V
CAPITAL STRUCTURE OF THE COMPANY
SHARE CAPITAL:
PRE SCHEME OF ARRANGEMENT:
Number
Authorised Capital
60,00,000 Equity Shares of Rs.10/- each
Total
Issued, Subscribed and Paid-up
250,000 Equity Shares of Rs.10/- each
Total
Rupee
6,00,00,000
6,00,00,000
25,00,000 #
25,00,000 #
POST SCHEME OF ARRANGEMENT
Number
Authorised Capital
25,000,000 Equity Shares of Rs.10/- each
Total
Rupee
250,000,000
250,000,000
Issued, Subscribed and Paid-up
20538003 Equity Shares of Rs.10/- each fully paid up
Total
20,53,80,030
20,53,80,030
# Pursuant to Clause 32 of the Scheme, on allotment of 20538003 Equity Shares of the
Resulting Company viz. HTMT Global Solutions Limited to the shareholders of the
Demerged Company viz. Hinduja TMT Limited who were entitled to the same in the
Demerger Share Entitlement Ratio of one Equity Share of HTMT Global Solutions forthevery
two equity shares of Hinduja TMT Limited held by them on the Record Date (i.e. 9 April
2007), the existing shareholding of the Demerged Company in the Resulting Company (i.e.
Rs. 25,00,000/-) was cancelled as an integral part of the Scheme in accordance with the
provisions of Sections 100 to 103 of the Act. The reduction, as aforesaid, did not involve
either a diminution of liability in respect of unpaid share capital or payment of paid-up share
capital.
Notes to Capital Structure:
1.
Share Capital History of the Company:
Authorised Share Capital:
The Company was incorporated with an authorised capital of Rs.25,00,000 (Rs. Twenty
five lakhs) divided into 25000 equity shares of Rs.100/- each.
The authorised share capital of the Company was then increased from Rs. 25,00,000 (Rs.
Twenty fife lakhs) to Rs.6,00,00,000 (Rs. Six crores) divided into 600000 equity shares
of Rs.100/- each by resolution passed by the members on 22nd May 1995.
15
The authorized share capital was altered by subdividing the face value of the Equity Shares
of the Company from Rs.6,00,00,000 divided into 600000 equity shares of Rs.100/each fully paid up to Rs. Rs.6,00,00,000 divided into 60,00,000 equity shares of Rs.10/each fully paid up by an ordinary resolution passed by the members on 17th June 2006.
The authorized share capital of the Company was thereafter increased from
Rs.6,00,00,000 (Rs. Six crores) divided into 60,00,000 equity shares of Rs.10/- each
fully paid up to Rs.25,00,00,000 (Rupees Twenty Five Crores) divided into 250,00,000
equity shares of Rs.10/- each pursuant to Clause 34(a) of the Scheme of Arrangement and
Reconstruction on 7th March 2007 being the Effective Date of the Scheme
Issued, Subscribed & Paid up Share Capital:
Rs. 2000 divided into 20 Equity Shares of Rs. 100/- each were subscribed by the
signatories to the Memorandum of Association of the Company.
400000 Equity Shares of Rs.100/- each for cash at par aggregating to Rs 4,00,00,000
were allotted on 4th October 1995.
The issued, subscribed and paid up share capital of the Company was reduced from Rs.
4,00,02,000 (Rs. Four Crores Two Thousand only) divided into 4,00,020 Equity Shares of
Rs. 100/- each to Rs. 25,00,000 (Rupees Twenty Five Lakhs only) divided into 25,000
Equity Shares of Rs. 100/- each vide Order dated 28th June 2000 of the Hon’ble High Court
of Judicature at Bombay in the Company Application No 260 of 2000 for reduction of the
paid-up share capital of the Company.
The Scheme of Arrangement and Reconstruction between Hinduja TMT Limited
(Demerged Company) and the Company and its respective shareholders and creditors for
demerger of the Information Technology/Information Technology Enabled Services
(IT/ITES) Undertaking of Hinduja TMT Limited into the Company and reduction of the
issued, subscribed and paid up equity share capital of the Company was sanctioned by the
Hon’ble High Court of Judicature at Bombay vide order dated 23rd February 2007 under
Sections 100, 391-394 of the Companies Act, 1956, The Orders under Sections 391-394 of
the Companies Act, 1956 of both the companies were filed with the Registrar of
Companies, Maharashtra on 7thMarch 2007. Accordingly the Demerger is effective from 7th
March 2007.
Pursuant to Clause 23 of the Scheme, the Board of Directors of the Company on 10th April
2007 issued and allotted 20538003 Equity Shares of Rs. 10/- each to the shareholders of
the Demerged Company whose names appeared in the Register of Members of the
Demerged Company on the Record Date viz 9th April 2007 in the Demerger Share
Entitlement Ratio of 1 equity share of Rs. 10/- each credited as fully paid up of the
Company for every 2 equity shares of Rs.10/- each held by such member in the
Demerged Company.
On allotment of 2,05,38,003 Equity Shares by the Company, the issued, subscribed and
paid up share capital of the Company reduced from Rs.207880030/- consisting of
20788003 equity shares of Rs. 10/- each fully paid-up to Rs. 205380030/- consisting of
20538003 equity shares of Rs.10/- each fully paid-up, and the reduction was effected by
the cancellation of the pre-Demerger paid-up share capital of the Company of 250000
equity shares of Rs. 10/- each fully paid-up, held by the Demerged Company pursuant to
16
Clause 32 of the Scheme in accordance with the provisions of Sections 100 to 103 of the
Companies Act 1956.
2.
Pre - Scheme of Arrangement Shareholding Pattern of the Company (As on 9th April
2007, being the Record Date):
I (a)
Category
Code
(A)
1
(a)
(b)
(c)
(d)
(e)
2
(a)
(b)
(c)
(d)
Category
Shareholder
of
Shareholding
of
Promoter
and
Promoter Group
Indian
Individuals/Hindu
Undivided Family
Central Govt./
State Govt.(s)
Bodies Corporate
Financial
Institutions/
Banks
Any others (specify)
Sub-Total (A) (1)
Foreign
Individuals
(NonResidents
Individuals/Foreign
Individuals
Bodies Corporate
Institutions
Sub-Total (A) (2)
No. of
shareholders
Total
No. of
shares
No. of shares
held
in
dematerialised
form
Total
shareholding
as
a
percentage of
total No. of
shares
As
a
percentage of
(A+B)
As
a
percentage
of (A+B+C)
6
60
--
0.02
0.02
-1
-249940
---
-99.98
-99.98
--7
--250000
--0
--100.00
--100.00
--
--
--
--
--
--0
--0
--0
--0.00
--0.00
7
250000
0
100.00
100.00
---
---
---
---
---
--
--
--
--
--
--
--
--
--
--
Total
Shareholding
of
Promoter
and
Promoter
Group
(A)=(A)(1)+(A)(2)
(B)
1
(a)
(b)
(c)
(d)
Public Shareholding
Institutions
Mutual Funds/UTI
Financial
Institutions/
Banks
Central Govt/State
Govt (s).
Venture
Capital
17
(e)
(f)
(g)
(h)
Funds
Insurance
Companies
Foreign Institutional
Investors
Foreign
Venture
Capital Investors
Sub-Total (B) (1)
B2
(a)
Non-Institutions
Bodies Corporate
(b)
I
Individuals
Idividual-1.
Individual
shareholders
holding
nominal
share capital upto
Rs.1 lac
ii.
Individual
shareholders
holding
nominal
share capital in
excess of Rs.1 lac
Sub-Total (B)(2)
Total
Public
Shareholding
(B)=(B)(1)+(B)(2)
II
(c)
(B)
(C)
Total=(A)+(B)
Shares
held
by
Custodians
and
against
which
Depository Receipts
have been issued
GRAND
TOTAL
=(A)+(B)+(C)
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
-0
-0
-0
-0.00
-0.00
---
---
---
---
---
--
--
--
--
--
--
--
--
--
-
0
0
0
0.00
0.00
0
0
0
0.00
0.00
7
250000
0
100.00
100.00
--
--
--
--
--
7
250000
--
100.00
100.00
I (b) Statement showing Shareholding of persons belonging to the category “Promoter and Promoter
Group”
Sr. No.
Name of the Shareholder
1
2*
4*
Hinduja TMT Limited.
Somnath Majumdar jtly with Hinduja TMT
Limited
Yagnesh Sanghrajka jtly with Hinduja TMT
Limited
Ravi Mansukhani jtly with Hinduja TMT Limited
5*
Ashok Mansukhani jtly with Hinduja TMT
3*
No. of shares
249940
Shares as a percentage of
total No. of shares (i.e.
Grand Total (A)+(B)+(C)
indicated in Statement at
para (1)(a) above.
99.980
10
0.004
10
0.004
10
0.004
18
6*
Limited
K.C. Samdani jtly with Hinduja TMT Limited
7*
Satheesh Kumar jtly with Hinduja TMT Limited
Total
10
0.004
10
0.004
10
250000
0.004
100.00
* Nominees of Hinduja TMT Limited
I (c) Statement showing Shareholding of persons belonging to the category “Pubic” and holding
more than 1% of the total No. of shares.
Sr. No.
No. of shares
para (1)(a) above.
No. of shares
Locked-in shares as a
percentage of total
-----NIL---I (d) Statement showing details of locked-in-shares
Sr. No.
-----NIL----
II (a) Statement showing details of Depository Receipts (DRs)
Sr. No.
Type of outstanding DR (ADRs, GDRs,
SDRs, etc.)
No.
outstanding
DRs
of
No. of shares underlying
outstanding DRs.
-----NIL-----
(II) (b) Statement showing Holding of Depository Receipts (DRs), where underlying shares are in
excess of 1% of the total No. of shares
Sr. No.
Name of the DR Holder
Type
of
outstanding DR
(ADRs)
outstanding DRs.
-----NIL-----
19
3.
Post - Scheme of Arrangement Shareholding Pattern of the Company as the date of this
Information Memorandum:
I (a)
Category
Code
(A)
1
(a)
(b)
(c)
(d)
(e)
2
(a)
(b)
(c)
(d)
Category
Shareholder
of
Shareholding
of
Promoter
and
Promoter Group
Indian
Individuals/Hindu
Undivided Family
Central Govt./
State Govt.(s)
Bodies Corporate
Financial
Institutions/
Banks
Any
others
(specify)
Sub-Total (A) (1)
Foreign
Individuals (NonResidents
Individuals/Foreign
Individuals
Bodies Corporate
Institutions
Any
others
(specify)
Sub-Total (A) (2)
Total Shareholding
of Promoter and
Promoter Group (A)
=
(A)
(1)
+
(A)(1)+(A)(2)
(B)
1
(a)
(b)
Public Shareholding
Institutions
Mutual Funds/UTI
Financial
Institutions/Banks
(c)
Central Govt/State
Govt (s).
Venture
Capital
Funds
Insurance
(d)
(e)
No. of
shareholders
Total No.
of shares
No. of shares
held
in
dematerialised
form
Total
shareholding
as
a
percentage of
total No. of
shares
As
a
percentage of
(A+B)
As
a
percentage
of (A+B+C)
14
4686985
4686985
22.82
22.82
--
--
--
--
--
5
--
6057228
--
6057228
--
29.49
--
29.49
--
--
--
--
--
--
19
10744213
10744213
52.31
52.31
--
--
--
--
--
2
---
2784160
---
2784160
---
13.56
---
13.56
---
2
2784160
2784160
13.56
13.56
21
13528373
13528373
65.87
65.87
10
2
1744456
50025
1744456
50025
8.49
0.24
8.49
0.24
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
20
(f)
(g)
(h)
B2
(a)
(b)
I
II
(B)
(C)
Companies
Foreign
Institutional
Investors
Foreign
Venture
Capital Investors
Any
others
(specify)
Sub-Total (B) (1)
Non-Institutions
Bodies Corporate
Individuals
i.
Individual
shareholders
holding
nominal
share capital upto
Rs.1 lac
ii.
Individual
shareholders
holding
nominal
share capital in
excess of Rs.1 lac
Sub-Total (B) (2)
Total
Public
Shareholding (B)=
(B) (1)+(B) (2)
Total = (A)+(B)
Shares held by
Custodians
and
against
which
Depository
Receipts
have
been issued
GRAND TOTAL
23
3216302
3216302
15.66
15.66
--
--
--
--
--
35
5010783
5010783
24.40
24.40
633
787386
768161
3.83
3.83
12137
1148134
1054952
5.59
5.59
3
63327
63327
0.31
0.31
12773
1998847
1886440
9.73
9.73
12808
12829
7009630
20538003
6897223
20425596
34.13
100.00
34.13
100.00
-
-
-
-
-
12829
20538003
20425596
100.00
100.00
I (b) Statement showing Shareholding of persons belonging to the category “Promoter and
Promoter Group”
Sr. No.
1
2
Ashok P. Hinduja
Ashok Parmanand Hinduja/ Jt. Harsha Ashok
Hinduja
Ashok Parmanand Hinduja/ Jt. S.P. Hinduja
HUF (Bigger) and Hinduja Properties
Development Ltd.
A.P. Hinduja (HUF)
A.P.
Hinduja/
Jt.
Hinduja
Properties
Development Ld. and S.P. Hinduja HUF
(Bigger)
Harsha Ashok Hinduja
Harsha Ashok Hinduja/Jt. Ashok Parmanand
3
4
5
6
7
No. of shares
31,600
45,313
para (1)(a) above.
0.15
0.22
3,85,715
1.88
54,327
0.26
6,71,185
16,695
3.27
0.08
21
8
9
10
Hinduja
Harsha A. Hinduja/Jt. S.P. Hinduja HUF
(Bigger) and A.P. Hinduja
Vinoo Srichand Hinduja
Aasia Management & Consultancy Pvt. Ltd. jtly
with Aasia Properties Development Ltd.
11
Aasia Management & Consultancy Pvt. Ltd.
12
jtly with Aasia Properties Development Ltd.
13
14
15
16
17
18
19
20
21
Amas Mauritius Ltd.
Kumbat Ltd.
Siddharth Textiles Pvt. Ltd.
Aasia Properties Development Ltd.
S.P. Hinduja HUF (Bigger)
Satya Ashok Hinduja
Ambika Ashok Hinduja
Shom Ashok Hinduja
Shanoo Mukhi
TOTAL
12,498
0.06
18,97,202
61,065
9.24
0.30
20,51,988
9.99
35,52,449
17.30
3,25,300
27,66,660`
17,500
5,211
1,22,280
5,32,483
6,60,698
1,77,242
1,40,007
955
1,35,28,373
1.58
13.47
0.09
0.03
0.60
2.59
3.22
0.86
0.68
0.00
65.87
I (c) Statement showing Shareholding of persons belonging to the category “Pubic” and holding
more than 1% of the total No. of shares.
Sr.
No.
1
Amam Limited A/c Invest-India (Mauritius)
Ltd.
Goldman Sachs Investments (Mauritius) I
Ltd.
HSBC
Global
Investment
Fund
Mauritius/HSBC Global Investment Fund
Bric Freestyle/Master Trust Bank of
Japan/HSBC Financial Services (Middle
East).
Copthall Mauritius Investment Ltd.
Citigroup Global Markets Mauritius Pvt
Ltd.
Reliance Capital Trustee Co. Ltd.
Tata Trustee Co. Pvt. Ltd.
HSBC India Opportunities Fund/ Unique
Opportunities Fund
2
3
4
5.
6
7
8
No. of shares
8,04,147
Shares
as
a
percentage of total No.
of shares (i.e. Grand
Total
(A)+(B)+(C)
indicated in Statement
at para (1)(a) above.
3.92
7,04,136
3.43
2,88,177
1.40
3,15,178
3,09,063
1.53
1.50
3,93,093
4,53,028
2,13,750
1.91
2.21
1.04
22
I (d) Statement showing details of locked-in-shares
(I)
(d) Statement showing details of locked-in-shares
I (d) Statement showing details of locked-in-shares
Sr. No.
No. of shares
1
2
3
Aasia Management and Consultancy Pvt Ltd.
A.P.Hinduja(HUF)
S.P.Hinduja HUF(Bigger)
TOTAL
3552400
54300
501000
4107700
Locked-in shares
percentage of total
17.30
0.26
2.44
20.00
as
a
No. of shares as
percentage of total
a
II (a) Statement showing details of Depository Receipts (DRs)
Sr. No.
Type of outstanding DR (Ads, GDRs, SDRs,
etc.)
No.
outstanding
DRs
of
-NIL-
II (b) Statement showing Holding of Depository Receipts (DRs), where underlying shares are in
excess of 1% of the total No. of shares
Sr. No.
Name of the DR Holder
Type
of
outstanding DR
(ADRs)
outstanding DRs.
-NIL-
4.
Details of the shareholding of the Promoters and Promoter Group:
(A)
Pre - Scheme of Arrangement, as on 9th April 2007, (being the Record Date):
S.
No.
Name of Shareholder
No. of shares % of holding
1
2*
3*
4*
5*
6*
7*
Hinduja TMT Limited
Somnath Majumdar jtly with Hinduja TMT Limited
Yagnesh Sanghrajka jtly with Hinduja TMT Limited
Ashok Mansukhani jtly with Hinduja TMT Limited
K. C. Samdani jtly with Hinduja TMT Limited
249940
10
10
10
10
10
10
99.98
}
}
} 0.02
}
}
}
Total
250000
100.00
23
(B)
Post- Scheme of Arrangement, as on the date of this Information Memorandum:
Sr. No.
1
2
Ashok P. Hinduja
Ashok Parmanand Hinduja/ Jt. Harsha Ashok
Hinduja
Ashok Parmanand Hinduja/ Jt. S.P. Hinduja
HUF (Bigger) and Hinduja Properties
Development Ltd.
A.P. Hinduja (HUF)
A.P.
Hinduja/
Jt.
Hinduja
Properties
Development Ld. and S.P. Hinduja HUF
(Bigger)
Harsha Ashok Hinduja
Harsha Ashok Hinduja/Jt. Ashok Parmanand
Hinduja
Harsha A. Hinduja/Jt. S.P. Hinduja HUF
(Bigger) and A.P. Hinduja
Vinoo Srichand Hinduja
Aasia Management & Consultancy Pvt. Ltd. jtly
with Aasia Properties Development Ltd.
3
4
5
6
7
8
9
10
11
12
jtly with Aasia Properties Development Ltd.
13
14
15
16
17
18
19
20
21
Amas Mauritius Ltd.
Kumbat Ltd.
Siddharth Textiles Pvt. Ltd.
Aasia Properties Development Ltd.
Satya Ashok Hinduja
Ambika Ashok Hinduja
Shom Ashok Hinduja
Shanoo Mukhi
TOTAL
5.
No. of shares
31,600
45,313
para (1)(a) above.
0.15
0.22
3,85,715
1.88
54,327
0.26
6,71,185
16,695
3.27
0.08
12,498
0.06
18,97,202
61,065
9.24
0.30
20,51,988
9.99
35,52,449
17.30
3,25,300
27,66,660`
17,500
5,211
1,22,280
5,32,483
6,60,698
1,77,242
1,40,007
955
1,35,28,373
1.58
13.47
0.09
0.03
0.60
2.59
3.22
0.86
0.68
0.00
65.87
The list of top 10 shareholders of the Company and the number of Equity Shares
held by them:
(A) Top 10 shareholders as on the date of the Information Memorandum:
Sr.No
Names
1
2
3
Aasia Management & Consultancy Pvt. Limited
Amas Mauritius Limited
Jointly with Aasia Properties Development
Limited
Harsha A.Hinduja /Jt. S.P.Hinduja HUF(Bigger)
4
No of shares
held
% of paid up
Capital
35,52,449
27,66,660
20,51,988
17.30
13.47
9.99
18,97,202
9.24
24
5
6
7
8
9
10
and A.P.Hinduja
Aman Limited A/c Invest India (Mauritius) Ltd
Goldman Sachs Investments (Mauritius) Ltd
A.P.Hinduja Jt. Hinduja Properties Development
Ltd and S.P.Hinduja HUF(Bigger)
Satya Ashok Hinduja
Tata Trustee Company Pvt. Limited
8,04,147
7,04,136
6,71,185
3.92
3.43
3.27
6,60,698
5,32,483
4,53,028
3.22
2.59
2.21
B) Top 10 shareholders o n t h e R e c o r d D a t e , prior to the date of the Information
Memorandum:
S.
No.
Name of Shareholder
No. of shares % of holding
1
2*
3*
4*
5*
6*
7*
Hinduja TMT Limited
Somnath Majumdar jtly with Hinduja TMT Limited
Yagnesh Sanghrajka jtly with Hinduja TMT Limited
Ashok Mansukhani jtly with Hinduja TMT Limited
K. C. Samdani jtly with Hinduja TMT Limited
249940
10
10
10
10
10
10
99.98
}
}
} 0.02
}
}
}
250000
100.00
Total
C) Top 10 shareholders two years prior to the date of this Information Memorandum:
Sr.
No.
1
InNetwork Entertainment Limited
2
Ashok P. Hinduja
3
4
%
15000
60.00
9998
40.00
Mr. Subhas S. Pramanik
1
0.00
Mr. Abin K.Das
1
0.00
25000
100.00
Total
6.
No. of shares
As sanctioned by the Hon’ble High Court of Judicature of Bombay pursuant to Clause 15
(c) of the Scheme of Arrangement and Reconstruction, 308860 Employee Stock Options
have been granted in the aggregate to the eligible employees of the Company on the
effective date i.e. on 7th March 2007 under the HTMT Technologies Limited Compensatory
Employees Stock Option Plan 2006, in lieu of lapsed options of Hinduja TMT Limited. One
half of the said options will vest on 7th March.2008 and the other half will vest on 7th March
2009.
Assuming that all the stock options will be exercised, the Shares that would be allotted
pursuant to the exercise would represent approximately 1.50% of the paid-up capital of the
25
Company.
7.
Other than the Employee Stock Options referred to above, as on date of this Information
Memorandum, there are no outstanding warrants, options or rights to convert debentures,
loans or other instruments into equity shares of the Company, nor any outstanding
debentures or bonds or other instruments issued by the Company.
8.
The face value of the Equity Shares is presently Rs.10/- and there shall be only one
denomination for the Equity Shares of the Company, subject to applicable regulations and
the Company shall comply with such disclosure and accounting norms specified by SEBI,
from time to time.
9.
The number of shareholders is 12829 as on the date of this Information Memorandum.
10.
None of the Equity Shares of the Company were under lock-in prior to the Scheme.
26
VI SCHEME OF ARRANGEMENT
Background and Rationale of the Scheme of Arrangement:
The Demerged Company’s core business was Information Technology (IT) and Information
Technology enabled Services (ITES). At the same time, the Demerged Company also had
presence in Media (Film Content, Cable TV distribution network) and Broadband (high speed
internet and related value added services) businesses through its subsidiaries.
In recent years, the Demerged Company’s IT/ITES business (mainly Business Process
Outsourcing – BPO) had grown at an industry-leading rate and the Demerged Company became
one of the significant players in India. The Company made several overseas acquisitions of ITESBPO companies as well as restructured its overseas and domestic operations. By enlarging its
global delivery footprint and blending its core competencies residing in various units, the
Demerged Company transformed itself into a global enterprise in the IT/ITES-BPO space.
At the same time, the Media and Broadband businesses of the Demerged Company also became
well established and well prepared to participate in the era of explosive growth that is expected on
the back of regulatory moves in motion.
In the context of the foregoing, the Demerged Company’s Directors considered that separating the
two businesses viz. IT/ITES-BPO and Media/Broadband would be a sound value proposition.
Going forward, it was considered that the IT/ITES-BPO business should be an independent pure
play focused company for improving market visibility and industry and investor recognition. The
sharper focus on IT/ITES-BPO would help attract further global customers and top class talent
apart from aiding organic and inorganic growth initiatives.
Simultaneously, the Media/broadband businesses would also benefit from the sharp focus that
would be accorded to them. The demerger would enable the media/broadband businesses to more
effectively deal with the changing business and regulatory environment, whereby convergence
within the sector is a challenge and an opportunity. Going forward, expansions through alliances,
partnerships, strategic investments and joint ventures including mergers and acquisitions will be a
key growth strategy for these businesses, and the restructuring would facilitate these initiatives.
To summarise, the Directors considered that the restructuring will not only unlock value for the
shareholders in the short term, the new entities would achieve their individual business objectives
faster and better than before, thereby creating further value for the shareholders in the long term.
Main Features of the Scheme:
The salient features of the Scheme are as follows:
(i)
The Scheme envisages the demerger of the Demerged Undertaking (comprising of the
whole of the IT/ITES Business of the Applicant Company, in India and abroad and as
more particularly defined therein) of the Applicant Company to the Resulting Company
pursuant to Sections 391 to 394 and other relevant provisions of the Act in the manner
provided for in the Scheme.
(ii)
The Scheme provides that the “Demerger Appointed Date” shall mean the opening of
business on October 1, 2006.
27
(iii)
The “Effective Date” for the Scheme means the last of the dates on which all the
conditions and matters in relation to the Scheme referred to in Clause 38 of the
Scheme have been fulfilled.
(iv)
The “Demerged Undertaking” (as defined in the Scheme) means the whole of the IT/ITES
Business of the Demerged Company, in India and abroad, described in Clause 1 of
the Scheme, on a going concern basis, which shall include (without limitation):
(a)
all assets and properties of or required for the IT/ITES Business wherever situated,
whether movable or immovable, freehold or leasehold, tangible or intangible,
including investments in, and advances to, as part of the business activity of
IT/ITES Business, subsidiaries of the Demerged Company enumerated in Clause 1
of the Scheme including without limitation all funds, investments, plant and
machinery, estates, buildings, offices (including marketing offices, corporate and
administrative offices and liaison offices), machinery, capital work in progress,
furniture, fixtures, office equipment, vehicles, computer installations, electricals
including any other hardware or software applications, appliances, accessories,
power lines, water pipelines and depots;
(b)
all agreements, contracts, engagements, permits, quotas, rights, registrations,
entitlements, industrial and other licences, bids, all assignments and grants
thereof, tenders, letters of intent, expressions of interest, development rights
(whether vested or potential and whether under agreements or otherwise),
municipal permissions, approvals, consents, subsidies, tax credits, incentives,
tenancies in relation to office and/or residential properties for the employees,
investments or interest (whether vested, contingent or otherwise) in projects
undertaken or contracted to be undertaken either solely or jointly with other
parties, goodwill, trade marks, trade names, trade secrets, product
registrations, patents, copyrights, all other intellectual property, bank accounts,
receivables, privileges, insurance claims and policies, powers of attorney, and
authorities, certifications, all other rights including sales tax deferrals and
exemptions and other benefits, lease rights, licences, powers and facilities of
every kind, nature and description whatsoever, rights to use and avail of
telephones, emails, telexes, facsimile, VSATs connections and installations
and any other communication devices, utilities, electricity and other services,
provisions, funds, benefits of all agreements, contracts and arrangements and
all other interests in connection with or relating to the Demerged Undertaking,
including licenses, approvals, certificates, clearances, exemptions and all benefits
relating to units in software technology parks /special economic zones ;
(c)
all deposits or benefits of any deposits, balances, earnest moneys and/or
security deposits paid or received by the Demerged Company directly or
indirectly in connection with or relating to the Demerged Undertaking;
(d)
all books, records, files, papers, engineering and process information,
computer programmes along with licenses, drawings, back up copies, websites,
domain names, manuals, data, catalogues, quotations, sales and advertising
materials, lists of present and former customers and suppliers, customer credit
information, customer pricing information, and other records, whether in
physical form or electronic form in connection with or relating to the Demerged
Undertaking; and
(e)
debts, duties, obligations and liabilities (including contingent liabilities)
relatable to the Demerged Undertaking;
28
Explanation:
(I)
(II)
For the purpose of the Scheme, it is clarified that the liabilities pertaining to the
Demerged Undertaking are:
(a)
The liabilities which accrue or arise out of the activities or operations of
the IT/ITES Business.
(b)
Specific loans and borrowings (including debentures) raised, incurred
and utilised solely for the activities or operation of the IT/ITES Business.
(c)
Liabilities (including debentures, if any) other than those referred to in
sub-clauses (a) and (b) above, if any, being the amounts of general or
multipurpose borrowings of the Demerged Company, allocated to the
IT/ITES Business in the same proportion in which the value of the
assets transferred under the Scheme bear to the total value of the
assets of the Demerged Company as at the end of business on the date
immediately preceding the Demerger Appointed Date.
Any question that may arise as to whether a specified asset or liability pertains
or does not pertain to the IT/ITES Business or whether it arises out of the
activities or operations of the IT/ITES Business shall be decided by mutual
agreement between the Board of Directors of the Demerged Company and the
Resulting Company.
(v)
The “Remaining Undertaking” as defined in the Scheme means all the estate, assets,
rights, title, interests, businesses, undertakings, activities, operations and the divisions of
the Demerged Company, including the Media Business of the Demerged Company, save
and except the Demerged Undertaking;
(vi)
The “Demerger Share Entitlement Ratio”, as defined in the Scheme, means the ratio in
which the Resulting Company will issue and allot shares to each member of the Applicant
Company whose name is recorded in the register of members of the Applicant Company on
the Record Date (as defined therein) in consideration for the demerger, being 1 Equity
Share in the Resulting Company of Rs. 10 /- credited as fully paid up for every 2
Equity Shares of Rs.10/- each fully paid up held by such member in the Applicant
Company.
(vii)
A summary of the salient features of the Scheme is set out below:
(a)
the demerger of the Demerged Undertaking of the Applicant Company to the
Resulting Company, and the consequent issue of equity shares by the Resulting
Company to the shareholders of the Applicant Company in the Demerger Share
Entitlement Ratio. M/s PricewaterhouseCoopers Private Limited and M/s Haribhakti
MRI Corporate Services Private Limited, have jointly confirmed that the Demerger
Share Entitlement Ratio is fair;
(b)
various other matters consequential or otherwise integrally connected with the
above, including:
(i)the manner of vesting and transfer of the assets of the Demerged Undertaking
in the Resulting Company;
29
(ii)the transfer of contracts, deeds, bonds, agreements, schemes, arrangements
and other instruments of whatsoever nature relating to the Demerged
Undertaking in favour of the Resulting Company;
(iii)the transfer to the Resulting Company of all consents, permissions, licenses,
certificates, clearances, authorities, powers of attorney given by, issued to or
executed in favour of the Applicant Company in relation to the Demerged
Undertaking;
(iv)the transfer of debts, liabilities, duties, and obligations of the Applicant Company
and being a part of the Demerged Undertaking to the Resulting Company;
(v)the transfer to the Resulting Company of all legal, taxation or other proceedings,
whether civil or criminal, (including before any statutory or quasi-judicial
authority or tribunal) by or against the Applicant Company and relating to the
Demerged Undertaking;
(vi)the manner in which the business of the Demerged Undertaking is to be carried
on in trust by the Applicant Company for the benefit of the Resulting Company
from the Appointed Date till the Effective Date;
(vii)the transfer of permanent employees engaged in the Demerged Undertaking of
the Applicant Company to the Resulting Company on terms and conditions not
less favourable than those on which they are engaged in the Demerged
Undertaking and without any interruption of service as a result of the transfer of
the Demerged Undertaking; and
(viii)reorganisation of the capital of the Applicant Company.
(c)
The relevant provisions of the Scheme is relation to Employee Stock Options
available to the employees of the Demerged Undertaking are as under:
(i)
In respect of the stock options granted by the Applicant Company under the
employees’ stock options scheme titled Hinduja TMT Limited Employees
Stock Option Plan, 2001 (the “Demerged Company Option Scheme”), to
employees engaged in the Demerged Undertaking, the Scheme provides
that the stock options which have been granted but have not vested as of
the Effective Date, in the employees engaged in the Demerged Undertaking,
would lapse (such lapsed options being hereafter referred to as “Lapsed
Options of the Demerged Company”, and such employees of the Demerged
Company engaged in the Demerged Undertaking whose stock options
granted under the Demerged Company Option Scheme would lapse being
hereinafter collectively referred to as the “Grantees of Lapsed Options” and
individually as “Grantee of Lapsed Options”). It is hereby also clarified that
the stock options under the Demerged Company Option Scheme which
have vested in employees engaged in the Demerged Undertaking as of the
Effective Date, would lapse if they remain unexercised on the Record Date
(as defined in the Scheme). It is hereby further clarified that, in respect of
stock options under the Demerged Company Option Scheme which have
vested as well as have been exercised before the Record Date (as defined
in the Scheme) the Demerged Company shall issue and allot one fully paidup equity share of Rs.10/- each of the Demerged Company for each
exercised option;
30
(ii)
(iv)
(d)
In order to compensate the Grantees of Lapsed Options in respect of the
Lapsed Options of the Demerged Company, the Resulting Company shall
grant, and shall be deemed to have granted, to each Grantee of Lapsed
Options, on the Effective Date, in lieu of the Lapsed Options of the
Demerged Company, in pursuance of the Scheme, such number of stock
options as are envisaged in the Resulting Company Compensatory ESOP
Scheme as would equal to the number of Lapsed Options of the Demerged
Company of the respective Grantee of Lapsed Options. This grant of stock
options by the Resulting Company to each Grantee of Lapsed Options shall
be, and shall be deemed to be, at an exercise price equal to the exercise
price at which such Grantee of Lapsed Options had been granted by the
Demerged Company the Lapsed Options of the Demerged Company. The
vesting period of the stock options granted under the Scheme by the
Resulting Company shall be as provided for in the Resulting Company
Compensatory ESOP Scheme.
Having regard to the compensatory nature of the grant of stock options of the
Resulting Company under the Scheme (pending listing of equity shares of the
Resulting Company on a recognized stock exchange) on the Effective Date, the
provisions of the Securities and Exchange Board of India (Employees Stock Option
Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended
to-date, shall apply, mutatis mutandis, to the extent applicable, to the stock options
granted by the Resulting Company to the Grantees of Lapsed Options in pursuance
of this Scheme with effect from the date on which the equity shares of the Resulting
Company are first listed on the National Stock Exchange of India Limited and the
Bombay Stock Exchange Limited in accordance with the provisions of Clause 27 of
the Scheme. It is further clarified that, for this purpose, the “intrinsic value” of the
stock options of the Resulting Company granted under the Scheme vis-à-vis the
Resulting Company shall be equal to “intrinsic value” of the Lapsed Options of the
Demerged Company vis-à-vis the Demerged Company under clause 2(9A) of the
Securities and Exchange Board of India (Employees Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999
The Scheme provides that upon the coming into effect of the Scheme and in
consideration of the Demerger pursuant to Part II of the Scheme, the Resulting
Company shall, without any further act or deed, issue and allot to each member of the
Demerged Company whose name is recorded in the register of members of the
Demerged Company (including employees, who have become shareholders by
exercising their options, which have vested in accordance with the Demerged
Company Option Scheme) on a date (the “Record Date”) to be fixed in that behalf by
the Board of Directors or a committee thereof of the Demerged Company, equity
shares of the Resulting Company in the ratio (the “Demerger Share Entitlement
Ratio”) of 1 Equity Share in the Resulting Company of Rs. 10 /- credited as fully paid
up for every 2 Equity Shares of Rs.10/- each fully paid up held by such member in the
Demerged Company. Further, upon effectiveness of this Scheme, pursuant to the
Demerger, the issued, subscribed and paid up equity share capital of the Demerged
Company shall be reduced by reducing the face value of the equity shares from 1 (One)
equity share of Rs.10/- fully paid up to 1 (One) equity share of Rs. 5/- each fully paid.
Consequent to such reduction in the face value of the paid up equity shares from Rs. 10/each to Rs. 5/- per share, the shareholding of the shareholders of the Demerged Company
shall be reduced proportionately. Simultaneously, 2 (Two) equity shares each of Rs. 5/-,
shall be consolidated into 1 (One) fully paid-up equity share of Rs. 10/-.
31
(e) The Scheme provides that In case any member’s holding in the Demerged Company is such that
the member becomes entitled to a fraction of an equity share of the Demerged Company or of
the Resulting Company, neither the Demerged Company nor the Resulting Company shall issue
fractional share certificates to such members but shall consolidate such fractions and issue
consolidated equity shares to separate trustees nominated respectively by the Demerged
Company and the Resulting Company in that behalf, who shall sell such shares and distribute
the net sale proceeds (after deduction of the expenses incurred) to the members respectively
entitled to the same, in proportion to their respective fractional entitlements in Demerged
Company and Resulting Company.
(f) The Scheme provides that the equity shares of the Resulting Company issued and allotted in
terms of Clause 23 above shall rank pari passu in all respects with the existing equity shares of
the Resulting Company. Further, the equity shares of the Demerged Company and the
Resulting Company to be issued and allotted in terms of the Scheme will be subject to the
Memorandum and Articles of Association of the Demerged Company and the Resulting
Company respectively.
(g) The Scheme provides that on allotment of shares by the Resulting Company in terms of
the Scheme, the existing shareholding of the Demerged Company, in the Resulting
Company shall be cancelled as an integral part of the Scheme in accordance with
provisions of Sections 100 to 103 of the Act and the Order of the High Court sanctioning
the Scheme shall be deemed to be also the Order under Section 102 of the Act for the
purpose of confirming the reduction. The reduction would not involve either a diminution
of liability in respect of unpaid share capital or payment of paid-up share capital, and the
provisions of Section 101 of the Act will not be applicable.
(h) The Scheme provides that all transactions during the period between the Appointed Date and
Effective Date relating to the Demerged Undertaking would be duly reflected in the financial
statements of the Resulting Company, upon the Scheme coming into effect.
(i)
The Scheme is conditional upon and subject to:
(i)
the Scheme being agreed to by the respective requisite majorities of the various
classes of members and creditors (where applicable) of the Demerged Company
and the Resulting Company as required under the Act and the requisite orders of
the High Court of Judicature at Bombay being obtained;
(ii)
such other sanctions and approvals including sanction of any Governmental
Authority, creditor, lessor or contracting party as may be required by law or contract
in respect of the Scheme being obtained;
(iii)
the certified copies of the court orders referred to in this Scheme being filed
with the Registrar of Companies, Maharashtra.
32
VII
STATEMENT OF TAX BENEFITS
April 27, 2007
The Board of Directors,
HTMT Global Solutions Ltd.,
In Centre, 49/50, MIDC,
12th Road, Andheri (East)
Mumbai 400093.
Dear Sirs,
We hereby report that the enclosed annexure (Annexure "A") states the possible tax benefits
available to HTMT GLOBAL SOLUTIONS LIMITED ('the Company') and its shareholders under
the current direct tax laws presently in force in India. Several of these benefits are dependent on
the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of
the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax
benefits is dependent upon fulfilling such conditions, which based on the business imperatives the
Company faces in the future, the Company may or may not choose to fulfil.
The benefits discussed in the above said annexure are not exhaustive and the preparation of the
contents stated is the responsibility of the Company's management. We are informed that this
statement is only intended to provide general information to the investors and hence is neither
designed nor intended to be a substitute for professional tax advice. In view of the individual nature
of the tax consequences and the changing tax laws, each investor is advised to consult his or her
own tax consultant with respect to the specific tax implications arising out of their participation in
the issue.
Our confirmation is based on the information, explanations and representations obtained from the
Company and on the basis of our understanding of the business activities and operations of the
Company and the interpretation of the current tax laws in India.
We do not express any opinion or provide any assurance as to whether:
The Company or its shareholders will continue to obtain these benefits in future; or
The conditions prescribed for availing the benefits, where applicable have been/would be
met with.
No assurance is given that the revenue authorities/courts will concur with the views expressed herein.
Our views are based on the existing provisions of law and its interpretation, which are subject to
change from time to time. We do not assume responsibility to update the views consequent to such
changes. We shall not be liable to the Company for any claims, liabilities or expenses relating to this
assignment except to the extent of fees relating to this assignment, as finally judicially determined to
have resulted primarily from bad faith or intentional misconduct. We will not be liable to any other
person in respect of this statement.
FOR SHAH & ASSOCIATES,
CHARTERED ACCOUNTANTS
H.N. SHAH
PARTNER
Encl: a/a
33
Annexure “A”
STATEMENT OF TAX BENEFITS AVAILABLE TO HTMT GLOBAL SOLUTIONS LIMITED
(HGSL) AND TO ITS SHAREHOLDERS
A.
Act’)
Key benefits available to the Company under the Income –tax Act, 1961 (‘the
1)
Business Income :
An undertaking which carries on the business of export of computer software (IT/ ITES)
enjoys the benefit of deduction of 100% of the profits for ten years under section 10 A of the
Act, beginning with the Assessment Year relevant to the Previous Year in which the
undertaking commences its business.
The undertaking of Hinduja TMT Ltd. carrying on this business have been demerged
into HGSL and as per applicable provisions of the Act will continue enjoying the benefits.
However, as per provisions of Finance Bill 2007, the company will be liable to tax on this
profits under Section 115 JB of the Act, from financial year 2007-08.
2)
Dividend Income :
Dividend (both interim and final) income, if any, received by the Company on its
investment in shares of another Domestic Company shall be exempt from tax under section
10 (34) read with Section 115-O of the Act.
Income received in respect of units of a Mutual Fund specified under section 10(23 D)
of the Act shall be exempt from tax under Section 10 (35) of the Act.
3)
Capital Gains :
Capital assets are to be categorized into short-term capital assets and long term capital
assets based on the period of holding. Shares held in a Company or any other securities listed
on a recognized stock exchange in India or units of UTI and specified Mutual Fund/zero
coupon Bonds are considered as long-term capital assets if these are held for a period of
exceeding 12 months. Capital gains arising on transfer of long term capital assets are
considered as ‘long term capital gains’. Capital gains arising on transfer of these assets
held for a period of 12 months or less are considered as ‘short term capital gains’.
Section 48 of the Act, prescribes the mode of computation of capital gains. It provides
for deduction of cost of acquisition/improvement and expenses incurred wholly and exclusively
in connection with the transfer of a capital asset from the sale consideration to arrive at the
amount of capital gains. However, in respect of long term capital gains, for resident
shareholders it offers a benefit by permitting substitution of cost of acquisition/improvement
with the
indexed cost
of
acquisition/improvement, which adjusts
the cost of
acquisition/improvement by the prescribed cost inflation index. The benefit of indexation is not
available in respect of long term capital gains arising from the transfer of long term capital
asset like bonds and debenture other than capital indexed bonds issued by the Government.
34
Long term capital gains arising on transfer of equity shares or units of an equity
oriented fund (as defined) which has been set up under a scheme of a Mutual Fund specified
under Section 10 (23 D), on or after October 1, 2004 are exempt from tax under Section 10
(38) of the Act provided the transaction is chargeable to Securities Transaction Tax (STT).
However, this gains is to be considered for the purpose of book profits subject to tax under
Section 115 JB of Income Tax Act.
Under the provisions of Section 112 of the Act, long term capital gains, which are not
exempt under Section 10 (38), are subject to tax at the rate of 20 per cent (plus applicable
surcharge on tax and education cess on tax and surcharge), in case where indexation benefit is
claimed. However, under the proviso to Section 112 (1), if the tax on long term capital gains
arising on transfer of listed securities or units or zero coupon bonds computed at the rate of
20 per cent (plus applicable surcharge on tax and education cess on tax and surcharge) after
availing the benefit of indexation exceeds the tax on the long term capital gain computed at
the rate of 10 per cent (plus applicable surcharge on tax and education cess on tax and
surcharge) without availing the benefit of indexation, then such excess tax is ignored for the
purpose of computing the tax payable on the capital gains.
Under the provisions of Section 111 A of the Act, short term capital gains arising on
sale of equity shares or units of equity oriented mutual fund (as defined) under Section 10 (23
D), on or after October 1, 2004, are subject to tax at the rate of 10 per cent (plus applicable
surcharge on tax and education cess on tax and surcharge), provided the transaction is
chargeable to STT.
Short term capital loss suffered during the year is allowed to be set off against short
term as well as long term capital gains of the said year, Balance loss, if any, could be carried
forward for eight years for claiming set off against subsequent years’ short term as well as
long term capital gains.
Long term capital loss suffered during the year is allowed to be set off against long term
capital gains. Balance loss, if any, could be carried forward for eight years for claiming set –
off against subsequent years’ long term capital gains.
As per Section 54 EC of the Act and subject to the conditions specified therein, long
term capital gains which are not exempt under Section 10 (38) of the Act shall not be
chargeable to tax in the proportion of capital gains, which are invested in certain notified
bonds within six months from the date of transfer. If the Company transfers or converts the
notified bonds into money ( as stipulated therein) within a period of three years from the date
of its acquisition, the amount of gains exempted earlier would be chargeable to tax as long
term capital gains in such year. The bonds specified for this Section are bonds issued by,
National Highway Authority of India (NHAI) and Rural Electrification Corporation Ltd. (REC)
after 1st April, 2006 subject to a limit of Rs.50 lacs in a financial year.
4)
Depreciation/ Business Loss :
The company shall be entitled to claim depreciation on tangible and intangible asset
owned by it and used for the purposes of its business in accordance with provisions of Section
32 of the Act.
Unabsorbed depreciation can be carried forward in future years to be set off against
income.
Business losses can be carried forward for eight years for set off against subsequent
years’ business profits.
35
5)
Preliminary Expenditure :
The company shall be eligible for amortization of preliminary expenditure as specified in
section 35 D of the Act being expenditure on public issue of share subject to meeting the
conditions and limits specified in that section.
Rebate
6)
As per Section 88 E of the Act, the STT paid in respect of the taxable securities
transactions entered into in the course of business would be eligible for rebate from the
amount of income-tax on the income chargeable under the head “Profits and Gains of
Business or Profession” arising from taxable securities transactions.
7)
MAT Credit
Under section 115 JAA of the Act, credit is allowed in respect of any Minimum Alternate Tax
(‘MAT’) paid under section 115 JB of the Act for any assessment year commencing on or
after April 1st 2006. Tax credit eligible to be carried forward will be the difference between
MAT paid and the tax computed as per the normal provisions of the Act for that assessment
year. Such MAT credit is allowed to be carried forward for set off purposes up to 7 years
succeeding the year in which the MAT credit is allowable.
8)
Miscellaneous
In accordance with provisions of Section 35 DD of the Act, expenditure incurred for the
purpose of amalgamation or demerger of an undertaking, the company shall be allowed a
deduction of an amount equal to one fifth of such expenses for each of the five consecutive
previous years beginning with the previous year in which the amalgamation or dermger takes
place.
B.
B.1
1)
Key benefits available to the Members of the Company under the ‘the Act’
Resident Members :
Dividend income:
Dividend (both interim and final) income, if any, received by the resident shareholder from the
domestic company shall be exempt under Section 10(34) read with Section 115O of the Act.
2) Capital gains:
Capital assets are to be categorized into short-term capital assets and long-term capital
assets based on the period of holding. Shares held in a Company or any other securities listed
on a recognized stock exchange in India or units of UTI and specified Mutual Fund/zero coupon
Bonds are considered as long-term capital assets if these are held for a period exceeding 12
months. Capital gains arising on transfer of long-term capital assets are considered as ‘longterm capital gains’. Capital gains arising on transfer of these assets held for a period of 12
months or less are considered as ‘short-term capital gains’.
Section 48 of the Act, prescribes the mode of computation of capital gains. It provides
for deduction of cost of acquisition/improvement and expenses incurred wholly and exclusively in
connection with the transfer of a capital asset, from the sale consideration to arrive at the amount
of capital gains. However, in respect of long-term capital gains, for resident shareholders it offers
a benefit by permitting substitution of cost of acquisition/improvement with the indexed
cost of acquisition/improvement, which adjusts the cost of acquisition/improvement by the
prescribed cost inflation index.
36
Long-term capital gains arising on transfer of equity shares or units of an equity oriented
fund (as defined) which has been set up under a scheme of a Mutual Fund specified under Section
10 (23D), on or after October 1, 2004 are exempt from tax under Section 10 (38) of the Act
provided the transaction is chargeable to Securities Transaction Tax (STT). However, this gain
is to be considered for the purpose of book profits subject to tax under Section 115JB of Income
Tax Act for corporate members.
Under the provisions of Section 112 of the Act, long-term capital gains, which are not
exempt under Section 10(38), are subject to tax at the rate of 20 per cent (plus applicable
surcharge on tax and education cess on tax and surcharge), in case where indexation benefit
is claimed. However, under the proviso to Section 112 (1), if the tax on long-term capital gains
arising on transfer of listed securities or units or zero coupon bonds computed at the rate of 20
per cent (plus applicable surcharge on tax and education cess on tax and surcharge) after
availing the benefit of indexation exceeds the tax on the long-term capital gain computed at
the rate of 10 per cent (plus applicable surcharge on tax and education cess on tax and
surcharge) without availing the benefit of indexation, then such excess tax is ignored for the
purpose of computing the tax payable on the capital gains.
Under the provisions of Section 111A of the Act, short-term capital gains arising on sale
of equity shares or units of equity oriented mutual fund (as defined) under Section 10 (23D), on
or after October 1, 2004, are subject to tax at the rate of 10 per c e n t (plus a p p l i c a b l e
s u r c h a r g e o n t a x a n d e d u c a t i o n c e s s o n t a x a n d surcharge), provided the transaction is
chargeable to STT.
Short-term capital loss suffered during the year is allowed to be set-off against shortterm as well as long-term capital gains of the said year. Balance loss, if any, could be carried
forward for eight years for claiming set-off against subsequent years’ short-term as well as longterm capital gains.
Long-term capital loss suffered during the year is allowed to be set-off against longterm capital gains. Balance loss, if any, could be carried forward for eight years for claiming
set-off against subsequent years’ long-term capital gains.
As per Section 54EC of the Act and subject to the conditions specified therein, longterm Capital Gains which are not exempt under Section 10(38) of the Act shall not be chargeable to tax in
the proportion of capital gains, which are invested in certain notified bonds within six months from
the date of transfer. If the Company transfers or converts the notified bonds into money (as
stipulated therein) within a period of three years from the date of its acquisition, the amount of
gains exempted earlier would be chargeable to tax as long-term capital gains in such year. The
bonds specified for this Section are bonds issued by, National Highway Authority of India (NHAI), and
Rural Electrification Corporation Ltd.(REC) after 1st April 2006 subject to a limit of Rs. 50 Lakhs in
one financial year.
Where the benefit of section 54EC has been availed of on investments in the notified bonds, a
deduction from the income with reference to such cost shall not be allowed under section 80C of
the Act.
As per the provisions of Section 54F of the Act and subject to conditions specified therein,
any long-term capital gains (other than on residential house ) which are not exempt under
Section 10(38) of the Act, arising to an individual or Hindu Undivided Family are exempt from
capital gains tax if the net sales consideration is utilized, within a period of one year before, or two
years after the date of transfer, in purchase of a new residential house, or for
construction of residential house within three years from the date of transfer. Provided that the
37
individual should not own more than one residential house at the time of such transfer. If the
residential house in which the investment has been made is transferred within a period of three
years from the date of its purchase or construction, the amount of capital gains tax exempted
earlier would become chargeable to tax as long term capital gains in the year in which such
residential house is transferred. Similarly, if the shareholder purchases within a period of two
years or constructs within a period of three years after the date of transfer of capital asset, another
residential house (other than the new residential house referred above), then the original
exemption will be taxed as capital gains in the year in which the additional residential house is
acquired.
3) Rebate:
As per Section 88E of the Act, the STT paid in respect of the taxable securities transactions
entered into in the course of business would be eligible for rebate from the amount of income-tax on the
income chargeable under the head ‘Profits and Gains of Business or Profession’ arising from
taxable securities transactions.
B.2 Key Benefits available to Non-Resident / Non-Resident Indian Member (other than FIIs
and Foreign Venture Capital Investors)
1) Dividend income:
Dividend (both interim and final) income, if any, received by the non-resident/non- resident
Indian shareholders from the domestic company shall be exempt under Section 10(34) read
with Section 115-O of the Act.
2) C a p i t a l gains:
Benefits outlined in Paragraph B.1(2) above are also available to a non- resident/nonresident Indian shareholder except that under first proviso to Section48 of the Act, the capital
gains arising on transfer of capital assets being shares of an Indian Company need to be
computed by converting the cost of acquisition, expenditure in connection with such transfer and
full value of the consideration received or accruing as a result of the transfer into the same
foreign currency in which the shares were originally purchased. The resultant gains thereafter
need to be reconverted into Indian currency. The conversion needs to be at the prescribed rates
prevailing on dates stipulated. Further, the benefit of indexation is not available to non-resident
shareholders.
3) Rebate:
As per Section 88E of the Act, the STT paid in respect of the taxable securities transactions entered into
in the course of business would be eligible for rebate from the amount of income-tax on the
income chargeable under the head ‘Profits and Gains of Business or Profession’ arising from
taxable securities transactions.
4) T a x Treaty Benefits:
As per Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to
the extent they are more beneficial to the non- resident/non-resident Indian shareholder.
Thus, a non-resident/non-resident Indian shareholder can opt to be governed by the beneficial
provisions of an applicable tax treaty.
38
5) Capital gains tax – Options available to a Non-Resident Indian under the Act:
Where shares have been subscribed to the convertible foreign exchange – Option for taxation
under Chapter XII-A of the Act.
Non-Resident Indians [as defined in Section 115C(e) of the Act], being
shareholders of an Indian Company, have the option of being governed by the provisions of Chapter XII-A of
the Act, which inter alia entitles them to the following benefits in respect of income from shares
of an Indian company acquired, purchased or subscribed to in convertible foreign exchange.
According to the provisions of section 115D read with Section 115E of the Act and
subject to the conditions specified therein, long term capital gains arising on transfer of an Indian
company’s shares, will be subject to tax at the rate of 10 percent (plus applicable surcharge and education
cess), without indexation benefit but with protection against foreign exchange fluctuation. No
deduction in respect of any expenditure or allowance shall be allowed under any provision of this
Act in computing the investment income of a non-resident Indian.
According to the provisions of section 115F of the Act and subject to the conditions
specified therein, gains arising on transfer of a long term capital asset being shares in an Indian
company shall not be chargeable to tax if the entire net consideration received on such transfer
is invested within the prescribed period of six months in any specified asset or savings certificates
referred to in section 10(4B) of the Act. If part of such net consideration is invested within the
prescribed period of six months in any specified asset or savings certificates referred to in Section
10(4B) of the Act then such gains would not be chargeable to tax on a proportionate basis. For this
purpose, net consideration means full value of the consideration received or accruing as a result of
the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with
such transfer.
Further, if the special asset or savings certificate in which the investment has been made is
transferred or converted into money within a period of three years from the date of investment, the
amount of capital gains tax exempted earlier would become chargeable to tax as long term capital
gains in the year in which such specified asset or savings certificates are transferred.
As per the provisions of Section 115G of the Act, Non-Resident Indians are not obliged
to file a return of income under Section 139(1) of the Act, if their only source of income is
income from investments or long term capital gains earned on transfer of such investments or
both, provided tax has been deducted at source from such income as per the provisions of
Chapter XVII-B of the Act.
Under Section 115H of the Act, where the Non-Resident Indian becomes
assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer,
along with his return of income for that year under Section 139 of the Act to the effect that the
provisions of the Chapter XII-A shall continue to apply to him in relation to such investment
income derived from the specified Assets for t h a t y e a r a n d s u b s e q u e n t a s s e s s m e n t
y e a r s u n t i l s u c h a s s e t s a r e t ransferred or converted into money.
As per the provisions of Section 115I of the Act, a Non-Resident Indian may elect not to be
governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of
income for that assessment year under Section 139 of the Act, declaring therein that the
provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his
total income for that assessment year will be computed in accordance with the other provisions of
39
the Act.
6)
Miscellaneous:
As per section 10(38) of the Act, long-term capital gains arising from the transfer of
long-term capital asset being an equity share of the Company, where such transaction is
chargeable to securities transaction tax, will be exempt in the hands of the shareholder.
As per Section 54EC of the Act and subject to the conditions specified therein, longterm Capital Gains which are not exempt under Section 10(38) of the Act shall not be chargeable to tax in
the proportion of capital gains, which are invested in certain notified bonds within six months from
the date of transfer. If the Company transfers or converts the notified bonds into money (as
stipulated therein) within a period of three years from the date of its acquisition, the amount of
gains exempted earlier would be chargeable to tax as long-term capital gains in such year. The
bonds specified for this Section are bonds issued by, National Highway Authority of India (NHAI), and Rural
Electrification Corporation Ltd.(REC) after 1st April 2006 subject to a limit of Rs. 50 Lakhs in one
financial year.
As per section 54F of the Act, long- t e r m Capital Gains (in cases not covered under
section 10(38)) arising on the transfer of the shares of the Company held by an individual or
Hindu Undivided Family (HUF) will be exempt from capital gains tax if the net consideration is
utilised, within a period of one year before, or two years after the date of transfer, in the purchase
of a residential house, or for construction of a residential house within three years. Such benefit
will not be available. If only a part of the net consideration is so invested, so much of the capital
gain as bears to the whole of the capital gain, the same proportion as the cost of the new
residential house bears to the net consideration, will be exempt.
As per Section 74 Short-Term capital loss suffered during the year is allowed to be
set-off against short- term as well as long-term capital gains of the said year. Balance loss, if
any, could be carried forward for eight years for claiming set-off against term as well as long –
term capital gains. Long Term capital loss suffered during the year is allowed to be set-off
against long-term capital gains. Balance loss, if any, could be carried forward for eight years
for claiming set-off against subsequent years’ long – term capital gains.
As per section 111A of the Act, short-term capital gains arising from the sale of equity shares
of the Company transacted through a recognized stock exchange in India, where such transaction
is chargeable to securities transaction tax will be taxable at the rate of 10% (plus applicable
surcharge and education cess).
B.2.1
Foreign Institutional Investors (FIIs)
1) In terms of section 10(34) of the Act, any income by way of dividends referred to in section
115O (i.e. dividends declared, distributed or paid on or after 1st April 2003) received on the
shares of the company is exempt from tax.
2) In terms of section 10(38) of the Act, any long term capital gains arising to an investor from transfer
of long-term capital asset being an equity share in a company or a unit of an equity-oriented fund
would not be liable to tax in the hands of the investor If the following conditions are satisfied:
2004;
-
The transaction of sale of such equity share is entered into on or after 1st October,
The transaction is chargeable to securities transaction tax as explained below.
40
3)
In terms of section 88E of the Act, the securities transaction tax paid by the
shareholder in respect of taxable securities transactions entered into in the course of his
business would be eligible for rebate from the amount of income-tax on the income chargeable
under the head “Profit and gains of business or profession” arising from such taxable securities
transactions computed based on average tax rate.
4)
The income by way of short-term capital gains / long-term capital gains realized by FIIs
on sale of shares in the company would be taxed at 30% / 10% respectively, as per section
115AD of the Act. (However, in respect of short term capital gains referred to in section 111A the
tax rate applicable will be 10%). The benefit of indexation and foreign currency fluctuation
protection as provided by section 48 of the Act are not applicable to a FII.
5)
Under section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax
treaty to the extent they are more beneficial to the non-resident. Thus, a non-resident can opt to be
governed by the provisions of the Act or the applicable tax treaty, whichever is more beneficial.
6)
As per Section 74 Short-term capital loss suffered during the year is allowed to be set-off
against short-term as well as long-term capital gains of the said year. Balance loss, if any, could
be carried forward for eight years for claiming set-off against subsequent years’ short term as well
as long term capital gains. Long-Term capital loss suffered during the year is allowed to be setoff against long- term capital gains. Balance loss, if any, could be carried forward for eight years
for claiming set-off against subsequent years’ long-term capital gains.
B.2.2 Venture Capital Companies / Funds
Under section 10(23 FB) of the Act, venture capital companies/funds registered with Securities
and Exchange Board of India, which are set up for investment in venture capital undertaking (as
defined) subject to the conditions specified, are eligible for exemption from income tax on all
their income, including dividend from and income from sale of shares of the company. However,
income received by a person out of investments made in a venture capital company or in a
venture capital fund shall be chargeable to tax in the hands of such person in the manner laid
down in Section 115 U.
B.2.3 Mutual Funds
Under section 10 (23 D) of the Act, any income of Mutual funds set up by Public Sector Banks
or Public Financial Institutions or Mutual Funds registered under the Securities and Exchange
Board of India Act, 1992 or regulations made there under or Mutual Funds authorized by the
Reserve Bank of India, subject to the conditions specified, would be exempt from income tax.
B.2.4 Benefits to company and shareholders under the Wealth Tax Act, 1957
Shares of the company held by the shareholder is not treated as an asset within the meaning of
section 2(ea) of Wealth Tax Act, 1957. Hence, shares are not liable to wealth tax.
Notes :
1.
All the above benefits are as per the current tax law as amended by the Finance Act,
2006 and proposed provisions as per Finance Bill, 2007.
2.
The above statement of possible tax benefits sets out the provisions of law in a
summary manner only and is not a complete analysis or list of all potential tax consequences.
41
3.
The stated benefits will be advisable only to the sole/first named holder in case joint
holders hold the shares.
4.
In respect of non-residents, the tax rates and the consequent taxation mentioned above
shall be further subject to any benefits available under the Double Taxation Avoidance
Agreements, if any, between India and the country in which the non-resident has fiscal
domicile.
5.
In view of the individual nature of tax consequences, each investor is advised to consult
his/her own tax advisor with respect to specific tax consequences of his/her participation in the
scheme.
FOR SHAH & ASSOCIATES,
CHARTERED ACCOUNTANTS
MUMBAI, 27.4.2007
PARTNER
42
VIII
BUSINESS
INDUSTRY OVERVIEW
Market Size:
As per a Nasscom McKinsey report, the global Offshore BPO industry has grown rapidly at a 43%
CAGR from $ 2.3 billion in 2001 to $ 11.4 billion in 2005. The Indian ITES-BPO exports have
grown at a CAGR of 53% from $ 0.6 billion in 2000 to $ 5.1 billion in 2005. This report has
estimated that the addressable Global Offshore BPO is approximately $ 150 billion. Another report
by IDC shows that the BPO market achieved revenue of $ 382 billion in 2004 and is expected to
grow to $ 641 billion by 2009 with a 10.9% CAGR.
captured in the next 4 years as the BPO market is expected to increase in size and gain in stature
with $ 55 billion expected to be offshored to low cost offshore locations by 2010.
Emerging trends:
Suppliers with Global delivery in low cost offshore locations are likely to benefit the most as onsite
players with delivery locations only in the high cost countries in the developed economies would
find it increasing difficult to withstand the competitive pricing pressures.
The market is also dominated by bigger players who have a good mix of on-shore and off-shore
capabilities. This trend is driving the Global companies to make bigger offshore acquisition to
acquire delivery capabilities particularly in India and Philippines. Indian companies are trying to
gain Global stature through building up delivery centers across the Globe and by going for
acquisitions for scale, cross segment expansion and to enter new markets.
Off-shoring is no longer the preserve of large corporations, it has now been embraced by the mid
market segment as well. As a result of this, the size of the deals is getting smaller.
The competitive landscape is changing as well. Suppliers are moving away from providing just
transaction processing services to provide comprehensive and customized solutions to clients. The
competitive landscape is changing as well. Clients are increasingly preferring suppliers who can
add more value in their businesses by reengineering processes rather than suppliers who simply
out-source/off-shore them to cheaper destinations.
Accordingly, companies that are able to differentiate and innovate in multiple areas like ability to
provide customized solutions, business process consulting services, alternate delivery capabilities,
ability to innovate in various areas like business models, delivery models, pricing, processes are
likely to be the leaders in the changing competitive scenarios by surviving the pricing pressures
from clients.
Most of the current off-shoring is happening in the Banking and Financial Services, Retail, Travel,
Telecom, Auto and in functional services like Customer Care, F&A and HR. These industries still
have a lot of potential for off-shoring. The emerging industries for off-shoring are Education,
Transportation, and High Tech industries. New service lines like procurement, training and product
engineering are evolving.
43
Newer markets are also opening up. Of late, off-shoring growth rate of Europe is higher than the
US. The East Asian market which was virtually unexplored is opening up. These new markets with
non-English languages present newer challenges to suppliers.
New Delivery destinations:
In the last ten years, IT and BPO industries have seen substantial off shoring. India has been the
leading off shoring destination accounting for 46% of the Global BPO industry. Customers have
increasingly started preferring Philippines for voice and India for non voice. Also, the suppliers are
moving to Tier II and Tier III cities to retain the cost arbitrage and to control attrition. Various
countries are emerging as alternate delivery locations and are expected to provide stiff competition
to India. China is growing at a faster rate and is preferred for non voice service. Countries like
Korea and Taiwan are emerging to satisfy the requirements of East Asian market. Countries like
Czech, Hungary, Poland are preferred by the European Market for their cultural affinity. Countries
like Russia have an advantage for high end statistical analysis and South Africa is preferred for
actuarial analysis. Locations like Ireland and the Caribbean are playing their near shore cards to
gain advantage. Mexico, Argentina and Brazil are ideally positioned to explore the attractive
Spanish market. Going forward, many locations like Malaysia, Thailand, Romania etc. are
expected to emerge with the governments in the developing economies trying to attract this
industry, particularly due to the fact that it is employment friendly. The suppliers have shown
increasing interest to explore new locations to maintain the cost arbitrage levels compared to
developed countries and to look out for skilled labor pool.
Moving up the value-chain:
Knowledge Process Outsourcing (KPO) is the next frontier for Global Sourced BPO which requires
application of knowledge, judgment and experience in particular lines of business. The KPO
potential is expected to be around USD 17 billion by 2010 and India is at present dominating with
71% market share (source: Evalueserve). Several KPO opportunities like Legal services,
Engineering R&D, Content Development, Market Research, Analytics are emerging.
BUSINESS OVERVIEW
This changing business environment provides unique opportunities to players like HTMT Global
Solutions Limited.
The Company was incorporated on 13th January 1995 as Tele Video Communications India Pvt.
Limited. The Company was converted into a public limited company on 20th May 1996. The name
of the Company was changed to HTMT Technologies Limited and then to HTMT Global Solutions
Limited vide fresh Certificates of Incorporation consequent upon change of name dated 11th
July 2006 and 12th March 2007 respectively issued by the Registrar of Companies,
Maharashtra, Mumbai. At the time of incorporation, the main objects of the Company were the
carrying on of activities relating to Media business. The objects of the Company were amended by
introducing objects relating to Information Technology/Information Technology Enabled Services
(IT/ITES) pursuant to the possible demerger of the IT/ITES undertaking of Hinduja TMT Limited
into the Company vide Special Resolution passed by the shareholders at the Extra Ordinary
General Meeting held on 31st March 2006 and confirmed by the Registrar of Companies,
Maharashtra on 19th May 2006.
The Company entered into the Scheme of Arrangement and Reconstruction under Sections
391 to 394 and other applicable provisions of the Companies Act, 1956 wi th Hinduja TMT
Limited and their respective Shareholders and Creditors (“Scheme”) for the demerger of t h e
IT/ITES Undertaking of Hinduja TMT into the Company on a going concern basis and
44
reduction of the issued, subscribed and paid up share capital of the Company.
The Appointed Date for the demerger as per the Scheme was 1st October 2006. The Scheme was
sanctioned by the Hon’ble High Court of Judicature at Bombay vide its Order dated 23rd February
2007, which was filed with the Registrar of Companies, Maharashtra on 7th March 2007,
which is the Effective Date of the Scheme.
Clause 27 of the Scheme, as sanctioned by the Hon’ble High Court of Judicature at Bombay
provides that the equity Shares of the Resulting Company, viz. HTMT Global Solutions Limited
shall, subject to the execution of the listing agreement and payment of the appropriate fee, be
listed on the National Stock Exchange of India Limited, the Bombay Stock Exchange Limited and
on such other recognized stock exchange(s) in India, if any, as may be decided by the Board of
Directors of the Resulting Company on consideration of all relevant factors.
The Company has positioned itself to offer Business Transformation Outsourcing solutions in key
verticals like Healthcare, Telecom, Banking and Financial Services, Consumer Electronics &
Packaging and Transportation & Logistics. The Company’s positioning is line with its Vision “To be
a globally preferred Business Transformation Partner for our clients through innovative outsourcing
solutions”. The Company expects to achieve this by having its total focus in making its customers
competitive.
To offer end to end comprehensive solutions which can transform the business processes of the
Customer and make them competitive, HTMT Global Solutions’ objective will be to understand the
industry better than the Customer. Knowing the industry challenges and the situation of the
Customer, HTMT Global will offer Customized Business Transformation Solutions to its Customers
which will make them competitive. This strategy combined with our ability to offer solutions globally
will enable HTMT Global to differentiate itself from Competition.
In many ways, HTMT Global has been a pioneer in its field. HTMT Global identified the BPO
potential in early 2000 which enabled it to emerge as one of the first movers in this industry. HTMT
Global was also the first to venture into overseas acquisitions. It pioneered the Global delivery
through its early entry in Philippines. Once the Philippines acquisition was integrated, HTMT
Global acquired call centres in US and Canada in 2004. As late as November 2006, HTMT Global
completed another acquisition in the US, a 30 year old call centre company called Affina. M&A has
been a major component of HTMT Global’s inorganic growth strategy. The successive execution of
that strategy has enabled HTMT Global to grow at above industry rates. The latest initiative has
been its entry into the India domestic market, where it has made its mark by executing several
large outsourcing contracts with Indian business houses.
The business model of the Company ranges from being an India offshore centric vendor to the
Global Delivery off shoring partner having capabilities to provide outsourcing services from
onshore, near shore & offshore locations both in BPO and call centre.
The Company has an employee strength of around 9500 with offices in North America, London &
Paris in Europe and 20 delivery centers in Bangalore, Mysore, Mumbai, Chennai & Hyderabad in
India, Lyndhurst, Peoria, St Louis, Waterloo, El Paso in the United States, Montreal & Toronto in
Canada, Cyber City in Mauritius and Manila in Philippines who constantly engage in delivering a
wide range of high quality outsourcing services to over 65 leading companies across the world.
The 20 delivery centres in 5 countries across the world makes the Company a true international
player having Global Delivery capabilities. The Company has pioneered the art of opening up
operations in Tier II and Tier III locations. The Company will leverage on this strength to
continuously provide cost arbitrage to its customers and to scale up its employee talent base. The
Company will also plan to strengthen its Global Delivery by having alternate delivery locations
45
across the globe to focus on new markets, opportunities and to reduce the country risk in
consistently delivering to its Customer.
As part of its organic growth strategy and to enhance its global delivery model, the Company
utilizes its delivery centers in USA, Canada, India, Philippines and Mauritius to service the needs
of its Global Customers. Besides using Mauritius centre for executing additional claim processing
business for the most referenced and satisfied US based Healthcare insurance client, this centre
also acts as a Business Continuity Planning (BCP) centre for the Company’s BPO operations. A
presence in Mauritius also enables the Company to offer French based BPO for potential
customers in France given the availability of French speaking skills in Mauritius and helps the
Company overcome cross country related issues.
The Company manages processes across several verticals including Telecom, Healthcare
Insurance, Banking & Financial Services, Consumer Electronics, Products Energy & Utilities etc.
HTMT Global has proven expertise in acquiring, integrating and growing the acquired entities. This
enabled HTMT Global to grow exponentially in the past five years. HTMT Global will continue to
inorganically grow its business so as radically transform itself to provide Business Transformation
Solutions to its Customers.
.
BUSINESS STRATEGY
The Company’s mission is to make its Customer’s Competitive by offering Business
Transformation Outsourcing (BTO) solutions in select verticals including Healthcare, Telecom,
Customer Electronics & Packaging, Banking and Financial Services and Transportation and to
secure a global presence. It will strive to:
•
•
•
•
•
•
•
•
•
•
Position and Brand itself globally as a Business Transformation Solutions (BTO) Provider
Build on Consulting and Domain skills in select verticals
Build a Robust Global Delivery
Capture emerging opportunities in advance (e.g. Spanish language capability, LPO )
Provide a full range of business solutions and professional resources to meet customer’s
information systems requirements in select verticals
Provide services and products of highest international quality.
Provide challenging and rewarding opportunities for employees to excel.
Improve the quality of life in the community it serves.
Offer High Quality Innovative and Value for money solutions across multiple technology
platforms and businesses in IT and BPO space to their customers.
Acquire business to radically transform itself to be a BTO player.
The Company will pursue an exceptional business growth strategy by:
•
•
•
•
•
Striving to transforming the customer experience
Continuously fine tuning the service offerings for edge over rivals.
Continuous improvement upon the key profit drivers – Quality / Productivity / Cost
advantage
Remaining Alert – Anticipating changes, identifying and exploiting opportunities
Striving to create or acquire new services/capabilities and adopt new technologies
46
IX
HISTORY OF THE COMPANY
Brief History and changes in Memorandum of Association
The Company was incorporated on 13th January 1995 as Tele Video Communications India Pvt.
Limited with an authorized share capital of Rs. 2500000 divided into 25000 Equity Shares of Rs.
100/- each and an issued, subscribed and paid up capital of Rs. 2000 divided into 20 Equity shares
of Rs. 100/- each. The Registered Office of the Company has been situated in the state of
Maharashtra. At the time of incorporation, the main objects of the Company were to carry out
activities relating to media business. The Company was converted into a public company on 20th
May 2006. The Company’s name was changed to Hinduja Technologies Limited and thereafter to
HTMT Technologies Limited and further to HTMT Global Solutions Limited, vide fresh certificates
of incorporation issued by the Registrar of Companies, Maharashtra on 19th June 2006, 11th July
2006 and 12th March 2007 respectively.
The authorised share capital of the Company was increased from Rs. 2500000 to Rs. 60000000,
divided into 600000 Equity Shares of Rs. 100/- each, by resolution passed by the members on 22nd
May 1995. The issued, subscribed and paid up share capital of the Company was increased from
Rs. 2000 divided into 20 Equity Shares of Rs. 100/- each to Rs. 400,02,000 divided into 400020
Equity Shares of Rs. 100/- each on 4th October 1995 by a rights issue. The issued, subscribed and
paid up share capital of the Company was reduced from Rs. 4,00,02,000 divided into 400020
Equity Shares of Rs. 100/- each to Rs. 2500000 divided into 25000 Equity Shares of Rs. 100/each vide Order dated 28th June.2000 of the Hon’ble High Court of Judicature at Bombay in
Company Application No. 260 of 2000 for reduction of capital.
The Company became a wholly owned subsidiary of Hinduja TMT Limited in February 2006. The
objects of the Company were amended by introducing objects relating to Information
Technology/Information Technology Enabled Services (IT/ITES) pursuant to the possible demerger
of the IT/ITES undertaking of Hinduja TMT Limited into the Company vide special resolution
passed by the shareholders at the Extra Ordinary General Meeting held on 31st March 2006 and
confirmed by the Registrar of Companies, Maharashtra on 19th May 2006.
The authorised Share Capital of the Company was amended by subdividing the face value of the
shares from Rs. 100/- each to Rs. 10/- each vide approval of the members sought at the Extra
Ordinary General Meeting of the members held on 17th June 2006. Accordingly the issued,
subscribed and paid up capital of the Company became Rs. 2500000 divided into 250000 equity
Shares of Rs. 10/- each.
The Hon’ble High Court of Judicature at Bombay vide Order dated 23rd February 2007 approved
the Scheme of Arrangement and Reconstruction for Demerger of the IT/ITES Undertaking of
Hinduja TMT Limited into the Company and reduction of the issued, subscribed and paid up share
capital of the Company (Scheme). Pursuant to the Scheme becoming effective on 7th March 2007
(the Appointed Date of the Scheme being 1st October 2006), the business of Hinduja TMT stands
transferred to, and is being carried out by the Company. Pursuant to the Scheme, the authorised
Share Capital of the Company was increased from Rs. 60000000 to Rs. 250000000 divided into
25000000 Equity Shares of Rs. 10 each.
Pursuant to the Scheme, on 10th April 2007 the Board of Directors of the Company issued and
allotted 20538003 Equity Shares of Rs. 10/- each to the shareholders of Demerged Company
whose names appeared in the Register of Members of the Demerged Company on the Record
Date viz.9th April 200 in the Demerger Share Entitlement Ratio of 1 Equity Share of Rs. 10/each credited as fully paid up of the Company for every 2 equity shares of Rs.10/- each held by
such member in the Demerged Company.
47
After allotment of 2,05,38,003 equity shares by the Company, the issued, subscribed and paid up
share capital of the Company reduced from Rs.207880030 consisting of 20788003 Equity Shares
of Rs. 10/- each fully paid-up to Rs. 205380030 consisting of 20538003 Equity Shares of Rs.10/each fully paid-up and the reduction was effected by the cancellation of the pre-arrangement paidup share capital of 250000 equity shares of Rs. 10/- each fully paid-up, held by the Demerged
Company, pursuant to Clause 32 of the Scheme in accordance with the provisions of Sections 100
to 103 of the Companies Act 1956.
Main Objects of the Company:
1.
To construct, install, operate, design, fabricate, purchase, sell, import, export, trade,
engineer, assemble, service, repair, exploit, convert, turn to account, rent out, maintain or in any
other manner exploit, or deal in audio, video and / or date signal broadcasting, transmission and /
or reception systems / networks or part/s thereof which may include but shall not be limited to
wired / wireless Cable TV Systems, Satellite Television Channels, Entertainment Channels in all
languages, Educational Channels, Microwave Multichannel Distribution Systems (MMDS), MDS,
Fibre Optic Systems, Laser Beam Systems, SMATV, Telephony, Personal Cellular Systems
(PCS), data transmission / receptions by utilizing, using, hiring, chartering, renting or in any other
manner exploiting Satellite Transponders, Satellite Transmission / reception, processing of video
or any other kind of signals for audio and visual communications for information / education /
entertainment purposes.
1a.
To carry out and undertake all activities, business, etc relating to Information Technology
(IT), Information Technology enabled Services (IteS), Business Process Outsourcing, Knowledge
Process Outsourcing, Call Centers and for that purpose to set out all facilities and infrastructure
etc in India and abroad.
1b.
To develop, implement, manufacture, convert, alter, modify, export, import, purchase, sell
or lease and otherwise deal in hardware, software and allied equipment including for Computer
Aided Design/ Computer Aided Manufacturing/ Computer Integrated Manufacturing and
Telecommunications and to install or hire computer and allied equipment and to run or conduct
bureau of computer services and in particular to develop, design, programme, conduct feasibility
studies and to act as advisors, consultants, retainers, trainers in all capacity and all matters and
problems relating to management, marketing in India and abroad.
1c.
To manufacture, develop, import, export, buy, sell, distribute, repair, convert, alter, modify,
take or let on hire, lease and otherwise deal in all kinds of electronic articles, products and devices
and their accessories, stores, spare parts, components, assemblies, and all kinds of instruments,
apparatus, appliances, software and gadgets, and used for in connection with any of the aforesaid
in India and abroad.
1d.
To act as Internet Service providers to its subscribers subject to approval of Department of
Telecommunications (DOT) / Telecommunications Regulatory Authority of India (TRAI) /other
authorities as may be approved by the Government from time to time and to construct, install,
operate, service, repair, exploit, convert, turn to account, rent out, maintain or in any other manner
exploit or deal in audio, video and/or date signal broadcasting, transmission and / or reception
systems / or networks or part /s thereof which may include but shall not be limited to wired /
wireless Cable T.V. systems, satellite Television Channels, Entertainment Channels in all
languages, Educational Channels, Microwave Multichannel Distribution Systems (MMDS), MDS,
Fibre Optic Systems, Laser Beam System, SMATV, Telephone, Personal Cellular Systems (PCS),
Data Transmission / Receptions by utilizing, using, hiring, chartering, renting or in other manner
48
exploiting satellite Transporters, Satellite Transmission/Reception, Processing of Video or any kind
of signals for Audio and Visual communications for information/education/entertainment purposes
in India and abroad.
1e.
To carry out and undertake all activities, business, etc relating to E-commerce and for that
purpose to set out all facilities and infrastructure etc in India and abroad.
Subsidiaries of the Company and their businesses:
The Company did not have any subsidiary/ies prior to the Demerger. Upon sanction by the High
Court of Judicature at Bombay, of the Scheme of Arrangement and Reconstruction between
Hinduja TMT Limited (Demerged Company) and the Company for the demerger of the Information
Technology/ Information Enabled Services (IT/ITES) Undertaking of Hinduja TMT Limited into the
Company, vide Order dated 23rd February 2007, the following foreign subsidiaries of the IT/ITES
Undertaking of the Demerged Company became subsidiaries of the Company with effect from the
Demerger Appointed Date i.e.1st October 2006
Name of the Business activity
Subsidiary
Source1HTMT
Marketing and providing
Inc
customer
contact
services to its clients
primarily in the form of
call centres.
The Subsidiary’s Board Company’s
of Directors
holding %
Mr. R.P.Hinduja
100
Mr. D.G.Hinduja
Mr. Ali Ganjei
Mr. M.S.Varadan
AFFINA, LLC
N.A
100
Mr. D.G.Hinduja
Mr. Ashok Dani
Mr. Venkatesan
Mr.U.M.Nair, Gerant
51
Mr. Pushkar Misra
Mr.M.S.Varadan
Mr. Partha Sarkar
Mr. Virginia B. Viray
100
Providing
Customer
Relationship
Management programs,
integrating
inbound
contact centres, internet,
database,
marketing,
market research, closedloop lead management
HTMT Europe Provision of Information
Limited
Technology consultancy
services.
Hinduja
TMT Providing
Information
France
Technology services and
solutions to its clientele
primarily in the form of
professional IT staffing,
claims
processing,
software
development
and consulting services.
Customer
Providing
customer
Contact Centre contact services to its
Inc
clients primarily in the
form of call centres.
C-Cubed
(Antilles) N.V.
Holding and financing of Zahavi Fiduciary and
group entities
Management
Services
N.V.
51
100
49
C-Cubed B.V.
Holding and financing of Curado Trust
group entities
(Nederland )B.V.
Pacific Horizon Holding and financing of Mr. Fung Kong Yune Kim
group entities
Mr. Somnath Majumdar
Limited
Mr. M.S.Varadan
Mr. Jayechund Jingree
100
100
Shareholders’ Agreement :
There is no separate Shareholders’ Agreement executed between any shareholder and the
Company.
Strategic / Financial Partners and Other Material Contracts:
Other than the contracts mentioned in the section “Documents for Inspection”, the Company does
not have any material contracts other than in the ordinary course of business, nor does it have
any strategic / financial partners.
50
X
MANAGEMENT
The overall management of the Company is vested in the Board of Directors, comprised of
qualified and experienced persons.
Board of Directors as on the date of the Information Memorandum is as follows:
Sr.
No.
1
2
3
4
Other Directorships in public companies
Name, Age, Designation, Father’s
Name,
Address,
Occupation,
Shareholding in the Company
Age : 36 years
Designation: Chairman
Father’s Name: Mr. Prakash P. Hinduja
Address: 13-B, Chemin De la Prevote,
1223 Cologny, Geneva, Switzerland
Occupation: Business
Shareholding in the Company: Nil
1. Hinduja TMT Limited (Co-Chairman)
2. Hinduja Group India Limited
3. Gulf Oil Corporation Limited (Vice
Chairman)
4. Planet E-Shop Holdings India Limited
5. Shop24Seven India Limited
1. Hinduja TMT Limited
2. Ashok Leyland Limited
Age: 35 years
3.Ashok Leyland Project Services Limited
Designation: Director
Father’s Name: Mr. Gopichand P.Hinduja 4.Ennore Foundries Limited
Address: 24, Carlton House Terrace,5.Hinduja Group India Limited
London SW1, United Kingdom
Occupation: Business
1. National Securities Clearing Corporation
Limited
Age: 45 years
2. Asset Reconstruction Company (India)
Limited
Father’s Name: Mr. Prabhakar Chitale
Address: 131, Tanna Residency, Bay View, 3. Gujarat Ambuja Cements Limited
4. Reliance Capital Limited
Veer Savarkar Marg, Prabhadevi,
5. Reliance Genral Insurance Co. Limited
Mumbai 400 025
6. SME Rating Agency of India Limited
Occupation: Profession
1. Hotel Leelaventure Limited
Mr. Anil Harish
2. Pantaloon Retail (India) Limited
Age: 53 years
3. Mahindra Gesco Developers Limited
4. Ador Welding limited
Father’s Name: Mr. D.M. Harish
Address: 13, CCI Chambers, Dinshaw5. Unitech Limited
6. Advani Hotels & Resorts (India) Limited
Wacha Road, Mumbai 400 020
7. Valecha Engineering Limited
8. Mukta Arts Limited
9. Tolani Shipping Company Limited
10. K.C. Maritime (India) Limited
11. Prebone Yamane India Limited
12.Galaxy Entetainment Corp. Limited
13. Mantri Chandak Constructions Limited
51
5
Age: 45 years
Father’s Name: Mr. Dinbandhu Mandal
Address: A-52, Sector 17, Noida 201301
Nil
6
1 Aasia Properties Development Limited
Mr. Kailashchandra Samdani
2 IndusInd Media & Communications Limited
Age: 67 years
Father’s Name: Mr. Ghanshyam Samdani
Address: Flat No.302, 3rd floor,
‘Shantikutir”, 10th Road, Santacruz (E),
Mumbai – 400 055
Brief Biographies of the Directors:
1. Mr. Ramkrishan P. Hinduja:
Mr. R.P. Hinduja, Chairman of the Board, is a graduate of the Wharton School of Business,
University of Pennsylvania. He is credited with incubating successful start-ups in the fields of
Telecom and Cable TV business of the HTMT group and spearheading and developing
HTMT’s technology, media and telecom activities worldwide with leading market shares in their
respective areas of operations. He has worked with Amas S.A., Geneva as Analyst and with
Arthur Andersen S.A., Geneva as Auditor. Mr. R.P. Hinduja, who has been a director of the
Demerged Company since 1994, holds director positions in several companies and is the CoChairman of the Demerged Company.
2. Mr. Dheeraj G. Hinduja:
Mr. D.G. Hinduja is an MBA from the University of London. He possesses rich experience of
having worked with Amas, UK as Market Analyst and with Ashok Leyland Limited (Project
Development). He has been a Member of the Steering Committee of Hinduja TMT Limited,
the Demerged Company which oversaw the operations of, and provided strategic direction to
the Demerged Company’s business. Mr. D.G. Hinduja holds director positions in several
companies and has been a director of the Demerged Company since 2001.
3. Mr. Rajendra P. Chitale:
Mr. R.P. Chitale is a Chartered Accountant. A director of several companies, Mr. Chitale is a
Partner of M.P. Chitale & Co.,one of the renowned accounting firms in India and a Member of
the Boards of Organizations like National Securities Clearing Corporation Limited and a
former member of National Stock Exchange of India Limited. Mr. Chitale is also the member
of the Governing Board of Insurance Advisory Committee, Insurance Regulatory &
52
Development Authority and the Investor Education & Protection Fund, Government of India.
He has been a Director of the Demerged Company since 2003
4. Mr. Anil Harish:
Mr. Anil Harish is a B.A., LL.B., LL.M. (USA) and has been a Director of the Demerged
Company since 1995. An Advocate, Mr. Anil Harish is a partner of D.M. Harish & Co., a wellknown firm of advocates and possesses over 20 years experience in legal practice,
specializing in Income Tax, FEMA and property matters. A director of several companies, Mr.
Anil Harish is also a former Managing Committee Member of the Income-Tax Appellate
Tribunal Bar Association and a former Managing Council Member of the Chamber of IncomeTax Consultants. He is member of several Committees of the Society of Indian Law Firms
(SILFs) and has written several articles for various publications.
5. Mr. Somabrata Mandal:
Mr. S. Mandal is a Managing Partner of Fox Mandal Little, one of the leading law firms in
India. He is a member of the Supreme Court Bar Association, Delhi High Court Bar
Association, International Bar Association, American Bar Association and Inter Pacific Bar
Association. Mr. Mandal is one of the Indian representatives at the Commission on Arbitration
of the International Chamber of Commerce. He is also the Vice Chairman of the Asia Pacific
Forum and Council member of Section on Legal practice of the International Bar Association.
He has been recently nominated by Asia Law & Practice, a publication from Hong Kong, as a
leading lawyer in India in the field of Mergers & Acquisitions. He has also been nominated by
the Chamber Global as a leading individual in project Finance.
6. Mr. Kailash Chandra Samdani:
Mr. K.C. Samdani is a B.A.,LLB and has been a Director of the Company since 1999. Mr.
Samdani possesses 40 years of experience in the field of law in various capacities Mr
Samdani was a member of the committee constituted by Reserve Bank of India for drafting
legislation on electronic funds transfer and also a member of in-house committee for
standardizing loan documents for large advances by State Bank of India. Mr. Samdani has
attended 14 days training programme in Cambridge, UK in September 1991 on International
Financial Law conducted by the Euromoney, London. Mr. Samdani has regularly delivered
lectures on the subject of recovery and enforcement of securities at RBI Bankers Training
College, SBI Staff College and has also delivered lectures at Central Bank of India Training
College, Federal Bank, Bank of America, IDBI Bank etc. Mr. Samdani is practising as an
advocate.
Borrowing Powers:
Subject to the provisions of the Act and the Articles, and without prejudice to the other powers
conferred by the Articles the Directors shall have the power from time to time at their discretion to
borrow any sum or sums of money for the purpose of the Company, provided that the total amount
borrowed at any time together with the moneys already borrowed by the Company (apart from
temporary loans obtained from the Company’s Bankers in the ordinary course of business) shall
not without the consent of the Company in General Meeting exceed the aggregate of the paid-up
capital of the Company and its free reserves, that is to say, reserves not set apart for any specific
purpose. Subject to the provisions of the Act and the Articles, the Directors may raise and secure
the payment of such sum or sums in such manner and upon such terms and conditions, in all
respects as they think fit and particular by the issue of bonds, perpetual or redeemable,
53
debentures or debenture-stock or any mortgage or charge or other security on the undertaking of
the whole or any part of the property of the Company (both present and future) including its
uncalled capital for the time being.
The members of the Company, at their Extra Ordinary General Meeting held on 5th March
2007, granted their consent to the Board of Directors of the Company to borrow, from time to
time, as they may consider fit, any sums of money, on such terms and conditions as the Board
may deem fit notwithstanding that the monies to be borrowed together with the monies
already borrowed by the Company (apart from temporary loans obtained from the Company's
bankers in the ordinary course of business) will exceed the aggregate of the paid-up share
capital of the Company and its free reserves, that is to say, reserves not set apart for any
specific purpose so that the total amounts of monies so borrowed at any time shall not
exceed the sum of Rs.1000 crore at any time.
Compensation of Managing Director / Whole Time Directors:
The Company does not have a Managing Director or a Whole time Director. The Board of
Directors have, vide resolution dated 31st March 2007, appointed Mr. Partha De Sarkar (Chief
Executive Officer) as Manager of the Company as defined in Section 2(24) of the Act with effect
from 1st April 2007. As per the terms of the resolution, Mr. Sarkar’s term of appointment is for a
period of 5 years with effect from 1st April 2007, on such remuneration as referred in the aforesaid
resolution. The profile of Mr. Partha Sarkar is provided in the section on Key Management
Personnel.
Corporate Governance:
The Company is fully compliant with the provisions of Clause 49 of the Listing Agreement and
the details are as follows:
The Board of Directors of the Company consists of six members, all of whom are Non
Executive Directors, out of which three are Independent Directors.
The Independent
directors
of
the
Rajendra P. Chitale and Mr. Somabrata Mandal
Company
are Mr. Anil
Harish,
Mr.
The Board of Directors has also constituted the Audit Committee and Shareholders/Investors’
Grievance Committee as required under Clause 49 of the Listing Agreement as under:
NAME OF THE COMMITTEE
AUDIT COMMITTEE
MEMBERS
OF
COMMITTEE
(i) Mr. Anil Harish
THE
ii) Mr. Rajendra P. Chitale
(iii) Mr. Ramkrishan P. Hinduja
Mr. Anil Harish
SHAREHOLDERS’/ INVESTORS’
GRIEVANCE COMMITTEE
CATEGORY
Non-Executive and
Independent
Non-Executive and
Independent
Non-Executive
Non-Executive and
Independent
Non-Executive and
Independent
Non-Executive
54
The role, powers, scope of functions and duties of the Audit Committee and Shareholders’ /
Investors’ Grievance Committee of the Board are as per the applicable provisions of the
Companies Act, 1956, Clause 49 of the Listing Agreement and the Code of Conduct of the
Company.
The Board of Directors, at its Meeting held on 7th March 2007 approved the Code of Conduct for
the Members of the Board and Senior Management. The Codes have been uploaded on the
company’s website www.htmtglobal.com
Compliance Report on Corporate Governance:
Particulars
I Board of Directors
(A) Composition of Board
(B) Non-executive Directors’
compensation & disclosures
(C) Other provisions as to
Board and Committees
D) Code of Conduct
II. Audit Committee
(A)Qualified & Independent
Audit Committee
(B)Meeting
of
Audit
Committee
Clause of
Listing
Agreement
Compliance
Status
Yes/No
49 I
49(IA)
49 (IB)
YES
YES
49 (IC)
YES
49 (ID)
49 (II)
49 (IIA)
YES
Remarks
YES
YES
(C)Powers
of
Audit 49 (IIB)
Committee 49 (IIC)
(D)Role of Audit Committee
49 II(D)
(E)Review of Information by 49 (IIE)
Audit Committee
YES
49 (III)
III. Subsidiary Companies
49 (IV)
IV. Disclosures
(A)Basis of related party 49 (IV A)
transactions
YES
(B) Disclosure of Accounting 49(IV B)
Treatment
YES
(C)Board Disclosures-Risk 49 (IV C)
Management
(D)Proceeds from public 49 (IV D)
issues,
rights
issues,
preferential issues etc.
(E)Remuneration
of 49 (IV E)
Directors
YES
Will be complied with after
listing / as required under
the Act
YES
Will be complied after
listing / as required under
the Act
YES
Will be reported in the
Annual Report for the
financial year 2006-2007
N.A.
YES
55
(F)Management
49 (IV F)
YES
(G)Shareholders
49 (IV G)
YES
V.CEO/CFO Certification
49 (V)
YES
VI. Report on Corporate 49 (VI)
Governance
YES
VII. Compliance
YES
49 (VII)
Will be included in the
Changes in the Company’s Board of Directors since inception:
Name of the Director
Date of
Appointment
13.01.1995
13.01.1995
Mr. A. K. Das (First Director)
Mr. Subhas Pramanik (First
Director)
Mr. Kuthoore Venkatsubramanian 04.09.1996
Date of
Resignation
05.07.2001
28.06.1997
Reason / Remarks
Resigned
Resigned
16.10.1999
Resigned
Mr. Bhagwan Punjabi
04.10.1995
28.06.1997
Resigned
Mr. Ashok Mansukhani
28.06.1997
05.07.2001
Resigned
Mr. Jagjit Singh Kohli
28.06.1997
14.05.1999
Resigned
Mr. Kailash Chandra Samdani
14.05.1999
Srinivas Palakodeti
Arun Kumar
05.07.2001
05.07.2001
29.03.2005
31.08.2005
24.03.2005
14 03.2007
Resigned
Resigned
Resigned
Mr. Ravi Mansukhani
29.09.2005
14.03.2007
Resigned
Mr. Anil Harish
05.03.2007
Appointed as Director
05.03.2007
05.03.2007
05.03.2007
05.03.2007
Date of Expiration of the Term of Office of the Directors:
Mr. Kailash Chandra Samdani and Mr. Anil Harish are liable to retire by rotation at the next Annual
General Meeting.
56
Shareholding of Directors:
None of the Directors hold any Equity Shares of the Company.
Interest of Directors:
Mr. Ramkrishan P. Hinduja, Chairman, Mr. Dheeraj G. Hinduja, Mr. Anil Harish and Mr. R. P.
Chitale, Directors, are also Directors of the Demerged Company viz. Hinduja TMT Limited. Other
than the reimbursement of expenses incurred and normal remuneration if any / sitting fees from
the Company, none of the Directors have any interest in the Company.
Management Organization Structure:
Mr. Partha De Sarkar, Chief Executive Officer (CEO) is responsible for the general conduct and
management of the business and affairs of the Company, subject to the superintendence, control
and supervision of the Board of Directors of the Company.
The heads of the following functions and operations report to the CEO:
•
•
•
•
•
•
•
•
•
•
•
•
•
International Operations
Domestic Operations & International Business Development
Global Finance
Legal & Secretarial
Technology
Human Resources
Automation and Process Improvement
Business Development
Quality
M&A and Strategy
US Operations
o President – Source1HTMT
o CEO – Affina
o Client Management
o Sales
Philippines Operations
o President – HTMT Philippines
o COO
Canada Operations
57
Key Management Personnel:
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Shareholding
Mr. Partha De Sarkar, 44
Chief Executive Officer
23rd July 2003
Mr. Sarkar spearheads the HTMT Global team as the Chief Executive
Officer. Prior to this, he held the position of Chief Operating Officer at
Hinduja TMT for 3 years. Mr. Sarkar possesses over 20 years of rich
experience in Customer Service and Operations across diverse
industries like Banking, Financial Services, Healtcare and Insurance. He
has served in executive capacities and handled large initiatives in setting
up and leading complex outsourcing projects across diverse domains.
He was with Deloitte Consulting, GE Capital International Services,
where he set up operations for large remote processing centres in India
to service international clients in US, UK, Australia and the Asia-Pacific
region. Prior to this, he was with Bank of America’s Consumer Banking
business for 9 years. Partha is a post graduate in Management from the
Indian Institute of Management (IIM), Bangalore and has a Master of
Technology degree from the Indian Institute of Technology (IIT), Chennai
1500 Shares
Name
and Mr. Somnath Majumdar, 46
Age:
Designation:
Senior Vice President and Head – Legal & Secretarial
Company Secretary and Compliance Officer
Date
of 1st October 2003
Joining:
Qualifications, Mr. Majumdar heads the Legal and Secretarial function and is also the
Company Secretary and Compliance Officer. Hiks responsibility
Experience
and Details of straddles HTMT Global and its subsidiaries in areas including Corporate
Governance, compliance with corporate laws and regulations including
Previous
Securities and Exchange Board / Stock Exchange regulations, advice on
Employment:
legal matters, business contracts and joint venture / shareholder / share
purchase and other commercial agreements, advice and execution of
mergers, demergers, acquisitions and foreign investments, litigation, etc.
Mr. Majumdar possesses over 22 years of rich experience in Corporate
Secretarial Practice, Law, Management Accounting, Strategic Planning
and Internal Audit and has worked with leading multinational and Indian
business groups like Parke-Davis/Warner Lambert – Pfizer, Larsen &
Toubro. Mr. Majumdar is a Commerce and Law graduate from Bombay
University, a Fellow member of the Institute of Company Secretaries of
India and is also a Chartered Accountant as well as a Cost Accountant.
Shareholding
3000 Shares
58
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Shareholding
Mr. Viswanath R. Rao, 48
Senior Vice President – International Operations
24th April 2006
Mr. Rao is responsible to drive customer loyalty, strengthen company
partnerships and deliver consistently high value to customers for the
overall service delivery processes to international clients based out of
India. He has been instrumental in setting up an offshore claims
adjudication process for a Fortune 150 client which has grown to over
1000 people under his able leadership. Mr. Rao has over 25 years of
experience in the manufacturing and BPO industry. Earlier, he has
served at ABB, Kirloskar AAF. His extensive background and experience
in the BPO industry gives him the perspective to bring operational
excellence combined with customer satisfaction. Mr. Rao is an
Engineering Graduate from the university of Chennai and a Post
Graduate in Executive General Management from the Indian Institute of
Management (IIM) Bangalore
Nil
Name
and Mr. B. N. Narasimha Murthy, 46
Age:
Designation:
Senior Vice President – Domestic Operations and International Business
Development
Date
of 5th December 1996
Joining:
Qualifications, Mr. Murthy is responsible for domestic business acquisitions, delivery
and support and planning of operations. He has shared his vast
Experience
and Details of knowledge and experience in the Company from the international
markets to the domestic markets. Mr. Murthy possesses over 18 years of
Previous
experience. He has worked with leading organizations like Datapro,
Employment:
Global Tele Systems, PCL, Larsen & Toubro. He has been instrumental
in successfully transitioning complex offshore projects in Telecom and
Healthcare to India. Mr. Murthy is a Post Graduate from the Indian
Institute of Management (IIM), Kolkata and a Bachelor of Technology
from the Indian Institute of Technology (IIT).
Shareholding
3000 Shares
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Mr. C. Subramanya, 39
Global CTO
30th August 2000
Mr. Subramanya heads the Technical Services Group. He is an expert in
Information Technology and Information Security and is responsible for
implementing, maintaining, monitoring the Company’s world class
technology and information security and ensuring that the Company’s
process aligns with its technological capabilities globally. Mr.
59
Shareholding
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Shareholding
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Shareholding
Subramanya possesses over 18 years experience in the technology
domain across various industries and has handled various aspects of
conceptualizing and commissioning of BPO and other IT Enabled
Services operations including transition of projects across the company’s
global facilities. Mr. Subramanya is an Engineering Graduate from MEI
Group of Institution in Computer Science and has undergone short term
courses in customer Support and Finance from the Indian Institute of
Management (IIM), Bangalore
1000 Shares
Mr. M.S. Varadan, 62
President – HTMT USA
1st April 2000
Mr. Varadan has been closely involved in in transforming the Company
into a global technology company through mergers and acquisitions. He
has played an active role in the acquisition of the call centres in the
Philippines, USA and Canada as well as the Global marketing set-up in
USA. In the recent past, he has played a crucial role in integrating the
newly acquired units with the Company. With over 40 years of
experience in diverse global organizations, Mr. Varadan brings to the
Company his excellent knowledge of organization management and
practices. He is an accountant by profession and has deep knowledge of
international accounting standards. He possesses rich experience in
commercial and investment banking and has worked in India and abroad
for State Bank of India and has also worked for other various leading
organizations including the Essar Group, Britannia, ISPAT Group.
2000 Shares
Mr. V. Prasanna Kumar, 49
Senior Vice President – Customer Relations
26th October 1996
Mr. Prasanna Kumar front-ends and manages the Company’s Customer
Relations and heads the Client relationship team from out of the New
Jersey office. Mr. Prasanna has reinforced the Company’s marketing
and customer relations by adopting advanced marketing methodologies
and has successfully obtained several large projects with large
capacities. Mr. Prasanna possesses 24 years of experience and
exposure to international markets. He has worked with large
organizations like Tata Consultancy Services, and clients like Citibank,
American Express, Banc Cantonale Vaudoise, Time Warner and
Fireman’s Fund insurance companies in UK, Switzerland, Mexico and
India. Mr. Prasanna is a Post Graduate in Industrial Management from
the Indian Institute of Technology (IIT), Chennai and is also a Gold
Medallist in Engineering from the University of Mysore.
50 Shares
60
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Shareholding
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Shareholding
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Mr. Ramesh Anand, 44
Vice President – Business Development
7th August 2006
Mr. Ramesh Anand is responsible for the Business Development efforts
in the southern parts of USA and also heads the Company’s foray into
the Banking and Financial Services space. Mr. Ramesh has worked with
leading organizations like Tata Consultancy Services, Hero ITeS, and
Technology companies in Silicon Valley like Oracle and Siebel. Mr.
Ramesh has also set up third party business for Owen Financial
Services and has also worked with IBM Daksh. Mr. Ramesh is a
Graduaute from the Birla Institute of Technolgy and Sciences (BITS –
Pilani) with a Masters in Management Studies.
Nil
Mr. Pushkar Misra, 42
President – HTMT Philippines
14th July 2004
Mr. Pushkar specializes in project planning and implementation. He has
served in various capacities and functions including investment banking,
project management, business planning and development and corporate
finance. He has also headed the group’s nedia commerce and ecommerce business in India. Mr. Pushkar possesses over 19 years of
experience and has worked with leading organizations like SBI Capital
Markets and Larsen & Toubro. Mr. Pushkar is a B.Tech in Mechanical
Engineering from the Indian Institute of Technology (IIT), Kanpur and an
MBA from the Indian Institute of Management (IIM), Ahmedabad.
4500 Shares
Mr. Bryce Hayes, 34
Chief Operations Officer, HTMT Philippines
7th April 2004
Mr. Hayes has led several initiatives and has been instrumental in
enhancing the call centre growth in HTMT-Philippines. He has extensive
experience from analysis and design to implementation and operation
and is responsible for executing and overseeing numerous client
partnerships. Mr. Hayes possesses over 13 years of experience in
serving the call centre industry as operations head, training director and
other management roles. He has held several other management
positions for outsoucing / BPO companies supporting a wide variety of
Fortune 100 and 500 clients in financial services, telecom, TY/Satellite,
61
Shareholding
Name
and
Age:
Designation:
Date
of
Joining:
Qualifications,
Experience
and Details of
Previous
Employment:
Shareholding
shipping, logistics and healthcare verticals. Mr. Hayes is a Post
Graduate from Utah Valley State College and the University of Utah. He
is a member of the Golden Key National Honour Society and was the
recipient of the University of Utah’s President’s scholarship.
3000 Shares
Ms. Malini Deekshit, 43
Vice President – Human Resources
19th April 2007
Ms. Deekshit possesses over 20 years of experience in various facets of
HR in IT and ITES industries. Prior to joining the Company, Ms. Deekshit
was the head of HR operations in Microland. She has also run her own
Recruitment and Training Consultancy. She has been associated with
several leading organizations like HCL, Mindtech and Mphasis. Ms.
Deekshit holds a Bachelor’s degree in Science from Bangalore
University.
Nil
Changes in the Key Management Personnel:
Mr. Divakar Kaza, Head of Human Resources resigned from the services of the Company with
effect from 5th May 2007. Ms. Malini Deekshit was appointed as Vice President - Human
Resources with effect from 19th April 2007. Mr. Yagnesh Sanghrakja, Global CFO resigned from
the services of the Company with effect from 31st May 2007. Mr. S.D. Srinivasan has been
appointed as Financial Controller for India and Mauritius
Employees and Employees Stock Option Scheme:
Presently the Company has strength of about 9500 employees.
The salient features of the Company’s Stock Option Scheme are as under:
1. PLAN OBJECTIVES
The objectives of the Plan are:
1.1 To compensate the employees of the De-merged Undertaking in respect of the unvested
stock options granted to them by the De-merged Company under the Demerged Company Option
Scheme that would lapse on the coming into effect of the Scheme of Demerger,.
1.2 To reward and retain employees, in keeping with market trends in the IT/ITES sector.
1.3 To motivate employees to drive corporate performance and thereby enhance overall
shareholder value.
2.
DEFINITIONS
62
2.1 "Acceptance letter" means the letter by which the Optionee communicates that the Grant of
Options has been accepted, and that he /she will abide by the terms and conditions of the
2.2 “Allotment Committee” means a committee of the Board, which shall meet periodically to allot
Shares arising out of the Exercise by the Optionees
2.3 “Board” means the Board of Directors of the Company.
2.4 “Company” means HTMT Technologies Limited and any successor company thereof and
includes where the context so requires, the subsidiaries of HTMT Technologies Limited.
2.5 “Compensatory ESOP Scheme” means this HTMT Technologies Ltd. Compensatory
Employee Stock Option Plan, 2006.
2.6 “Compensation Committee” means a committee of Directors of the Company constituted by
the Board consisting of a majority of independent Directors and entrusted with the authority to
implement the Compensatory ESOP Scheme.
2.7 “Corporate Action” means rights issue, bonus issue, merger, sale of division, amalgamation,
merger, demerger, reconstruction, reorganisation or such action by which the controlling or the
shareholding pattern of the Company undergoes any kind of change.
2.8 "Date of Separation" means the last date of employment with the Company.
2.9 “Demerged Undertaking” means and includes the whole of the business, undertaking,
activities and operations of information technology / information technology enabled services
(“IT/ITES”) of the Demerged Company including such business, undertaking, activities and
operations carried on directly or indirectly through its branches and subsidiaries in India and
abroad.
2.10 “Demerged Company Option Scheme” means Hinduja TMT Limited Employees Stock
Option Plan, 2001
2.11 "Director" means a director on the Board.
2.12 “Effective Date” means the date on which all the conditions and matters in relation to the
Scheme of Demerger have been fulfilled and the Scheme of Demerger becomes effective.
2.13 "Employee/Transferred Employee” means an employee of the Demerged Undertaking and
includes an employee of Hinduja TMT and employees of the IT/ITES subsidiaries of Hinduja TMT,
whether working in India or abroad on the Grant Date, whose options granted by Hinduja TMT
pursuant to the Demerged Company Option Scheme lapsed on the coming into effect of the
Scheme of Demerger.
2.14 "Exercise" means an act whereby the Optionee makes a written application to the
Company, to subscribe for the Shares against the Options Vested in him / her under the
Compensatory ESOP Scheme together with payment of the Exercise Price.
2.15 "Exercise Application” is the application form in which the Optionee has to apply to the
Company along with the cheque / demand draft in respect of the Exercise Price for Exercising the
Options granted to him/her.
63
2.16 "Exercise Price" means in relation to each Transferred Employee, such price at which the
said Transferred Employee was originally granted the Lapsed Options of the Demerged Company,
being also the price at which such Transferred Employee, as Optionee is entitled to subscribe to
the Shares arising out of Options Granted and Vested in him/her under the Compensatory ESOP
Scheme.
2.17 "Exercise Period" means the time period after Vesting, within which the Optionee should
Exercise his/her right to apply for Shares against the Options vested in him/her under the
2.18 “First Anniversary Date” means the date, which falls after one year of the Grant Date.
2.19 "Grant" is the process whereby the Compensation Committee shall be deemed to have
granted Options to the Transferred Employees under this Compensatory ESOP Scheme on the
Grant Date.
2.20 “Grant Date” means the Effective Date and which shall be the date the Transferred
Employee shall be deemed to have been Granted Options by the Company under the
2.21 “Demerged Company ” means Hinduja TMT Limited.
2.22 “Lapsed Options of the Demerged Company” means and includes options granted by
Hinduja TMT under the Demerged Company Option Scheme, to employees engaged in the
Demerged Undertaking which have not vested as of the Effective Date, which stock options would
lapse upon coming into effect of the Scheme of Demerger on the Effective Date.
2.23 "Letter of Grant" means the letter issued by the Company to an Employee intimating the
Grant of Options to him/her for acquiring a specified number of Shares at the Exercise Price.
2.24 “Nominee” shall mean the person nominated by the Employee as provided in this Plan.
2.25 “Normal Retirement Date” shall mean the date on which an Employee is due to retire from
the services of the Company, in accordance with the service conditions to which he/she is subject.
2.26 "Option" means a right (but not an obligation) granted to an Employee to apply for a
specified number of Shares of the Company at a future date and at a predetermined price (being
the Exercise Price) in accordance with the terms stated in this Compensatory ESOP Scheme.
However, Options do not carry voting rights as available to an ordinary shareholder and as defined
in the Companies Act, 1956. Each Grant of an Option would represent the right to apply for one
fully paid-up equity share of the Company of the face value of Rs. 10/- per share. In case of subdivision of Shares or in case of bonus, rights, etc. the number of Options will be suitably adjusted
by the Compensation Committee.
2.27 “Optionee” means a Transferred Employee to whom Options have been Granted pursuant
to this Compensatory ESOP Scheme, and who has accepted such Grant by signing the
Acceptance Letter and includes where the context so requires, the Nominee or the legal heirs of a
deceased Employee.
2.28 “Plan” or ‘Compensatory ESOP Scheme” means this HTMT Technologies Limited
Compensatory Employees Stock Option Plan, 2006.
64
2.29 “Scheme of Arrangement” or “Scheme of Demerger” means Scheme of arrangement
and reconstruction between Hinduja TMT and the Company and their respective shareholders and
creditors .
2.30 “Second Anniversary Date” means the date, which falls after two years of the Grant Date.
2.31 "Share" means the equity shares of the Company.
2.32 “.“SEBI ESOP Guidelines” means the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 as revised from
time to time.
2.33 “Vesting” means the process by which the Optionee is given the right to apply for Shares
against Options granted to him/her under the Compensatory ESOP Scheme.
2.34 “Vesting Date” means the earliest date on which the Optionee may Exercise his / her right
to seek allotment of Shares in terms of the Vesting Schedule under the Compensatory ESOP
Scheme.
2.35 “Vesting Schedule” shall have the meaning assigned to it in Clause 6.2 hereof.
3. AUTHORITY AND POWERS OF THE COMPENSATION COMMITTEE
3.1 Notwithstanding anything stated herein, the Compensation Committee in its absolute discretion
has been authorised to determine all the terms governing the Compensatory ESOP Scheme
including any variation thereof and including but not limited to
3.1.1
The terms and conditions subject to which the Options vested would be exercisable by
an Optionee.
3.1.2
3.1.3
The period within which the Options have to be Exercised by theOptionee.
The procedure for cashless Exercise of Options, if any.
3.1.4 Giving effect to amendments in the number of Options and/or the Exercise Price as a result
of Corporate Actions.
3.1.5 Giving effect to amendments in the Vesting Schedule and/or Exercise Period in the case of
Optionees who have separated from the Company’s service by reason of any disability of pursuant
to any scheme of voluntary retirement or for any other reason, which in the opinion of the
Compensation Committee, is a fit case for making any such amendments.
3.1.6 Resolution of any disputes arising on any matter arising out of the implementation of this
Plan.
3.1.7
Accelerate the Vesting Schedule.
3.1.8
Cancellation of Options on account of misconduct of Optionee.
3.2 The terms prescribed by the Compensation Committee and/or the resolution by the
Compensation Committee of any dispute, shall be final and binding on all the Employees/
Optionees.
65
4. ELIGIBILITY, GRANT CONDITIONS AND NOMINATION
4.1 Eligible Employees
4.1.1 All Transferred Employees of the Company pursuant to the Scheme of Demerger are the
eligible employees, under the Compensatory ESOP Scheme, and to whom the Options as stated
in para 5.1 shall be deemed to have been Granted on the Grant Date
4.2 Grant conditions
4.2.1 Options granted to an Employee shall not be transferred to any other person.
4.2.2 No person other than the Optionee shall be entitled to Exercise the Option, save as provided
in 6.6.
4.2.3 Options granted to an Employee shall not be pledged, hypothecated, mortgaged or otherwise
alienated in any manner.
4.2.4 An Optionee is required to sign and return to the Company the Acceptance Letter in the
prescribed form in order to be entitled to Exercise the Options Granted to him/her under this Plan.
4.3
Nomination
4.3.1 An Optionee may appoint any person as his/her Nominee in the prescribed form, for
exercising the rights in the circumstances specified in para 6.6.
4.3.2 An Optionee may revoke such nomination at any time and a fresh nomination may be made
on such revocation.
4.3.3 Upon the demise of the Optionee, the Nominee, if any, shall alone be entitled to Exercise the
rights of the Optionee concerned and the Company shall not be liable in relation to any rights and
obligations amongst the legal heirs of the Optionee concerned.
4.3.4 If the Optionee fails to make a nomination, the ensuing Shares will be issued to the legal
heirs only upon such evidence being produced to the absolute satisfaction of the Board as may be
required from time to time.
5.
NUMBER OF OPTIONS
5.1 . Every Transferred Employee shall be deemed to have been granted by the Compensation
Committee with effect from Grant Date, the number of Options, equal to the number of Lapsed
Options of the Demerged Company.
6.
VESTING OF OPTIONS
6.1 Vesting Period: There shall be a period of one year between the Grant Date and Vesting
of Options.
6.2 Vesting Schedule: The Vesting Schedule for the Options granted to the Transferred
Employee shall be as under:
•
•
One half of the Options will vest on the First Anniversary Date
The balance half of the Options will vest on the Second Anniversary Date.
66
6.3 Accelerated vesting: Subject to the provisions of para 6.1, the Compensation Committee
may at its discretion accelerate the Vesting Schedule for some or all of the Options granted to the
Transferred Employees in the event of Corporate Action, which in the opinion of the Compensation
Committee is an appropriate case for acceleration of the Vesting Schedule.
6.4 Vesting in the event of retirement: Options that had been Granted to an Optionee who
retires from the Company’s services on the Normal Retirement Date or thereafter (such Optionee
being hereinafter referred to as “Retired Optionee”), shall vest in accordance with the Vesting
Schedule specified in para 6.2.
6.5 Vesting in the event of permanent incapacity: Subject to the provisions of para 6.1, all
Options granted to an Optionee who suffers a permanent incapacity while in employment, shall
vest in him/her as on the date of permanent incapacitation.
6.6 Vesting in the event of Death of an Optionee: Subject to the provisions of para 6.1 in the
event of (a) death of an Optionee while in employment or (b) death of a retired Optionee, all the
Options granted to him/her till such date, shall immediately vest in the Nominee (or in the legal
heirs in the vent there is no Nominee) of the deceased Optionee or deceased Retired Optionee, as
the case may be.
6.7 Vesting for Employees on long leave: The Vesting Schedule may be extended by the entire
duration of the leave period for Employees on long leave, subject to a maximum period of 24
months from the Grant Date.
7. EXERCISE OF OPTIONS:
7.1 Exercise Timeframe: An Optionee or Retired Optionee may exercise his/her vested Options,
in part or in whole any day after the earliest applicable Vesting Date and prior to the completion of
the 36th month from the Grant Date.
7.2 Exercise of Vested Options in the event of Death: The Nominee, or in the event there is no
Nominee, the legal heirs of a deceased Optionee or Retired Optionee, as the case may be, may
Exercise the Options at any time prior to the completion of the 36th month from the Grant Date
7.3 Exercise of Vested Options in the event of resignation or termination of services: An
Optionee who separates from the services of the Company for any reason other than (a)
retirement on the Normal Retirement Date or thereafter, (b) death (c) permanent incapacity (d)
Corporate Action, may Exercise the vested Options at any time within a period of three months
from the last date of employment with the Company, or within a period of 36th months from the
Grant Date whichever is earlier.
7.4 Exercise of Vested Options in the event of permanent incapacity: An Optionee who
suffers permanent incapacity while in employment may exercise the Options at any time prior to
the completion of the 36th month from the Grant Date.
7.5 Remittance on Exercise of Options: An Optionee (or as the case may be, the Nominee or
legal heir of a deceased Optionee or deceased Retired Optionee), shall remit the full amount
payable by him/her on Exercise of the Options together with the Exercise Application in the
prescribed form, indicating the number of Options Exercised, in the manner stated in the said
Exercise Application.
8. LAPSE OF OPTIONS
67
8.1 Notwithstanding anything contained elsewhere in this Plan, the Options vested in, but not
exercised by, an Optionee as well as unvested Options, will lapse, in case of termination of his/her
employment for any reason, which in the opinion of the Compensation Committee is an
appropriate case for lapse of the Option, including but not limited to the following:
8.1.1
Misconduct,
8.1.2
Fraud,
8.1.3 Unauthorised disclosure of confidential data.
8.2
Treatment of unvested Options: If an Optionee separates from the services of the
Company for any reason other than (a) retirement on the Normal Retirement Date or thereafter, (b)
death or (c) permanent incapacity (d) separation from services of the Company due to Corporate
Action;
8.2.1 all unvested Options outstanding on the date of separation of the Optionee will lapse on the
said date of separation.
8.2.2 all Vested Options that have not been Exercised within a period of three months from the last
day of employment with the Company, or within a period of 36th months from the Grant Date
whichever is earlier, will lapse.
Provided that in the event of resignation / termination from the services of the Company for
reasons other than (a) retirement on the Normal Retirement Date or thereafter, (b) death or (c)
permanent incapacity (d) separation from services of the Company due to demerger or any
Corporate Action, the unexercised Options will lapse.
9. ALLOTMENT OF SHARES ON EXERCISE OF OPTIONS: The Allotment Committee shall
periodically allot shares arising out of Exercise of Options. The Company’s shares are proposed to
be/ will be traded on Stock Exchanges compulsorily in dematerialised form. The Shares allotted by
the Allotment Committee, pursuant to receipt of valid Exercise Applications will be allotted only in
dematerialised form.
10. LOCK-IN PERIOD
No lock-in restriction would apply to the Shares issued consequent upon the Exercise of Options
granted under this Plan.
11. PRICING
11.1 The Exercise Price of Options Granted, pursuant to this Compensatory ESOP Scheme, in
relation to each Transferred Employee shall be such price at which the said Transferred Employee
was originally granted the Lapsed Options of the Demerged Company.
11.2 In the event of any changes in the number and/or face value of the outstanding equity
shares of the Company by way of stock split, exchange of shares, recapitalisations, Corporate
Action or otherwise, the Exercise Price per Share/number of unvested and Vested but not
Exercised Options shall be appropriately adjusted in accordance with the directions of the
Compensation Committee in this matter, and such directions shall be binding.
12. TRANSFER OF OPTIONEES
An Optionee whose services are transferred from the Company to any of its subsidiary ,shall be
entitled to retain his/her entitlement to the Options granted to him/her, in accordance with the
terms and conditions specified in the Letter of Grant, subject to the provisions of this Plan.
68
13.
TAXES
All taxes consequent upon the grant/exercise of stock options under this Plan will be borne by the
Optionee or by the Nominee/legal heir as the case may be.
14. COMPLIANCE WITH REGULATIONS
Optionees are required to comply with all applicable laws and regulations relatable to the exercise
of rights attached to the Options.
15
GENERAL RISKS AND DISCLOSURES
Participation in the Plan shall not be construed as any guarantee of return on the equity
investment. Any loss due to fluctuations in the market price of the equity and the risks associated
with the investment are that of the Employee alone.
16
CHANGE OF PLAN
The Company and Compensation Committee have the discretion to change the terms and
conditions of the Plan. However, the change shall not be to the detriment of the Employees
participating in the Plan and shall have effect only after complying with the conditions specified in
the SEBI ESOP Guidelines.
17 NOT CONTRACT OF EMPLOYMENT
17.1 Grant of Options under this Plan shall not form part of any contract of employment between
the Company and the Employee. The rights and obligations of any individual under the terms of
his office or employment with the Company shall not be affected by his/her participation in this
Plan.
17.2 Nothing in this Plan shall be construed as affording an Employee any additional rights as to
compensation or damages in consequence of the termination of such office or employment for any
reason.
17.3 This Plan shall not confer on any person any legal or equitable rights against the Company
either directly or indirectly or give rise to any cause of action on law or equity against the
Company.
69
XI PROMOTERS
The details of the Promoters are given below:
Promoters:
1
2
3
4
5
6
7
8
9
10
11
12
Ashok P. Hinduja (Age:56)
Ashok P. Hinduja Jt..Harsha A. Hinduja
Ashok P. Hinduja Jt. S.P. Hinduja HUF (Bigger) and Hinduja Properties Development Limited
A P Hinduja (HUF)
A P Hinduja Jt. Hinduja Properties Development Ltd and S.P. Hinduja HUF (Bigger)
Harsha A. Hinduja (Age: 52)
Harsha A. Hinduja Jt. Ashok P. Hinduja
Harsha A Hinduja Jt. S.P. Hinduja HUF(Bigger) and Ashok P. Hinduja
Vinoo S. Hinduja (Age: 40)
Aasia Management & Consultancy Pvt. Limited Jt. Aasia Properties Development Limited
Aasia Management Consultancy Limited Jt Aasia Properties Development Limited
13
14
15
16
17
18
19
20
21
Kumbat Limited
Siddharth Textiles Pvt. Limited
Aasia Properties Development Limited
S P Hinduja HUF (Bigger)
Satya A. Hinduja (Age: 24)
Ambika A. Hinduja (Age: 28)
Shom A. Hinduja (Age: 16)
Shanoo Mukhi (Age: 43)
Background of Promoters and promoting companies:
Mr. Ashok P. Hinduja
Mr. Ashok P. Hinduja is a graduate in Commerce from Bombay University. Mr. Hinduja has been
conferred with the honorary degree of Doctorate of Law and Doctorate of Economics, respectively
by the University of Westminster, UK, and Richmond College, UK. Mr. Hinduja has played a
leading role in driving the growth of the transnational Hinduja Group’s activities in India. As
Trustee, he also oversees the philanthropic activities of the Hinduja Foundation whose prime focus
is on education and healthcare. A Founder Member of the National Health and Education Society,
Mr. Hinduja is the Resident Member of the Board of Management of the P.D. Hinduja National
Hospital in Mumbai. He is also the Managing Trustee of Smt. P.D. Hinduja Trust, which runs the
K.P.B. Hinduja College of Commerce in Mumbai.
Others
•
Ms. Harsha A. Hinduja has over 20 years of experience in business.
•
Ms. Vinoo S. Hinduja has held various senior positions in multinational conglomerates and
has received training in (i) The Cromwell Hospital London (ii) Credit Sussie Bank, Geneva (iii)
Chase Manhattan Bank London in areas of Hospital Administration and Management as well as in
70
Banking and Finance. Ms. Hinduja is a Member of the Board of Management of the P.D. Hinduja
National Hospital in Mumbai.
•
Aasia Management & Consultancy Pvt. Limited was incorporated under the Companies
Act, 1956, on 18th May 1995 and is in the business of dealing in properties, films and consultancy
services. The registered office of the company is situated at Hinduja House, 171 Dr. Annie Besant
Road, Worli, Mumbai 400 018.
The shareholding pattern of the company as on 31st March 2007 is as follows:
Category
Promoters
Non-promoters
Total
No. of shares held
--100000
100000
Shares of Rs. 10 each
% of shareholding
--100%
100%
Board of Directors:
Ms. Harsha A. Hinduja
Mr. P.J. Saldanha
•
Aasia Properties and Development Limited was incorporated under the Companies Act,
1956, on 9th July 1968 and is in the business of real estate and consultants services. The
registered office of the company is situated at Hinduja House, 171 Dr. Annie Besant Road, Worli,
Mumbai 400 018.
Category
Promoters
Non-promoters
Total
No. of shares held
195950
4050
200000
% of shareholding
97.47%
2.53%
100%
Board of Directors:
Mr. A.K. Das
Mr. Prabal Banerji
Mr. K.C. Samdani
Mr. V.G. Gurnani
Mr. J. Chugani
•
Siddharth Textiles Pvt. Limited was incorporated under the Companies Act, 1956 on 23rd
October 1952 and is in the business of property management services. The registered office of the
company is situated at 75C, J.R. Mhatre Marg, Ruia Park, Juhu, Mumbai 400 049.
71
Category
Promoters
Non-promoters
Total
No. of shares held
51795
33205
85000
% of shareholding
60.94%
39.06%
100%
Board of Directors:
Mr. A.K. Das
Mr. J. Chugani
Mr. P.J. Saldanha
•
Kumbat Limited was incorporated on 22nd May 1995 in Mauritius and is in the business of
making strategic investments.
Category
Promoters
Non-promoters
Total
No. of shares held
--100000
100000
Shares of $1 each
% of shareholding
--100%
100%
Board of Directors:
Mr. Sushil Kumar Jogoo
Mr. P.P. Hinduja
Mr. Ajay P. Hinduja
•
Amas Mauritius Limited was incorporated on 12th July 1993 in Mauritius and is in the
business of making strategic investments.
Category
Promoters
Non-promoters
Total
No. of shares held
--400000
400000
Shares of $1 each
% of shareholding
--100%
100%
Board of Directors:
Mr. Sushil Kumar Jogoo
Mr. P.P. Hinduja
Mr. Ajay P. Hinduja
72
XII
MANAGEMENT DISCUSSION AND ANALYSIS
BPO Industry Overview:
As per a Nasscom McKinsey report, the global Offshore BPO industry has grown rapidly at a 43%
CAGR from $ 2.3 billion in 2001 to $ 11.4 billion in 2005. The Indian ITES-BPO exports have
grown at a CAGR of 53% from $ 0.6 billion in 2000 to $ 5.1 billion in 2005. This report has
estimated that the addressable Global Offshore BPO is approximately $ 150 billion. Another report
by IDC shows that the BPO market achieved revenue of $ 382 billion in 2004 and is expected to
grow to $ 641 billion by 2009 with a 10.9% CAGR.
captured in the next 4 years as the BPO market is expected to increase in size and gain in stature
with $ 55 billion expected to be offshored to low cost offshore locations by 2010.
Suppliers with Global delivery in low cost offshore locations are likely to benefit the most as onsite
players with delivery locations only in the high cost countries in the developed economies would
find it increasing difficult to withstand the competitive pricing pressures.
The market is also dominated by bigger players who have a good mix of on-shore and off-shore
capabilities. This trend is driving the Global companies to make bigger offshore acquisition to
acquire delivery capabilities particularly in India and Philippines. Indian companies are trying to
gain Global stature through building up delivery centers across the Globe and by going for
acquisitions for scale, cross segment expansion and to enter new markets.
Off-shoring is no longer the preserve of large corporations, it has now been embraced by the mid
market segment as well. As a result of this, the size of the deals is getting smaller.
The competitive landscape is changing as well. Suppliers are moving away from providing just
transaction processing services to provide comprehensive and customized solutions to clients. The
competitive landscape is changing as well. Clients are increasingly preferring suppliers who can
add more value in their businesses by reengineering processes rather than suppliers who simply
out-source/off-shore them to cheaper destinations.
Accordingly, companies that are able to differentiate and innovate in multiple areas like ability to
provide customized solutions, business process consulting services, alternate delivery capabilities,
ability to innovate in various areas like business models, delivery models, pricing, processes are
likely to be the leaders in the changing competitive scenarios by surviving the pricing pressures
from clients.
Most of the current off-shoring is happening in the Banking and Financial Services, Retail, Travel,
Telecom, Auto and in functional services like Customer Care, F&A and HR. These industries still
have a lot of potential for off-shoring. The emerging industries for off-shoring are Education,
Transportation, and High Tech industries. New service lines like procurement, training and product
engineering are evolving.
Newer markets are also opening up. Of late, off-shoring growth rate of Europe is higher than the
US. The East Asian market which was virtually unexplored is opening up. These new markets with
non-English languages present newer challenges to suppliers.
73
In the last ten years, IT and BPO industries have seen substantial off shoring. India has been the
leading off shoring destination accounting for 46% of the Global BPO industry. Customers have
increasingly started preferring Philippines for voice and India for non voice. Also, the suppliers are
moving to Tier II and Tier III cities to retain the cost arbitrage and to control attrition. Various
countries are emerging as alternate delivery locations and are expected to provide stiff competition
to India. China is growing at a faster rate and is preferred for non voice service. Countries like
Korea and Taiwan are emerging to satisfy the requirements of East Asian market. Countries like
Czech, Hungary, Poland are preferred by the European Market for their cultural affinity. Countries
like Russia have an advantage for high end statistical analysis and South Africa is preferred for
actuarial analysis. Locations like Ireland and the Caribbean are playing their near shore cards to
gain advantage. Mexico, Argentina and Brazil are ideally positioned to explore the attractive
Spanish market. Going forward, many locations like Malaysia, Thailand, Romania etc. are
expected to emerge with the governments in the developing economies trying to attract this
industry, particularly due to the fact that it is employment friendly. The suppliers have shown
increasing interest to explore new locations to maintain the cost arbitrage levels compared to
developed countries and to look out for skilled labor pool.
Knowledge Process Outsourcing (KPO) is the next frontier for Global Sourced BPO which requires
application of knowledge, judgment and experience in particular lines of business. The KPO
potential is expected to be around USD 17 billion by 2010 and India is at present dominating with
71% market share (source: Evalueserve). Several KPO opportunities like Legal services,
Engineering R&D, Content Development, Market Research, Analytics are emerging.
HTMT Global Solution’s Competitive Advantage:
HTMT Global Solutions Limited is very well placed to take advantage of the opportunities being
presented by this buoyant macro-economic business environment. With its global delivery
capabilities in India, Philippines, USA, Canada and Mauritius, it is one of the few Indian multinationals to offer the right-shoring advantage, i.e. on-shore in the USA, near-shore in Canada and
off-shore in India, Philippines and Mauritius.
More and more developing economies are now trying to emulate the India success story of
providing cost effective business solutions for IT and BPO services for the US and European
markets. Countries like China, Malaysia, Vietnam, the Eastern European Block and Latin American
nations like Argentina, Brazil, Costa Rica, Mexico are becoming increasingly competitive. But the
competition from these other locations presents a unique opportunity for HTMT Global Solutions.
With its rich cash reserves and debt free balance sheet, The Company is strongly positioned to
entering these new low cost delivery destinations through the inorganic M&A route. This is HTMT
Global’s strength, having successfully executed multiple inorganic acquisitions in the last three
years. This feat has few parallels amongst HTMT Global’s competition.
In addition, there are some other factors which go in favour of HTMT Global Solutions.
•
Domestic ITES industry is expected to grow at 60% and HTMT Global has a dominant position
in this market because of its first mover advantage.
•
More marginal players in the industry are expected to be under profitability pressures to sell
off. Consolidation is likely to make some of these assets available for acquisition at attractive
rates. This will provide a low cost, low capital intensive inorganic growth opportunity.
•
Captive centers of multinational companies, which currently have a significant market share of
off-shoring, are proving substantially expensive compared to third party suppliers. The trend of
these captive centers outsourcing the non-confidential work to third party service providers is
74
expected to grow in the near future. HTMT Global Solutions, with its marquee list of clients, is
expected to provide these companies a very attractive option to go to a pure third party vendor.
•
As corporations have grown increasing comfortable with the maturity of offshore BPO
providers, more and more higher value added processes are now being considered for offshoring. These are in the areas of research, analytics, legal, finance and accounts, HR
services etc. Again, HTMT Global Solutions aspires to be in the forefront of this move to go up
the value chain of off-shoring services.
•
New service lines like Engineering, Procurement, Education and Training, Market Research
etc. are also opening up to off-shoring.
Challenges:
Some of the challenges HTMT Global faces in its core business of ITES-BPO are as under
• Global delivery model adopted by the company brings in variety of risks like country,
exchange rate and regulations.
•
Continued price and margin pressure due to the intensity of competition.
Performance / Segment Analysis:
The Company functions as an operating IT/ITES Company and has only one segment as IT /
ITES. The performance of the IT/ITES business segment of the Company for the period under
review as compared to the previous year (previous year comparison is with Hinduja TMT Ltd.,
which demerged its IT/ ITES Undertaking to Company puirsuant to the Scheme as sanctioned by
the Hon’ble high Court of Judicature at Bombay) is given below. The figures for the period ended
March 2007 are unaudited. The figures for Hinduja TMT Ltd. are as per the results published for
the six months period ended on 30th September 2006.
(Rs. in Lakhs)
HTMTGlobal
Solutions Ltd.
(Oct ’06 to Mar
’07)
(1)
Segment
Revenues
Segment
Results (PBIT)
Capital
Employed
Hinduja TMT Ltd.
(Apr ’06 to Sept ’06)
(2)
Total IT/ITES for
2006-07
(For comparison
purposes)
(3) = (1) + (2)
Hinduja TMT
Ltd.
2005-06
(4)
% Change
(5)
15458
15509
30967
22701
36.4
2230
2656
4886
2011
143.0
51831
49700
51831
30135
72.0
Comments:
a. Increase in revenue is mainly due to increase in India delivered international business and
domestic business as well as inclusion of full year operations of Manila branch for the
financial year 2006 07 as compared to previous year which included the revenue for part of
the year.
75
b. PBIT for the current year has increased due to increased volume of domestic business and
higher contribution from existing international business.
c. Capital employed has increased substantially due to higher allocation of capital at the time
of Demerger as well as surpluses from the segment, adding to the net worth.
Risks, Concerns and Mitigation Plans:
HTMT Global is regularly taking adequate steps to mitigate existing and potential risks like (a)
competition (b) customer retention (c) regulatory (d) geographical concentration (e) client
creditworthiness (f) foreign exchange rate fluctuations (g) contractual obligations, and (h) project
management (timely and satisfactory completion of assignments).
The Company has adequate backup procedures and redundancy in technology and
telecommunication set up to address disaster. Multi-locational delivery of services are in place, so
that alternate sites are made available in case of sudden disruption of work due to natural
calamities or other internal as well as external factors.
Internal Control Systems and their adequacy:
The internal control systems and processes of the Company cover operational efficiency, accuracy
and promptness in financial reporting, compliance with laws and regulations and development of
mature, disciplined and effective processes. The processes also are designed to meet the goals of
cost, schedule, functionality and product quality, thus resulting in higher levels of customer
satisfaction.
A well-defined organizational structure, clearly demarcated authority levels and well-documented
policy and guidelines to ensure process efficiencies are the hallmarks of the Company’s internal
control system.
The Company is ISO 9001 certificated and is currently undergoing a certification upgrade to the
newer standard of ISO27000. Its information security systems are certified to BS7799 standards,
which is the international benchmark for Information Assets. On top of that, the Health Insurance
Practice is HIPAA certified and is also getting ready for SAS 70 audit.
The internal and external Auditor’s reports with comments of the management are regularly placed
before the Audit Committee, which discusses the reports with the management and the Auditors to
satisfy about the internal control environment designed to ensure that the results of operations are
reflected properly in the financial statements and proper internal control procedures are followed.
Industry Accolades:
HTMT Global Solutions was rated the Number One Callcenter by the Global Services Magazine, a
very distinguished publication from the renowned outsourcing advisory firm NeoIT based in New
York.
The Information Technology Division won the Indian Express Intelligent Enterprise Award in the
Technology Senate in Mumbai, adjudicated by E&Y.
Material Developments in Human Resource Management / Industrial Relations:
The HR mandate in the organization has always been to attract, retain and motivate the best
people from the Industry.
76
True to its commitment to be at the leading edge of it HR practices, the company invited world
renowned consultants Gallup to conduct the Employee Satisfaction Survey across all global
locations. The results of the survey have just been completed and the management is working on
some of the improvement areas identified by the survey.
For the last three years, the company has continued to feature in the top 10 companies for
Employee Satisfaction in the annual survey conducted by Dataquest and IDC.
The Employee Stock Option Plan, which covers 95% of the employees in the managerial level saw
its first vesting in November 2006 and the employees were benefited handsomely on account of
the substantial appreciation of their options.
The above initiatives played a vital role in contributing to strategic benefits to both the organization
and its employees. Consequently, attrition rates have been maintained at below-industry averages
– a pointer towards growing employee satisfaction and acceptance of HTMT Global Solutions as a
preferred employer.
CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis describing the Company’s objectives,
expectations, predictions and assumptions may be ‘forward looking’ within the meaning of
applicable Securities Laws and Regulations. Actual results may differ materially from those
expressed herein. Important factors that could influence the Company’s operations include
global and domestic economic conditions affecting demand, supply, price conditions, change in
Government’s regulations, tax regimes, other statutes and other factors such as litigation and
industrial relations.
77
XIII
FINANCIAL INFORMATION
Summary Financial Statements for the previous four years prior to the date of listing:
Rs Lakhs
Balance Sheet
US$ mil.
3
As at
31/03/2007
As at
31/03/2007
Unaudited
Consolidated
Unaudited
Consolidated
Rs Lakhs
As at
31/03/2006
Audited
Rs Lakhs
As at
31/03/2005
Audited
Rs Lakhs
As at
31/03/2004
Audited
Sources of Funds:
Share Capital 1
Share Capital Suspense 1
Reserves and Surplus
Total
Minority Interest
Deferred Tax
25.00
2053.80
67887.07
69965.87
(58.89)
434.48
0.06
4.71
155.74
160.51
(0.14)
1.00
25.00
25.00
-
25.00
25.00
-
25.00
25.00
-
Total
70341.45
161.37
25.00
25.00
25.00
Application of funds:
Fixed Assets
Investments
Net current assets
Profit and Loss Account
20018.84
4223.70
46098.91
-
45.92
9.69
105.76
-
(89.41)
114.41
(71.03)
96.03
(60.36)
85.36
Total
70341.45
161.37
25.00
25.00
25.00
Income
Expenditure
Profit /(Loss) before Taxes
Profit /(Loss) After Taxes
Profit After Minority
Interest
For the year
Ended
31/03/07 2
Unaudited
Consolidated
44594.02
For the year
Ended
31/03/07 2
Unaudited
Consolidated
100.68
For the
year
Ended
31/03/06
For the
year
Ended
31/03/05
For the
year
Ended
31/03/04
0.42
333.57
334.83
39127.82
5466.20
5255.25
88.34
12.34
11.87
16.83
(16.41)
(18.38)
344.24
(10.67)
(10.67)
346.39
(11.56)
(11.56)
5305.53
11.98
(18.38)
(10.67)
(11.56
Notes:
1.
Post allotment of 20538003 equity shares of Rs. 10/- each to the eligible shareholders of
Hinduja TMT Limited and post cancellation of the entire pre-demerger share capital of Rs.
25 lakhs held by Hinduja TMT Limited pursuant to the Scheme, the paid-up share capital
as of date is Rs. 2053.80 lakhs.
78
2
The Appointed Date of Demerger of the IT/TES Undertaking of Hinduja TMT Limited into
the Company is 1st October 2006. The figures given above are for the 12 months’ period
from 1st April 2006 to 31st March 2007 for the purpose of understanding the full year
financials and include that for the period of 6 months upto 30th September, 2006, which
have been reported by Hinduja TMT Limited.
3
The figures disclosed in US Dollars has been derived considering an exchange rate
conversion of Rs. 43.5898 and Rs. 44.2916 per dollar for Balance Sheet and Profit and
Loss account respectively.
4
Relates to the period prior to the coming into effect of the Scheme and does not relate to
the current business of the Company
(The rest of the page is intentionally kept blank)
79
AUDITORS’ REPORT
TO THE BOARD OF DIRECTORS OF HTMT GLOBAL SOLUTIONS LIMITED
Page 1 of 2
1.
We have audited the attached Balance Sheet of HTMT Global Solutions Limited [formerly
HTMT Technologies Limited] (“the Company”) as at December 31, 2006, and the related Profit
and Loss Account and the Cash Flow Statement for the period ended on that date annexed
thereto, which we have signed under reference to this report. These financial statements are
the responsibility of the Company’s Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2.
We conducted our audit in accordance with auditing standards generally accepted in India.
Those Standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by the Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
3.
We report that:
(a)
We have obtained all the information and explanations, which to the best of our
knowledge and belief, were necessary for the purposes of our audit;
(b)
In our opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
(c)
The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d)
In our opinion and to the best of our information and according to the explanations given
to us, the said financial statements together with the notes thereon and attached thereto,
give a true and fair view in conformity with the accounting principles generally accepted in
India:
(i)
in the case of the Balance Sheet, of the state of affairs of the Company as at
December 31, 2006;
(ii)
in the case of the Profit and Loss Account, of the profit for the period ended
on that date; and
in the case of the Cash Flow Statement, of the cash flows for the period ended
on that date.
80
AUDITORS’ REPORT
TO THE BOARD OF DIRECTORS OF HTMT GLOBAL SOLUTIONS LIMITED
Page 2 of 2
This report is intended solely for your information and for submission to The Bombay Stock
Limited, Mumbai and National Stock Exchange of India Limited, Mumbai for inclusion
in the Information Memorandum in connection with the listing requirement and is not to be used,
referred to or distributed for any other purpose without our prior written consent.
Place: Mumbai
Date: 21st May, 2007
Partha Ghosh
Partner
Membership No. F - 55913
For and on behalf of
Price Waterhouse
Chartered Accountants
81
[formerly HTMT Technologies Limited]
Balance Sheet as at 31st December, 2006
As at
(Rs. In Lacs)
As at
31.12.2006
31.03.2006
25.00
25.00
B
2,053.80
48,519.01
-
C
1,126.49
-
450.60
-
52,174.90
25.00
10,170.90
-
261.49
-
10,432.39
-
45,452.28
-
Schedule
SOURCES OF FUNDS
Shareholders' Funds
Share Capital
Share Capital Suspense
A1
A2
Loan Funds
Secured Loans
Deferred Tax Liability (Net)
(Refer Note 4 on Schedule S)
TOTAL
APPLICATION OF FUNDS
Fixed Assets
D
Gross Block
14,720.02
Less: Depreciation
4,549.12
Net Block
Capital Work-in-Progress
Investments
E
Current Assets, Loans and Advances
Job-in-Progress
F
90.59
-
Sundry Debtors
G
3,668.06
-
Cash and Bank Balances
H
780.81
0.95
Other Current Assets
I
1,702.85
-
Loans and Advances
J
5,961.01
14.48
12,203.32
15.43
Less: Current Liabilities and Provisions
Current Liabilities
K
10,853.61
104.84
Provisions
L
5,059.48
-
15,913.09
104.84
Net Current Assets
(3,709.77)
(89.41)
82
Balance Sheet as at 31st December, 2006
As at
(Rs. In Lacs)
As at
31.12.2006
31.03.2006
-
114.41
52,174.90
25.00
Schedule
TOTAL
Significant Accounting Policies
R
Notes to Accounts
S
0.00
The Schedules referred to above form an integral part of the Balance Sheet.
This is the Balance Sheet referred to in our report of even date.
For and on behalf of the Board
Partha Ghosh
Partha De Sarkar K.C. Samdani
Partner
Chief Executive
Officer
Director
Price Waterhouse
Anil Harish
Yagnesh Sanghrajka
Director
Global Chief Financial
Officer
Somnath Majumdar
Senior Vice President and
Head - Legal & Secretarial
Place: Mumbai
st
Date: 21 May, 2007
Place: Mumbai
83
Profit and Loss Account for the period 1st April 2006 to 31st December 2006
(Rs. In Lacs)
Schedule
01.04.2006
to
01.04.2005
to
31.12.2006
31.03.2006
INCOME
Operating Income
M
7,434.79
-
Other Income
N
98.45
0.42
7,533.24
0.42
213.97
-
TOTAL
EXPENDITURE
Direct Cost, Product Charges and Connectivity Cost
Employee Costs
O
4,282.12
-
Administrative and Other Expenses
P
1,486.75
16.83
Interest
Q
Depreciation / Amortisation
TOTAL
Profit/ (Loss) Before Taxation
Tax Expense
- Current Tax [including for earlier year Rs. Nil (Previous Year Rs. 1.93
Lacs)]
- Deferred Tax
- Fringe Benefit Tax
Profit / (Loss) After Taxation
Add: Balance Brought Forward from Previous Year
Surplus/ (Deficit) carried to Balance Sheet
2.24
-
583.84
-
6,591.02
16.83
942.22
(16.41)
19.09
1.93
(72.68)
-
8.65
0.04
987.16
(18.38)
(114.41)
(96.03)
872.75
(114.41)
84
Profit and Loss Account for the period 1st April 2006 to 31st December 2006
01.04.2006
to
(Rs. In Lacs)
01.04.2005
to
31.12.2006
31.03.2006
Earnings Per Share
- Basic and Diluted (Rupees)
(Face Value of Equity Share - Rs. 10)
13.86
(7.35)
Significant Accounting Policies
R
Notes to Accounts
S
The Schedules referred to above form an integral part of the Profit and Loss Account.
This is the Profit and Loss Account referred to in our report of even date.
Partha Ghosh
Partha De Sarkar
Partner
Chief Executive
Officer
K. C. Samdani
Director
Price Waterhouse
Chartered Accountants.
Anil Harish
Director
Yagnesh Sanghrajka
Officer
Somnath Majumdar
Place: Mumbai
st
Date: 21 May, 2007
Place: Mumbai
85
Schedules forming part of the Balance Sheet as at 31st December, 2006
As at
As at
31.12.2006
31.03.2006
SCHEDULE 'A1'
Share Capital
Authorised
6,000,000 Equity shares of Rs. 10 each
(Previous Year - 600,000 Equity Shares of Rs. 100 each)
600.00
600.00
600.00
600.00
25.00
25.00
25.00
25.00
2,053.80
-
2,053.80
-
Notes:
- During the year the Authorised Share Capital of the Company was sub-divided
from 600,000 Equity Shares of Rs. 100 each to 6,000,000 Equity Shares of Rs. 10
each pursuant to the resolution approved by the Shareholders at their meeting held
on 17th June, 2006.
- Subsequent to the period-end the Authorised Share Capital of the Company was
increased from 6,000,000 Equity Shares of Rs. 10 each to 25,000,000 Equity
Shares of Rs. 10 each pursuant to the special resolution approved by the
Shareholders at their meeting held on 5th March, 2007.
Issued, Subscribed and Paid-up:
250,000 Equity Shares of Rs. 10 each, fully paid-up (Previous year 25,000 Equity
Shares of Rs. 100 each)
SCHEDULE 'A2'
Share Capital Suspense
20,537,898 Equity Shares of Rs. 10 each, pending allotment
86
As at
As at
31.12.2006
31.03.2006
SCHEDULE 'B'
General Reserve
As per last Balance Sheet
Add: Adjustments pursuant to the Scheme of Arrangement and
Reconstruction
-
-
47,646.26
47,646.26
-
872.75
(114.41)
48,519.01
(114.41)
1,126.49
-
1,126.49
-
SCHEDULE 'C'
Secured Loans
Lease Liability
[Due within a year Rs. 559.19 lacs (Previous year Rs. Nil)]
[Secured by first charge by hypothecation of assets]
87
88
As at
As at
31.12.2006
31.03.2006
SCHEDULE 'E'
Investments - (At cost)
(As per Annexure - A)
45,452.28
-
45,452.28
-
90.59
-
90.59
-
50.93
-
3,617.13
-
SCHEDULE 'F'
Jobs-in-Progress
SCHEDULE 'G'
Sundry Debtors (Unsecured)
Considered Good
- Over Six Months
- Other Debts
Considered Doubtful - Over Six Months
Less: Provision for Doubtful Debts
3,668.06
-
32.46
-
3,700.52
-
32.46
-
3,668.06
-
[Includes due from subsidiaries - Rs. 1,842.26 Lacs (Previous Year - Rs. Nil)]
89
As at
As at
31.12.2006
31.03.2006
SCHEDULE 'H'
Cash and Bank Balances
Cash on Hand
3.44
0.10
141.28
0.85
31.64
-
2.66
-
243.12
-
Bank Balances with Scheduled Banks in:
- Current Accounts
- Margin Money Accounts #
- Deposit Accounts
- Exchange Earners' Foreign Currency Account
[US 595,224 (Previous Year - Rs. Nil)]
-
Bank Balances with Non-Scheduled Banks in:
- Current Accounts
358.67
-
780.81
0.95
23.49
-
1,679.36
-
1,702.85
-
# - Under Lien with Banks towards Guarantee issued by them on behalf of the Company.
SCHEDULE 'I'
Interest Accrued on
- Inter-Corporate Deposits and Others
[Includes due from subsidiaries - Rs. 19.09 Lacs (Previous Year - Rs. Nil)]
Income Accrued
90
As at
As at
31.12.2006
31.03.2006
SCHEDULE 'J'
Loans and Advances
(Unsecured and Considered Good)
Advances Recoverable in Cash or in Kind or for value to be Received
2,608.69
-
Insurance Claims Receivable
250.74
-
Share Application Money
125.00
-
80.15
14.48
450.00
-
1,253.06
-
Employee Loans and Advances
104.18
-
Security Deposits
739.48
-
Balance with Excise and Custom Authorities
349.71
-
5,961.01
14.48
Current Liabilities
Sundry Creditors (Refer Notes 14(a) and 14(b) on Schedule S)
9,178.95
88.79
Due to Subsidiaries
1,348.20
-
326.46
16.05
10,853.61
104.84
382.60
-
4,675.40
-
1.48
-
5,059.48
-
[Includes due from subsidiaries Rs. 250.83 Lacs (Previous Year - Rs. Nil)]
Advance Tax and Tax Deducted at Source (Net of Provisions)
Inter-Corporate Deposits
Loans to Subsidiaries (Refer Note 7 on Schedule S)
SCHEDULE 'K'
Other Liabilities
SCHEDULE 'L'
Provisions
Retirement Benefits
Provision for Contingencies (Refer Note 13 on Schedule S)
Fringe Benefit Tax (Net of Advance Tax)
91
Schedules forming part of the Profit and Loss Account for the period 1st April 2006 to 31st December, 2006
01.04.2006
01.04.2005
to
to
31.12.2006
31.03.2006
SCHEDULE 'M'
OPERATING INCOME
I.T. and I.T. Enabled Services
- Overseas
5,605.07
-
- Domestic
1,829.72
-
7,434.79
-
19.09
-
2.12
-
67.42
-
Rent Income
5.29
-
Liabilities no longer payable written-back
0.88
-
Miscellaneous Income
3.65
0.42
98.45
0.42
4,026.30
-
166.31
-
89.51
-
4,282.12
-
[Tax Deducted at Source Rs. 93.58 Lacs (Previous Year - Rs. Nil)]
SCHEDULE 'N'
OTHER INCOME
Interest
- On Inter-Corporate Deposits
- On Others
Dividend
SCHEDULE 'O'
EMPLOYEE COSTS (including reimbursements)
Salary and Other Benefits
Contribution to Employees' Provident and Other Funds
Staff Welfare Expenses
92
Schedules forming part of the Profit and Loss Account for the period 1st April 2006 to 31st December, 2006
01.04.2006
01.04.2005
to
to
31.12.2006
31.03.2006
SCHEDULE 'P'
ADMINISTRATIVE AND OTHER EXPENSES
Rent and Compensation
336.58
0.60
Repairs and Maintenance - Others
Utilities
113.07
251.89
-
Insurance
16.24
-
Rates, Taxes and Duties
15.64
-
Advertisement and Business Promotion
18.56
-
Communication
58.03
-
Travelling, Conveyance and Car Hire Charges
Legal and Professional Charges
Training and Recruitment Charges
Computer and Other Equipment Hire Charges
Printing and Stationery
Membership and Subscription
Discounts and Commission
Software Expenses / Jobs-in-Progress Written Off
155.27
-
62.15
0.17
130.42
-
8.26
-
15.50
-
1.30
-
40.89
-
5.46
-
15.00
0.28
5.00
0.08
12.11
2.29
0.02
-
196.67
-
26.42
1,486.75
15.68
16.83
22.11
-
2.23
24.34
-
Auditors' Remuneration
- As Auditors
- For Other Matters
- Out-of-Pocket Expenses
Donation
Bank Charges and Commission
Directors' Sitting Fees
Exchange Loss (Net)
Loss on Sale / Scrapping of Assets
Miscellaneous Expenses
SCHEDULE 'Q'
INTEREST
- On Lease Liability
- Cash Credit and Other Facilities
93
Cash flow statement for the period ended 1st April 2006 to 31st Decemb
(Rs. in Lacs)
01.04.2005
to
31.03.2006
01.04.2006
to
31.12.2006
A Cash Flow from Operating Activities:
Profit / (Loss) before tax
Adjustments for:
Depreciation/ Amortisation
Liability no longer Payable Written Back
Interest Income
Dividend Income
Interest Expense
Unrealised Foreign Exchange (Gain)/ Loss
(net)
Provision for Retirement Benefits
942.22
(16.41)
621.11
-
1,563.33
(16.41)
583.84
(0.88)
(21.21)
(67.42)
24.34
85.51
16.93
Operating profit / (Loss) before working
capital changes
Adjustments for:
Trade Receivables
Stock in Trade/ Job in Progress
Loans and Advances
Trade Payables and Provisions
156.93
1.22
(513.43)
(204.83)
334.12
14.13
(4.99)
(225.99)
Operating profit / (Loss) after working capital
changes
Direct Taxes Paid / (Refund)
Net Cash / (Used in) from Operating
Activities
9.14
1,337.34
91.93
(A)
(7.27)
(5.11)
(91.93)
5.11
1,245.41
(2.16)
(825.26)
(825.26)
-
(24.34)
(24.34)
-
B Cash Flow from Investing Activities:
Purchase of Fixed Assets
Finance lease (principal portion)
Investments Made
Investments Sold
Dividend Income
Net Cash Used in Investing Activities
(578.88)
(160.48)
(5,783.97)
5,630.65
67.42
(B)
C Cash Flow from Financing Activities:
Interest Expense
Net Cash Used in Financing Activities
(24.34)
(C)
94
Cash flow statement for the period ended 1st April 2006 to 31st Decemb
01.04.2006
to
31.12.2006
Net Increase/ (decrease) in Cash and Cash
Equivalents (A+B+C)
Cash and Cash Equivalents as at the
beginning of the year
Cash and Cash Equivalents received pursuant
to Scheme of Arrangement
(Refer Note 16 to Schedule S)
Cash and Cash Equivalents as at the end of
the year
(Rs. in Lacs)
01.04.2005
to
31.03.2006
395.82
(2.16)
0.95
3.11
384.04
-
780.81
0.95
As at
31.12.2006
As at
31.03.2006
Cash and Cash Equivalents comprise :
Cash on Hand
Bank Balances with Scheduled Banks in :
3.44
0.10
141.28
-
31.64
0.85
2.66
-
- Exchange Earners' Foreign Currency Account
Bank Balances with Non-Scheduled Banks in:
243.12
-
- Current Accounts
358.67
-
780.81
0.95
- Current Accounts
- Margin Money Accounts
- Deposit Accounts
1.
The above cash flow statement has been prepared under the "Indirect Method" as set out in the Accounting Standard-3
on Cash Flow Statement, issued by the Institute of Chartered Accountants of India.
2.
In terms of the Scheme of Arrangement and Reconstruction referred to in Note 16 on Schedule S, the net assets
aggregating Rs. 49,700.06 Lacs are transferred to the Company. The demerger being a non cash transaction, the same
has been appropriately considered in the above Cash Flow Statement
95
3.
In view of the matter stated in Note 15 of Schedule R to the Accounts , the figures of the current period are not directly
comparable with those of the previous period.
This is the Cash Flow Statement referred in our report of even date.
Partha Ghosh
Partner
Price Waterhouse
Chartered Accountants.
Partha Sarkar
K. C. Samdani
Director
Anil Harish
Director
Yagnesh Sanghrajka
Global Chief Financial Officer
Somnath Majumdar
Place: Mumbai
Place: Mumbai
96
Schedules forming part of the Balance Sheet as at 31st December 2006
and the Profit and Loss Account for the period 1st April 2006 to 31st December 2006
SCHEDULE – R
Accounting Policies
1.
Accounting Convention
These Accounts have been prepared under historical cost convention on accrual basis
and comply with the Accounting Standards issued by the Institute of Chartered
Accountants of India. Disclosures under Part I and II of Schedule VI of the Act have been
made in the financial statements to the extent considered adequate.
2.
Fixed Assets
Fixed assets are stated at cost of acquisition, including any cost attributable for bringing
the asset to its working condition for its intended use, less accumulated depreciation.
Tangible Assets
a. Depreciation on assets for own use is provided on Straight Line Method on pro-rata
basis at the rates prescribed under Schedule XIV to the Act, except for leasehold
improvements, which are depreciated over the period of the lease. Assets costing
less than Rs. 5,000 each are depreciated fully in the year of acquisition.
b. Assets given to employees on contractual obligations are depreciated to the extent of
50% of the value over a period of four years, at the end of which these assets are
transferred to the respective employees at the residual book value.
Intangible Assets
Commercial Rights associated with business and customers are amortised over a period
of five years. Computer software is amortised over a period of 4 to 5 years.
Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any indication
that an asset may be impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the asset or
recoverable amount of the cash generating unit to which the asset belongs is less than
its carrying amount, the carrying amount is reduced to its recoverable amount. The
reduction, if any, is treated as an impairment loss and is recognised in the Profit and
Loss Account. If at the Balance Sheet date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is reassessed and
the asset is reflected at the recoverable amount.
3.
Valuation of Stock-in-trade
Jobs in Progress has been valued at cost/ contract value on the basis of work completion
at the year-end.
97
SCHEDULE – R
Accounting Policies
4.
Valuation of Investments
Investments are carried at cost. The securities held by the Company are long-term/
strategic in nature. In the Management’s opinion, the decline, if any, in the value of these
long term/ strategic investments is temporary in nature and based on overall investment
strategies/ plans, no provision is considered in this respect. Where the decline in the
value of these investments is permanent in nature, a provision to recognise such decline is
made in the books of account.
5.
Revenue Recognition
a. In respect of I.T. Division, revenue is billed to clients as per terms of specific contracts.
On fixed-price contracts, revenue is recognised based on milestones achieved as
specified in the contracts on the basis of work completed. Revenue from sale of
licences for the use of software applications is recognised on transfer of title to the
user of licence. Revenue from rendering Technical Project and other services is
recognised during the period in which services are rendered.
In Claim Processing Activity, revenue is recognised based on number of resolved
claims, at applicable rates.
In Call Centre Activity, revenue is recognised based on actual utilisation or minimum
utilisation level specified in the agreements, whichever is higher.
b. Profits/ Losses from investment activities (including gain/ (loss) on sale of stake in
subsidiaries) are recognised on the basis of trade dates/ contracts/ agreements
entered with parties.
c. Interest and Dividend income is accounted on accrual basis.
d. In respect of other heads of income, the Company follows the practice of accounting of
such income on accrual basis.
6.
Foreign Currency Transactions
a. All foreign currency transactions are recorded at the rates prevailing on the date of
transaction.
b. All foreign currency current assets and liabilities are translated at the exchange rate
prevailing at the period-end and the exchange difference has been ascertained and
recognised in the books of accounts.
c. Exchange differences arising on repayment/ translation of foreign currency liabilities
incurred for the purpose of acquiring fixed assets are adjusted with the carrying
amount of respective fixed assets.
98
SCHEDULE – R
Accounting Policies
d. Forward exchange contracts are accounted for, by amortising the difference between
the forward rate and the exchange rate on the date of the transaction over the life of
the contract.
e. In respect of transactions related to foreign branches, all revenue and expense
transactions during the year are reported at average rate. Monetary assets and
liabilities are translated at the rate prevailing on the Balance Sheet date whereas nonmonetary assets and liabilities are translated at the rate prevailing on the date of the
transaction. Net gain / loss on foreign currency translation in respect of transactions of
all foreign branches, which are integral to the Company, are recognised in the Profit
and Loss Account.
7.
Employee Benefits
(i)
Defined Contribution Plan
The Company has Defined Contribution plans for post employment benefits
namely Provident Fund and Superannuation Fund which are recognised by the
income tax authorities and administered through trustees.
Under the Provident Fund Plan, the Company contributes to a Government
administered provident fund on behalf of its employees and has no further
obligation beyond making its contribution.
The Superannuation Fund applicable to certain employees, constitutes an insured
benefit, which is classified as a defined contribution plan as the Company makes
contributions to an insurance company and has no further obligation beyond
making the payment to the insurance company.
The Company makes contributions to State plans namely Employee's State
Insurance Fund and Employee's Pension Scheme 1995 and has no further
obligation beyond making the payment to them.
The Company's contributions to the above funds are charged to revenue every
year.
(ii)
Defined Benefit Plan
The Company has a Defined Benefit plan namely Gratuity covering substantially all
of its employees in India. The gratuity scheme is funded through Group Gratuity
Policy with Life Insurance Corporation of India (‘LIC’). For the balance employees
the scheme is unfunded. The Company also has an unfunded, non contributory
pension benefit plan at certain foreign branches.
The liability for the defined benefits plan of Gratuity and Pension is determined on
the basis of an actuarial valuation at the period end.
99
SCHEDULE – R
Accounting Policies
Termination benefits are recognised as an expense as and when incurred.
Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised
immediately in the Profit and Loss Account as income or expense.
(iii)
Other Employee Benefits:
The employees of the Company are entitled to leave encashment as per
the leave policy of the Company. The liability in respect of leave
encashment is provided, based on an actuarial valuation carried out by an
independent actuary as at the period end.
8.
Taxation
a. Provision for Income Tax is made after considering exemptions and deductions
available under the Income Tax Act, 1961, of India and legal advice from time
to time. Provisions for Income Tax in respect of overseas branches are made
as per the tax laws applicable to the relevant country.
b. Deferred tax resulting from timing differences between book and tax profits is
accounted for under the liability method, at the current rate of tax, to the extent
that the timing differences are expected to crystallise.
9.
Provisions and Contingent Liabilities
Provisions are recognised when the Company has legal and constructive
obligation as a result of past event for which it is probable that a cash outflow will
be required and a reliable estimate can be made of the amount of obligation.
Contingent Liabilities are disclosed when the Company has possible or present
obligation and it is probable that a cash flow will not be required to settle that
obligation.
10.
Leases
a. Leases of assets under which all the risks and benefits of ownership are
substantially transferred to the lessee are classified as finance leases. Finance
leases are capitalised at the estimated present value of the minimum lease
payments. Each lease payment is allocated between the liability and finance
charges so as to achieve a constant rate on the finance balance outstanding.
The corresponding rental obligations, net of finance charges, are included in
secured loans. The interest element of the finance charge is charged to the
Profit and Loss Account over the lease period. Leased assets are being
depreciated over the lease period.
b. Assets acquired as leases where a significant portion of the risks and rewards
of the ownership are retained by the lessor are classified as Operating Leases.
Lease rentals are charged to the Profit and Loss Account on accrual basis.
100
SCHEDULE – R
Accounting Policies
11.
Accounting for Employee Stock Options
Stock Options to be granted to the employees of the Company and its subsidiaries under
the stock option schemes established are accounted as per the treatment prescribed by
Employee Stock Option Scheme and Employee Stock Purchase Guidelines 1999 (SEBI
guidelines) as amended from time to time, issued by the Securities and Exchange Board
of India. According to the above guidelines, the excess of market value of the stock
options as on the date of grant over the exercise price of the options, if any, is to be
recognised as deferred employee compensation and is charged to the Profit and Loss
Account ratably over the vesting period of the options.
101
and the Profit and Loss Account for the period 1st April 2006 to 31st December 2006.
SCHEDULE – S
Notes to Accounts
1.
Capital Commitments and Contingent Liabilities (includes balances taken over
pursuant to Scheme of Arrangement and Reconstruction as referred to in Note 15
below)
a)
Estimated Amount of Contracts (net of capital advances) remaining to be
executed on Capital Account – Rs. 1,126.01 Lacs (Previous Year Rs. Nil)
b)
Contingent liabilities in respect of:
i.
Bank Guarantee given by Corporation Bank in favour of the
President of India, Deputy Commissioner of Customs – Rs. 0.53
Lacs (Previous Year Rs. Nil).
ii.
Bank Guarantee given by IndusInd Bank in favour of the
Brihanmumbai Mahanagarpalika Corporation, Octroi- Department
[Mumbai Municipal Corporation] Rs. 1.25 Lacs (Previous Year Rs.
Nil)
iii.
Bank Guarantee given by Canara Bank in favour of the President of
India, Deputy Commissioner of Customs – Rs. 115.87 Lacs
(Previous Year Rs. Nil)
iv.
Guarantee given by the Company for Source1 HTMT Inc., U.S.A., a
subsidiary company, in regard to the sublease agreement entered
into by the subsidiary Rs. 206.45 Lacs. (Previous Year Rs. Nil)
v.
Indemnity Bond provided by the Company to Travelers Casualty
and Surety Company of America to procure bond, for telemarketing
work undertaken by Source1 HTMT Inc., a subsidiary company, to
meet bonding requirement for the States of Mississippi, Louisiana
and Kentucky at their face value up to an amount of Rs. 53.10 Lacs
(Equivalent USD 1.20 Lacs) (Previous Year Rs. Nil)
vi.
Corporate Guarantee provided by the Company in favour of Ryder
System, Inc., to guarantee the payment and performance of
Source1 HTMT Inc., a subsidiary company, under the Outsourcing
Master Services Agreement entered between the two.
vii.
Bank Guarantee given by State Bank of Mauritius Limited in favour
of Mauritius Telecom Limited for indemnifying against any loss for
supply of an International Private Leased Circuit (IPLC) to the
Company, to the maximum extent of Rs. 9.62 Lacs (Equivalent USD
21,735) (Previous Year Rs. Nil) or any part thereof.
viii.
Bank Guarantee given by State Bank of Mauritius Limited in favour
of the Ministry of Labour, Mauritius – Rs. 0.40 Lacs (Equivalent
MUR 0.30 Lacs) (Previous Year Rs. Nil) for expense maintenance
and repartition of two employees of the company.
102
SCHEDULE – S
Notes to Accounts
c)
ix.
Corporate Guarantee provided by the Company in favour of sellers
of Affina LLC, USA to secure the performance of Source1 HTMT Inc
(buyer entity)., a subsidiary company, of its obligations under the
Unit Purchase Agreement entered into between buyer entity and
sellers of Affina LLC, USA.
x.
Corporate Guarantee provided by the Company in favour of Zurich
Services Corporation, Schaumburg to secure the performance of
Source1 HTMT Inc., a subsidiary company, under the Master
Service Agreement, pursuant to which Source1 HTMT Inc. has
contracted to perform certain services.
An irrevocable Letter of Credit for Rs. 885 Lacs (Equivalent USD 20 Lacs)
(Previous Year Rs. Nil) issued towards performance of an overseas
contract against charge on current and fixed assets of the Company, both
present and future.
2.
The Company was originally incorporated on 13th January, 1995 as Tele Video
Communications India Limited. During the period, the name of the Company was
changed to Hinduja Technologies Limited effective 19th June, 2006 and thereafter
to HTMT Technologies Limited effective 11th July, 2006, which was subsequently
changed to HTMT Global Solutions Limited effective 12th March, 2007.
3.
Earnings per Equity Share (Basic and Diluted)
01.04.2006
to
31.12.2006
Profit/ (Loss) for the year after Tax (Rs. in Lacs)
Weighted average number of equity shares for
Earnings per Share Computation
For Basic and Diluted Earnings per share (Nos.)
Nominal Value of an equity share (Rs.)
Earnings per share after Tax (Basic and Diluted)
(Rs.)
01.04.2005
to
31.03.2006
987.16
(18.38)
7,120,896
10.00
13.86
*250,000
*10.00
(7.35)
* Consequent to the sub-division of equity shares during the period, the weighted
average number of Equity Shares has been restated from 25,000 equity shares
of Rs. 100 each to 250,000 Equity Shares of Rs. 10 each.
103
SCHEDULE – S
Notes to Accounts
4.
Break-Up of Deferred Tax Asset / (Liability)
As at
31.12.2006
Deferred Tax Liability
Depreciation on Fixed Assets
Total Deferred Tax Liability
Deferred Tax Asset
Liabilities to be deducted for Tax purposes when
paid
Unabsorbed carry forward loss/ depreciation
Total Deferred Tax Asset
Net Deferred Tax Asset / (Liability)
5.
(Rs. in Lacs)
As at
31.03.2006
565.99
565.99
-
21.41
-
93.98
115.39
(450.60)
-
Segment Information
In accordance with Accounting Standard 17 “Segmental Reporting” issued by the Council of
the Institute of Chartered Accountants of India, the Company has determined its operations
as a single reportable business segment, namely Information Technology/ Information
Technology Enabled Services. Hence, it has no other reportable segments. Thus the
segment revenue, segment results, total carrying value of segment assets and liabilities,
capital expenditure incurred to acquire the assets, the total amount of charge for depreciation
are all as reflected in the financial statements as of and for the period ended 31st December,
2006.
Geographical Segments
Particulars
India
(Rs. in Lacs)
Total
Outside India
01.04.2006 01.04.2005 01.04.2006 01.04.2005 01.04.2006 01.04.2005
to
to
to
to
to
to
31.12.2006 31.03.2006 31.12.2006 31.03.2006 31.12.2006 31.03.2006
Sales
Revenue*
Carrying
Amount of
Assets#
Capital
Expenditure
1,829.72
-
5,605.07
-
7,434.79
-
5,201.00
15.43
62,886.99
-
68,087.99
15.43
395.29
-
1,659.30
-
2,054.59
-
* - There are no Inter Segment Revenues
# - includes Strategic Investments in various I.T. subsidiaries.
104
SCHEDULE – S
Notes to Accounts
6.
Related Party Disclosures
IA
Holding Company
Hinduja TMT Limited (upto 30th September, 2006)
IB
Individual having control with relatives and associates.
Mr. Ashok P. Hinduja
II
1.
2.
3.
4.
5.
6.
7.
8.
III
Subsidiaries of HTMT Global Solutions Limited (includes
indirect subsidiaries)
Pacific Horizon Limited, Mauritius
Source1 HTMT Inc., U.S.A.
C-Cubed B.V., Netherlands
C-Cubed (Antilles) N.V., Netherlands
Customer Contact Centre Inc., Manila
HTMT Europe Limited, U.K.
Hinduja TMT France., France
Affina L.L.C ., U.S.A ( w.e.f. 10th November, 2006)
Key Management Personnel
Mr. Partha De Sarkar (Chief Executive Officer)
IV
1.
2.
3.
4.
5.
6.
7.
8.
Enterprises where common control exists
Hinduja TMT Limited
IndusInd Media & Communications Limited
Hinduja Group India Limited
Grant Investrade Limited
Aasia Corporation
Aasia Management & Consultancy Private Limited
Aasia Properties Development Limited
Note:
The parties mentioned in Note II, III and IV above are considered to be related w.e.f. 1st
October, 2006 in view of the Scheme of Arrangement and Reconstruction referred to in
Note 15 below.
105
SCHEDULE – S
Notes to Accounts
The following details pertain to transactions carried out with the related parties in the
ordinary course of business and the balances outstanding at the period-end:
Nature of Transaction
During the Year
Rendering of Services
Source1 HTMT Inc.
(Rs. in Lacs)
Total
Parties
Personnel Parties
Parties
referred to referred to referred to referred
in IA and in II above in III above to in IV
above
IB above
[-]
3,942.50
[-]
[-]
[-]
[-]
[-]
3.33
[-]
3.33
[-]
3,942.50
[-]
3.33
[-]
3,945.83
[-]
[-]
[-]
[-]
3,942.50
[-]
[-]
[-]
19.09
[-]
19.09
[-]
[-]
[-]
[-]
[-]
[-]
19.09
[-]
19.09
[-]
-
2.08
-
-
2.08
[-]
[-]
[-]
2.08
[-]
[-]
[-]
[-]
[-]
[-]
2.08
[-]
[-]
[-]
[-]
[-]
[-]
[-]
[-]
[-]
[-]
33.54
[-]
[0.60]
33.54
[0.60]
33.54
[-]
[0.60]
33.54
[0.60]
[-]
[-]
22.11
[-]
22.11
[-]
[-]
[-]
[-]
[-]
22.11
[-]
22.11
[-]
[-]
-
[-]
4.02
[-]
4.02
[-]
4.02
[-]
Others
Total
Interest Income
C-Cubed (Antilles) N.V.
Total
Miscellaneous Income
Customer Contact Centre Inc.
Total
Rent
IndusInd Media & Communication
Limited
Others
Total
Interest on Leased Assets
Total
Communication Charges
IndusInd Media & Communication
Limited
Total
[-]
[-]
[-]
[-]
4.02
[-]
106
SCHEDULE – S
Notes to Accounts
Executive Remuneration
Mr. Partha De Sarkar
Total
Reimbursement of expenses
from other Companies
Hinduja TMT Limited
Total
Reimbursement of expenses to
other Companies
Hinduja TMT Limited
Source1 HTMT Inc.
Total
Assets acquired on finance
lease
Total
Period-end Balance
Receivable net of payable as at
the period-end
Source1 HTMT Inc.
(Rs. in Lacs)
Total
Parties
Parties
Personnel Parties
IB above
above
[-]
[-]
[-]
[-]
16.31
[- ]
16.31
[-]
[-]
[-]
16.31
[-]
16.31
[-]
[-]
[-]
[-]
[-]
[-]
[-]
39.97
[-]
39.97
[-]
39.97
[-]
39.97
[-]
[-]
[-]
[-]
[-]
218.30
[-]
218.30
[-]
[-]
[-]
[-]
49.43
[-]
[-]
49.43
[-]
49.43
[-]
218.30
[-]
267.73
[-]
[-]
[-]
1,286.97
[-]
1,286.97
[-]
[-]
[-]
[-]
[-]
1,286.97
[-]
1,286.97
[-]
-
-
1,710.61
[-]
[-]
[-]
[-]
[-]
[-]
[-]
1,845.47
[-]
0.59
[-]
1,846.06
[-]
[-]
1,291.14
[-]
1,845.47
[-]
37.03
[-]
4,884.25
[-]
1,710.61
C-Cubed (Antilles) N.V.
Hinduja TMT Limited
Others
Total
[-]
[-]
[-]
[-]
[-]
[-]
1,291.14
[-]
[-]
36.44
[-]
3,038.19
[-]
107
SCHEDULE – S
Notes to Accounts
(Rs. in Lacs)
Total
Parties
Parties
Personnel Parties
IB above
above
Payable net of receivable as at
the period-end
Customer Contact Centre Inc.,
Manila
IndusInd Media &
Communications Limited.
Total
Investments
Pacific Horizon Limited
Total
-
2,147.64
-
-
2,147.64
[-]
[-]
[-]
[-]
[-]
2,147.64
[-]
[-]
[-]
[-]
[-]
89.97
[88.79]
89.97
[88.79]
[-]
89.97
[88.79]
2,237.61
[88.79]
[-]
[-]
42,437.96
[-]
42,437.96
[-]
[-]
[-]
[-]
[-]
42,437.96
[-]
42,437.96
[-]
Figures in brackets pertain to the previous year.
7.
Loans and Advances in the nature of Loans to subsidiaries:
Name of the subsidiary
C-Cubed (Antilles) N.V., an indirect
subsidiary
Total
•
•
•
•
As at 31.12.2006
1,253.06
1,253.06
(Rs. in Lacs)
Maximum
Balance
Outstanding
1,301.48
1,301.48
Loans and Advances, in the nature of Loans to Subsidiaries as shown above
are repayable on demand.
There are no loans and advances in the nature of loans to associates.
There are no other loans and advances in the nature of loans where there is no
repayment schedule.
All loans and advances in the nature of loans are given on terms within the
limits specified under Section 372A of The Act.
108
SCHEDULE – S
Notes to Accounts
8.
Details of balance with Non Scheduled Banks
Name of Bank
As at
31.12.2006
In Current Account
HSBC Bank (Canada and New York)
Chinatrust Bank, Philippines
International
Exchange
Bank,
Philippines
Sub-total
9.
39.20
5.79
48.31
92.77
277.65
323.34
93.30
693.76
In Deposit Account
Chinatrust Bank, Philippines
Sub-total
265.37
265.37
279.30
279.30
Total
358.67
973.06
a)
Earnings in Foreign Exchange:
Particulars
IT and IT enabled Services
b)
01.04.2006
to
31.12.2006
5,605.07
(Rs. in Lacs)
01.04.2005
to
31.03.2006
-
01.04.2006
to
31.12.2006
31.75
40.89
34.50
2,552.58
(Rs. in Lacs)
01.04.2005
to
31.03.2006
-
Expenditure in Foreign Currency:
Particulars
Foreign Travel (including allowances)
Discounts and Commission
Direct Cost
Expenditure incurred at overseas
branches
10.
(Rs. in Lacs)
Maximum Balance
Outstanding
Quantitative Details
Additional information pursuant to the provisions of paragraph 3 of Part II of Schedule to
the Act:
Particulars
Mutual Fund Units
Purchases*
Nos.
Amount
(Rs. in
Lacs)
57,742,290
5,776.19
Sales
Nos.
56,283,186
Amount
(Rs. in
Lacs)
5,630.65
* excludes units transferred from Hinduja TMT Limited, pursuant to the Scheme of
Arrangement and Reconstruction referred to in Note 15 below.
109
SCHEDULE – S
Notes to Accounts
11.
Finance Leases
The details of finance leases are as follows:
The Company (the lessee) has taken certain assets on lease at cost Rs. 1,286.97
Lacs (Previous Year Rs. Nil ) on lease from Customer Contact Centre., Manila for
four years. The Company has classified these assets as assets acquired under
finance lease in accordance with Accounting Standard 19 – ‘Leases’.
Minimum lease payments as at 31st December, 2006:
(Rs. in Lacs)
Particulars
01.04.2006
to
31.12.2006
Present Value
1,126.49
[-]
Finance Charge
22.11
[-]
The minimum lease payment is payable as follows:
(Rs. in Lacs)
Particulars
Minimum Future Lease Rentals
Due
within Due later than one Due after
one year
year and not later years
than five years
559.19
567.30
[-]
[-]
61.62
32.16
[-]
[-]
620.81
599.46
[-]
[-]
Present Value
Finance
Charges
Total
five
[-]
[-]
[-]
12.
Operating Leases
The details of operating leases are as follows:
Particulars
Office
Premises
(Rs. in Lacs)
Amount
recognised
Due
within Due later than Due after five during the
year
one year
one year and not years
later than five
years
908.55
2,404.70
799.55
256.65
[-]
[-]
[-]
[-]
Minimum Future Lease Rentals
The operating lease arrangement relating to office premises extend up to a maximum of
ten years from the respective dates of inception and are renewable on mutual consent. In
110
SCHEDULE – S
Notes to Accounts
addition, the Company has entered into various cancellable leasing arrangements for
office and residential premises and towards which an amount of Rs. 79.93 Lacs (Previous
Year Rs. 0.60 Lacs) has been recognised in the Profit and Loss Account.
13.
Provisions for contingencies
The Company has recognised Provision for Contingencies towards possible obligation that
may arise in future for past agreements entered into with parties with respect to
investments. Actual disbursals will be determined on finalisation of interpretations of certain
clauses of the said agreements.
14.
a) As identified by the Management, the Company had no outstanding dues to small-scale
industrial undertakings as at 31st December, 2006. (Previous Year Rs. Nil).
b) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues,
which are outstanding for more than 45 days at the balance sheet date. The Micro, Small
and Medium Enterprises have been identified on the basis of information available with the
Company. This has been relied upon by the auditors.
15.
Pursuant to the Scheme of Arrangement and Reconstruction for demerger of IT/ ITES
business between the Company, Hinduja TMT Limited and their respective shareholders
and creditors, as approved by the Shareholders of Hinduja TMT Limited at their meeting
held on 4th December, 2006 and subsequently sanctioned by Honourable High Court of
Bombay effective 7th March, 2007, the assets and liabilities (including capital commitments
and contingent liabilities) pertaining to IT/ ITES business were transferred to and vested in
the Company w.e.f 1st October, 2006. Accordingly, such assets and liabilities have been
taken over at their book values and General Reserve is credited to the extent of the
excess of net assets taken over the face value of new equity shares issued. Pursuant to
the aforesaid Scheme, the Board of Directors at their meeting held on 10th April, 2007
allotted equity shares of Rs. 10 each to the Shareholders of Hinduja TMT Limited in ratio of
1 equity share of Rs. 10 each of the Company against 2 equity shares of Rs. 10 each held
in Hinduja TMT Limited. The face value of new equity shares aggregates to Rs. 2,053.80
lacs, which is disclosed under Schedule A2 – Share Capital Suspense pending allotment
as at 31st December, 2006. Further, in the terms of the aforesaid Scheme, the existing
equity shares of Rs. 10 each aggregating Rs. 25 Lacs held by Hinduja TMT Limited and its
nominees will be cancelled on allotment of new equity shares in the Company. On
cancellation of such equity shares, the amount will be credited to General Reserve.
Assets and Liabilities taken over by the Company are as follows
Fixed Assets (including Capital Work-inProgress)
Investments
Net Current Assets
Net Worth*
(Rs. in Lacs)
9,149.26
45,266.77
(4,715.97)
49,700.06
111
SCHEDULE – S
Notes to Accounts
16.
The Company has during the period adopted Accounting Standard 15 (revised 2005)
‘Employee Benefits’.
The Company has classified the various benefits provided to employees as under:I Defined Contribution Plan
a. Provident Fund
b. Superannuation Fund
c. State Defined Contribution Plans
i. Employers' Contribution to Employee's State Insurance
ii. Employers' Contribution to Employee's Pension Scheme 1995.
During the period, the Company has recognised the following amounts in the Profit and
Loss Account (Rs. in lacs)
- Employers' Contribution to Provident Fund [Includes EDLI
charges and Employers' Contribution to Employee's Pension
Scheme 1995]
- Employers' Contribution to Employee's State Insurance
- Employers' Contribution to Other Employee's Benefit
Scheme
* Included in Contribution to provident and other funds (Refer
Schedule ‘O’)
II
65.40
38.32
53.15
Defined Benefit Plan
Gratuity and Pension Plan
In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done
in respect of the aforesaid defined benefit plan of gratuity and pension based on the
following assumptions: 8%
Discount Rate (per annum)
4%Rate of increase in Compensation levels
7%
Rate of Return on Plan Assets
8%
112
SCHEDULE – S
Notes to Accounts
A)
Changes in the Present Value of Obligation
(Rs. in lacs)
Non
Funded
76.96
223.88
Funded
Present Value of Obligation as at 1st April, 2006
Taken over pursuant to the Scheme of Arrangement
and Reconstruction referred to in Note 15 above.
Interest Cost
Past Service Cost
Current Service Cost
Curtailment Cost / (Credit)
Settlement Cost / (Credit)
Benefits Paid
Actuarial (gain) / loss on obligations
Present Value of Obligation as at 31st December,
2006
B)
1.89
11.14
(5.67)
(3.60)
80.72
5.80
48.41
278.09
Changes in the Fair value of Plan Assets
Present Value of Plan Assets at the April 1, 2006
Taken over pursuant to the Scheme of Arrangement and
Reconstruction referred to in Note 15 above.
Expected Return on Plan Assets
Actuarial Gains and Losses
Contributions
Benefits Paid
Fair Value of Plan Assets at 31st December, 2006
(Rs. in lacs)
154.51
3.31
(3.31)
(5.67)
148.84
C) Percentage of each Category of Plan Assets to total Fair Value of Plan Assets
as at 31st December, 2006
The Plan Assets are administered by Life Insurance Corporation of India (‘LIC’) as per
Investment Pattern stipulated for Pension and Group Schemes Fund by Insurance
Regulatory and Development Authority regulations.
D) Reconciliation of Present Value of Defined Benefit Obligation and the Fair
value of Assets
(Rs. in lacs)
Present Value of funded Obligation as at 31st December,
80.72
2006
Fair Value of Plan Assets as at 31st December, 2006
148.84
Funded Status
148.84
Present Value of unfunded Obligation as at 31st December,
264.92
2006
Unrecognised Actuarial (gains) / losses
Unfunded Net Asset / (Liability) Recognised in Balance
Sheet**
(264.92)
** Included in Retirement Benefits (Refer Schedule ‘L’)
113
SCHEDULE – S
Notes to Accounts
E) Amount recognised in the Balance Sheet
Present Value of Obligation as at 31st December, 2006
Fair Value of Plan Assets as at 31st December, 2006
Asset/(Liability) recognised in the Balance Sheet***
*** Included in Advances Recoverable in Cash or in Kind or for
value to be Received (Refer Schedule ‘J’)
F)
(Rs. in lacs)
80.72
148.84
68.12
Expenses recognised in the Profit and Loss Account
Current Service Cost
Past Service Cost
Interest Cost
Expected Return on Plan Assets
Curtailment Cost / (Credit)
Settlement Cost / (Credit)
Net actuarial (gain) / loss recognised in the period
Total Expenses recognised in the Profit and Loss
Account****
**** Included in Employee Cost (Refer Schedule ‘O’)
(Rs. in lacs)
59.55
7.69
(3.31)
(0.29)
63.64
17.
Pursuant to the Scheme of Arrangement and Reconstruction as referred to in Note 15
above, being effective 7th March, 2007, the stock options granted and not vested/
exercised to/by the employees of Hinduja TMT Limited and transferred to the Company
have lapsed. In accordance with the Compensatory Employees Stock Option Plan, 2006
as approved by the Shareholders of the Company at their Extra Ordinary General Meeting
held on August 31, 2006 and pursuant to the aforesaid Scheme of Arrangement and
Reconstruction, 308,860 lapsed options are deemed to have been granted to employees
transferred to the Company.
18.
Provision for Income – Tax for the current year has been made after taking into account
benefit available under Section 10A of the Income Tax Act, 1961, of India, in respect of
business process outsourcing and call centre activities carried out by the Company. The
Company has maintained separate books of account for the aforesaid activities.
114
SCHEDULE – S
Notes to Accounts
19.
Previous financial year accounts are for the financial year ended 31st March, 2006. In view
of Scheme of Arrangement and Reconstruction referred to in Note 15 above, the figures of
the current period are not comparable with those of the previous period.
20.
Previous Year’s figures have been regrouped/ rearranged, wherever considered
necessary.
The Schedules A to S and Annexure A referred to above form an integral part of the Accounts.
Partha Ghosh
Partner
Membership No. F– 55913
Price Waterhouse
Chartered Accountants
Partha Sarkar
Anil Harish
Director
K. C. Samdani
Director
Yagnesh Sanghrajka
Officer
Somnath Majumdar
Head – Legal & Secretarial
Place: Mumbai
Date : 21st May, 2007
Place: Mumbai
Date : 21st May, 2007
115
ANNEXURE 'A'
INVESTMENTS (Long Term)
Sr.
No.
Scrip
As at 31.12.2006
Face Value
Per Share Quantity Amount
Nos.
Rs.
(Rs. in Lacs)
As at 31.03.2006
Quantity
Amount
Nos.
INVESTMENT IN SUBSIDIARY
I (Unquoted)
Pacific Horizon Limited, Mauritius
USD 1
32,514,228 42,437.96
TOTAL INVESTMENTS IN
SUBSIDIARY (A)
-
-
42,437.96
OTHER UNQUOTED INVESTMENTS
II (AT COST)
(a) EQUITY SHARES:
IndusInd Information Technologies
Limited
10
400,000
40.00
-
-
I.D.B.I.-Principal Floating Rate Fund
(Fixed Maturity Plan - Dividend
Reinvestment)
(N.A.V. Rs. 10.0031 per unit)
10
10,218,072
1,022.12
-
-
I.D.B.I.-Principal Cash Management Fund
(Liquid Option)
10
4,521,662
452.20
-
-
I.D.B.I.-Principal Floating Rate Fund
(Fixed Maturity Plan - Dividend Payout)
10
15,000,000
1,500.00
-
-
(b) MUTUAL FUNDS
Total (B)
TOTAL VALUE OF UNQUOTED
INVESTMENTS (A+B)
3,014.32
45,452.28
117
Additional information pursuant to Part IV of Schedule VI to The Act
ANNEXURE ‘B’
Balance Sheet Abstract and Company’s General Business Profile:
I
Registration Details
Registration No.
State Code.
U 9 2 1 9 9 M H 1 9 9 5 P L C 0 8 4 6 1 0
1 1
Balance Sheet Date
3 1
1 2
0 6
Capital raised during the period (Amount in Rs. Thousands)
II
III
Public Issue
N I L
Rights Issue
N I L
Bonus Issue
N I L
Private Placement
N I L
Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Sources of Funds
Total Liabilities
5 2 1 7 4 9 0
Total Assets
5 2 1 7 4 9 0
Paid-Up Capital
2 5 0 0
4 8 5 1 9 0 1
Secured Loans
1 1 2 6 4 9
Unsecured Loans
N I L
Application of Funds
Net Fixed Assets
1 0 4 3 2 3 9
IV
Investments
4 5 4 5 2 2 8
Net Current Liability
3 7 0 9 7 7
Miscellaneous Expenditure
N I L
Accumulated Losses
N I L
Deferred Tax Liability
4 5 0 6 0
Performance of Company (Amount in Rs. Thousands)
Total Income
7 5 3 3 2 4
( Please tick appropriate box + for Profit, - for Loss )
+-
√
Profit/Loss Before Tax
9 4 2 2 2
Total Expenditure
6 5 9 1 0 2
+ √
( Please tick appropriate box + for positive, - for negative )
+-
√
V
Earning per Share in Rs.
1 3 . 8 6
Profit/Loss After Tax
9 8 7 1 6
Dividend Rate %
N I L
Generic Names of Three Principal Products/Services of the Company (as per monetary terms)
Item Code No. (ITC Code)
N O T
A P P L I C A B L E
Product
S O F
D E V
I T
Description
T W A R E
E L O P M E N T
E N A B L E D
S E R V I C E S
Partha Sarkar
Yagnesh Sanghrajka
Officer
Somnath Majumdar
Anil Harish
Director
K. C. Samdani
Director
Mumbai
st
Date: 21 May, 2007
122
Financial and other Information of Group Companies:
Hinduja TMT Limited:
Date of Incorporation : 18th July 1985
Registration Number: L51900MH1985PLC036896
Registration with: Registrar of Companies Maharashtra, Mumbai
Nature of Activities: Holding Company of media and other Business
Consolidated
(Rs in lakhs)
Year
Paid- Reserves
Eqity
Capital
2003-2004
2004-2005
2005-2006
4090.39
4090.39
4090.39
29541.96
49257.69
52314.90
Sales
Profit
after Tax
EPS
(Rs.)
28534.74
6615.70
61383.99 26473.18
46988.94
2723.17
20.57
56.54
6.37
Book
Value
per
Share
(Rs)
82.22
130.42
137.90
Board of Directors:
Mr. A.P.Hinduja Executive Chairman
Mr. R.P.Hinduja Co-Chairman
Mr. D.G. Hinduja
Mr. Anil Harish
Mr. H.C.Asher
Mr. R.P.Chitale
Ms Vinoo Hinduja (Alternate Director to Mr. R.P.Hinduja)
Mr. Ravi Mansukhani Alternate Director to Mr. D.G.Hinduja.
IndusInd Media & Communications Limited:
Date of Incorporation : 23rd February 1995
Registration Number: U92132MH1995PTC085835
Nature of Activities: Digital media distribution, Broadband Internet, Cable Movie and
Home Shopping Channels, Financing content production & Content Aggregation.
(Rs in lakhs)
Year
2003-04
2004-05
2005-06
Paid Reserves
Capital
19079.78
19079.78
13771.84
11344.29
11344.29
16612.23
Sales
Profit
after Tax
EPS
(Rs.)
10572.24
(414.13)
(2.42)
8887.16 (6508.41) (13.09)
13781.57
(386.44)
(0.68)
Book
Value
per
Share
(Rs)
14.44
2.93
2.12
118
Board of Directors:
Mr. A.K.Das (Chairman)
Mr. Ravi Mansukhani
Mr.Ashok Mansukhani
Mr. K.C. Samdani
Mr.Sanjeev R.Pandit
Brig.. T. M. Sridharan
Mr. R.P.Chitale.
Grant Investrade Limited:
Date of Incorporation : 18th March 1997
Registration Number: U67120MH1997PLC106676
Nature of Activities: Special Purpose Vehicle-Investment Company
(Rs in lakhs)
Year
Paid- Reserves
Eqity
Capital
2003-2004
2004-2005
2005-2006
415.49
415.49
415.49
21757.91
21757.91
21757.91
Sales
Profit
after
Tax
EPS
(Rs.)
0.99
0.89
0.93
(0.75)
(0.98)
(0.94)
(0.02)
(0.02)
(0.02)
Book
Value
per
Share
(Rs)
533.56
533.54
533.51
Board of Directors:
Mr. A.K.Das
Mr. H.C.Asher
Mr. Ravi Mansukhani
119
XIV OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
The Scheme provides that upon the coming into effect of the Scheme, all legal,
taxation or other proceedings (including before any statutory or quasi-judicial
authority or tribunal) by or against the Demerged Company under any statute,
whether pending on the Demerger Appointed Date or which may be instituted any
time in the future and in each case relating to the Demerged Undertaking shall be
continued and enforced by or against the Resulting Company after the Effective
Date. The Resulting Company shall be added as party to such proceedings and shall
prosecute or defend such proceedings in co-operation with the Demerged Company
(or any successor thereof).
The Scheme further provides that if proceedings are taken against the Demerged
Company (or any successor thereof) in respect of the matters referred to above, it
shall defend the same in accordance with the advice of the Resulting Company and
at the cost of the Resulting Company, and the latter shall reimburse and indemnify
the Demerged Company (or any successor thereof) against all liabilities and
obligations incurred by the Demerged Company (or any successor thereof) in
respect thereof.
The Scheme also provides that the Resulting Company undertakes to have all legal,
taxation or other proceedings initiated by or against the Demerged Company (or any
successor thereof) referred to above transferred into its name and to have the same
continued, prosecuted and enforced by or against the Resulting Company to the
exclusion of the Demerged Company (or any successor thereof).
Save as stated herein, there are no outstanding or pending material litigation, suits,
criminal or civil prosecution, proceedings initiated for any offence (irrespective of whether
specified in paragraph (I) of Part I of Schedule XIII of the Companies Act, 1956) or
litigation for tax liabilities against the Company, its promoters, directors, group companies
and there are no material defaults, non payments or overdue or statutory dues,
institutional or bank dues or dues towards holders of debentures, bonds and fixed
deposits.
Litigation against the Company:
•
Two suits have been filed against the Company as follows: bearing no. O.S.9453/06
(filed by M/s Trade Agencies before the 17th Assistant City Civil Court, Chennai) and
no.O.S. 9456/06 (filed by M/s Prashanth Enterprises before the 2nd Assistant City Civil
Court, Chennai) claiming an amount of Rs. 1.25 lakhs and Rs.36000/- respectively on
account of alleged damage to certain office furniture taken on hire. An order of
attachment on the Company’s moveables was made in the first suit, which is under
appeal and the application for an attachment order was dismissed in the second suit.
•
The Regional Provident Fund commissioner, New Delhi passed an order demanding
Rs. 12.53 lakhs under Section 14-B of the Provident Fund Act. The Company has
deposited 50% of the demand and filed an appeal before the Hon’ble Employee
Provident Fund Appellate Tribunal, New Delhi for the setting aside of the order.
•
An ex-employee has filed a case for regularization of employment against the
Company’s branch in Manila, before the National Labour Relations Commission,
bearing case no. 00-02-01632-07, which is being contested.
120
Litigation against the Directors of the Company:
•
The Maharashtra Media Employees Union has filed Complaint No. (ULP) 221 & 268
of 2005 before the Industrial Court at Mumbai against a group company IndusInd
Network Entertainment Limited and Others including Mr. R.P. Hinduja as CoChairman of Hinduja TMT Limited, praying for directions to restrain the respondent
from laying off certain employees and from declaring a closure or lock out, alleging
unfair labour practices. Mr. R.P. Hinduja is a Director and the Chairman of HTMT
Global Solutions Limited An appeal has been filed before the Division Bench of the
High Court of Bombay, praying for deletion of Mr. R.P. Hinduja’s name from the
proceedings, since there is no employer-employee relationship between Mr. R.P.
Hinduja or the company of which he is the Co-Chairman, and the complainant
employees.
•
An ex-employee has filed Complaint No. (ULP) 333 of 2002 and Application No. 225
of 2002 before the Second Labour Court at Mumbai against a group company
IndusInd Network Entertainment Limited and Others including Mr. R.P. Hinduja as CoChairman of Hinduja TMT Limited, praying for quashing of termination letter dated 31st
May 2002, reinstatement with full back wages and with continuity of services, with
effect from the said date and compensation of Rs. 3.85 lakhs. Mr. R.P. Hinduja is a
Director and the Chairman of HTMT Global Solutions Limited. The complaint has
been dismissed.
•
Two show-cause notices notices bearing reference F. no. 23/79/2005-DZU/HL/4555
dated 23rd August 2006 and F.No. 23/79/2005 –DZU/VKTT/4619 dated 24th August
2006 have been issued by the Directorate of Revenue Intelligence (DRI) against Mr.
Som Mandal (an independent Director of the Company). The facts of the matter are
as follows: DRI has alleged that two cars that were imported by one Mr. S. Bhandari,
proprietor of History Logistic and V. K. Tours & Travels under EPCG Scheme by
availing concessional rate of Customs duty, were sold to Mr. Mandal, thereby causing
loss to the revenue. Mr. Mandal has opposed these show cause notices stating that
one of the cars had been leased to him for a certain and had been returned much
before the notices were issued. The other car was with Mr. Mandal for a brief period
but was returned before the notices were issued as Mr. Bhandari didn't give all the
custom papers. None of the cars in any case were ever transferred in Mr. Mandal’s
name. The main accused namely Mr. Bhandari has filed a Settlement Application
Under Section 127-B of Customs Act, 1962 before the Customs and Central Excise
Settlement Commission, Delhi wherein he has admitted the duty liability and hence
has claimed immunity from prosecution and penalty. Mr. Mandal has moved the
Settlement Commission as a Co-Applicant stating that since the main accused has
admitted liability for payment of duty, the show cause against Mr. Mandal should be
dropped.
Litigation against the promoters:
•
of 2005 before the Industrial Court at Mumbai against group company IndusInd
Network Entertainment Limited (now merged into group company IndusInd Media and
Communications Limited) and Others including Mr. A.P. Hinduja as Chairman of
Hinduja TMT Limited, praying for directions to restrain the respondent from laying off
certain employees and from declaring a closure or lock out, alleging unfair labour
practices. Mr. A.P. Hinduja is one of the promoters of HTMT Global Solutions Limited
An appeal has been filed before the Division Bench of the High Court of Bombay,
122
praying for deletion of Mr. A.P. Hinduja’s name from the proceedings, since there is
no employer-employee relationship between Mr. A.P. Hinduja or the company of
which he is the Chairman, and the complainant employees.
•
of 2002 before the Second Labour Court at Mumbai against group company IndusInd
Communications Limited) and Others including Mr. A.P. Hinduja as Chairman of
Hinduja TMT Limited, praying for quashing of termination letter dated 31st May 2002,
reinstatement with full back wages and with continuity of services, with effect from the
said date and compensation of Rs. 3.85 lakhs. Mr. A.P. Hinduja is one of the
promoters of HTMT Global Solutions Limited. The complaint has been dismissed.
Litigation against the companies promoted by the promoters of the Company and
companies under the same management:
•
A summary suit bearing number 2550 of 2004 was filed against Hinduja TMT Limited,
a company promoted by the promoters of the Company and under the same
management, by Niskalp Investments and Trading Company Limited in the High Court
of Bombay. The plaintiff filed a summons for judgement for recovering a sum of Rs.
8.67 crores plus interest for alleged breach of a contract to purchase certain shares.
The summons for judgement was dismissed and the company was granted
unconditional leave to defend the suit and the suit was transferred to the list of
commercial causes. The plaintiff filed a Special Leave Petition in the Supreme Court
against the order of the High Court. The Hon’ble Supreme Court disposed of the SLP
with a direction that the High Court should dispose of the suit expeditiously. The suit is
being contested.
•
Hinduja TMT Limited, a company promoted by the promoters of the Company and
under the same management, has been named as a respondent in a complaint filed
by the Maharashtra Media Employees Union before the Industrial Court at Mumbai
bearing Complaint No. (ULP) 221 & 268 of 2005 against group company IndusInd
Communications Limited) and Others praying for directions to restrain the respondent
from laying off certain employees and from declaring a closure or lock out, alleging
unfair labour practices praying for directions to restrain the respondent from laying off
certain employees and from declaring a closure or lock out, alleging unfair labour
practices. An appeal has been filed before the Division Bench of the High Court of
Bombay, praying for deletion of the company’s name from the proceedings, since
there is no employer-employee relationship between the company and the
complainant employees.
•
Hinduja TMT Limited, a company promoted by the promoters of the Company and
under the same management, has been named as a respondent in Complaint no.
(ULP) 333 of 2002 and Application No. 225 of 2002 filed before the Second Labour
Court at Mumbai against group company IndusInd Network Entertainment Limited
(now merged into group company IndusInd Media and Communications Limited) and
Others praying for quashing of termination letter dated 31st May 2002, reinstatement
with full back wages and with continuity of services, with effect from the said date and
compensation of Rs. 3.85 lakhs. The complaint has been dismissed.
122
•
Disputed Income Tax matters pertaining to various assessment years from
Assessment Year 1994-95 till Assessment Year 2004-05 contested till 30th April 2007
at various appellate levels amounting to Rs. 6,319.92 lacs (tax impact Rs. 2451.71
lacs)
Litigation against subsidiaries of the Company and group companies:
Subsidiaries:
•
An ex-employee of Hinduja TMT France (a subsidiary), who had resigned from the
company’s services in 2003 filed a claim of Euros 241000 against the company
alleging wrongful dismissal. The labour court granted a claim of euros 89000 while
rejecting the balance claim. The company has filed an appeal against the labour court
judgment.
•
An ex-employee filed a complaint for illegal dismissal against Customer Contact
Center Inc., Manila, a subsidiary, before the National Labour Relations Commission,
Second Division, bearing case no. NLRC NCR Case No. 0499436-06 (NCR-00-0504718-05), which was dismissed by the Labour Arbiter. The ex-employee has filed an
appeal against the judgement before the Second Division of the NLRC.
•
An ex-employee filed a complaint for illegal dismissal against Customer Contact
First Division, bearing case no. NLRC NCR Case No. 0499232-06 (NCR-01-0042105). The Labour Arbiter has ordered the company to pay approximately PhP 200000
plus back wages. The company has filed an appeal against the judgement, before the
First Division of the NLRC.
•
An ex-employee filed a complaint for constructive dismissal against Customer Contact
Third Division, bearing case no. NLRC NCR Case No. 0499244-06(7) (NCR-00-0806908-05). The Labour Arbiter has ordered the company to pay approximately PhP
200000 plus back wages. The company has filed an appeal against the judgement,
before the Court of Appeals.
•
An ex-employee filed a complaint in the Regional Trial Court, City of Makati,
Philippines, against Lopez Group of Companies and others, alleging illegal dismissal
and non payment of certain dues. Customer Contact Center Inc., Manila, a subsidiary,
has been named as a defendant. The complaint relates to certain actions allegedly
taken by the Lopez Group, prior to Customer Contact Center Inc. becoming a
subsidiary of the Company.
Group companies:
IndusInd Media & Communications Ltd (“IMCL”)
•
Cases pertaining to films – injunction against copyright violation.
IMCL is named as one of the respondents in the following cases filed against certain
parties (respondents), whereby the respective Plaintiff(s) has (have) sought to restrain the
respondents from broadcasting / telecasting the suit movie(s) as indicated.
Case
Reference /
Forum
Name of the Plaintiff
Suit Movie
123
Suit No.
3077 of 1988
3531 of 1988
High Court of
Bombay
High Court of
Bombay
3149 of 1995
Sai Paranjape Films
Pvt. Ltd
Pan India Paryatan
Ltd. & Anr.
High Court of
Bombay
3260 of 1998 High Court of
Bombay
1373
of High Court of
1999, Appeal Bombay
No. 958 of
1999.
Notice
of Bombay
Motion 3339
of 1999.
in Notice of Bombay
Motion, 2078
of 1996 in
Appeal
No.519
of
1999.
Bombay
3354 (L) of
High Court of
2001
Bombay
Bombay
2171
of High Court of
1996, Notice Bombay
of
Motion,
2077
of
1996, Appeal
No.572
of
1999.
Bombay
Bombay
1268 / 2003 High Court of
Bombay
Bombay
1132 of 2002 Delhi High
Court
Maruti International
and Shemaroo Video
Yash Johar
1006 of 1998
Tips Films Private
Limited
Tips Films Private
372 of 1999
Delhi High
Court
Delhi High
Disha
1) Need Hamari and Tumari
(2) Ghar Ka Chirag (3) Yadav
Ki Zangeer (4) Imitah.
Raja
Duplicate
Ultra Movie Channel
Pvt. Ltd.
Details as per Annexure-I.
Sawan Kumar Tak
Soutan
Ultra Movie Channel.
Details as per Annexure-II.
Mr. Rajiv Suri
Manzil and Parwana.
Vijay Ramdas Galani
(Film Folks)
Ganesh Films (Mr.
Nambi Rajan)
Sushil
Kumar
Agarwal (Ultra Movie)
Ajnabee.
Details as per Annexure – III
.
Chota Sa Ghar.
Mirabai Films Pvt.
Monsoon Wedding
Ltd.
Manjitmaan – Prop – Zindagi Khoobsurat Hai
Sai Productions
Pravin Shah
The Hero
Prakash Verma
Bansi Birju
Dream Productions
Bend It Like Beckham, its
dubbed
version
Football
Shootball
Hai
Rabba,
Jajantaram Mamantaram &
Agnivarsha.
Jab Pyar Kisi Se Hota Hai.
Kacche Dhagge.
124
851 of 1998
488 of 2000
1006 of 2000
2590 / 1999
2398 / 2000
1081 / 1999
190 / 2000
1739 / 2000
818 / 2000
1315 of 2001
1176 of 2001
1336 of 2001
2144 of 2001
To be
numbered
2372 of 2001
1561 of 2001
1538 of 2001
1841 of 2001
1776 of 2001
629 of 2002
46 / 03
1420 of 1999
(OS) 593 /
05
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Delhi High
Court
Limited
Vinod Chopra
Kareeb
Gordhan Tanwani
Dulhan Hum Le Jayenge.
Tips Films Pvt. Ltd.
Kya Kehna
Mr. Rahul Sughand
Khoobsurat
Mr. Vinod Chopra
Mission Kashmir
Mr. Vasu Baghnani
Biwi No.1.
Mr. Surinder Kapoor
Pukar
Gini Arts
Deewane
Nitin Manmohan
Chal Mere Bhai
Super Cassettes Ind.
Ltd.
Aamirkhan
Production. Pvt. Ltd.
A.B.C. Corpn. Ltd.
Tum Bin
Lagaan
AKS
Arc Light and Films
Pvt. Ltd. & Ors.
Sunny Super Sounds
Ltd.
Ashok Mehta Visuals
Pvt. Ltd.
Deepak Shivdasani &
Ors.
Excel Entertainment
Pvt. Ltd.
Sri Surya Movies
Ashoka
Santoshi Productions
Lajja
I Dreams Productions
16 December
Super Cassette
Industries Ltd.
Columbia Pictures
Inc. & Ors.
I Dream Prodcutions
Aap Ko Pehle Bhi
Dekha Hai.
Great Expectation
Indian
Moksha
Yeh Raste Hai Pyar Ke
Dil Chahata Hai
Nayak
Kahin
Naina
Annexure-I
Aaj Ka Romeo, Aapo Jadro, After School, Ajanbi Saaya, Akhand Chudlo, Alakhne Otle,
Allah Meherban To Gadha Pehelwan, Anari, Andaz Tera Mastana, Angel the Search,
Apna Desh, Asha, Baap Diaro, Badla, Badaltey Rishtey, Bagula Bhagat, Banarasi Babu,
Bandagi, Bal Krishna Leela, Bhagat Gora Kumbhar, Bhagat Pepaji, Blast Fighter, Bye
125
Bye Bay, Chaine Girls, Charotar Ni Champa, Chhaila, Chor Machaye Shor, Cocaine
Wars, Daughter of the Jungle, Death Wish V, Deewana Hoon Pagal Nahin, Devata,
Dharti Na Jhoroo, Dhola Maru, Dholi, Dhuen Ki Lakkar, Dilli Ka Sheikhchilli, Dirty Love,
Do Anjane, Do Dil Diwane, Dost Magarmach, Ek Arman Mera B/W, Ek Gaon Ki Kahani
COLOUR, Ek Ladki Saat Ladke, Ek Numbar Ka Chor, Ek Phool Char Kante, Ek Tha Raja,
Eknath Video Patrika (3 Episodes), Enemy Gold, Faasle, Fakira, Farishta Ya Qatil,
Farrari, Farz Ki Jang, Fateh, Footpath Ni Rani, Gai Aur Gauri, Gajab Tamasha, Galioyon
Ka Badshah, Game, Ganga Abad Rakhion Sajanva Ke, Ganga Aur Gauri, Ganga Maiya
Tohar Kiriya, Ganga Mange Khoon, Gangapurni Ganga, Ganga Sati, Ganga Tera Pani
Amrit, Ganga Tere Desh Mein, Garibon Ka Data, Garvi Naar Gujrathi, Garvo Garsiya,
Geet Gaya Patharonne, Geet Milan Ke Gaate Rahenge, Gentleman, Ghanchakar,
Ghanoor, Ghar, Ghar Grahasti, Ghar Jamai, Ghar Ka Kanoon, Ghatak, Ghazab,
Ghunghat, Gulam Begum Badshah, Gumnaam, Haar Jeet, Haque Ke Ladai (Bhoj),
Hastmelap, Hero No.1, Hot Blood, Hundra, Jaal Saaz, Jagadas Jhuma Ghar, Jai
Bhadrakali, Jai Mahalakshi Maa, Jail Khana, Janam Janamna Sathi (Guj), Janwar Aur
Insan, Jathro Bhabho, Jawan Muhabat, Jeb Katari, Jogidas Khuman, Kapro Zaveri (G),
Kasauti, Kesar Chandan, Khama Mara Lal, Khama Mara Vira, Khandan, Kholano
Khundar, Kidnapper, Kill Boats, Killing Machine, Kul Kusambo Ni Kanya, Lady Doctor,
Lady Dragon, Lady Dynamite, Lady Kick Boxer, Lakha, Lakho Loyan, Live Girls, Loafer,
Love, Love Around the Corner, Love Games, Lovers Nights, Maa, Maalik, Maan Apaman,
Mafia-Raaj, Magnificient Bodyguard, Maha Yudh, Mahri Nandi No Vir, Mamta Ki
Saugandh, Maniyaro, Man Mandir, Maun, Mere Garib Nawaz, Mehulo Lohar, Mere
Sartaz, Meri Jung, Meru Mulande, Mountain of Cannibal God, Nai Roshani, Namal
Haram, Naseebdar, Naya Daur, Night Fire, Night Killer, Nirnayak, Ooperwala Jane,
Paras, Parde Ke Peeche, Phir Wahi Raat, Pocketmaar, Police Station, Prem Granth, Pyar
Hi Pyar, Putra Vadhu, Raja, Raja Hindustani, Rajputani, Rakh Na Ramakda, Rakhawala,
Rangili Gujratan, Rano Kunwar, Reti Na Ratan, S.A.S. Terminator, Saazish, Sacho Sukh
Sasariyama, Sanja Doli Leke Aana, Samaya Varte Savdhan, Sant Gora Kumbhar, Sant
Tulsidas, Sargam, Sas Bhi Kabhi Bahu Thi, Sati Jasmo Oodhan, Scream & Die, Secrets,
Seduction, Sewak, Shatranj, Shaukeen, Shree Krishna Sharnam, Silk, Sonba Aane
Roopba, Sultan-E-Hind, Suraj Aur Chanda, Sweet Dreams, Sword of the Barbarian,
tamere Champa Ne Amekel, Teenage Dreams, Temptation, Throne of Fire, Thunder,
Tigerman, To Sleep with Vampire, Too Hot To Handle, Top Secret, Treasure of Four
Crowns, Tumsa Nahi Dekha B/W, Uljan, Vat Vachan Ne Vir, Vasana, Via Viramgaon,
Visamo, Waris, Wheels of Fire, Who Kaun Thi, Yaar Mera, Yash, Yeh Raath Phir Na
Aayegi, Yeh Aashiqui Meri, Young Lady Chatterley, Ziddi, Zinda Dil
Annexure-II
15th August, 36th FilmFare Awards Night, Aag Lagaa Do Sawwan Ko, Aahottee, Aai Mala
Shana Kar (Marathi), Aaj, Aaj Ka Arjun, Askhri Kasam, Aangan B/W, Aao Pyar kare, Aarti
(B&W), Aashapura Math Ni Chunaria (G), Ab Meri Bari,Abi Hayat (B&W), Abbiman
(B&W), Abode, Actress, Agent Vinod, Agnee, Agneepath, Agreement, Ahankar, Ajooba
Kudrat Ka, Akhri Gulam, Alibaba Marjina, Aliya Bhogasi (Marathi), Amar Bhopali, Ambi
Jato Akoceya, Anand Mate B/W, Anarkali B/W, Andaz Apna Apna, Andeera, Andolan,
Angaar, Angraksha, Anjaam, Anjali, Ankhiyon Ke Jharokhon Se, Anmol, Anmol Tasveer,
Anokha Andaz, Anokha Aspatal, Aanolkhi,Apna Dess,Apna Desh Pareye Log, Aram
Haram Aahe, Arjun, Around the World, Ashi Hi Banwa Banwi,Asla Navra Nako Ga Bai,
Asli Naqli (B&W), Aurat (B&W), Avinash, Awaaz De Kahan Hai, Awghachi Sansar, Azad
Desh Ke Gulam,Baap Beti, Baap Numbari Beta Dusnambari, Baat Hai Pyar Ki,Baazi,
Baba Ramdev, Babaramdev Bhajan Wala, Baba Ramdev Peer, Babar,Babul, Badai,
Bade Sarkar B/W,Badi Bahen, Badnaam, Badnam, Baghi (B&W), Baharon Ki Manzil,
Bahut Din Huwe (B&W), Bai Chali Sasariye, Bai Ra Bhag, Bai Saba Jatan Karo, Bajrang
Bali, Bal Shivaji, Balache Baap Brahmachari, Balam Pardesia, Balmaa, Balram
Shrikrishna, Banarsi Thug, Bando Bandi, Banoo, Be Shaque, Bechain, Behrupia,
126
Behtreen Pankaar, Bekaraar, Benazir, Beqabu, Beta, Bewafa Se Wafa, Bewafai,
Bhagwat Mahima (B&W), Bhakticha Mala, Bhula Na Dena, Bhuvan Bhone, Bikaoo Tordo,
Biin Ma Ke Bachchey, Biran Ki Raat, Blood (Hindi), Bol Radha Bol, Bole Taisa Na Chale
(Marathi), Bombay Flight (English), Boond Jo Ban Gaye Moti, Brahma, Byayeda Bina
Kunwara Dole, Ceaani (New), Chacha Zindabad, Chahunga Main Tujhe, Chal Chal Re
Navjawan, Chalte Chalte Vol I, Chalte Chalte Vol II, Chalte Chalte Vol 3, Chalte Chalte
Vol 4, Chalte Chalte Vol 5, Chalte Chalte Vol 6, Champakali, Chand ki Duniya,
Chandanachi Ek Choli Ange Jaali, Chandralekha (B&W), Charandar Chor, Charms of
Snake Valley, Charno Ki Sadgandh, Choota Sa Ghar, Choti Bahu, Chnga – The Beat
Contest, Coolie No.1, Corative Yoga, Daaku, Dahej, Dako Kuni Bi, Dalal Hindi & Bengali,
Danga Pasad, Dard-e-dil, Daulat Ki Jung, Deeshishu, Deedar, Deep Jalta Rahe B&W,
Deewana, Deewana Tere Naam Ka, Deshwasi, Dev Pavla, Dharam Adhikari, Dharam
Bhau, Dharam Bhatru, Dharti Aakash, Dharti Deorar (19 folk songs), Dharti Deorar (Part
II), Dharti Maiya (Bhoj), Dhat Tere Ke, Dial 100, Dil Apna Aur Preet Pareyee, Dil Ek
Musafir, Dil Hi to Hai, Diler (guj), Dillagi, Divya Sehkti, Diwani Javani, Diya Aur Toofan, Do
Ankhee Barah Hath, Do Bhai, Do Dost, Do Dolhe (B&W), Do Hawaldar, Do Phool, Don11, Doosri Bibi, Dost, Dost Garibonka, Dost Ki Saugandh, Dr. Kotnis Ki Amar Kahani,
Dulhan Wohi Jo Piya Man Bhaye, Dulhin (Bhoj), Duniya, Duniya Jukkti Hai, Duniya
Nanchegi, Durgegsh Nandini (B&W0, Eeta Eeith Ka Jawab Pathar, Eights Days, Eja Bijaa
Tijaa, Bhar Mai Baaj, Ghat Mai Baaj Lugat, Ghabana (B&W), Ghayal Apsara, Ghunghat
(B&W), Ghunghatiya Bi Laaj, Gibaftaar, Gibaftaar, Gogaji Peer, Gohti Hi Sakhe (Guj),
Gopichand Bharathri ®, Goraa, Grahasti (B&W), Guddu, Guesh House Kilee, Gulabi
Raate, Gunrah, Gomrah Jawani, Gukahon Ka Devta. Haath Lavie Tithe Sona, Hathi Mera
Saathi, Hai Meri Jaan, Haque, Hari Darshan, Hasino Ka Badla, Hasion Ka Hela, Bathyar,
Hawas Ka Poojari, Heee B&W, Heer Ranjha, Hercules, Ebroic Trio (English), Bifaiat, Hira
Chuda, Hits of Balkan Vol, Hits of Salman Vol 2, Borrymoon, Hongkong, Hullare
(Punjabi), Hum Aapke Hain Kaun, Hum Bhi Insaan Hai, Hum Bhi Kuch Kam Nahi, Hum
Hai Kamal Ke, Hum Hai Premi, Hum Kahan Je Rahe Be, Ham Se Kya Takrana, Hum Sab
Chor Hain (B&W), Homkadam, Hungama Bombay Style, I Love Mumbai, Illaka, Insaan
Bana Shaitan, Insaf Ki Pukar, Insaniyat (B&W), Inteha Pyar Ki, Intejaar Ke Ratan,
International Crook, Ishq Mein Jina, , Mein Marna, Iye Marathichi Nagari, Izzat Ke
Lootere, Issatdaar, Jaal, Jaali Note, Jaan Ke Khel kar, Jaan Pechan, Jaan Tere Naam,
Jagriti (B&W), Jain Hanuman, Jai Radhakrishna, Jai Santoshi Maa, Jakhmee Waghin, Jal
Bin Machli Kritya, Bin Bijl, Jalan, Janamna Sathi, Javan Kundali, Janam Se Pehle, Janta
Ki Adalat, Janwar, Jasoor, Jawab Ayega, Jawan Dilq Ki Rani, Jawan Maru, Jawani Bani
Diwanee, Jawani Jawani Jawani, Jawani Ku Kurbani, Jawani Ki Lehren, Jayan Bhata,
Jayshree, Jazbaat, Jeet Hamri, Jeevan Mrityu, Jhanak Jhanak Payal Baaje, Jhanjhaar,
Jhuk Gaya Aashan, Jigarwala, Jiyo To Ase Jiyo, Jog Sanjog, Johar in Bombay, Ju Ki
Kahani, Jaghu, Jungla Ka Beta, Jungle Ki Bahaar, Kunkaar, Jubrat, Ka Purush Maha
Purush, Kaach Ki Deewar, Kab Ta Chup Rahoong, Kabiaa, Kapila, Kahan Hain Kanoon,
Raise Kaise log, Kaise Kaise Rishte, Kali Raat, Kaliyon Ki Awaz, Kalpana, Kaluram
Prajapati Night, Kalyog Ke Avatar, Kama Purta Mama, Kanhaiya, Kanoon, Kanoon Apna
Apna, Karamai, Karun Ki Vijay, Kare Chukana Hai, Rasam Dhahde II, Kashmakash, Katil
Jawani, Kaun Apna Kaun Paraya, Kaya Palat, Khomoshi (B&W), Khatarnayak, Khel,
Hilaaf, Khoon Ka Rishta, Khubsurat Dhokha B&W, Khuda Gawah, Kissa Paheli Raat Ka,
Koi Na Jane Re, Kshateiya, Kudrat Ka Kanoon, Koi Doo Koo, Kunsin Hasina,
Kunkavacha Tilla, Kurbaan, Laaj Rakhorani Sati, Rajasthani, Laat Saab, Ladka Ladki,
Ladki Sahyadri Ki, Lahu Ke Do Rang, Laila Majnu Ki Hai, Hautanki, Lakhat Ashi Dekhni,
Lakhon Ke Ek Colour, Lakhon Ni Laaj, Lamboo Dada, Lavaa, Leela, Life 90, Loot Gati
Pyae Hain, Love Romace, Maa, Bahen Aur Biwi, Maa Beta, Maalahaal, Maan Abhihan,
Madine Ki Galiya, Maba Bhat Tukaram, Maha Nanda, Mahal Sangram, Mahalaxmi
Hahika, Mahendra Kapoor Night, Mahfil, Mahlok ke Khawab, Maidan-e-Jung, Main Aue
mere Haathi, Main Azad Hoon, Main Pyasi Hoon, Main Tera Dushman, Main Tere Liye,
Main Tere Pyar Kiya, Mama Bhache, Manchala, Mangala (B&W), Manorama, Mast
Kalander, Maya Bhaiar (Guj), Maya Bazar (Hin), Maidoo, Meethi Meethin Baten, Msgha,
127
Mera Muquddar Kya Hai, Mere Bhaiya, Mere Humdum Mere Dost, Mere Sajana, Meri
Hukumat, Meri Zuban, Mhari Pyari Chanana, Milan Ki Pyas, Milap, Miss Mala, Miss
Pakela, Mithe Mithe Raatein, Monkey & the Crocodile, Mr. Sampat (B&W), Mr. in
Bombay, Kuklava (Punjabi), Hinimji B&W, Huthi Bhar Zamesh, Kaaiya, Kaamchin, Kachdi
Jawani (Punjabi), Nidya Ke Paar, Nadiya Ke Paar Hindi B&W, Nagin, Naina, Naked Lies,
Nanad Bhojai (E), Nani Bai Ko Nayero, Nani Kaa, Naseeb Apna Apna, Nasebwala, Nastik
B&W, Nadkari, Navrang, Navee Sagle Gadhay, Naya Anddai, Nakhana, Neelkamal
(B&W), New Delhi, Nirala, Nirbhay, Nirdosh, Nishan (B&W), Oh Darling Yeh hai India,
OwaliteBhauraya, Paanch Range chi, Panch Pankar, Paap Ka Anth, Pap Ki kami, Paap
Pait Kaa, Paheli, Paheli Raat, Pahile Prem (Marathi), Paighan (B&W), Pandir Bhalanath,
Param Dharam, Paranveer Chakra, Parashani, Parbat Pe Apna Deea, Parchhain,
Parchhaiyan, Parda (Marathi), Parmvtha, Passport, Patcha Bahu, Pathar Dil, Pathreela
Basta, Pawan Putra Hanuman, Payal Ki Jakihar, Payal Ki Jhankar, Paying Guest B&W,
Precha Kabro, Pehla Wsha, Phool Aur Kaante, Phool Aue Kaliya, Phoon Bane Angaabs,
Phoolon Ki Sej, Phulwari, Picnic B&W, Pinga Pyaar Diyan (Punjabi), Pinjbra (Hin), Pinjra
(Mab), Piya Ka Ghar, Piya Milan Bi Aash, Police aur Mujrin, Policewala, Prabhu Ki Maya
B&W, Prahar, Pratighat, Pratima Aur Payal, Prem Pratigya, Purana Satya, Pyaar (Video
Film), Pyaar Jhukta Nahin, Pyaar Ke Devta, Pyaar Ka Mandir, Pyaar Ko Toofan, Pyaar
Kiya Hain Pyar Karenge, Pyar Bhara Dil, Pyar Deewana hota Hain, Pyar Ka Bandhan,
Pyar Ka Rishta, Pyar Ka Tarana, Pyar Ke Kabil, Pyar Ke Naam Qurbani, Pyar Ki Cheeka,
Pyari Behana, Pyasa Dil, Pyasi Meri Nigahen, Qatil, Raaka, Raaste Pyar Ke, Raavan,
Radha Aur Seeta, Railway Platform, Raj Kumar, Raj Tilak B&W, Raj Lol Geet Part I, II, III,
Raja Rani Ko Chahiye, Pasika, Raju Aur Tinku, Raksha Bandhan, Ram Joshi, Rama-oRama, Ramu Chanana, Rang Tarang, Ranga Mera Naam, Rangilo Rajasthan, Reksha,
Reshna Ki Jawani, Return of the Evil Death, Rhino, Rikshawala, Rikjhik Geeto Ke, Roos
Gayilan Sayiar Hamar, Roti, Saajan, Saajan Chale Sasural, Saajna Ki Baahon Mein,
Saabansh, Saazish B& W, Sabse Bada Rupaiya, Sache Ka Bol Bala, Safar, Sahira,
Sailaab, Saiya Tohre Karan, Sajan, Samadhi Hindi B&W, Sangeeta, Sanjog Colour,
Sansar (B&W), Sanwariya, Sarabi Ki Kah. Aurat Ki, Zabarni, Sarayu There (In Avadhi),
Sasi Pandu (Punjabi), Sau Chore, Saubhagya Daam, Saubhagyawati Bhav (Marathi),
Sauda, Saudagar, Sawan Ko Ane do, Sawan Bi Teej ®, Sehra, Sehti Hurad (Punjabi),
Shaadi, ShaadiByak Ke Geet, 18 Raj, Shabab Ke Shikari, Shabistan Hindi B&W,
Shabhan Hindi B&W, Shadi Se Pahela Shadi Ke Baad, Shaheed B&W, Shaktiman,
Shakuntala, Shandaar, Shaolin Temple, Shapate tula Balachi, Shart B&W, Sheeksha,
Shiramai, Shikari, Shikshaa, Shriman Fantoosh, Shrihatiji B&W, Shub-Din, Sikka,
Sindoor, Situk, Skuggler, Soorthi Singh (Guj), Star Buzz (Vid Mag), Star Night Show,
11/3/89, Ahren, Stree, Subah ka Tara, Suhaag Raat Se Pahele, Suhag ki Aas, Suhag,
Suhagan No Singar ®, Sun Meri Laila, Sun Sajna, Sukayaha, Sunhera Sansar, Sunto Le
Hasina, Supatar Bibani, Suraj, Surang, Suryavanshi, Swami, Tamacha, Tapasta,
Taquatwar, Taqdeer, Taqdeer Ke Phere, Taraana,Tarana (Old B&W), Tarasti Jawani,
Tarzan Delilal, Teen Bahuraniyan Colour, T. Batti Char Raasta, Tee Brothers of Shaolin,
Teri Mehrebaniya, Teri Meri Kahani, Thari haabi (Raj), The Adventures of a Sugar Doll,
The Crow for all Seasons, The Sword of Tipu Sultan, Thief of Baghdad, Toofan, Toofan
Aur Diya, Toofan Hein Pyaar Kahan, Touch the Sky, Tree & the Boney Bag, Trideviyan,
To Meri Main Tera, Tulsi Sone Hamab Angana (Bhoj), Tumhare Bina, Tupa-Top, Tuzi
Mazi Hamali Jodi, Tyaagi, Umar Pachpan Ka Dil Bachpan Ka, Uanchoo, Ustad, Vaishali,
Vartaman, Veer Tejaji, Veerta, Veeru Ustad, Vishkanya, Vishnu Devaa, Vishwas, Vafaa,
Wanted, Waqt Ka Badshan, Waqt Ki Awaaz, Watan, Yaar Dilbaara, Yahudi, Yoga For
Better Sei Yugandhar, Zakhmi Kali, Zamana, Zameen Ashaam, Zameer Ke Tare,
Zihmedar, Zinda Laash, Zindago (B&W), Zoln Ka Jawab, Zunj.
Annexure-III
Ullaasam, En Aasa Raasaava, Simhaaraasi, Veeram Velanja Mannu, Unnidathil Ennai
Koduthen, Neevaruvai Ena, Kannu Pada Paguthiah, Tirneveli, Alai Payuthey, Vallarusu,
128
Raajakali Amman, Rajasthan, Kudi Valthal Koodi Nanmai, Maayie, Ennama Kannu,
Guna, Dolapathi, Chinna Gownder, Bharathan, Enga Veetu Velan, Annamali, Kottai
Vaasal, Roja, Devar Magan, Rasukkuty, Thai Mozhi, Ezhai Jaadi, Kalsingan, Aranmanai
Killi, Pudhiya Mugam, Maravan, Porandhalum Ambalaya Porkkokodhadhu, Veera, Honest
Raj, Vaitnam Colony, Pathavi Permanam, An Aasai Macchan, Muthu, Sathy Leelavathi,
Karuppa Nilla, Bombay, Batche, Thirumurthy, Vanchinathan, Dheena, Booty, Negeshwari,
Pappa, Friends, Kannuku Kannaga, Nilakalam, Piriyadha Varam Vendum, Thaali Katha
Kali Ammao, Ninaikatha Naal Ellai, Rishi, Ullam Kollai Poguthey
•
Other cases against IMCL
Case
Reference /
Suit No.
2590/S/2005
Forum
City Civil Court,
Mumbai
736 / 2003
City Civil Court,
Mumbai
in Notice of Bombay
Motion
No.2183 of
1998
1088 of 1988
Petition
No.18 u/s 9
of the
Arbitration
and
Conciliation
Act
1056 of 2002
2116 / 1996
1116/02
2411 of 2002
Name of the Plaintiff
/ Applicant /
Complainant
Mr. Dhanawad
Particulars
Dispute relating to trespassing
of area of cable operation.
Nahalchand
Dispute relating to trespassing
Laloochand Pvt. Ltd.
of area of cable operation.
Ambience
Space Appeal filed to vary the order
Sellers Private Ltd.
of the Division Bench that the
Defendant be allowed to
permit
the
blackout
programmes which are not in
conformity with / are in
violation of the law of the land.
Delhi High
Aasia Today Limited Restraining the Defendant
Court
and EL-Zee Television from receiving Zee Cinema
Private Limited
signals
without
prior
authorization.
Court of Civil Natraj Cable Network
To provide signals to 150
Judge
Senior
subscribers as per terms of
Division,
the Agreement.
Faridabad.
Delhi High
Court
Delhi High
Court
Delhi High
Court
City Civil Court,
Ahmedabad
Taj Television Ltd. & Restraining the Defendant
Anr.
from transmitting signals of
Ten Sports including for World
Cup of 2002.
Time Warner, USA.
Restraining
use
of
the
trademark CBO
Restraining the Broadcasters
Star Broadcasting
viz. ESPN, Zee, Modi, Sony
Service (I) Ltd. (vs.
from
switching
off
the
Indian Cable and
decoders.
Broadcasting
Federation & Others.)
Patel
Cable
TV Permanent
injunction
Network
restraining the Defendant and
their agents from causing any
interruption, disconnection or
supplying signals in the Cable
Network in the area of
Mithakali
area
of
129
769 / 2000
1848 / 2003
1857 / 2003
Small Causes
Court,
Ahmedabad.
City Civil Court,
Ahmedabad
City Civil Court,
Ahmedabad
CCP No.158
of 1999
Delhi High
Court
Criminal (M)
3014 / 97
Chief
Metropolitan
Magistrate,
New Delhi
Case
No.ESIA
No.11/01
Petition u/s
75 of the
ESIC Act.
Contempt
case – 2003
in
the
Arbitration
application
no.19
of
2002
501 to 516 /
PS / 06
Tis Hazari
Court, Delhi.
Mr. Rameshbhai Patel
Thahot Narendrabhai
Chandrasingh.
Aarsi Co-op. Housing
Society
Ltd.,
Ellisbridge,
Ahmedabad.
Columbia Pictures &
Others (vs. certain
persons including an
erstwhile officer of the
company)
Mr. Arun Agarwal,
Advocate (vs. Star TV
and others including
an erstwhile officer of
the company)
Ajay Gambhir (vs.
ESIC and the
company)
Court of Civil Natraj Cable Network
Judge
Senior
Division,
Faridabad.
Before 37 Addl.
Chief
Metropolitan
Magistrate,
Esplanade
517 to 610 / Before 37 Addl.
PS / 06
Chief
Metropolitan
Magistrate,
Esplanade.
RTPE No.2 MRTP
of 2001
Commission,
New Delhi
State (DCP
Enforcement)
State (DCP
Enforcement)
Nirmal Jain
Ahmedabad.
Dispute relating to claiming of
rent for open terrace space.
To accept Plaintiff as Agent
and provide cable connection.
To provide cable connection
to the members of Aarsi Coop. Housing Society.
Contempt application alleging
disobedience of the Court
Order dated 7.7.1999 in
respect
of
film
‘Great
Expectation’.
Offences u/s 292 and section
293 of the Indian Penal Code,
1908, Cable Network Act,
Indecent
Presentation
of
Women (Prohibition) Act,
Indian
Telegraph
Act,
Copyright Act, FERA and
rules and regulations and
guidelines
of
Board
of
Censors and other applicable
laws for transmitting the TV
signals of Star Movies, Star
TV and V Channel.
Claim damages to the tune of
Rs.25 lacs plus Rs.10,000/per month as pension for
having met with an accident
on duty.
Restraining the Respondent
from
releasing
signals
/connection to any third party
until final order.
Prosecution u/s 16 of Cable
Television Network Act, 1995
for showing adult content film
as per exhibit of the
complaint.
Prosecution u/s 16 of Cable
Television Network Act, 1995
for showing adult content film
as per exhibit of the
complaint.
Complaint
filed
alleging
arbitrary increase in cable
subscription rates.
130
CA No.28 of MRTP
2002 / 911
Commission,
New Delhi.
7/2003
562 0f 2002
Sudarshan
Application filed demanding
payment of compensation of
Rs. 6.5 lakhs alleging that an
agreement executed by the
complainant with a distributor
of the company, relating to
connectivity of subscribers,
was not honoured.
MRTP
Federation
of Complaint alleging illegal /
Commission,
Residence
Welfare arbitrary increase of cable
New Delhi.
Association of Vasant charges. Maintain status/quo
Kunj, Delhi.
pending enquiry.
High Court of B.S.Shetty and Anr
Damages claimed for alleged
Bombay
defamatory statement in news
telecast in InTime Channel
•
In March 1998, the Addl. Commissioner of Entertainment Tax, Mumbai had passed an
order demanding a sum of Rs. 47.93 lakhs towards entertainment tax in respect of an
in-house magazine of the company “What’s In”. IMCL filed a writ petition in the High
Court of Bombay which directed the company to deposit a sum of Rs. 25 lakhs and
directed the Commissioner not to take coercive action until the company’s appeal was
heard. In August 2003, the Addl. Commissioner, Konkan Division issued an order
demanding the balance amount, threatening coercive action for recovery. The
company has appealed against the order before the Hon’ble Minister of Revenue,
Government of Maharahtra.
•
IMCL has filed an application no. 174 of 2002 in the Court of the Civil Judge, Senior
Division, Nasik against the State of Maharashtra and the Collector of Nasik praying for
the following reliefs: that the plaintiff is not liable to pay entertainment tax under the
Bombay Entertainment Duty Act, 1923 and plaintiff cannot be compelled to collect
taxes either from the cable operators or from subscribers; that a decree of perpetual
injunction be granted in favour of plaintiff and against defendants from sealing the
plaintiff’s control room at Nasik. The case relates to the defendant’s demand for
payment of entertainment tax by the company, although the company did not supply
signals to end viewers. The signals were provided to franchisees who are liable for the
entertainment tax.
•
IMCL is named as a respondent in certain Public Interest Litigation (PIL) petitions filed
in the High Court of Mumbai, as under:
(i) W.P. No. 611/2003 filed by Mr. Kirit Somaiya and Others against the Chief
Secretary, Government of Maharashtra and Others for orders to regulate the cable
business as per the guidelines of Notification dated 10.7.2003 issued by Ministry of
Information & Broadcasting.
(ii) W.P. No. 1397/2007 filed by South Mumbai Cable TV Operators Welfare
Association against the Ministry of information and Broadcasting and Others praying
for orders that the Ministry be directed to formulate and publish in advance the
proposed amended Cable Television Networks (Regulations) Rules at least one
month in advance before the implementation of CAS in India and till that the
introduction of Addressable System in Metros be stayed.
(iii) W.P. No. 1485/2003 filed by Mr. Sitaram Bhoi and Others against the Union of
India and Others, praying for orders to set aside section 4A of the Cable Network
Regulation Act, 1995 and to direct the Union of India and State of Maharashtra to set
up control measures to monitor the Pay Channels
131
•
The Directorate of Revenue Intelligence had filed a case in the Court of the Chief
Metropolitan Magistrate, Esplanade, bearing No. 32/CW/05 against IndusInd Network
Entertainment Limited (now merged into IMCL), IMCL and others for alleging violation
of Import/Export policy notification no. 110/95 issued by the Director General of
Foreign Trade. The differential customs duty amount of approximately Rs. 5.09 crores
as per the orders passed by the Commissioner of Customs (Adj), Mumbai, was
appealed before the CESTAT, which set aside the demands and dropped the fines
sought to be levied against the company (Rs. 2.45 crores) and others. The customs
department has filed an appeal bearing reference Lodging 30/2007 before the High
Court of Bombay, praying for the setting aside of the orders passed by CESTAT.
•
IMCL has filed the following appeals before the Commissioner of Entertainment Tax,
Gandhinagar praying for the quashing and setting aside of the order of the Mamlatdar
Entertainment Tax and Collector, Ahmedabad for recovery of entertainment tax and
penalty thereon: Nos. 73/2006, 74/2006, 75/2006, 76/2006. Amount of entertainment
tax involved: Rs. 83.2 lakhs plus penalty
•
The Income-tax department has filed an appeal before the Income-Tax Appellate
Tribunal against the order of the Commisioner of Income-Tax (Appeals) in favour of
IMCL assessing a loss of Rs. 28.7 crores for the Assessment Year 1996-97
•
IMCL has filed an appeal before the Income-Tax Appellate Tribunal against the
disallowance of expenses of Rs. 2.7 crores for the Assessment Year 1997-98.
•
The Income-tax department has filed an appeal before the Income-Tax Appellate
Tribunal against the order of the Commisioner of Income-Tax (Appeals) in favour of
IMCL assessing a loss of Rs. 4.3 crores for the Assessment Year 1998-99
•
IMCL has filed an appeal before the Income-Tax Appellate Tribunal against the
disallowance of business loss of Rs. 5.8 crores and depreciation allowance of Rs. 9.3
crores for the Assessment Year 2001-02.
•
IndusInd Network Entertainment Limited (now merged into IMCL) has filed an appeal
against the order of the Assessing Officer making an addition of Rs. 10.4 lakhs to the
returned income for the Assessment Year 2000-01.
•
IndusInd Network Entertainment Limited (now merged into IMCL) has filed an appeal
against the order of the Assessing Officer making an addition of Rs. 3.4 crores to the
returned income for the Assessment Year 2001-02.
•
In2Cable (India) Limited (now merged into IMCL) has filed an appeal before the
Commissioner of Income –Tax (Appeals) against the order of the Assessing Officer
making an addition of Rs.74.9 lakhs to the returned income for the Assessment Year
2001-02.
•
IMCL has filed the Miscellaneous Application No. 75 in the IInd Labor Court, Nagpur,
and Miscellaneous Application Nos. 72, 73 and 74 in the IVth Labor Court, Nagpur
praying for the setting aside of ex-parte orders passed against the company for the
reinstatement of employment of certain ex-employees.
•
of 2005 before the Industrial Court at Mumbai against IndusInd Network
Entertainment Limited (now merged into IMCL) and Others praying for directions to
132
restrain the respondent from laying off certain employees and from declaring a closure
or lock out, alleging unfair labour practices. The case is being contested.
•
of 2002 before the Second Labour Court at Mumbai against IndusInd Network
Entertainment Limited (now merged into IMCL) and Others praying for quashing of
termination letter dated 31st May 2002, reinstatement with full back wages and with
continuity of services, with effect from the said date and compensation of Rs. 3.85
lakhs. The complaint has been dismissed.
None of the above litigation / disputes pertaining to the directors / promoters / companies
promoted by the promoters / companies under the same management / group companies
has or is likely to have any adverse impact on the financial performance of the Company.
In the opinion of the Board, there have not arisen, since the date of the last financial
statements disclosed in this Information Memorandum, any circumstances that materially
or adversely affect or are likely to affect the overall business of the Company as a whole,
which are otherwise than in the ordinary course of business.
133
XV
GOVERNMENT APPROVALS
Pursuant to the Scheme, all the permissions, approvals, licenses etc. granted by
the Government and Government agencies in connection with or relating to the
IT/ITES Undertaking have been transferred to and vested in and/or deemed to be
transferred to and vested in the Company.
134
XVI
REGULATORY AND STATUTORY DISCLOSURES
Authority for Listing:
The Company entered into the Scheme of Arrangement and Reconstruction under
Sections 100, 391 to 394 and other applicable provisions of the Companies Act, 1956
wi th Hinduja TMT Limited and their respective Shareholders and Creditors
(“Scheme”) for the demerger of t h e IT/ITES Undertaking of Hinduja TMT into the
Company on a going concern basis and for reduction of the issued, subscribed
and paid up share capital of the Company. The Appointed Date for the
demerger as per the Scheme was 1st October 2006. The Scheme was sanctioned by the
Hon’ble High Court of Judicature at Bombay vide its Order dated 23rd February 2007,
which was filed with the Registrar of Companies, Maharashtra on 7th March 2007,
which is the Effective Date of the Scheme.
Accordingly, with effect from 1 s t October, 2006 (being the Appointed Date), the IT/ITES
Undertaking of Hinduja TMT stands transferred to and vested in the Company as a going
concern.
Clause 27 of the Scheme, as sanctioned by the Hon’ble High Court of Judicature at
Bombay provides that the equity Shares of the Resulting Company, viz. HTMT Global
Solutions Limited shall, subject to the execution of the listing agreement and payment of
the appropriate fee, be listed on the National Stock Exchange of India Limited, the
Bombay Stock Exchange Limited and on such other recognized stock exchange(s) in
India, if any, as may be decided by the Board of Directors of the Resulting Company on
consideration of all relevant factors.
Eligibility Criterion:
There being no initial public offering or rights issue, the eligibility criteria in terms of
Clause 2.2.1 of SEBI (DIP) Guidelines, 2000 does not become applicable. However, SEBI
has vide its letter CFD/DIL/NB/NB/95345/2007 dated 5th June 2007, relaxed the
applicability of the provisions of Regulation 19(2)(b) of the Securities Contract
(Regulations) Rules, 1957, under Clause 8.3.5 of SEBI (DIP) Guidelines, 2000. The
Company has submitted its Information Memorandum, containing information about itself,
making disclosure in line with the disclosure requirement for public issues, as applicable
to BSE and NSE for making the said Information Memorandum available to public through
their websites viz. www.bseindia.com and www.nseindia.com.
The Company has also made the said Information Memorandum available on its website
viz. www.htmtglobal.com.
The Company will publish an advertisement in the newspapers containing the details in
line with the details required as per clause 8.3.5.4 of SEBI (DIP) Guidelines,
2000. The advertisement will draw a specific reference to the availability of
aforesaid Information Memorandum on the Company’s website www.htmtglobal.com
.
Prohibition by SEBI:
The Company and its directors and promoters have not been prohibited from
accessing the capital markets under any order or direction passed by SEBI.
135
General disclaimer from the Company:
The Company accepts no responsibility for statements made otherwise than in
the Information Memorandum or in the advertisements to be published in terms of Clause
8.3.5.4 of SEBI (DIP) Guidelines, 2000 or any other material issued by or at the
instance of the Company and anyone placing reliance on any other source of
information would be doing so at his or her own risk. All information shall be made
available by the Company to the public and investors at large and no selective or
additional information would be available for a section of the investors in any manner.
Disclaimer Clause of BSE:
A copy of this Information Memorandum has been submitted to BSE. BSE has vide its
letter DCS/SJK/RCG/AJ/2006/500189 dated 29th September 2006 approved the Scheme
of Arrangement under clause 24 (f) of the Listing Agreement and by virtue of that
approval, BSE’s name in this Information Memorandum as one of the Stock
Exchanges on which the Company’s securities are proposed to be listed is appearing.
BSE does not in any manner warrant, certify or endorse the correctness or completeness
of any of the contents of this Information Memorandum; or warrant that this
Company’s securities will be listed or will continue to be listed on the BSE ; or take
any responsibility for the financial or other soundness of this Company; and that it
should not for any reason be deemed or construed to mean that this Information
Memorandum has been cleared or approved by BSE. Every person who acquires any
securities of this Company may do so pursuant to independent inquiry, investigation
and analysis and shall not have any claim against the BSE whatsoever by reason of
any loss which may be suffered by such person consequent to or in connection
with such subscription/acquisition whether by reason of anything stated or omitted to
be stated herein or for any other reason whatsoever.
Disclaimer Clause of NSE:
A copy of this Information Memorandum has been submitted to NSE. NSE has vide its
letter NSE / LIST / 32059A dated 30th October 2006 approved the Scheme of Arrangement under
clause 24 (f) of the Listing Agreement and by virtue of that approval, NSE’s
name in this Information Memorandum as one of the Stock Exchanges on which the
Company’s securities are proposed to be listed is appearing. NSE does not in any
manner warrant, certify or endorse the correctness or completeness of any of the
contents of this Information Memorandum; or warrant that this Company’s securities
will be listed or will continue to be listed on the NSE ; or take any responsibility for
the financial or other soundness of this Company; and that it should not for any
reason be deemed or construed to mean that this Information Memorandum has
been cleared or approved by NSE. Every person who acquires any securities of this
Company may do so pursuant to independent inquiry, investigation and analysis and
shall not have any claim against the BSE whatsoever by reason of any loss which
may be suffered by such person consequent to or in connection with such
subscription/acquisition whether by reason of anything stated or omitted to be stated
herein or for any other reason whatsoever.
Filing:
Copies of this Information Memorandum have been filed with the BSE and NSE.
136
Listing:
Applications have been made to the BSE and NSE for permission to deal in and for an
official quotation of the Equity Shares of the Company. The Company has nominated
the BSE as the Designated Stock Exchange for the aforesaid listing of its Equity
Shares. The Company has taken steps for the completion of necessary formalities for listing
and commencement of trading at the Stock Exchanges mentioned above.
Stock Market Data for Equity Share Capital:
Equity shares of the Company have not been previously listed on any Stock Exchanges.
The Company is seeking for approval of listing of its shares through this
Information Memorandum.
Demat Credit:
The Company has executed agreements with NSDL and CDSL for admitting its Securities
in demat form. The ISIN No. INE170I01016 was allotted to the Company’s Equity Shares.
The allotment of Equity shares was made on 10th April 2006 and the demat accounts of
the members were credited on 17th and 18th April 2007.
Dispatch of share certificates:
Equity Shares that were allotted in physical certificate form were dispatched to the
members on 17th and 18th April 2007.
Expert Opinions:
Save as stated elsewhere in this Information Memorandum, the Company has not
obtained any expert opinions.
Previous rights and public issues:
The Company has not made any public issue since incorporation.
Commission and brokerage on previous issues:
Since the Company has not issued shares to the public in the past, no sum has been
paid or has become payable as commission or brokerage for subscribing to or procuring
or agreeing to procure subscription for any of the Equity Share since its inception.
Companies under the Same Management:
Following companies may be treated as companies under the same management as HTMT
Global Solutions Limited within the meaning of Section 370(1B) of the Companies Act,
1956
•
•
•
Hinduja TMT Limited
IndusInd Media & Communications Limited
Grant Investrade Limited
Capital Issues by Group Companies:
No capital issues have been made in the last three years by Hinduja TMT Limited which
137
is a company listed on the BSE and NSE.
Share Prices of Listed Group Companies:
Pre Demerger
Year 2004-2005
Month
BSE
NSE
High
(Rs.)
April ‘04
May ‘04
June ‘04
July ‘04
Aug ‘04
Sept ‘04
Oct ‘04
Nov ‘04
Dec ‘04
Jan ‘05
Feb‘05
Mar ‘05
244.00
214.60
212.00
219.90
241.00
275.90
297.45
293.00
321.75
347.00
358.90
338.00
Turn
over
(Qty)
90273
33168
139442
214755
156401
279408
76137
125441
96709
389987
136388
410725
Low
(Rs.)
204.10
127.00
163.00
160.00
202.20
231.05
258.00
273.50
273.05
273.00
305.00
283.15
Turn
over
(Qty)
56285
60434
27376
196852
72196
97588
1430011
17512
33255
174760
30301
61515
High
(Rs.)
244.40
213.80
211.90
219.95
243.25
275.65
297.70
294.00
323.60
348.00
360.00
337.25
Turn
over
(Qty)
168134
69530
326905
474781
297969
418639
141464
306136
300713
1245135
123698
824414
Low
(Rs.)
204.80
127.70
163.00
175.00
202.10
231.10
260.00
231.15
272.15
271.10
305.00
283.05
Turn
over
(Qty)
128332
162902
56176
375832
155102
165993
424934
30166
91404
382705
56937
204795
Year 2005-2006
Month
BSE
High
(Rs.)
April ‘05
May ‘05
June ‘05
July ‘05
Aug ‘05
Sept ‘05
Oct ‘05
Nov ‘05
Dec ‘05
Jan ‘06
Feb‘06
Mar ‘06
329.00
347.00
348.45
379.00
355.55
412.00
452.25
382.00
415.00
396.00
384.00
510.00
Turn
over
(Qty)
169472
143957
160075
411841
47834
564373
404569
73061
75685
23753
48864
79028
Low
(Rs.)
290.10
293.00
305.00
297.00
316.95
318.00
315.00
332.20
358.00
358.00
343.05
380.00
Turn
over
(Qty)
26761
19831
60656
77683
28471
16781
28965
11875
37746
19503
30640
161558
High
(Rs.)
328.50
347.00
349.00
380.00
349.40
413.00
452.00
381.75
414.90
400.00
384.00
510.00
NSE
Turn
Low
over
(Rs.)
(Qty)
119794
290.00
254475
292.00
308293
305.10
862335
297.20
268095
315.00
861918
315.30
684527
315.15
117309
330.00
175862
356.60
59713
314.80
159581
335.00
113312
381.00
Turn
over
(Qty)
57376
52917
308293
184411
37658
82421
77262
81098
115991
48786
27722
223513
138
Year 2006-2007
Month
BSE
High
(Rs.)
April ‘06
May ‘06
June ‘06
July ‘06
Aug ‘06
Sept ‘06
Oct ‘06
Nov ‘06
Dec ‘06
Jan ‘07
Feb‘07
Mar ‘07
670.00
866.90
693.30
521.10
637.40
597.00
549.70
625.00
797.00
782.00
723.00
627.00
Turn
over
(Qty)
44159
220312
27282
61230
182357
404663
10207
91193
494894
97513
72448
228797
NSE
Low
(Rs.)
482.10
527.90
355.20
451.00
492.00
515.00
485.00
479.20
529.00
655.00
568.00
450.00
Turn
over
(Qty)
33934
42698
29261
24359
24657
39721
23386
34604
34983
286225
23927
64126
High
(Rs.)
673.50
866.30
710.00
521.90
635.90
595.10
550.50
627.25
798.50
782.00
725.00
626.00
Turn
over
(Qty)
151297
512171
61447
136307
322610
876350
34745
83299
1170312
356197
204260
189019
Low
(Rs.)
473.40
501.00
355.15
419.80
491.15
521.10
483.00
475.00
522.00
655.00
550.00
446.50
Turn
over
(Qty)
28931
192948
74826
75922
32438
31970
33057
114630
89313
529859
36243
95696
Post Demerger
Year 2007-2008
Month
BSE
High
(Rs.)
Apr ‘07
May ‘07
Turn
over
(Qty)
890.00 1760443
610.00
144296
NSE
Low
(Rs.)
Turn
over
(Qty)
557.20 1760443
550.00
14648
High
(Rs.)
Turn
over
(Qty)
880.00 2458136
662.00
85385
Low
(Rs.)
Turn
over
(Qty)
555.30 2458136
539.00
11805
Change in auditors during last three years:
M/s. Shah & Company, Chartered Accountants, resigned as Statutory Auditors of the
Company vide their letter dated 4th January 2007. M/s Price WaterHouse, Chartered
Accountants were appointed as Statutory Auditors of the Company in the vacancy caused
by the resignation of M/s. Shah & Company, by the shareholders at an Extraordinary
General Meeting held on 7 t h March 2007, to hold office up to the date of the next
Annual General Meeting of the Company.
Revaluation of assets:
The Company has not revalued its assets during the last five years.
139
XVII
DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF
ASSOCIATION
Rights of Equity Shareholders:
The Shareholders are entitled to receive dividend, as and when declared and bonus and
rights shares, as and when issued. Further, the rights of the above and other holders
of shares are subject to the provisions of the Companies Act, 1956, the Memorandum
and the Articles of Association of the Company and other laws as applicable from time to
time.
Ranking of Equity Shares:
The new equity shares shall rank in all respects pari-passu with existing fully paid up
Equity Shares.
Face Value:
The Face Value of Equity Shares of the Company is Rs.10/-.
Main provisions of the Articles of Association:
The main provisions of Articles of Association of the Company are as follows:
SHARES AND SHARE CERTIFICATES
Shares to be numbered progressively and no share to be sub-divided: The shares in
the capital of the company shall be numbered progressively (according to their several
denominations) and except in the manner hereinafter mentioned, no share shall be subdivided.
Directors may allot shares as fully paid-up: Subject to the provisions of the Act and
these Articles, the Directors may allot and issue in the capital of the Company as payment
or part payment for any property (including goodwill of any business) sold or transferred
goods or machinery supplied or for services rendered to the Company either in or about
the formation or promotion of the Company or the conduct of its business and the shares
which may be so allotted may be issued as fully paid up or partly paid up otherwise than
in cash and if so issued, shall be deemed to be fully paid up or partly paid up shares as
aforesaid.
Acceptance of shares: An application signed by or on behalf of an applicant for shares
in the Company, followed by an allotment of any shares therein, shall be an acceptance
of shares within the meaning of these Articles, and every person who thus or otherwise
accepts any shares and whose name is on the Register of members shall for the purpose
of these Articles be a member.
Deposit and calls etc. to be debt payable immediately: The money (if any) which the
Director shall on the allotment of any shares being made by them required or direct to be
paid by way of deposit, call or otherwise in respect or any shares, allotted by them shall
immediately on the insertion of the names of the allottee in the Register of Members as
the name of the holder of such shares, became a debt due to and recoverable by the
Company from the allottee thereof, and shall be paid by him accordingly.
140
Instalments on shares to be duly paid: If by the conditions of allotment of any share the
whole or part of the amount or issue price thereof shall be payable by instalment every
such instalment shall, when due, be paid to the Company by the person who for the time
being and from time to time shall be the registered holder of the share or his legal
representative.
Company not bound to recognize any interest in shares other than that of the
registered holders: Except as required by law, no person shall be recognized by the
Company as holding any share on any trust and the Company shall not be bound by or
be compelled in any way, to recognize even when having notice thereof of any equitable,
contingent, future or partial interest in any share or any interest in any fractional part of
share or (except only as by these Articles or as ordered by a Court of competent
jurisdiction or by law otherwise provided) any other rights in respect of any share except
an absolute right to the entirety thereof of the registered holder.
Certificate and Shares Signing of share certificates:. Every member shall be entitled,
without payment, to one or more certificates in marketable lots, for all the shares of each
class or denomination registered in his name, or if the Directors so approve (upon paying
such fee as the Directors may from time to time determine) to several certificates, each
for one or more of such shares and the company shall complete and have ready for
delivery such
certificates within three months from the date of allotment, unless
the
conditions of issue thereof otherwise provide, or within one month of the
receipt of application of registration of transfer, transmission, sub-division, consolidation
or renewal of any of its shares as the case may be. Every certificate of shares shall
be under the seal of the company and shall specify the number and distinctive numbers
of shares in respect of which it is issued
and amount paid-up thereon and shall be
in such form as the directors may prescribe or approve, provided that in respect of a
share or shares held jointly by several persons, the company shall not be borne to
issue more than one certificate and delivery of a certificate of shares to one of
several joint holders shall be sufficient delivery to all such holder.
The Certificate of title to shares shall be issued under the seal of the Company which
shall be affixed in the presence of and signed by (i) two directors or persons acting on
behalf of the Directors under a duly registered power of Attorney; and (ii) the secretary or
some other person appointed by the Board for the purpose.
PROVIDED that at least one of the aforesaid two directors shall be person other than the
Managing Directors or wholetime Directors. A Director may sign a share certificate by
fixing his signature thereon by means of any machine, equipment or other mechanical
means such as engraving in metal or lithography.
PROVIDED ALWAYS that
notwithstanding anything contained in this Article, the certificates of title to shares may be
executed and issued in accordance with such other provisions of the Act or the Rules
made thereunder as may be in force for the time being and from time to time.
Limitation of time for issue of certificates: The Company shall within three months
after the allotment of any debentures and within one month after the application for the
registration of the transfer of any such debentures, complete and have ready for delivery
the certificates of all debentures allotted or transferred, unless the conditions of issue of
the debentures otherwise provide and the Company shall otherwise comply with the
requirements of the Act.
As to issue of new certificate in place of one defaced, lost or destroyed: If any
certificate be worn out, defaced, mutilated or torn or if there be no further space on the
back thereof for endorsement of transfer, then upon production and surrender thereof
to the Company, a new Certificate may be issued in lieu thereof, and if any certificate
141
lost or destroyed then upon proof thereof to the satisfaction of the company and on
execution of such indemnity as the company deem adequate, being given, an a new
Certificate in lieu thereof shall be given to the party entitled to such lost or destroyed
Certificate. Every Certificates under the Article shall be issued without payment of fees if
the Directors so decide, or on payment of such fees (not exceeding Rs.2/- for each
certificate) as the Directors shall prescribe. Provided that no fee shall be charged for
issue of new certificates in replacement of those which are old, defaced or worn out or
where there is no further space on the back thereof for endorsement of transfer.
Provided that notwithstanding what is stated above the Directors shall comply with such
Rules or Regulation or requirements of any Stock Exchange or the Rules made under the
Act or the rules made under Securities Contracts (Regulation) Act, 1956 or any other
Act, or rules applicable in this behalf.
The provisions of this Article shall mutatis mutandis apply to debentures of the Company.
Demateriali-sation of Securities: Notwithstanding anything contained in these Articles,
the Company shall be entitled to dematerialize or rematerialize its share, debentures and
other securities (both existing and future) held by it with the Depository and to offer its
shares, debentures and other securities for subscription in a dematerialized form pursuant
to the Depositories Act, 1996 and the Rules framed thereunder if any.
Options for Investors: Every person subscribing to securities offered by the Company
shall have the option to receive the security certificates or to hold the securities with a
Depository. Such a person who is the beneficial owner of the securities can at any time
opt out of a Depository, if permitted by law, in respect of any security in the manner
provided by Depositories Act, and the Company shall in the manner and within the time
prescribed, issue to the Beneficial owner the required certificates of securities. Where a
person opts to hold his security with a Depository, the Company shall intimate such
Depository the details of allotment of the security and on receipt of such information, the
Depository shall enter in its record the name of the allottee as the beneficial owner of the
security.
Securities in Depositories to be in fungible form: All securities held by a Depository
shall be dematerialized and shall be in a fungible form. Nothing contained in Sections
153, 153A, 153B, 187A, 187B, 187C and 372A of the Act shall apply to a Depository in
respect of the securities held by it on behalf of the beneficial owners.
Rights of Depositories and Beneficial Owners
(1) Notwithstanding anything contrary contained in the Act or these Articles, a Depository
shall be deemed to be the registered owner for the purposes of effecting transfer of
ownership of security on behalf of this Beneficial Owner.
(2) Save as otherwise provided in (1) above, the Depository as a registered owner of
the securities shall not have any voting rights or any other right in respect of the securities
held by it.
(3) Every person holding securities of the Company and whose name is entered as a
Beneficial Owner in the records of the Depository shall be deemed to be a member of the
Company. The Beneficial Owner of the securities shall not have any voting rights or any
other right in respect of his securities held by a Depository.
Depository to furnish information Notwithstanding anything contrary contained in the
Act or these Articles, where the securities are held in a Depository, the records of the
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Beneficial Ownership may be served by such Depository on the Company by means of
electronic mode or by delivery of floppies and discs.
Option to opt out in respect of any security If a Beneficial Owner seeks to opt out of a
Depository in respect of any security, the Beneficial Owner shall inform the Depository
accordingly. The Depository shall, on receipt of intimation as above, make appropriate
entries in its record and shall inform the Company accordingly. The Company shall within
thirty (30) days of the receipt of the intimation from the Depository and on fulfillment of
such conditions and on payment of such fees as may be specified by the regulations,
issue the certificate of securities to the Beneficial Owner or the transferee as the case
may be.
Sections 83 and 108 of the Act not to apply: Notwithstanding anything to the contrary
contained in the Articles:
i. Section 83 of the Act shall not apply to the shares with a Depository.
ii. Section 108 of the Act shall not apply to transfer of security effected by the transferor
and the transferee both of whom are entered as Beneficial Owners in the records of a
Depository.
Register and Index of Beneficial Owners: The Register and Index of Beneficial Owner,
maintained by a Depository under section 11 of the Depositories Act shall be deemed to
be the Register and Index of members and security holders as the case may be for the
purposes of these Articles.
Intimation to Depository: Notwithstanding anything contained in the Act or these
Articles, where securities are dealt with in a Depository, the Company shall intimate the
details of allotment of securities thereof to the Depository immediately on allotment of
such securities.
Stamp duty on securities held on de-materialized form: No stamp duty would be
payable on shares and securities held in dematerialized form in any medium as may be
permitted by law including any form of electronic medium.
Applicability of the Depositories Act 1996: In case of transfer of shares, debentures
and other marketable securities, where the Company has not issued any certificate and
where such shares, debentures or securities are being held in an electronic and fungible
form in a Depository, the provisions of the Depositories Act 1996 shall apply.
Company to recognize the rights of registered Holders as also the Beneficial
Owners in the records of the Depository: Save as herein otherwise provided, the
Company shall be entitled to treat the person whose name appears on the Register of
Members as the holder of any share, as also the Beneficial Owner of the shares in the
records of the Depository as the absolute owner thereof as regards receipt of dividends or
bonus or service of notices and all or any other matters connected with the Company, and
accordingly the Company shall not except as ordered by a Court of competent jurisdiction
or as by law required be bound to recognize any benami trust or equity or equitable,
contingent or other claim to or interest in such share on the part of any other person
whether or not it shall have express or implied notice thereof.
FORFEITURE, SURRENDER AND LIEN
If call or instalment not paid notice must be given: If any member fails to pay the
whole or any part of any call or instalment or any money due in respect of any shares
either by way of principal or interest on or before the day appointed for the payment of the
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same, the Directors may, at any time thereafter during such time as the call or instalment
or any part thereof or other moneys remain unpaid or a judgement or decree in respect
thereof remains unsatisfied in whole or in part, serve a notice on such member or on the
person (if any) entitled to the share by transmission requiring him to pay such call or
instalment or such part thereof or other moneys as remain unpaid together with any
interest that may have accrued and all expenses (legal or otherwise) that may have been
incurred by the Company by reason of such non-payment.
Terms of notice: The notice shall name a day (not being less than 14 days from the date
of the notice) on or before which such call, instalment or such part or other moneys as
aforesaid and such interest and expenses as aforesaid are to be paid, and if payable to
any person other than the Company, the person to whom such payment is to be made.
The notice shall also state that in the event of non payment on or before the time and (if
payable to any person other than the money) to the person appointed the shares in
respect of which the call was made or instalment is payable will be liable to be forfeited.
In default of payment shares to be forfeited: If the requirement of any such notice as
aforesaid shall not be complied with, any of the shares in respect of which such notice
has been given, may at any time thereafter, before payment of all calls or instalments,
interest and expenses or other moneys due in respect thereof, be forfeited by a resolution
of the Directors to that effect. Such forfeiture shall include all dividends declared in
respect of the forfeited share and not actually paid before the forfeiture.
Entry of forfeiture in Register of Members: When any share shall have been so
forfeited, an entry of the forfeiture with the date thereof shall be made in the Register of
Members.
Forfeited shares to be property of the Company and may be sold etc. Any share so
forfeited shall be deemed to be the property of the Company and may be sold, re-allotted
or otherwise disposed of either to the original holder thereof or to any other person, upon
such terms and in such manner as the Board shall think fit.
Power to annul forfeiture: The Directors may at any time before any share so forfeited
shall have been sold, re-allotted or otherwise disposed of annul the forfeiture thereof upon
such conditions as they think fit.
Member still liable to pay money owing at the time of forfeiture and interest: Any
member whose shares have been forfeited shall notwithstanding the forfeiture, be liable
to pay and shall forthwith pay to the Company all calls, instalments, interest, expenses
and other moneys owing upon or in respect of such shares at the time of the forfeiture
together with the interest thereon from the time of the forfeiture until payment at such rate
not exceeding 15 per cent per annum as the Directors may determine and the Directors
may enforce the payment of the whole or a portion thereof if they think fit but shall not be
under any obligation to do so.
Surrender of shares: The Directors may subject to the provisions of the Act accept a
surrender of any share from or by any member desirous of surrendering shares of the
Company on such terms, as they think fit.
Company’s lien on shares/debentures: The Company shall have a first and paramount
lien upon all the shares/debentures (other than fully paid-up shares/debentures)
registered in the name of each member (whether solely or jointly with others) and upon
the proceeds of sale thereof for all moneys (whether presently payable or not) called or
payable at a fixed time in respect of such shares/debentures and no equitable interest in
any
share shall be created except upon the footing and condition that this Article will
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have full effect. And such lien shall extend to all dividends and bonuses from time to
time declared in respect of such shares/debentures. Unless otherwise agreed the
registration of a transfer of shares/debentures shall operate as a waiver of the
Company's lien if any, on such shares/debentures. The Directors may at any time declare
any shares/debentures wholly or in part to be exempt from the provisions of this clause.
As to enforcing lien by sale: For the purpose of enforcing such lien, the Directors may
sell the shares subject thereto in such manner as they shall think fit, but no sale shall be
made (until such period as aforesaid shall have arrived) and until notice in writing of the
intention to sell shall have been served on such member or the person (if any) entitled by
transmission to the share and default shall have been made by him in payment, fulfillment
or discharge of such debts, liabilities or engagements for seven days after such notice.
To give effect to any such sale, the Board may authorize some person to transfer the
shares sold to the purchaser thereof and the purchaser shall be registered as the holder
of the shares comprised in any such transfer. Upon any such sale as aforesaid, the
certificates in respect of the shares sold shall stand cancelled and become null and void
and of no effect and the Directors shall be entitled to issue a new certificate or certificates
in lieu thereof to the purchaser or purchasers concerned.
Application of proceeds of sale: The net proceeds of any such sale after payment of
the costs of such sale shall be applied in or towards the satisfaction of such debts,
liabilities or engagements of such members and the residue (if any) paid to such member
or the person (if any) entitled by transmission to the shares so sold.
Certificate of Forfeiture: A certificate in writing under the hands of a Director, that the
call in respect of a share was made, and notice thereof given, and that default in payment
of the call was made, and that the forfeiture of the share was made by a resolution of the
Directors to that effect, shall be conclusive evidence of the fact stated therein as against
all persons entitled to such share.
Title of purchaser and allottee of forfeited shares: The Company may receive the
consideration, if any, given for the share on any sale, re-allotment or other disposition
thereof and the person to whom such shares is sold, re-allotted or disposed of may be
registered as the holder of the share and shall not be bound to see to the application of
the consideration, if any, nor shall his title to the share be affected by irregularity or
invalidity in the proceedings in reference to the forfeiture, sale, re-allotment or other
disposal of the share.
TRANSFER AND TRANSMISSION OF SHARES
Register of Transfer: The Company shall keep a book to be called the “Register of
Transfers” and therein shall be fairly and distinctly entered the particular of every transfer
of transmission of any share.
Instrument of Transfer: The instrument of transfer shall be in writing and all provisions of
Section 108 of the Companies Act, 1956 and statutory modification thereof for the time
being shall be duly complied with in respect of all transfer of shares and registration
thereof.
Application for Transfer:
(1) An application for the registration of a transfer of the shares in the Company may be
made either by the transferor or the transferee.
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(2) Where the application is made by the transferor and relates to partly paid shares, the
transfer shall not be registered unless the Company gives notice of the application to the
transferee and the transferee makes no objection to the transfer within two weeks from
the receipt of the notice.
(3) For the purpose of Sub-clause (2) above, notice to the transferee shall be deemed to
have been duly given if it is dispatched by pre-paid registered post to the transferee at the
address given in the instrument of transfer and shall be deemed to have been duly
delivered at the time at which it would have been delivered in the ordinary course of post
To be executed by transferor and transferee:
Every such instrument of transfer shall be signed both by the transferor and the
transferee and the transferor shall be deemed to remain the holder of such share until the
name of the transferee is entered in the Register of Members in respect thereof.
Transfer not to be registered except on production of instrument of transfer: The
Company shall not register a transfer of shares in the Company unless a proper
instrument of transfer duly stamped and executed by or on behalf of the transferor and by
or on behalf of the transferee and specifying the name, address and occupation, if any, of
the transferee, has been delivered to the Company along with the certificate is in
existence, along with the no such share certificate is in existence, along with the letter of
allotment of the shares. Provided that where on an application in writing made to the
Company by the transferee and bearing the stamp required for an instrument of transfer it
is proved to the satisfaction of the Board of Directors that the instrument of transfer
signed by or on behalf of the transferor and by or on behalf of the transferees has been
lost, the Company may register the transfer on such terms as to indemnify as the Board
may think fit, provided further that nothing in this Article shall prejudice any power of the
Company to register as shareholder any person to whom the right to any shares in the
Company has been transmitted by operation of law.
Subject to the provisions of Section 111A, the shares or debentures and any interest
therein of the Company shall be freely transferable.
The provisions of this section shall not restrict the right of a holder of shares or
debentures, to transfer such shares or debentures and any person acquiring such shares
or debentures shall be entitled to voting rights unless the voting rights have been
suspended by an order of the Company Law Board.
Notice of refusal to be given to transferor and transferee: The provisions of Section
111 of the Companies Act, 1956, regarding powers to refuse Registration of Transfer and
appeal against such refusal should be adhered to. Provided that registration of transfer
shall not be refused on the ground of the transferor being either alone or jointly with any
other person or persons indebted to the Company on any account whatsoever except
when the company has a lien on the shares. Transfer of shares/debentures in whatever
lot shall not be refused.
Transfer by legal representative: A transfer of a share in the Company of a deceased
member thereof made by the legal representative shall, although the legal representative
is not himself a member, be as valid as if he had been a member at the time of the death
of such member.
Custody of Transfer: The instrument of transfer shall after registration be retained by
the Company and shall remain in its custody. All instruments of transfer which the
Directors may decline to register shall on demand be returned to the persons depositing
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the same. The Directors may cause to be destroyed all transfer deeds lying with the
Company for a period of ten years or more.
Closure of transfer books: The Directors shall have the power, on giving not less than
seven days previous notice by advertisement as required by section 154 of the Act, to
close the Register of Members and transfer books of the Company for such period or
periods of time not exceeding in the whole 45 days in each year but not exceeding 30
days at a time, as they may deem fit.
Title to shares and deceased holders: The executors or administrators of a deceased
member or a holder of a Succession certificate (whether European, Hindu,
Mohammedan, Parsi or otherwise not being one of two or more joint holders) shall be the
only person whom the Company will be bound to recognize as having any title to the
shares registered in the name of such member and the Company shall not be bound to
recognize such executors or administrators unless such executors or administrators shall
have first obtained Probate or Letters of Administration as the case may be, from a duly
Constituted Court in India, provided that in any case where the Directors in their absolute
discretion think fit, the Directors may dispense with the production of Probate or Letter of
Administration or Succession Certificate and under the next Article, register the name of
any person who claims to be absolutely entitled to the share standing in the name of a
deceased members, as a member.
Registration of persons entitled to shares otherwise than by transfer (Transmission
Clause):
Subject to the provisions of the Act and these Articles, any person becoming entitled to
any share in consequence of the death, lunacy, bankruptcy or insolvency of any member
or by any lawful means, other than by transfer in accordance with these presents may,
with the consent of the Directors (which they shall not be under any obligation to give)
upon producing such evidence that he sustains the character in respect of which he
proposes to act under this Article or of his title as the Directors shall require either be
registered as a member in respect of such shares or elect to have some person
nominated by him and approved by the Directors registered as a member in respect of
such shares. Provided nevertheless that if such person shall elect to have his nominee
registered he shall testify his election by executing in favour of his nominee an instrument
of transfer in accordance with the provision herein contained and until he does so he shall
not be freed from any liability in respect of such shares. This Clause is herein referred to
as the Transmission Clause.
Refusal to register nominee: Subject to the provisions of the Act and these Articles, the
Directors shall have the same right to refuse to register a person entitled by transmission
to any shares or his nominee as if he were transferee named in an ordinary transfer
presented for registration.
Board may require evidence of transmission: Every transmission of a share shall be
verified in such manner as the Directors may require, and the Company may refuse to
register any such transmission until the same be so verified or until or unless an
indemnity be given to the Company with regard to such registration which the Directors at
their discretion shall consider sufficient, provided nevertheless that there shall not be any
obligation on the Company or the Directors to accept any indemnity.
Company not liable for disregard of a notice prohibiting registration of transfer:
The Company shall incur no liability or responsibility whatsoever in consequence of their
registering or giving effect to any transfer of shares made, or purporting to be made by
any apparent legal owner thereof (as shown or appearing in the Register of Members) to
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the prejudice of persons having or claiming any equitable right, title or interest to or in the
same shares notwithstanding that the Company may have had notice of such transfer and
may have entered such notice or referred thereto in any book of the Company and the
Company shall not be bound or required to regard or attend or give effect to any notice
which may be given to them of any equitable right, title or interest, or be under any liability
whatsoever for refusing or neglecting to do of though it may have been entered or
referred to in some book of the Company but the Company shall nevertheless be at
liberty to regard and attend to any such notice and give effect thereof, if the Directors
shall so think fit.
No fee shall be charged for registration of transfer, transmission, Probate, Succession
Certificate and Letters of administration, Certificate of Death or Marriage, Power of
Attorney or similar other document.
Chairman of Directors of Vice-Chairman or a Director to be Chairman of General
Meeting:
(a) The Chairman (if any) of the Board of Directors shall, if willing, preside as Chairman
at every General Meeting, whether Ordinary or Extraordinary, but if there be no such
Chairman, or in case of his absence or refusal, the Vice Chairman (if any) of the Board of
Directors shall, if willing, preside as Chairman at such meeting and if there be no such
Vice-Chairman or in case of his absence or refusal, some one of the Directors (if any be
present) shall be chosen to the Chairman of the meeting.
In case of their absence or refusal a member may act: (b) If at any meeting a quorum
of members shall be present, and the Chair shall not be taken by the Chairman of the
Board or by the Vice-Chairman or by a Director at the expiration of fifteen minutes from
the time appointed for holding the meeting or if before the expiration of that time all the
Directors shall decline to take the Chair, the members present shall choose one of their
number to the Chairman of the meeting.
Business confined to election of Chairman whilst Chair vacant: No business shall be
discussed at any General Meeting except the election of a Chairman whilst the Chair is
vacant.
Chairman with consent may adjourn meeting: The Chairman with the consent of any
meeting at which a quorum is present, may adjourn any meeting from time to time.
DIVIDENDS:
Division of profit: The profits of the Company subject to any special rights relating
thereto created or authorized to be created by the Memorandum or these Articles and
subject to the provisions of these Articles shall be divisible among the members in
proportion to the amount of capital paid-up on the shares held by them respectively.
Provided always that (subject as aforesaid) any capital paid-up on a share during the
period in respect of which a dividend is declared shall unless the Directors otherwise
determine only entitle the holder of such share to an apportioned amount of such dividend
as from the date of such payment.
Capital paid up in advance interest not to earn dividend: Where capital is paid up in
advance of calls upon the footing that the same shall carry interest, such capital shall not,
whilst carrying interest, confer a right to participate in profits.
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Dividends in to amount proportion paid up: The Company may pay dividends in
proportion to the amount paid-up or credited as paid-up on each share, where a large
amount is paid-up or credited as paid-up on some shares than on others.
The Company in General Meeting may declare dividend: The Company in General
Meeting may subject to section 205 of the Act declare a dividend to be paid to the
members according to their respective rights and interest in the profits and subject to the
provisions of the Act may fix the time for payment. When a dividend has been so
declared, the warrant in respect thereof shall be posted within thirty days from the date of
the declaration to the shareholders entitled to the payment of the same.
Power of Directors to limit dividends: No larger dividend shall be declared than is
recommended by the Director but the Company in General Meeting may declare a
smaller dividend. No dividend shall be payable except out of the profits of the Company
for that year or any other undistributed profits or otherwise than in accordance with the
provisions of Section 205, 206 and 207 of the Act and no dividend shall carry interest as
against the Company. The declaration of the Directors as to the amount of the net profit of
the Company shall be conclusive.
Interim Dividend: Subject to the provisions of the Act, the Directors may from time to
time, pay to the members such interim dividends as in the judgement the position of the
Company justifies.
Retention of dividends until completion of transfer under Article 77: Subject to the
provisions of the Act, the Directors may retain the dividends payable upon shares in
respect of which any persons is under Article 77 hereof, entitled to become a member or
which any person under that Article is entitled to transfer until such person shall become a
member in respect of such shares or shall duly transfer the same.
No member to receive dividend whilst indebted to the company and company’s
right to reimbursement thereof: Subject to the provisions of Act, no member shall be
entitled to receive payment of any interest or dividend in respect of his share or shares,
whilst any money may be due or owing from him to the Company in respect of such share
or shares or otherwise, howsoever either alone or jointly with any other persons; and the
Directors may deduct from the interest or dividend payable to any member all sums of
money so due from him to the Company.
Transfer of Shares must be registered: A transfer of shares shall not pass the right to
any dividend declared thereon before the registration of the transfer.
Dividend how remitted: Unless otherwise directed, any dividend may paid by cheque or
warrant sent through post to the registered address of the member or person entitled to in
case of joint holders to that one of them first named in the register in respect of the joint
holding. Every such cheque shall be made payable to the order of the person to whom it
is sent. The Company shall not be liable or responsible for any cheque or warrant lost in
transmission or for any dividend lost to the member or person entitled thereto by the
forged endorsement of any cheque or warrant or the fraudulent or improper recovery
thereof by any other means.
Unpaid/Unclaimed dividend: Where the Company has declared a dividend but which
has not been paid or the dividend warrant in respect thereof has not been posted within
30 days or such other period as prescribed by the provisions of the Companies Act, 1956
including any statutory modification or amendment thereof, from the date of declaration
to any shareholder entitled to the payment of the dividend, the Company shall within 7
days from the date of expiry of the said period of 30 days, open a special account in that
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behalf in any scheduled bank called "Unpaid Dividend of _____ Limited" and transfer to
the said account, the total amount of dividend which remains unpaid or in relation to
which no dividend warrant has been posted.
Any money transferred to the unpaid dividend account of the Company which remains
unpaid or unclaimed for a period of seven years from the date of such transfer, shall be
transferred by the Company to the Investor Education and protection Fund established by
the Central Government.
No unclaimed or unpaid dividend shall be forfeited by the Board.
Dividend and call together; Set off allowed:Any General Meeting declaring a dividend
may make a call on the members for such amount as the meeting fixes, but so that the
call on such member shall not exceed the dividend payable to him and so that the call be
made payable at the same time as the dividend, and the dividend, may, if so arranged
between the Company and the members, be set off against the calls.
CAPITALISATION:
1) Any General Meeting may resolve that any amount standing to the credit of the share
premium account or the capital redemption reserve account or any moneys, investments
or other assets forming part of the undivided profits (including profits or surplus moneys
arising from the appreciation in value of any capital assets of the Company) standing to
the credit of the Reserve, General Reserve or any Reserve Fund or any other Fund of the
Company or in the hands of the Company available for dividend be capitalized.
a)
by the issue and distribution as fully paid-up of shares, debentures, debenture
stock, bonds or other obligations of the Company or
b) by crediting shares of the Company which may have been issued and are not fully
paid-up, with the whole or any part of the sum remaining unpaid thereon.
Provided that any amounts standing to the credit of the share premium account or the
capital redemption reserve account shall be applied only in crediting the payment of
capital on shares of the Company to be issued to members (as herein provided) as fully
paid bonus shares.
2)
Such issue and distribution under (1)(a) above and such portion of the profits to
Reserve, General Reserve, or Reserve made to among and in favour of the members or
any class of them or any of them entitled thereto and in accordance with their respective
rights and interest and in proportion to the amount of capital paid-up on shares held by
them respectively in respect of which such distribution under (1) (a) or payment under
(1)(a) above shall be made on the footing that such members become entitled thereto as
capital.
3)
The Directors shall give effect to any such resolution and apply such portion of
the profits to Reserve, General Reserve, or Reserve Fund or any other Fund or Account
as aforesaid as may be required for the purpose of making payment in full for the shares,
debentures or debenture stock, bonds or other obligations of the Company so distributed
under (1)(a) above or (as the case may be) for the purpose of paying, in whole or in part,
the amount remaining unpaid on the shares which may have been issued and are not
fully paid up under (1) (b) above, provided that no such distribution or payment shall be
made unless recommended by the Directors and if so recommended such distribution or
payment shall be accepted by such members as aforesaid in full satisfaction of their
interest in the said capitalized sum.
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4)
For the purpose of giving effect to any such resolution the Directors may settle
any difficulty which may settle any difficulty which may arise in regard to the distribution
or payment as aforesaid as they think expedient and in particular they may issue
fractional certificates and may fix the value for distribution or any specific assets and may
determine that cash payments to made to any members on the footing of the value so
fixed and may vest any such cash, shares, debentures, debentures stock bonds, or other
obligations in trustees upon such trust for the persons entitled thereto as may seem
expedient to the Directors and generally may make such arrangements for the
acceptance, allotment and sale of such shares, debentures, debentures stock bonds or
obligations and fractional certificates or otherwise as they may think fit.
5)
Subject to the provisions of the Act and these Articles, in cases where some of
the shares of the Company are fully paid and others are partly paid only such
capitalization may be effected by the distribution of further shares in respect of the fully
paid shares, and by crediting the partly paid shares with the whole or part of the unpaid
liability thereon but so that as between the holders of the fully paid shares, and the partly
paid shares the sum so applied in the payment of such further shares and in the
extinguishment of diminution of the liability on the partly paid shares shall be so applied
pro rata in proportion to the amount on them already paid or credit as paid on the existing
fully paid and partly paid shares respectively.
6)
Where deemed requisite, a proper contract shall be filed in accordance with the
Act and the Board may appoint any person to sign such contract on behalf of the
members entitled as aforesaid and such appointment shall be effective.
WINDING UP:
If the Company shall be wound up and the assets available for distribution among the
members as such shall be insufficient to repay the whole of the paid up capital, such
assets shall be distributed so that as early as may be, the losses shall be borne by the
members in proportion to the capital paid-up, or which ought to have been paid-up, at the
commencement of the winding up, on the shares held by them respectively. And if in
winding up the assets available for distribution among the members shall be more than
sufficient to repay the whole of the capital paid up at the commencement of the winding
up, the excess shall be distributed amongst the members in proportion to the capital at
the commencement of the winding up paid-up or which ought to have been paid-up on the
shares held by them respectively. But this Article is to be without prejudice to the rights of
the holders of shares issued upon special terms and conditions.
Distribution of Assets:
Distribution specie or kind:
1) If the Company shall be wound up, whether voluntarily on otherwise, the liquidator may
with the sanction of a special resolution divide amongst the contributories, in specie or
kind any part of the assets sanction, vest any part of the assets of the Company in
Trustees upon such trust for the benefit of the contributories, or any of them, as the
liquidators, with the like sanction shall think fit.
2) If thought expedient such division may subject to the provisions of the Act be otherwise
than in accordance with the legal rights of the contributories (except where unalterably
fixed by the Memorandum of Association) and in particular any class may be given
preferential or special rights or may be excluded altogether or in part but in case any
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division otherwise than in accordance with legal rights of the contributories shall be
determined on, any contributory who would be prejudiced there by shall have a right to
dissent and ancillary rights as if such determination where a special resolution passed
pursuant to Section 494 of the Act.
3) In case any shares to be divided as aforesaid involve a liability to calls or otherwise any
person entitled under such division to any of the said shares may within ten days after the
passing of the special resolution by notice in writing direct the liquidators to sell his
proportion and pay him the net proceeds and the liquidators shall if practicable, act
accordingly.
Right of shareholders in case of sale: A special resolution sanctioning a sale to any
other company duly passed pursuant to Section 494 of the Act may subject to the
provisions of the Act in like manner as aforesaid determine that any shares or other
consideration receivable by the liquidators be distributed amongst the members otherwise
than in accordance with their existing rights and any such determination shall be binding
upon all the members subject to the rights of dissent and consequential rights conferred
by the said sanction.
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XVIII DOCUMENTS FOR INSPECTION
Copies of the following documents will be available for inspection at the registered office
of the Company on any working day (i.e. Monday to Friday and not being a bank
holiday in Mumbai) between 3 . 0 0 p . m . and 5 . 00 p.m. upto seven days from the date
of filing of this Information Memorandum with the Stock Exchanges:
1.
Memorandum and Articles of Association, as amended till date.
2.
Certificate of Incorporation and Fresh Certificates of Incorporation consequent
upon changes of name of the Company issued by the Registrar of Companies,
Maharashtra, Mumbai.
3.
Scheme of Arrangement between the Company and Hinduja TMT Limited
and their respective shareholders and Creditors.
4.
Orders of the Hon’ble High Court of Judicature at Bombay, dated 23rd February
2007 sanctioning the Scheme of Arrangement under Sections 100, 391-394 of the
Companies Act, 1956.
5.
Letter under Clause 24(f) of the Listing Agreement bearing reference
of
BSE
number DCS/SJK/RCG/AJ/2006/500189 dated
29 t h September 2006
approving the Scheme.
6.
Letter under Clause 24(f) of the Listing Agreement bearing reference
number NSE/ LIST/32059A dated 30 t h October 2006 of NSE approving the Scheme.
7.
Tripartite agreement between the Company, Sharepro Services (India)
Private Limited (Registrars and Transfer Agents) and NSDL dated 12th April 2007.
8.
Tripartite agreement between the Company, Sharepro Services (India)
Private Limited (Registrars and Transfer Agents) and CDSL dated 9th April 2007.
SEBI letter CFD/DIL/NB/NB/95345/2007 dated 5th June 2007, granting relaxation
from the applicability of the provisions of Regulation 19(2)(b) of the Securities Contract
(Regulations) Rules, 1957, under Clause 8.3.5 of SEBI (DIP) Guidelines, 2000 for listing
of the Equity Shares of the Company.
9.
10.
Resolution for appointment of Manager.
11.
Return of Allotment filed by the Company for allotment of Shares pursuant to the
Scheme.
153
XIX DECLARATION
To the best of the knowledge and belief of the Board of Directors of the Company,
all statements made in this Information Memorandum are true and correct.
Signed on behalf of the Board of Directors
For HTMT Global Solutions Limited
Director
Place: Mumbai
Date: 5th June 2007
154

information memorandum

Transcription

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