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Aditya birla minacs worldwide limited

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Aditya birla minacs worldwide limited

  1. 1. ADITYA BIRLA MINACS WORLDWIDE LIMITEDANNUAL REPORT OF SUBSIDIARIES 2010-2011Sl. No. Name Page No1. Aditya Birla Minacs Worldwide Limited 12. Transworks Inc (USA) 273. Aditya Birla Minacs Philippines Inc. 304. A V Transworks Limited 375. Aditya Birla Minacs Worldwide Inc., (Canada) 426. The Minacs Group (USA) Inc. 587. Bureau of Collection Recovery, LLC 628. Minacs Worldwide S A De C V (Mexico) 649. Minacs Limited (UK) 6610. Minacs Worldwide GmbH (Germany) 6811. Minacs KFT, Hungary 7112. Aditya Birla Minacs BPO Limited 7413. Aditya Birla Minacs BPO Private Limited 8114. Compass BPO Inc 91(1)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKDIVIDENDIn view of the carried forward losses no dividend is recommended.BUSINESS REVIEW
  2. 2. Industry ScenarioIn 2010-11, the global economy showed signs of coming out of recessionthough there continues to be fears that the revival may not be sustainable.Rising oil prices, EU debt pressures and sharp increase in inflation inAsia continues to cast a gloomy picture though there are signs that theimpact may not as bad as in 2009-10. The BPO industry showed signsof growth but pricing pressures continued. Customers continued to becircumspect in increasing their outsourcing since their own businesseshave reduced resulting in excess employees in their own organizations.Summar y of OperationsThe actions initiated by your Company to improve operational excellenceand grow revenues have started to show results.Over the previous year, consolidated revenues increased by 16%. Thesharp sales focus on delivering value to our customers whilstdemonstrating domain knowledge has resulted in revenue growthdespite lower revenue productivity due to pricing pressures.The revenue growth along with the continued efforts on costoptimization enabled your Company’s operating profits (EBITDA) hasshown an increase from ` 1,136 million to Rs.1,958 million – a significantgrowth of 72% over the previous year. Your Company’s actionscontinued the improvement in the operating margins from 7.8%to 11.5%.The growth in revenues required the company to expand its operationssites. Your company opened a new site at Southfield, USA and hasalso opened a new site in Philippines in June 2011.
  3. 3. Your Company has continued on its 3- Year roadmap to grow revenuesby obtaining a higher wallet share from existing clients whilst addingnew logos, improve profitability by continuing operational efficienciesand increasing business delivered from India and other offshoregeographies. Your Company’s investment in its sales team organizedon industry verticals continues to fuel the strong growth in its salespipeline and the management plans to further invest in this area.OUTLOOKThe improvement in your company’s revenues in FY 2010-11 is expectedto continue in the current financial year. However, the challengingenvironment resulting in pricing pressures from our customers coupledwith growing inflation in India and Philippines is likely to put severepressures on profitability in the current financial year. Further, the sharpDIRECTORS’ REPOR TDear Shareholders,On behalf of the Directors, it is our pleasure to present the Sixteenth Annual Report, together with theAudited Statement of A ccounts of AdityaBirla Minacs Worldwide Limited (“the Company”) and its subsidiaries for the year ended 31stMarch, 2011.FINANCIAL PERFORMANCEThe summarized Standalone and consolidated results of your Company and its subsidiaries are given inthe table below. Both Stan dalone andConsolidated results include the results of Aditya Birla IT Services and Aditya Birla Technologies, whichwere merged into Aditya Birla WorldwideLimited with effect from 1st
  4. 4. April 2010 (detailed in a separate note below).(` Mn) Standalone Results Consolidated ResultsParticulars Year ended Year ended Growth Year ended Year Ended Growth31/03/2011 31/03/2010 31/03/2011 31/03/2010Total Income 2,461 2,263 9% 16,326 14,693 11%Operating EBITDA 121 179 (32%) 1,772 1,136 56%Profit/(loss) before Interest, Depreciation& Tax (EBITDA) 75 167 (55%) 1,701 901 89%Finance Charges 261 319 (18%) 353 469 (25%)Depreciation 192 141 36% 654 605 8%Provision for Income Tax & FBT(including for earlier years) 3 2 50% 9 58 (84%)Net Profit/(Loss) After Tax (380) (295) 649 (231) —Profit/(Loss) brought forward fromprevious year (543) (248) (2,455) (2,224)Profit/(Loss) carried to Balance Sheet (924) (543) (1,806) (2,455)depreciation of the U.S dollar as against the Canadian dollar will alsohurt our efforts to improve profitability.Your company plans to a 2 pronged approach to fight the profitabilityissues. One, we will try and improve our share of higher margin businesslike non voice work and combining our IT and BPO capabilities to improverevenue productivity. Secondly, your Company will continue its focuson building operating efficiencies and optimization of costs to bring itscost structure in line with the best in class in the BPO industry.
  5. 5. HUMAN CAPITALHuman capital is the key resource for Information Technology EnabledServices Industry. At the end of the year, on a consolidated basis, yourCompany had 19,615 employees and 12,345 operations seats across25 company leased centers.MERGERYour company had filed a petition before the High Court of Karnataka,Bangalore, seeking sanction to the composite scheme of amalgamationamongst Aditya Birla Minacs IT Services Limited, Aditya Birla MinacsTechnologies and Aditya Birla Minacs Worldwide Limited (the“Companies”) and their respective shareholders which was approvedby the Board of directors of the Companies at their respective meetingson July 23, 2010 (the “Original Scheme”). The High Court was pleasedto sanction the Original Scheme by its order dated November 3, 2010.However, the Board of Directors of the Companies passed a resolutionon February 17, 2011 to modify the Original Scheme and your companyhad again filed an application with the High Court of Karnataka seekingsanction to the modified Composite scheme of amalgamation (the“Modified Scheme”). The Company convened meetings of securedand unsecured creditors of the Company pursuant to the High Courtorder dated March 4, 2011 to approve the Modified Scheme on Apr 8,2011 and the Modified Scheme was approved at the said meetings.The Company had filed a petition with the High Court seeking sanctionof the Modified Scheme. The High Court was pleased to sanction theModified Scheme vide its order dated September 5, 2011.
  6. 6. SUBSIDIARY COMPANIESFollowing are the Subsidiaries of your Company:-■ A V Transworks Limited (Canada)■ Transworks Inc. (USA)■ Aditya Birla Minacs Philippines Inc.■ Aditya Birla Minacs Worldwide Inc. (Canada) and its followingsubsidiaries• The Minacs Group (U.S.A.) Inc(2)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYK• Minacs Worldwide GmbH (Germany)• Minacs Limited (UK)• Minacs Worldwide S.A. de C.V. (Mexico)• Minacs Kft (Hungary)• Aditya Birla Minacs BPO Limited (UK)• Aditya Birla Minacs BPO Private Limited• Compass BPO Inc. (USA)• Bureau of Collection Recovery LLC• Bureau of Collection Recovery IncAs per Section 212 of the Companies Act, 1956, the Directors’ Report,Auditor’s Report, Balance Sheet and Profit and Loss Account of theCompany’s subsidiaries are required to be attached to the Balance Sheetof the Company. However, vide General Circular No. 2/2011 dated08.02.2011, the Central Government has granted general exemptionfrom the provisions of Section 212 of the Act subject to compliance
  7. 7. with conditions specified therein, which include inter- alia, that:-(i) The Board of Directors of theCompany by resolution gives itsconsent for not attaching the balance sheet of the subsidiaryconcerned;(ii) The company shall present in the annual report, the consolidatedfinancial statements of holding company and all subsidiaries dulyaudited by its statutory auditors; and(iii) The company shall disclose in the consolidated balance sheet thefollowing information in aggregate for each subsidiary includingsubsidiaries of subsidiaries:- (a) capital (b) reserves (c) total assets(d) total liabilities (e) details of investment (except in case ofinvestment in the subsidiaries) (f) turnover (g) profit before taxation(h) provision for taxation (i) profit after taxation (j) proposed dividend;In line with above, the consolidated financial statement of the Companyis presented in its annual report along with the summary informationon the Company’s subsidiaries as mandated in circular above. The annualaccounts of the Company’s subsidiaries and the related detailedinformation shall be made available to shareholders of the Companyand the Company’s subsidiaries seeking such information on requestat any point of time. The annual accounts of the Company’s subsidiariesshall also be kept for inspection during business hours by anyshareholders at the Registered Office of the Company and of theCompany’s subsidiaries. A hard copy of details of accounts ofsubsidiaries shall be furnished to any shareholder on demand.EMPLOYEE STOCK OPTION PLANYour Company approved a new Employee Stock Option Plan (ESOP) in
  8. 8. the Extra-Ordinary General Meeting held on Dec 18, 2009. Under thenew ESOP Scheme, a total of 1,897,337 (One million Eight hundredninety seven thousand three hundred and thirty seven) options wouldbe available for being granted to eligible employees of your Company.Each option when exercised would be converted into one Equity shareof Re. 1 each fully paid-up.Till March 31, 2011, your Company had granted 1,367,000 options toits full time employees leaving a balance of 530,337 for future grants.DIRECTORSDuring the year, Mr. Kumar Mangalam Birla resigned as director witheffect from August 28, 2010. The Board places on record its sincereappreciation for the valuable services rendered by Mr. Kumar MangalamBirla.Mr. Kumar Mangalam Birla and Mr. Deepak Jayant Patel were appointedas additional directors at the Board meeting held on October 12, 2010.Resolutions seeking your approval for the appointment of Mr. DeepakJayant Patel have been incorporated in the Notice of the ensuing AnnualGeneral Meeting of the Company.Mr. Deepak Jayant Patel was appointed as Whole-time director of theCompany with effect from October 12, 2010 for a period of three yearsand the same was approved by the members at the Extra-ordinaryGeneral meeting held on October 12, 2010.In accordance with Article 100 of the Articles of Association, Mr. SushilAgarwal and Mr. Devajyoti Bhattacharya, Directors retire by rotation atthe forthcoming Annual General Meeting. Both of them, being eligible,
  9. 9. offer themselves for reappointment.DIRECTORS’ RESPONSIBILITY STATEMENTYour Company is committed to maintaining the highest standards ofCorporate Governance. Though your Company is an unlisted Companyand hence Clause 49 of the Listing Agreement is not applicable, yetyour Company, on a suo moto basis has taken necessary initiatives tocomply with the provisions of the said clause to the extent possible.As required under Section 217(2AA) of the Companies Act, 1956, yourDirectors confirm that:i) In the preparation of the annual accounts, the applicable accountingstandards have been followed along with proper explanation relatingto material departures;ii) The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year andof the loss of the Company for that period;iii) The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance withthe provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and otherirregularities;iv) The Directors have prepared the annual accounts on a goingconcern basis.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
  10. 10. FOREIGN EXCHANGE EARNINGS AND OUTGOThe information required under the Companies (Disclosure of Particularsin the Report of the Board of Directors) Rules, 1988 for the year endedMarch 31, 2011 is given in Annexure ’A’ forming part of this Report.PARTICULARS OF EMPLOYEESIn accordance with the provisions of Section 217(2A) read withCompanies (Particulars of Employees) Rules, 1975 and Companies(Particulars of Employees) Amendment Rules, 2011, the names andother particulars of employees are set out in the Directors’ report asAnnexure ’B’. It may be noted that in accordance with the notificationsdated March 24, 2004 and March 31, 2011 issued by the Ministry ofCorporate Affairs, Government of India, particulars of employees postedand working in a country outside India, not being directors or theirrelatives drawing more than Rupees Six Million per financial year orRupees five hundred thousand per month, as the case may be, are notincluded in this statement but such particulars shall be furnished to theRegistrar of Companies. Such particulars shall be made available to anyshareholder on specific request made by him / her during the course ofthe Annual General Meeting.PUBLIC DEPOSITSYour Company has not accepted any fixed deposits during the financialyear 2010-11. There was no unclaimed deposit and interest accrued ason March 31, 2011.STATUTORY AUDITORSThe report of the Statutory Auditors is attached to this report. All the
  11. 11. notes to Schedules and Accounts are self-explanatory and do not callfor any further comments.Your Directors request you to appoint Auditors for the current year asset out in the accompanying notice of the ensuing Annual GeneralMeeting.ACKNOWLEDGEMENTYour Directors place on record their appreciation for employees at alllevels, who have contributed to the growth and performance of yourCompany.Your Directors also thank the clients, vendors, bankers, shareholdersand advisers of the Company for their continued support.Your Directors also thank the Central and State Governments, and otherstatutory authorities for their continued support.For and on behalf of the BoardAditya Birla Minacs Worldwide LimitedDate : July 27, 2011 Sushil Agarwal Dr. Rakesh JainPlace: Mumbai Director Director(3)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKANNEXURE – AParticulars pursuant to Companies (Disclosure of particulars in thereport of the Board of Directors) Rules, 19881. Conservation of energyYour Company’s operations involve very low energy consumption.
  12. 12. However, measures are taken to reduce energy consumption byusing energy-efficient equipment.As energy costs comprise a very small part of our total expenses,the financial impact of these measures is not material.2. Research and development (R&D)a) R&D initiatives at institutes of national importanceAs the Company was mainly engaged in the business of callcenter activities, there are no matters to report on theseaspectsb) Specific areas for R&D at your Companyc) Benefits derived as a result of R&D activityd) Future plan of actione) Expenditure on R&D for the year ended 31stMarch, 2011` Nil3. Technology absorption, adaptation and innovation:Your Company continues to use latest hardware and software toimprove the quality of its products and services. The Company willcontinue to invest in state–of–the–art technology and infrastructureto improve the productivity and quality of its products and services.4. Foreign exchange earnings and outgo (Standalone)( ` /Mn)Foreign Exchange Year ended Year ended31
  13. 13. stMarch, 2011 31stMarch, 2010Earnings 1488 1488 1604Outflow (Includingcapital goods & services) 281 281 2855. Activities relating to exports, initiatives taken to increaseexports, development of new export markets for products andservices and export plansIn fiscal 2010-11, 61% of revenues were derived from exports.Your Company established a substantial direct sales marketingnetwork in its strategic markets in North America and Europe togrow its business in these regions. Your Company is alsoaddressing other Asia Pacific countries as potential markets forgrowth.(4)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKAUDI TORS’ REPOR TToThe Members of Aditya Birla Minacs Worldwide Limited1. We have audited the attached Balance Sheet of Aditya Birla MinacsWorldwide Limited (‘the Company’) as at March 31, 2011 and alsothe Profit and Loss account and the cash flow statement for the
  14. 14. year ended on that date annexed thereto. These financialstatements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financialstatements based on our audit.2. We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those Standards require that we planand perform an audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluatingthe overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.3. As required by the Companies (Audito’s Report) Order, 2003 (asamended) (“the Order”) issued by the Central Government of Indiain terms of sub-section (4A) of Section 227 of the Companies Act,1956 (“the Act”), we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said Order.4. Further to our comments in the Annexure referred to above, wereport that:i. We have obtained all the information and explanations, whichto the best of our knowledge and belief were necessary forthe purposes of our audit;ii. In our opinion, proper books of account as required by law
  15. 15. have been kept by the Company so far as appears from ourexamination of those books;iii. The balance sheet, profit and loss account and cash flowstatement dealt with by this report are in agreement with thebooks of account;iv. In our opinion, the balance sheet, profit and loss account andcash flow statement dealt with by this report comply with theaccounting standards referred to in sub-section (3C) of section211 of the act.v. On the basis of the written representations received from thedirectors, as on March 31, 2011, and taken on record by theBoard of Directors, we report that none of the directors isdisqualified as on March 31, 2011 from being appointed as adirector in terms of clause (g) of sub-section (1) of section 274of the Act.vi. In our opinion and to the best of our information and accordingto the explanations give to us, the said accoutn give theinformation required by the act, in the manner so requiredand give a true and fair view in conformity with the accountingprinciples generally accepted in India;a) in the case of the balance sheet, of the state of affairs ofthe Company as at March 31, 2011;b) in the case of the profit and loss account, of the loss forthe year ended on that date; andc) in the case of cash flow statement, of the cash flows for
  16. 16. the year ended on that date.For S.R. BATLIBOI & ASSOCIATESFirm Registration No. 101049WChartered Accountantsper Amit MajumdarPartnerMembership No. 36656Place: MumbaiDate: July 27, 2011Annexure ref er red to in paragraph [3] of our report of e ven dateRe: Aditya Birla Minacs Worldwide Limited (‘the Company’)1. (a) The Company has maintained proper records showing fullparticulars, including quantitative details and situation of fixedassets.(b) Fixed assets have been physically verified by themanagement during the year and no material discrepancieswere identified on such verification.(c) There was no disposal of a substantial part of fixed assetsduring the year.ii. The Company does not have any inventory and hence theprovisions of clause 4(ii) of the Order are not applicable to theCompany and hence not commented upon.iii. (a) According to the information and explanations given to us,the Company has not granted any loans, secured orunsecured to companies, firms or other parties covered in
  17. 17. the register maintained under section 301 of the Act.Accordingly, the provisions of clause 4(iii) (a) to (d) of theOrder are not applicable to the Company and hence notcommented upon.(b) According to information and explanations given to us, theCompany has not taken any loans, secured or unsecured,from companies, firms or other parties covered in the registermaintained under section 301 of the Act. Accordingly, theprovisions of clause 4(iii) (e) to (g) of the Order are notapplicable to the Company and hence not commented upon.iv. In our opinion and according to the information and explanationsgiven to us, there is an adequate internal control systemcommensurate with the size of the Company and the nature ofits business, for the purchase of fixed assets and for the sale ofservices. During the course of our audit, we have not observedany major weakness or continuing failure to correct any majorweakness in the internal control system of the company in respectof these areas. The activities of the Company do not involvepurchase of inventories and sale of goods.v. According to the information and explanations provided by themanagement, we are of the opinion that there are no contractsor arrangements that need to be entered in the registermaintained under section 301 of the Act.vi. The Company has not accepted any deposits from the public.vii. In our opinion, the Company has an internal audit system
  18. 18. commensurate with the size and nature of its business.viii. To the best of our knowledge and as explained, the CentralGovernment has not prescribed the maintenance of cost recordsunder clause (d) of sub-section (1) of section 209 of the Act forthe products of the Company.ix. (a) The Company is generally regular in depositing withappropriate authorities undisputed statutory dues includingprovident fund, employees’ state insurance, income tax,sales tax, wealth tax, service tax, custom duty, excise duty,cess and other material statutory dues applicable to it. Theprovisions relating to investor education and protection fundare not applicable to Company.Further, since the Central Government has till date notprescribed the amount of cess payable under section 441 Aof the Act, we are not in a position to comment upon theregularity or otherwise of the Company in depositing thesame.(b) According to the information and explanations given to us,no undisputed amounts payable in respect of provident fund,employees’ state insurance, income tax, wealth tax, servicetax, sales tax, custom duty, excise duty, cess and othermaterial statutory dues were outstanding, at the year end,for a period of more than six months from the date theybecame payable. The provisions relating to investoreducation and protection fund are not applicable to Company.
  19. 19. (5)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYK(c) According to the information and explanations given to us,there are no dues of income tax, sales tax, wealth tax, servicetax, customs duty, excise duty and cess which have notbeen deposited on account of any dispute, except as follows:Name of Nature Amount Period to Forumthe statute of dues (Rs.) which the whereamount dispute isrelates pendingIncome Tax Penalty 7,329,260 FY 2003- BombayAct 1961 for dis- 2004 Highallowance Courtof expensesx. The Company’s accumulated losses at the end of the financialyear are less than fifty per cent of its net worth. The Companyhas incurred cash loss during the year and in the immediatelypreceding financial year.xi. Based on our audit procedures and as per the information andexplanations given by the management, we are of the opinionthat the Company has not defaulted in repayment of dues to abank or debenture holders. The Company did not have anyoutstanding dues in respect of a financial institution.xii. According to the information and explanations given to us and
  20. 20. based on the documents and records produced before us, theCompany has not granted loans and advances on the basis ofsecurity of way of pledge of shares, debentures and othersecurities.xiii. In our opinion, the Company is not a chit fund or a nidhi / mutualbenefit fund / society. Therefore, the provisions of clause 4(xiii)of the Order are not applicable to the Company.xiv. In our opinion, the Company is not dealing in or trading in shares,securities, debentures and other investments. Accordingly, theprovisions of clause 4(xiv) of the Order are not applicable to theCompnay.xv. According to the information and explanations given to us, theCompany has given guarantee for loans taken by others frombank and financial institutions. the terms and conditions whereof,in our opinion, are not prima-facie prejudicial to the interest ofthe Company.xvi. Based on information and explanations given to us by themanagement, term loans were applied for the purpose for whichthe loans were obtained.xvii. According to the information and explanations given to us andon an overall examination of the balance sheet of the Company,we report that no funds raised on short-term basis have beenused for long-term investment.xviii. The Company has not made any preferential allotment of sharesto parties or companies covered in the register maintained under
  21. 21. section 301 of the Act.xix. The Company has unsecured debentures outstanding during theyear, on which no security or charge is required to be created.xx. The Company has not raised any money by public issues duringthe year.xxi. Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements andas per the information and explanations given by themanagement, we report that no fraud on or by the Company hasbeen noticed or reported during the year.For S.R. BATLIBOI & ASSOCIATESFirm Registration No. 101049WChartered Accountantsper Amit MajumdarPartnerMembership No. 36656Place: MumbaiDate: July 27, 2011(6)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKBALANCE SHEET AS AT 31S T MARCH, 2011A s At 31st A s At 31stMar, 20 11 Mar, 20 10Schedule ` Lacs ` Lacs
  22. 22. I. SOURCES OF FUNDS1 Shareholders’ FundsShare capital 1 234.92 234.92Employee stock optionsoutstanding (Refer Note 9of schedule 17) 576.53 126.15Reserves and surplus 2 27,795.68 27,795.682 Loan fundsSecured loans 3 46,218.48 44,399.77Unsecured loans 4 25,000.00 25,000.00Total 99,825.61 97,556.52II. APPLICATION OF FUNDS1 Fixed Assets Fixed Assets 5Gross Block 16,471.07 12,653.09Less : AccumulatedDepreciation / Amortization 10,698.24 8,778.26Net Block 5,772.83 3,874.83Capital work-in-progress(including capital advances) 489.63 1,399.182 Investments Investments 6 68,631.20 76,935.663 Current Assets,Loans and Advances :Accured interest — 75.53Sundry debtors 7 5,162.24 3,803.84Cash and bank balances 8 839.68 18.15
  23. 23. Loan to subsidiaries 15,185.23 11,009.19Loans and advances 9 3,422.56 2,559.02(A) (A) 24,609.71 17,465.73Less: Current Liabilitiesand Provisions : and Provisions : 10Current liabilities 8,741.71 7,417.50Provisions 172.48 133.11(B) (B) 8,914.19 7,550.61Net Current Assets (A-B) (A-B) 15,695.52 9,915.124 Profit and Loss account Profit and Loss account 9,236.43 5,431.73Total Total 99,825.61 97,556.52Notes to Accounts Notes to Accounts 17The schedules referred to above and notes to accounts form an integral part of theBalance Sheet.As per our report of even dateFor S.R. Batliboi & AssociatesFirm Registration No. 101049WChartered Accountantsper Amit MajumdarPartnerMembership No. 36656Place: MumbaiDate: July 27, 2011For and on behalf of the Board of Directors ofAditya Birla Minacs Worldwide Ltd.
  24. 24. Dr. Rakesh JainDirectorSushil AgarwalDirectorRamesh KamathChief Financial OfficerDate : July 27, 2011PROFIT & LOSS ACCO UNT FOR THE YEAR ENDED 31STMARCH, 2011For the For theyear ended year ended31st March 31st March2011 2010Schedule ` Lacs ` LacsINCOME :Service charges 24,400.99 22,111.06Other income 11 206.21 522.38Total Total 24,607.20 22,633.44EXPENDITURE :Personnel expenses 12 15,682.87 12,993.92Other operating expenses 13 4,686.67 4,015.80Administrative expenses 14 3,048.53 3,602.29Marketing / businessdevelopment expenses 15 434.31 353.77Financial charges /
  25. 25. interest cost 16 2,614.80 3,186.42Depreciation / amortization 1,915.92 1, 413.85Total 28,383.10 25,566.05Loss for the year (3,775.90) (2,932.61)Less: Withholding taxwritten off / provided for 28.80 19.55Net Loss for the year (3,804.70) (2,952.16)Loss brought forwardfrom previous year (5,431.73) (2,479.57)Deficit carried toBalance Sheet (9,236.43) (5,4 31.73)Earnings Per ShareBasic Weighted Averagenumber of shares 23,491,711 23,491,711Diluted Weighted Averagenumber of shares 24,858,711 23,864,586Basic earnings/(loss) per share(Nominal value of shares ` 1 eachPrevious year ` 1 each) ` (16.20) (12.57)Diluted earnings/(loss) per share((Nominal value of shares ` 1 eachPrevious year ` 1 each) ` (16.20) (12.57)Notes to Accounts Notes to Accounts 17The schedules referred to above and notes to accounts form an integral part of theProfit and Loss Account.
  26. 26. As per our report of even dateFor S.R. Batliboi & AssociatesFirm Registration No. 101049WChartered Accountantsper Amit MajumdarPartnerMembership No. 36656Place: MumbaiDate: July 27, 2011For and on behalf of the Board of Directors ofAditya Birla Minacs Worldwide Ltd.Dr. Rakesh JainDirectorSushil AgarwalDirectorRamesh KamathChief Financial OfficerDate : July 27, 2011(7)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKCASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011` LacsFor the Year ended 31.3.2011 For the Year ended 31.3.2010A. Cash flows from Operating Activities
  27. 27. Net Loss for the year (3,775.92) (2,932.61)Adjustments for:Depreciation / Amortization 1,915.92 1,413.85Loss/(Profit) on Sale of Fixed Assets — 53.05Unrealised foreign exchange (gain)/ loss (Net) 943.66 63.95Interest Income (130.02) (222.21)Gain On Mutual Fund Investments (57.58) (226.62)Dividend Income — (68.33)Finance/Interest Expense 2,614.80 3,186.42Employee stock compensation expenses 450.38 126.15Provision for doubtful debt 126.22 2.95Operating Profit before working capital changes 2,087.46 1,396.60Movements in working capital :(Increase)/Decrease in Sundry Debtors (1,484.62) (194.90)(Increase)/Decrease in Loans & Advances (640.41) (123.63)Increase/(Decrease) Current Liabilities & Provisions 1,360.17 2,498.67Cash generated from operations 1,322.60 3,576.73Loan to subsdiaries (4,176.04) (419.60)Add/(Less): Direct Taxes (including TDS) paid)/Tax Refunds (251.93) (82.68)Net Cash flow from Operating Activities (3,105.37) 3,074.45B. Cash Flows from Investing ActivitiesPurchase of Fixed Assets (2,904.32) (3,872.59)Proceeds from sale of Fixed Assets — 116.66Investment in Subsidaries (345.54) (13,247.66)(Purchase)/Sale of investment 8,650.00 (5,350.00)
  28. 28. Interest income received 205.55 151.14Dividend received 57.58 294.95Net Cash from/(for) Investing Activities 5,663.27 (21,907.49)C. Cash flow from Financing ActivitiesProceeds from/(repayment of) Bank Borrowings - Unsecured — (2,500.00)Proceeds from/(repayment of) Long-term borrowings - Secured 875.05 (491.49)Proceeds from Issue of Compulsorily Convertible Debentures — 25,000.00Interest/financial charges paid (2,611.43) (3,170.95)Net Cash generated/(used) in Financing Activities (1,736.38) 18,837.56D. Foreign Exchange difference on translation of foreign currency cash and cash equivalents ForeignExchange difference on translation of foreign currency cash and cash equivalents — (0.02)Net Increase in cash and Cash equivalants during the year 821.55 4.50Cash and cash equivalants at the beginning of the year 16.21 11.71Cash and cash equivalants at the end of the year 837.74 16.21Notes:Components of Cash and Cash Equivalents As at 31.3.2011 As at 31.3.2010i) Cash Balance on hand 6.32 3.84ii) Balance with Scheduled and other Banks :- in Current Account 831.42 12.37Total 837.74 16.21Note:i) Fixed Deposit of ` 1.94 Lacs (Previous year ` 1.94 Lacs) given as margin money has not beenconsidered as cash and cash equivalentsAs per our report of even dateFor S.R. Batliboi & AssociatesFirm Registration No. 101049W
  29. 29. Chartered Accountantsper Amit MajumdarPartnerMembership No. 36656Place: MumbaiDate: July 27, 2011For and on behalf of the Board of Directors ofAditya Birla Minacs Worldwide Ltd.Dr. Rakesh JainDirectorSushil AgarwalDirectorRamesh KamathChief Financial OfficerDate : July 27, 2011(8)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKSCHEDULE 5 - FIXED A SSE TS Rs. LacsGROSS BLOCK DEPRECIATION / AMORTIZATION NET BLOCKParticulars As on Additions Deductions As on As on For the Deductions As on As on As onApr-1-10 Mar-31-11 Apr-1-10 Year Mar-31-11 Mar-31-11 Mar-31-10Computers and telecommunicationequipments 8,158.58 2,259.27 — 10,417.86 5,965.04 1,063.01 — 7,028.05 3,389.81 2,193.54Plant and machinery 1,676.56 507.46 — 2,184.02 991.01 246.95 — 1,237.96 946.06 685.55
  30. 30. Office equipment 322.08 57.19 — 379.27 195.70 45.97 — 241.67 137.60 126.38Furniture and fixtures 649.20 319.29 — 968.49 420.75 124.22 — 544.97 423.52 228.45Leasehold improvements 1,488.28 464.90 — 1,953.18 979.64 344.36 — 1,324.00 629.18 508.64Intangible assetsSoftware 52.19 204.20 — 256.39 52.19 0.14 — 52.33 204.06 —Client acquisition cost 279.98 — — 279.98 164.11 87.65 — 251.76 28.22 115.87Motor car 26.22 5.66 — 31.88 9.82 7.68 — 17.50 14.38 16.40Total 12,653.09 3,817.97 — 16,471.07 8,778.26 1,919.98 — 10,698.24 5,772.83 3,874.83Previous Year 10,679.49 2,549.47 575.87 12,653.09 7,770.56 1,413.85 406.15 8,778.26 3,874.83Notes:The opening gross block of fixed assets, accumulated depreciation and net block has been reclassified asper the asset categori es, per se.A s At A s At31st Mar, 20 11 31st Mar, 20 10` Lacs ` LacsA s At A s At31st Mar, 20 11 31st Mar, 20 10` Lacs ` LacsSCHEDULES FORMING P ART OF THE BALANCE SHEETAs At As At31st Mar, 2011 31st Mar, 2010` Lacs ` LacsSCHEDULE - 1 - SHARE CAPITALAuthorised Capital30,000,000 (Previous Year 30,000,000)Equity Shares of ` 1/- each 300.00 300.00
  31. 31. 300.00 300.00Issued, Subscribed and Paid up Capital2,34,91,711 (P Y 2,34,91,711) Equity Shares of` 1/- each fully paid up 234.92 234.92(Of the above 20,738,378 (Previous Year: 20,738,378)equity shares are held by Aditya Birla Nuvo Limited,being the holding company, including 7 sharesheld by them through their nominees)Total 234.92 234.92SCHEDULE - 2 - RESERVES and SURPLUSSecurities Premium Account 27,795.68 27,795.68Total Total 27,795.68 27,795.68SCHEDULE - 3 - SECURED LO ANSi) Working capital facility from banks 2,304.06 —(Secured against receivables)(Repayable within one year - NIL ;Previous Year ` 899.42 Lacs )ii) Term loan from banks 2,000.00 3,000.00(Secured against the first paripassu chargeon the moveable assets )(Repayable within one year - Rs 1,000 Lacs;Previous Year ` 2,000 Lacs )iii) ECB from banks 41,914.42 41,399.77(Secured against the first charge on themoveable assets and second charge on
  32. 32. Receivables)(Repayable within one year ` 207.59 Lacs,Previous Year - ` 592.07 Lacs)Total Total 46,218.48 44,399.77SCHEDULE - 4 - UNSECURED LOANSCompulsorily convertible debentures 25,000.00 25,000.00(Refer note 17 of schedule 17)Total Total 2 5,000.00 25,000.00SCHEDULE - 6 - INVESTMENTSLong Term Investments Long Term Investments (At Cost)In Subsidiary CompaniesTrade, unquoted, fully paid-upNIL (Previous Year NIL) equity shares of US $ 1 eachin Transworks Inc. — —127,000,001 (Previous Year 127,000,001) equity sharesof CAD 1 each in AV Transworks Limited 53,369.34 53,369.3430,000,000 (Previous Year 30,000,000) preferenceshares of CAD 1 each in A V Transworks Limited 13,690.00 13,344.46969,232 (Previous Year 490,000) shares of Peso100each in Aditya Birla Minacs Philippines Inc. 871.86 448.01Share application money paid to Aditya Birla MinacsPhilippines Inc. — 423.85Current Investments Current Investments (At lower of cost andNet Assets Value)Unquoted
  33. 33. (4,461,070.79 units of ` 15.69 each)– In Mutual Funds - Birla Sunlife Cash Plus -Instl. Premium - Growth 216.86 850.00– Birla Sunlife Savings Fund Instl. Growth 483.14 8,500.00Total Total 68,631.20 76,935.66No. of units The following Investments were purchased & Cost Sale Value Gainsold during the period : (` Lacs) (` Lacs) ( ` Lacs)364,571,417 B irla Sunlife Savings Fund -Instl. Premium - Growth 4,982.82 4,999.55 16.72114,706,916 Birla Sunlife Cash Plus - Instl.Premium - (Growth) - I 17,385.00 17,406.24 21.2499,223,350 Birla Sunlife Cash Plus - Instl.Premium - (Growth) - II 14,709.83 14,728.54 18.711,119,188 Birla Sunlife Saving - Instl. Prem. - Growth 200.00 200.91 0.91Total Total 37,277.65 37,335.24 57.58A s At A s At31st Mar, 20 11 31st Mar, 20 10` Lacs ` LacsSCHEDULE - 7 - SUNDR Y DEBT ORSDebts outstanding over six monthsi) Unsecured, considered good 18.50 42.81Unsecured, considered doubtful 129.17 2.95Less:- Provision for doubtful debts (129.17) (2.95)18.50 42.81ii) Other DebtsUnsecured, considered good 5,143.74 3,761.03[Includes unbilled revenue of ` 2,056.86 Lacs
  34. 34. (Previous year ` 2,070.47 Lacs)]Total Total 5,162.24 3,803.84Included in Sundry Debtors are dues fromCompanies under the same management:Aditya Birla Financial Shared ServicesPrivate Limited 1.51 1.92Birla Sun Life Insurance Company Limited 163.53 228.32SCHEDULE - 8 - CASH AND BANK BALANCESi) Cash on hand 6.32 3.84ii) Balance with scheduled Banks :On current account 829.65 10.70On fixed deposits (As margin against bankguarantee) 1.94 1.94Balance with other Banks :On Current Account 1.77 1.67(with Natwest Bank, UK. MaximumBalance outstanding during the year` 1.77 lacs (Previous year - ` 30.99 )Total Total 839.68 18.15(9)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKF or the F or they ear ended y ear ended31st Marc h, 2011 31st Marc h, 2010
  35. 35. ` Lacs ` LacsSCHEDULE - 14 - ADMINISTRATIVE EXPENSESi) Legal & professional fees 600.80 453.26ii) Telephone expenses 85.46 89.25iii) R ecruitment & relocation 425.41 206.22iv) Auditors remuneration– Audit fees 33.50 36.86– Out of pocket expenses 1.91 0.03v) Vehicle expenses 292.26 159.71vi) Seminar & outside training expenses 89.38 65.59vii) Printing & stationery 58.05 37.13viii) Di rectors sitting fees 1.85 1.65ix) Insurance charges 26.79 35.71x) Travelling expenses 399.78 329.46xi) Loss / (Profit) on sale of fixed assets — 53.05xii) Rates and Taxes 26.38 43.00xiii) Provision for doubtful Debt 126.22 2.95xv) Foreign Exchange loss on Loans taken/given 556.18 1,030.98xvi) Foreign Exchange Fluctuation (net) - Others 111.03 807.77xiv) Miscellaneous expenses 213.53 258.68Total Total 3,048.53 3,611.30SCHEDULE - 15 - MARKETING /BUSINESS DEVELOPMENT EXPENSESi) Business promotion expenses 4.97 6.18ii) Advertisement and branding expenses 3.60 3.42
  36. 36. iii) Ente rtainment expe nses 5.21 3.35iv) Marketing expenses 411.84 324.77v) Telemarketing registration & bonding expenses 8.69 16.05Total 434.31 353.77SCHEDULE - 16 - FINANCIAL CHARGES & INTEREST COSTi) Arrangement Fees 96.66 427.56ii) Interest on external commercial borrowingsand term Loan 2,418.51 2,666.73iii) Interest on wo rking capital and demand Loan 21.83 73.05v) Other financial charges 77.80 19.08Total Total 2,614.80 3,186.42A s At A s At31st Mar, 20 11 31st Mar, 20 10` Lacs ` LacsSCHEDULE - 9 - LO ANS AND ADVANCES(Unsecured considered good)i) Advances recoverable in cash or in kind or forvalue to be received 1,011.57 1,383.30ii) Tax deducted at source 447.06 223.93iii) Deposits- other s 963.93 951.79iv) Inter-company deposits 1,000.00 —Total Total 3,422.56 2,559.02Included in Loans and Advances are dues fromCompanies under the same management:Aditya Birla Minacs IT Services Limited 1,000.00 —
  37. 37. [Maximum amount outstanding during the year ` 1,000 lacs( Previous Year- ` Nil)]SCHEDULE - 10 - CURRENT LIABILITIES & PROVISIONSi) Sundry creditors (including book overdraft of ` Nil Lacs;Previous Year. ` 476.65 Lacs) 8,010.19 6,983.25ii) Interest accrued but not due 212.71 216.08iii) Subsidiary companies 290.65 (36.54)iv) Other li abilities 228.16 254.718,741.71 7,417.50PROVISIONSi) Gratuity 50.45 29.91ii) Leave encashment 122.03 103.20172.48 133.11Total Total 8,914.19 7,550.61For the For theyear ended year ended31st March, 2011 31st March, 2010` Lacs ` LacsSCHEDULE - 11 - OTHER INCOMEi) Gain on mutual fund investments 57.58 226.62ii) Dividend from subsidiary — 68.33iii) M iscellaneous income 18.61 5.22iv) Interest income– on inter-company deposits(TDS: ` 0.08 Lacs; Previous Year. ` 0.48 Lacs) 16.87 2.13
  38. 38. – on loan to subsidiary (TDS: ` 19.55 Lacs;Previous Year ` 80.82 Lacs) 113.15 220.08Total 206.21 522.38SCHEDULE - 12 - PERSONNEL EXPENSESi) Salaries & other employee benefits 12,377.97 10,715.15ii) Contribution to provident and other funds 871.08 598.38iii) Employee Compensation under ESOP 450.38 126.15v) Staff Welfare Expenses 1,916.58 1,510.37iv) Gratuity (Refer Note 16 schedule 17) 66.86 43.87Total Total 15,682.87 12,993.92SCHEDULE - 13- OTHER OPERATING EXPENSESFacility Expensesi) Rent charges 1,602.77 1,310.15ii) Electricity expenses 1,112.91 835.34iii) House keeping expenses 201.47 136.02iv) Security charges 203.72 162.85iv) Repairs & maintenance– Building 8.34 71.26– Others 253.16 196.21v) Hire Charges 95.57 41.07Technology Expensesvi) Connectivity charges 668.51 795.08vii) R epairs & maintenance - Machine ry 331.65 375.75viii) Software & support expenses 208.57 92.07Total Total 4,686.67 4,015.80
  39. 39. (10)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKSCHEDULE – 17: NOTES TO ACCO UNTS1. Nature of operationsAditya Birla Minacs Worldwide Limited (“the Company”) (ABMWL) providescustomized business process outsourcing (BPO) solutions focused mainly on theareas of capability, contact center solutions, integrated marketing services andknowledge process outsourcing.2. ACCOUNTING POLICIESa. Basis of preparationThe financial statements have been prepared to comply in all material respectswith the Accounting Standards notified by Companies (Accounting Standards)Rules, 2006, (as amended) and the relevant provisions of the CompaniesAct, 1956. The financial statements have been prepared under the historicalcost convention on an accrual basis. The accounting policies have beenconsistently applied by the Company and are consistent with those used in theprevious year.b. Use of estimatesThe preparation of financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and disclosure ofcontingent liabilities at the date of the financial statements and the results ofoperations during the reporting period end. Although these estimates are basedupon management’s best knowledge of current events and actions, actual
  40. 40. results could differ from these estimates.c. Revenue recognitioni) Revenue is derived from both time-based and unit-priced contracts.Revenue is recognized as related services are performed based onagreements / arrangements with the customersii) Interest income is recognised on a time proportion basis taking intoaccount the amount outstanding and the rate applicable.iii) Divi dend is recognised when the shareholders’ right to receive paymentis established bythe balance sheet date.d. Fixed assetsFixed assets are stated at cost less accumulated depreciation and impairmentlosses if any. Cost comprises the purchase price and any attributable cost ofbringing the asset to its working condition for its intended usee. DepreciationDepreciation on assets is provided on straight-line basis, on the rates based onthe useful lives as estimated by the management, which are greater than thecorresponding rates prescribed in Schedule XIV of the Companies Act, 1956.The individual assets costing less than ` 5,000/- are depreciated in full in theyear of purchase. The management’s estimate of useful lives of the variousfixed assets is given hereby:Assets Estimated useful lifei) Computers Equipment/Int angibles 2 - 4 yearsii) Telecommunication Equipment 5 yearsiii) Plant & Machinery 5 yearsiv) Office Equipment 5 Years
  41. 41. v) Furniture & Fixtures 6 Yearsvi) Motor Car 5 YearsLeasehold improvements are depreciated over the shorter of the estimateduseful life of the asset and the lease term of the premises.f. LeasesFinance lease, which effectively transfers to the Company substantially all therisks and benefits incidental to ownership of the leased item, are capitalized atlower of fair value and present value of the minimum lease payments at theinception of the lease term and disclosed as leased assets. Lease paymentsare apportioned between the finance charges and reduction of the lease liabilitybased on implicit rate of return. Finance charges are charged directly againstincome. Lease management fees, lease charges and other initial direct costsare capitalized.Leases where the lessor effectively retains substantially all the risks and benefitsof ownership of the leased item, are classified as operating leases. Operatinglease payments are recognized as an expense in the Profit and Loss accounton a straight-line basis over the lease term.g. Investmentsi) Investments that are readily realizable and intended to be held for notmore than a year are classified as current investments. All otherinvestments are classified as long-term investments.ii) Long-term investments are valued at cost. Any decline in the value ofinvestments other than temporary, is provided for and charged to theprofit & loss account.iii) The current investments are carried at lower of cost and net asset value
  42. 42. determined on an individual investment basis.h. ImpairmentThe carrying amounts of assets are reviewed at each balance sheet date if thereis any indication of impairment based on internal/external factors.An impairment loss is recognized wherever the carrying amount of an assetexceeds its recoverable amount. The recoverable amount is the greater of theasset’s net selling price and value in use. In assessing value in use, the estimatedfuture cash flows are discounted to their present value using a pre-tax discountrate that reflects current market assessments of the time value of money andrisks specific to the asset.i. Transactions in Foreign Currencyi) Initial RecognitionForeign currency transactions are recorded in the reporting currency, byapplying to the foreign currency amount the exchange rate between thereporting currency and the foreign currency at the date of the transaction.ii) ConversionForeign currency monetary items are reported using the closing rate.Non-monetary items, which are carried in terms of historical costdenominated in a foreign currency, are reported using the exchange rateat the date of the transaction.iii) Translation of Integral foreign operationThe financial statements of foreign operations whose operations areintegral to the operations of the Company are translated using theprinciples and procedures as if the transactions of the foreign operationshad been those of Company itself.
  43. 43. iv) Exchange DifferencesExchange differences arising on the settlement of monetary items or onreporting company’s monetary items at rates different from those at whichthey were initially recorded during the year, or reported in previous financialstatements, are recognized as income or as expenses in the year in whichthey arise.v) Forward Exchange Contracts not intended for trading or speculationpurposesThe premium or discount arising at the inception of forward exchangecontracts is amortized as expense or income over the life of the contract.Exchange differences on such contracts are recognized in the statementof profit and loss in the year in which the underlying transactions occur.Any profit or loss arising on cancellation or renewal of forward exchangecontract is recognized as income or as expense for the year.vi) Accounting policy for DerivativesThe Company uses derivative financial instruments such as forwardexchange contracts, currency swaps and interest rate swaps to hedgeits risks associated with foreign currency fluctuations and interest rate.Currency and interest rate swaps are accounted in accordance with theircontractj. Retirement benefits(i) Defined Contribution PlanCompany’s contributions payable during the year to Provident Fund,Superannuation Schemes are recognized in the Profit and Loss Account.(ii) De fined Benefit Plan
  44. 44. Company’s liabilities under payment of gratuity Act (funded) andcompensated leave encashment are determined by Actuarial Valuationmade at the end of each financial year using the projected unit creditmethod. Actuarial gain and losses are recognized immediately in thestatement of Profit and Loss Account as income or expense. Obligationis measured at the present value of estimated future cash flows using adiscounted rate that is determined by reference to market yields at theBalance Sheet date on Government bonds where the currency and termsof the Government bonds are consistent with the currency and estimatedterms of the defined benefit obligation.k. ProvisionA provision is recognized when an enterprise has a present obligation as aresult of past event; it is probable that an outflow of resources will be requiredto settle the obligation, in respect of which a reliable estimate can be made.Provisions are not discounted to its present value and are determined basedon best estimate required to settle the obligation at the balance sheet date.These are reviewed at each balance sheet date and adjusted to reflect thecurrent best estimates.l. Income TaxTax expense comprises of current and deferred tax. Provision for current tax ismade on the basis of estimated taxable income for the current accountingyear. The deferred tax for timing differences between the book and tax profitsfor the year is accounted for, using the tax rates and laws that have beensubstantively enacted as of the Balance Sheet date. Deferred tax assets arisingfrom timing differences are recognized to the extent there is reasonable certainty
  45. 45. (11)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKthat these would be realized in future. In case of unabsorbed losses andunabsorbed depreciation, all deferred tax assets are recognized only if there isvirtual certainty supported by convincing evidence that they can be realizedagainst future taxable profit.m. Employee Stock OptionsMeasurement and disclosure of the employee share-based payment plans isdone in accordance with SEBI (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accountingfor Employee Share-based Payments, issued by the Institute of CharteredAccountants of India. The Company measures compensation cost relating toemployee stock options using the intrinsic value method. Compensation expenseis amortized over the vesting period of the option on a straight line basis.n. Earnings per shareBasic earnings per share are calculated by dividing the net profit or loss for theyear attributable to equity shareholders by the weighted average number ofequity shares outstanding during the year.For the purpose of calculating diluted earnings per share, the net profit or lossfor the year attributable to equity shareholders and the weighted average numberof shares outstanding during the year are adjusted for the effects of all dilutivepotential equity shares.o. Cash and Cash equivalentsCash and cash equivalents for the purposes of cash flow statement comprise
  46. 46. cash at bank and in hand and short-term investments with an original maturityof three months or less.3. Contingent Liabilities. ( ` Lacs)Particulars As at As atMarch 31, 2011 March 31, 2010i) Estimated amount of contractsremaining to be executed on capitalaccount and not provided for. 69.11 146.03ii) Guarantees and counter guaranteesgiven by the Company to Commissionerof Customs towards custom & exciseduty exemption under STPI Scheme(Based on present export performance,the Company expects to meet its exportobligation and hence this liability is notlikely to materialize) 1421.43 1,329.95iii) Guarantees and Counter guaranteesgiven by the Company to its insurancecompany in USA and to Citibank, NA onthe basis of which the insurancecompany issued telemarketing bondsfavoring Attorney generals of variousstates in USA on behalf of the Company.(These bonds are required to be givenfor compliance of telemarketing laws in
  47. 47. USA. In case of any violations of theserules, the penalties are imposed. TheCompany does not expect any liabilitieson the same). 446.50 451.40iv) Guarantee given by the Company toBanks for securing the loans granted bysuch banks to the subsidiaries ofthe Company. 10,939.25 11,059.30v) Guarantee and Counter given byCompany to Department ofTelecommunication (DoT) for getting thepermission for sharing of internationaland domestic call center. 350.00 210.00vi) Service tax refund relating to year2005-2007 rejected by service taxdepartment. Company is in appeal atvarious levels against rejection orders 266.58 266.58vii) Penalty for disallowances of expensesincurred by the Company for F.Y2003-2004. The Company has filed anappeal before the Bombay High Court. 73.29 73.294. Earnings in foreign currency ( ` Lacs)Particulars Year Ended Year EndedMarch 31, 2011 March 31, 2010a) Service Income 14,765.98 15,825.42
  48. 48. b) Interest Income 113.15 220.085. Expenditure in foreign cur rency ( ` Lacs)P articulars Year Ended Year EndedMarch 31, 2011 March 31, 2010Expenditure in foreign cur rency (A ccrual Basis)a) Traveling expenses 44.11 111.30b) Marketing expenses 509.56 437.11c) Interest expenses 2,212.96 2,283.54d) Technology expenses 46.63 19.386. CIF value of imports ( ` Lacs)Particulars Year Ended Year EndedMarch 31, 2011 March 31, 2010Capital goods 154.99 202.417.7. The Company has entered into operating lease agreements for its BPO centers rangingfor a period of 3 to 5 years The lease rentals charged during the year and maximumobligations on long-term non-cancelable operating leases payable as per the rentalsstated in respective agreements are as follows( ` Lacs)Particulars Year Ended Year EndedMarch 31,2011 March 31,20101. Lease payments recognized in theprofit & loss account for the year 1,602.77 1,379.782. Obligations on non-cancelable leases :i) Not later than one year : 665.78 919.48ii) Later than one year and not
  49. 49. later than 5 years Nil 517.00iii) Later than 5 years Nil Nil8. Deferred TaxesThe Company has deferred tax assets in respect of unabsorbed depreciation andbusiness loss. As there is no virtual certainty about the realization of the deferred taxassets against the future taxable profits, the same has not been recognized.9. Employee Stock Option PlanIn December 2009, the Board of the Company approved the Employees Stock OptionPlan 2009 (“the Plan”), which covers the employees of the Company including itssubsidiaries. The plan is administered and supervised by the Compensation Committeeof the board (the ‘Committee’).The Scheme provides that these options would vest in tranches over a period of3-4years as follows:Period within which options will vest unto the participant %of options thatwill vestEnd of 15 months from the date of grant of options 20%End of 27 months from the date of grant of options 20%End of 39 months from the date of grant of options 60%Fair Valuation:The fair valuation of the options used to compute proforma net profit and earning pershare have been done by an independent valuer on the date of grant using black-Scholes Model. The keyassumptions and the fair value are as under.Particulars PercentageRisk Free Interest Rate % 6.84%Option Life (years) 4.80Expected Volatility (%) 0%
  50. 50. Historical Volatility (%) 0%Expected Dividend Yield (%) 0%Weighted Average Fair Value per Option (`) 141Had the compensation cost for the stock option granted under ESOS-2009 beenrecognized, based on fair value at the date of grant in accordance with Black andScholes Model, the proforma amount of net profit and earning per share of theCompany would have been as under:(` Lacs)Particulars March 31, 2011 March 31,2010Net Loss (3,804.72) (2,952.16)Add: Compensation cost as per Intrinsic Value 450.38 126.15Less: Compensation cost as per fair value 813.73 227.92Adjusted Net Loss (4,168.07) (3,053.93)Weighted average number of Basic EquityShares Outstanding (in Nos) 23,491,711 23,491,711ESOPS outstanding at the end of the year 1,367,000 372,875Weighted average number of Diluted EquityShares Outstanding (in Nos) 24,858,711 23,864,586Face Value of Equity Shares (In `) 1.00 1.00Reported Earning Per Share (EPS)– EPS (In `) (16.20) (12.57)– Diluted (In `) (16.20) (12.57)Proforma Earning Per Share (EPS)– EPS (In `) (17.74) (13.00)– Diluted (In `) (17.74) (13.00)
  51. 51. (12)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKThe participants shall exercise the options within five years from vesting orwithin three years from the date of listing, whichever is earlier. The Plan is contingenton the shares being listed in a recognized stock exchange in India on or before1stJuly, 2015. If the Company’s shares are not listed on the stock exchange by30thJune, 2015, the existing employees shall have to sell all options vested to theCompany or its nominee at a price determined as per Plan.Particulars March31, 2011 March 31, 2010Total Options under the Plan 1,897,337 1,897,337Options outstanding at the beginning of the year 1,491,500 NilGranted during the year 34,500 1,491,500Forfeited during the year 159,000 NilExercised during the year Nil NilOutstanding at the end of the year 1,367,000 1,491,500Expired during the year Nil NilExercisable at the end of the year Nil NilExercise Price ( `) 230 230The employee stock option outstanding account shown in Balance Sheet is net ofunamortized amount on account of Deferred Employee Compensation Account
  52. 52. ` 490.28 Lacs (PY ` 1,037.82 Lacs).10. 10. The Company does not owe any amount a) to any Small Scale Undertaking b) tosupplier as defined under the Micro, Small and Medium Enterprises DevelopmentAct, 2006 at year end.11. Related Party TransactionsName and nature of relationship of the Related Party where control exists:Holding Company Aditya Birla Nuvo Limited (ABNL)Wholly owned subsidiary company AV TransWorks Limited, Canadaor parties where control exists:- (Subsidiary of ABMWL)TransWorks Inc., USA (TW Inc)(Subsidiary of ABMWL)Aditya Birla Minacs Worldwide Inc. Canada(ABMWI) (Subsidiary of AV TransWorks)Aditya Birla Minacs Philippines Inc.(Subsidiary of ABMWL)Aditya Birla Minacs BPO Private Limited.(Subsidiary of Aditya Birla Minacs BPOLimited, U.K, formerly known as CompassBPO Ltd.) (w.e.f. March 9, 2010)Fellow Subsidiaries Aditya Birla Financial Shared ServicesLimited (ABFSSL)Birla Sun Life Insurance Company Limited(BSLICL)Aditya Birla Minacs IT Services Limited(ABMITS)
  53. 53. ABNL Investment Limited(formerly Laxminarayan Investment Limited)Joint Venture of Holding Company/ Birla Sun Life Asset ManagementFellow subsidiary Company Limited (BSAMC)(Directly held by the Holding Company tillMar 22, 2010 thereafter Joint Venture ofFellow subsidiary)IDEA Cellular Limited. Joint venture ofholding company.Key Management Personnel Deepak Patel (Whole Time Director. w.e.fOctober 12, 2010.12. Summary of transactions with related parties during the year: ( ` Lacs)Particulars Year ended Year endedMarch 31, 2011March 31, 2010Holding CompanyInter corporate deposit (ICD) given to ABNL 1,500 NilICD repayment by ABNL 1,500 NilInterest income 8.14 NilReimbursement of costs to the company 5.14 33.34Service Income (Indo Gulf Fertilizers Division of ABNL) 7.21 NilSubsidiary CompaniesTransworks Inc. USA:– Repayment of Share Capital Nil 96.80– Payment of dividend to holding company Nil 68.33Aditya Birla Minacs Worldwide Inc Canada:
  54. 54. – Marketing and technology expenses 509.56 437.11– Services Income 695.00 669.37A V Transworks Limited, Canada:– Investment in Preference Share Capital Nil 13,344.46– Foreign Currency Loan Given 10,424.82 6,782.95– Repayment of Foreign currency Loan 7,350.85 6,362.40– Interest Income Nil 202.42Aditya Birla Minacs Philippines Inc:– Foreign Currency Loan Given Nil 117.36– Interest Income Nil 17.66Aditya Birla Minacs BPO Private Limited– ICD taken 100.00– ICD re-paid 100.00– Interest expenses on ICD 2.25F ello w SubsidiaryABNL Inv estment Limited– ICD Taken Nil 500.00– Interest expenses on ICD Nil 3.67– ICD Repaid Nil 500.00Birla Sun Lif e Insurance Company Limited.,– Staff welfare expenses(Term Life Insurance) 19.28 18.15– Services Income 891.07 645.55– Expenses Reimbursed by the company 22.80 NilAditya Birla Minacs IT Services Limited.
  55. 55. – Personnel costs 27.41 50.53– Software expenses (ERP implementation) Nil 102.83– Reimbursement of Cost to the company 320.46 111.38– ICD Given during the year 1,795.00 200.00– Interest Income on ICD 16.87 2.13– ICD Re-paid 795.00 200.00Aditya Birla Financial SharedServices Private Limited.– Reimbursement of cost to the company 10.60 1.92Joint VentureBirla Sun Life Asset ManagementCompany Limited.– Services Income 210.73 166.80– Reimbursement of cost by the company Nil 4.16– Reimbursement of cost to the company Nil 5.66Idea Cellular Limited– Services Income 7,114.84 5,102.90Remuneration to Key Management Person*– Salary & Allowances 136.20 Nil– Contribution to Provident fund andother funds 11.4 NilRelated Party Balances:Holding Company– Payable – ABNL 24.41 21.93– Receivable- ABNL
  56. 56. (Division-Indo Gulf Fertilisers) 7.07 Nil– Corporate guarantees taken fromHolding Company 13,160.83 9,479.40Subsidiary Company– Receivable– Transworks Inc 1.12 1.12– Payable Aditya Birla Minacs WorldwideInc (Net of receivable of ` 101.42 lacs) 252.94 Nil– Receivable - Aditya Birla MinacsWorldwide Inc (Net of payable 27.79 lacs) Nil 16.86– Receivable (foreign currency loan) toA V Transworks Limited 14,290.0 10,714.33Receivable-Aditya Birla Minacs Philippines Inc. 957.82 968.27Corporate Guarantee given to Bank forLoan taken by A V Transworks Limited 10,939.25 11,059.30Joint Venture– Receivable - Idea Cellular Limited 859.18 766.68– Receivable- Birla Sun Life AssetManagement Company Limited. 16.45 38.68Fellow Subsidiary– Payable - Aditya Birla MinacsIT Services Limited. Nil 61.59– Receivable -Aditya Birla FinancialShared Services Private Limited. 1.51 1.92– Receivable - Birla Sun Life InsuranceCompany Limited. 163.53 228.32
  57. 57. – Receivable from Aditya Birla MinacsIT Services Limited (ICD) 1,000.00 Nil* As the liabilities for gratuities and leave encashment are provided on an actuarialbasis for the company as a whole, the amounts pertaining to the director is notincluded above13. Derivative Instruments.The Company uses derivative financial instruments such as forward exchangecontracts, currency swaps and interest rate swaps to hedge its risks associated withforeign currency fluctuations and interest rate.(13)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKThe Company, time to time, holds financial derivatives instruments primarily forhedging purpose. In pursuance of the announcement dated 29th March 2008 ofICAI, The Company has decided to account for losses, if any, on derivativestransactions, on net basis, after considering effect of underlying exposure /commitments / obligations. As there was no such loss at the end of the year, theabove changes does not have any effect on the profit for the year.Derivative Outstanding as at March 31 2011Particulars Currency Amount in Foreign PurposeCurrency (in Lacs)Forward Cover USD 283.85 To hedge receivables(402.69)Forward Cover USD 754.20 To hedge Loan Payable(754.20)
  58. 58. Forward Cover CAD 84.00 To hedge Loan Receivable(9.50)Forward Cover CAD 300.00 To hedge Redeemable(300.00) Preference share CapitalReceivableForward Cover USD NIL To hedge Interest Payable(10.00)Forward Cover USD 50.00 To hedge working capital(Nil) (PCFC) Loan payableCross Currency Swap JPY 554.19 To hedge loan payable(2,121.22)Note: Figures in brackets relates to previous year.All the above contracts are for hedging and not for speculation.As at March 31, 2011 all the foreign currency exposure stands hedged by derivativeinstrument or otherwise.14. Segment Information for the year ended March 31, 2011(1) Primary business segmentThe company provides a variety of Business Process outsourcing services.The risks and rewards from each of these service agreements are similar. Asthe Company’s business activity primarily falls within a single business segment,there are no additional disclosures to be provided in respect of primary segmentunder Accounting Standard 17 ‘Segment Reporting’, other than those alreadyprovided in the Financial Statements.(2) Secondary business segment:a. Geographical turnover is segregated based on the location of the customer
  59. 59. to whom the services are rendered.b. Assets are segregated based on their location.c. Information about secondary business segments:( ` Lacs)Year ended 31stMarch, 2011 India Outside India TotalA Revenue by geographical market 9,635.01 14,765.98 24,400.99B Carrying amount of segment assets 13,147.82 86,355.55 99,503.37C Capital Expenditure (included in(b) above) 2,908.42 Nil 2,908.42Year ended 31stMarch, 2010 India Outside India TotalA Revenue by geographical market 6,285.64 15,825.42 22,111.06B Carrying amount of segment assets 18,183.22 81,467.26 99,650.48C Capital Expenditure (included in(b) above) 3,872.59 Nil 3,872.5915. 15. The Company has invested ` 81,349.34 Lacs (previous year ` 76,817.93 lacs) (includesloan given of ` 14,290 Lacs (previous year ` 10104.13 lacs)) in AV Transworks Ltd,Canada which has further invested in Aditya Birla Minacs Worldwide Inc, Canada.Considering the strategic and long term nature of aforesaid investments and assetbase and business plan of the investee companies, in the opinion of the managementthere is no diminution in the value of investment other than temporary.16. Retirement Benefits: ( ` Lacs)
  60. 60. Year ended Year endedMarch 31, 2011 March 31, 2010(a) Defined Benefit Plans -The Amounts recognized in the balancesheet are as follows in respect ofgratuity (fully funded by the company):Present value of the funded definedbenefit obligation at the end of the year 259.75 223.35Fair value of plan assets 133.36 163.82Benefit Paid on behalf of Fund 75.94 29.62Net Liability 50.45 29.91T he Amounts recogniz ed in Salary,Wages and Employee Benefits in theProfit and Loss Account as follows inrespect of gratuity (fully funded bythe company):Current Service cost 116.68 127.73Past Service Cost 8.73 NilInterest on Defined Benefit Obligations 18.43 14.17Expected return on plan assets (14.21) (9.45)Net Actuarial (gain)/loss recognizedduring the year (62.77) (88.58)Net Gratuity Cost 66.86 43.87Actual Return on Plan AssetsExpected Return on Plan Assets 14.21 9.45Actuarial gain/(loss) on Plan Assets 1.66 (4.95)
  61. 61. Actual Return on Plan Assets 15.86 4.50Reconciliation of present value of theobligation and the fair value of the plan assets:Opening Defined Benefit Obligationas on 1.4.2010 223.35 188.95Current Service Cost 116.68 127.73Past Service Cost 8.73 NilInterest Cost 18.43 14.17Actuarial (Gain)/loss (61.11) (77.87)Benefits Paid (46.32) (29.62)Closing Defined Benefit Obligationas on 31.03.2011 259.75 223.35Change in fair value plan assetsOpening Fair Value of the plan assets 163.82 125.96Expected return on plan assets 14.21 9.45Actuarial Gain/(loss) 1.66 (4.95)Contributions by the Employer Nil 62.98Benefits Paid (46.32) (29.62)Closing Fair value of the plan assets 133.36 163.82Investment details of plan assetsGovernment of India Securities 38.79 36.04Corporate Bonds 2.08 3.28Insurer Managed Fund (with commonfund of Holding Company) 86.80 124.50Others 5.69 Nil
  62. 62. Total 133.36 163.82The overall expected rate of return on assetsis determined based on the market pricesprevailing on that date, applicable to the yearover which the obligation is to be settled.(B) Defined Contributions Plans:Contribution to Employee Provident Fund 608.12 512.18Contribution to ESIC 260.23 85.17Contribution to superannuation fund 13.21 19.84(C) Principal Actuarial Assumptions At theBalance Sheet date (31.03.10)Discount rate 8.00% 8.25%Estimated rate of return on plan assets 8.00% 8.25%Future Salary escalation 10% for first 10% for firstthree years and Three Years and5% thereafter 5% thereafter(D) Experience Adjustment 2010-11 2009-10 2008-09 2007-08 2006-07Liability at the endof the Period 259.75 223.35 188.95 104.70 79.02Fair Value of Plan Assetsat the end of the Period 133.36 163.82 106.06 74.35 66.90Benefit paid onbehalf of fund 75.94 29.62 Nil Nil NilDeficit / (Surplus) 50.45 29.91 82.89 30.35 12.12Experience adjustments
  63. 63. on plan liabilities (Gain)/Loss (61.11) (77.87) 90.53 (23.12) (21.65)Experience adjustmentson plan Assets Gain/(Loss) 1.66 (4.95) 14.44 0.47 (2.34)17. 17. The Company has issued Zero Coupon Compulsorily Convertible Debentures (CCD)for Rs 25,000 Lacs (previous year Rs Rs 25,000 Lacs) which are to be converted intoEquity on the business day following expiry of a period of 60 months from the date ofallotment of such CCD. As per the terms of the issue, the Conversion price will bemutually decided thirty days before the conversion date. Aditya Birla Nuvo Limited(14)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKFor S.R. BATLIBOI & ASSOCIATES .Firm Registration No. 101049WChartered Accountantsper Amit MajumdarPartnerMembership No. 36656Place: MumbaiDate: July 27, 2011For and on behalf of the Board of Directors ofAditya Birla Minacs Worldwide LimitedDr. Rakesh JainDirectorSushil AgarwalDirector
  64. 64. Ramesh KamathChief Financial OfficerDate : July 27, 2011(ABNL), the holding company, has entered into an Option Agreement with theSubscribers of these CCD pursuant to which the holders of CCD have call option onABNL and ABNL has put option on the Subscribers on expiry of 24,36,48 and 60months from the date of allotment of these CCD. The holders can also exercise putoption on happening of certain specified events.18. 18. The Company had filed Composite Scheme of Amalgamation (or “Scheme”) withKarnataka High Court (or “High Court”) for the merger of Aditya Birla Minacs ITServices Limited and Aditya Birla Minacs Technologies Limited with the Companywith effect from April 1, 2010. The High Court sanctioned the Scheme on November3, 2010 and order was received by Company on December 9, 2010. The approved Sc hemewas not filed with Registrar of Companies as the management was desirous of makingcertain modifications in the Scheme. Therefore, the Company has revised the Schemeand the same has been filed for approval with the High Court on February 22, 2011.Currently, the revised Scheme is pending approval from the High Court. Accordingly,the revised Scheme has not been given effect in consolidated financial statements.1 9.9 . Previous year’s figures have been regrouped, where necessary to conform to this year’sclassification.(15)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKAUDITORS’ REPOR TTo
  65. 65. The Board of Directors of Aditya Birla Minacs Worldwide LimitedWe have audited the attached consolidated Balance Sheet of AdityaBirla Minacs Worldwide Limited (‘the Company’) and its subsidiaries(collectively referred to as the ‘Group’), as at March 31, 2011, and alsothe consolidated Profit and Loss Account, and the consolidated CashFlow statement for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company’smanagement and have been prepared by the management on the basisof separate financial statements and other financial information regardingcomponents. Our responsibility is to express an opinion on thesefinancial statements based on our audit.We conducted our audit in accordance with auditing standards generallyaccepted in India. Those Standards require that we plan and performthe audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis forour opinion.We did not audit the financial statements of subsidiaries namely, AdityaBirla Minacs Worldwide Inc. (consolidated) and Aditya Birla MinacsPhilippines Inc., whose financial statements reflect total assets of` 75,146.33 lacs as at March 31, 2011 and the total revenue of
  66. 66. ` 140,411.82 lacs and cash outflows amounting to ` 28.70 Lacs for theyear then ended. The financial statements and other financial informationof Aditya Birla Minacs Worldwide Inc. and Aditya Birla Minacs PhilippinesInc. have been audited by other auditors as per the requirements ofCandian Generally Accepted Accounting Standards (GAAP) andPhilippines GAAP respectively. These have been converted as perrequirements of Indian GAAP by the management and the conversionhas been audited by us. Our opinion, in so far as it relates to the amountsincluded in respect these subsidiaries, is based solely on report of otherauditors and converted into Indian GAAP as stated above.We report that the consolidated financial statements have been preparedby the Company’s management in accordance with the requirementsof Accounting Standards (AS) 21, Consolidated financial statements,notified pursuant to the Companies (Accounting Standards) Rules, 2006(as amended).Based on our audit and on consideration of reports of other auditors onseparate financial statements and on the other financial information ofthe components, and to the best of our information and according tothe explanations given to us, we are of the opinion that the attachedconsolidated financial statements give a true and fair view in conformitywith the accounting principles generally accepted in India:(a) in the case of the consolidated balance sheet, of the state of affairsof the Group as at March 31, 2011;(b) in the case of the consolidated profit and loss account, of the profitfor the year ended on that date; and
  67. 67. (c) in the case of consolidated cash flow statement, of the cash flowsfor the year ended on that date.For S. R. BATLIBOI & ASSOCIATES,Firm registration number: 101049WChartered Accountantsper Amit MajmudarPartnerMembership No.: 36656Place: MumbaiDate: July 27, 2011(16)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKCONSOLIDATED B ALANCE SHEE T AS AT MARCH 31, 2011Schedule March 31, March 31,2011 2010` Lacs ` LacsI. SOURCES OF FUNDS1 Shareholders’ FundsShare capital 1 234.92 234.92Employee stock options(Refer note 9 of schedule 17) 576.53 126.15Reserves and surplus 2 27,795.68 27,795.68Foreign currency translation reserve 5,843.43 3,825.392 Secured loans Secured loans 3 65,646.73 59,468.49
  68. 68. 3 Unsecured loans Unsecured loans 4 39,214.88 38,646.264 Deferred tax liability 941.68 497.79Total 140,253.85 130,594.68II. APPLICATION OF FUNDS1 Fixed Assets Fixed Assets 5Gross Block 78,263.88 67,838.12Less : Depreciation / Amortization 56,021.06 48,306.72Net Block 22,242.82 19,531.40Capital Work-in-Progress(including capital advances) 1,694.68 2,538.41Goodwill 70,807.08 60,789.412 Investments Investments 6 700.00 9,350.003 Deferred Tax Asset 276.59 297.514 Current Assets, Loans andAdvancesSundry Debtors 7 37,362.16 24,945.48Cash and Bank Balances 8 3,176.45 1,983.08Loans and Advances 9 12,889.35 8,439.07(A) (A) 53,427.96 35,367.63Less: Current Liabilities andProvisions Provisions 10Current Liabilities 26,774.08 21,698.75Provisions 184.68 135.12(B) (B) 26,958.76 21,833.87Net Current Assets (A-B) 26,469.20 13,533.76
  69. 69. 5 Profit and Loss account 18,063.48 24,554.19Total 140,253.85 130,594.68Notes to Accounts Notes to Accounts 17The schedules referred to above and notes to accounts form an integral part of theBalance Sheet.For and on behalf of the Board of Directors ofAs per our report of even date Aditya Birla Minacs Worldwide Ltd.For S.R. BATLIBOI & ASSOCIATESFirm Registration No. 101049w Dr. Rakesh JainChartered Accountants Directorper Amit Majumdar Sushil AgarwalPartner DirectorMembership No. 36656Place: Mumbai Ramesh KamathDate: July 27, 2011 Chief Financial OfficerDate : July 27, 2011CONSOLIDATED PR OFIT & LOSS ACCOUNT FOR THEYEAR ENDED MARCH 31, 2011Schedule March 31, March 31,2011 2010` Lacs ` LacsINCOME :Service Charges 163,140.16 146,688.59Other Income 11 124.08 247.58Total 163,264.24 146,936.17
  70. 70. EXPENDITURE :Personnel expenses 12 103,822.63 96,743.54Other Operating Expenses 13 13,196.10 12,356.64Administrative Expenses 14 28,974.13 28,635.21Marketing / BusinessDevelopment Expenses 15 257.89 192.43Financial Charges 16 3,533.40 4,692.43Depreciation / Amortization 6,540.36 6,047.28Total 156,324.51 148,667.53Profit / (Loss) before tax for the year 6,939.73 (1,731.36)Less: Provision for taxation /Minimum Alternative Tax 267.11 495.92Add: Recovery of income taxes 340.10 —Less: Deferred tax charge 522.01 79.99Profit / (Loss) for the year 6,490.71 (2,307.27)Profit / (Loss) brought forwardfrom previous year (24,554.19) (22,246.92)Accumulated balance carriedto the Balance Sheet (18,063.48) (24,554.19)Basic Weighted Average number of shares 23,491,711 23,491,711Diluted Weighted Average number of shares 24,858,711 23,864,586Basic earnings per share(Nominal value of shares` 1 each Previous year ` 1 each) ` 27.63 (9.82)Diluted earnings per share
  71. 71. (Nominal value of shares ` 1 eachPrevious year ` 1 each) ` 26.11 (9.82)Notes to Accounts Notes to Accounts 17The schedules referred to above and notes to accounts form an integral part ofthe Profit & Loss Account.For and on behalf of the Board of Directors ofAs per our report of even date Aditya Birla Minacs Worldwide Ltd.For S.R. BATLIBOI & ASSOCIATESFirm Registration No. 101049w Dr. Rakesh JainChartered Accountants Directorper Amit Majumdar Sushil AgarwalPartner DirectorMembership No. 36656Place: Mumbai Ramesh KamathDate: July 27, 2011 Chief Financial OfficerDate : July 27, 2011(17)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKCONSOLIDATED CA SH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011(` in Lacs)For the year ended For the year endedMarch 31, 2011 March 31, 2010A. Cash flows from Operating ActivitiesNet Profit/(Loss) before taxation, and extraordinary items 6,939.73 (1,731.36)
  72. 72. Adjustments for:Depreciation / Amortization 6,540.36 6,047.28Loss/(Profit) on Sale of Fixed Assets — 53.05Foreign Exchange (Gain)/Loss (Net) 943.66 (2,595.19)Interest Income (25.89) (4.43)Dividend Income (57.58) (226.62)Finance/Interest Expense 3,533.40 4,692.43Employee stock compensation expenses 450.38 126.15Provision for doubtful debt 224.97 2.95Operating Profit before working capital changes 18,549.03 6,364.26Movements in working capital :(Increase)/Decrease in Sundry Debtors (11,506.86) 3,296.47(Increase)/Decrease in Loans & Advances (4,469.25) (4,254.09)Increase/(Decrease) Current Liabilities & Provisions 4,120.68 3,997.64Foreign exchange on translation (918.27) 1,088.11Cash generated from operations 5,775.33 10,492.39Add/(Less): Direct Taxes (including TDS) paid)/T ax Refunds (449.02) (575.91)Net Cash flow from Operating Activities 5,326.31 9,916.48B. Cash Flows from Investing ActivitiesPurchase consideration on acquisition (9,211.96) (3,468.05)(Purchase)/Sale of Fixed Assets (8,010.94) (8,011.01)Proceeds from sale of Fixed Assets 19.45 601.13(Purchase)/Sale of investment 8,650.00 (5,350.00)Interest income received 25.89 4.43Dividend received 57.58 226.62
  73. 73. Net Cash from/(for) Investing Activities Net Cash from/(for) Investing Activities (8,469.98) (15,996.88)C. Cash flow from Financing ActivitiesProceeds from/(repayment of) Bank Borrowings - Unsecured (0.00) (2,500.00)Proceeds from/(repayment of) Long-term borrowings - Secured 7,795.32 (9,697.56)Proceeds from/(repayment of) other borrowings — —Proceeds from/(Repayment of) Vehicle/Capital lease borrowing (725.76) (1,762.86)ESOP paymentsProceeds from Issue of Compulsorily Convertible Debentures — 25,000.00Interest/financial charges paid (3,533.40) (4,692.43)Net Cash generated/(used) in Financing Activities 3,536.16 6,347.15D. Foreign Exchange difference on translation of foreign currency cash and cash equivalents (0.27) (3.01)Net Increase in cash and C ash equivalents during the year 392.21 263.74Cash and cash equivalents at the beginning of the year 1,981.14 1,602.02Cash acquired on acquisition 801.23 115.38Cash and cash equivalents at the end of the year 3,174.58 1,981.14Notes:Components of Cash and Cash Equivalents As at As at31.03.2010 31.03.2009i) Cash Balance on hand 13.98 13.33ii) Balance with Scheduled and other Banks :- in Current Account 3,160.53 1,967.81Total 3,174.51 1,981.14Note:i) Fixed Deposit of ` 1.94 Lacs (P.Y. 1.94 Lacs) given as margin money has not been considered as cashand cash equivalentsAs per our report of even date For and on behalf of the Board of Directors
  74. 74. of Aditya Birla Minacs Worldwide LimitedFor S.R. BATLIBOI & ASSOCIATESFirm Registration No: 101049W Dr. Rakesh JainChartered Accountants DirectorSushil Agarwalper Amit Majmudar per Amit Majmudar DirectorPartnerMembership No. 36656 Ramesh KamathPlace: Mumbai Chief Financial OfficerDate: July 27, 2011 Date: July 27, 2011(18)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKSCHEDULES FORMING P ART OF THE BALANCE SHEETMarch 31, March 31,2011 2010` Lacs ` LacsSCHEDULE 1 - SHARE CAPITALAuthorised Capital30,000,000 (P Y 30,000,000) Equity Shares of ` 1/- each 300.00 300.00Total 300.00 300.00Issued, Subscribed and Paid up Capital2,34,91,711 (P Y 2,34,91,711) Equity Shares of` 1/- each fully paid up 234.92 234.92(Of the above 2,0,738,378 (PY: 20,738,378) equity shares are
  75. 75. held by Aditya Birla Nuvo Limited Being the holding company,including 7 shares held by them through their nominees)Total 234.92 234.92SCHEDULE 2 - RESERVES AND SURPLUSSecurities Premium AccountOpening Balance 27,795.68 27,795.68Total Total 27,795.68 27,795.68SCHEDULE 3 - SECURED LOANSi) Working Capital Facility from Banks 2,304.06 —(Secured against receivables)(Repayable within one year - NIL; Previous Year. ` 899.42 lacs)ii) Capital Lease — 725.76(Secured against the charge on the respective assets)iii) Term l oan from Banks 2, 000.00 3,000.00(Secured against the first charge on the fixed assets andsecond charge on Receivables) (Repayable withinone year - ` 1,000. lacs; Previous Year ` 2,000 lacs )iv) External Commercial Borrowings from banks 61,342. 67 55,742.73(Secured against the first charge on the fixed assets andsecond charge on Receivables)(Repayable within one year - ` 1,000. lacs;Previous Year ` 2,000 lacs )Total Total 6 5,646.73 59,468.49SCHEDULE 4 - UNSECURED LOANSi) Long Term Loan from Banks 1 4,214.88 13,646.26
  76. 76. (Repayable within one year - NIL; Previous Year. NIL)ii) Compulsorily Convertible Debentures 25,000.00 25,000.00(Refer note 15 of Schedule 17)Total Total 3 9,214.88 38,646.26SCHEDULE 6 - INVESTMENTSUnquoted(4,461,070.79 units of Rs. 15.69 each)In Mutual Funds - Birla Sunlife Cash P lus - Instl. Premium - Growth 216.86 850.00– Birla Sunlife Savings Fund Instl. Growt h 483.14 8,500.00Total 700.00 9,350.00SCHEDULE 7 - SUNDRY DEBTORSi) Debts outstanding over six monthsUnsecured, considered good 67.14 42.81Unsecured, considered doubtful 129.17 34.74Less:- Provision for doubtful Debt ( 129.17) (34.74)67.14 42.81ii) Other DebtsUnsecured, considered good 37,295.02 24,902.67Unsecured, considered doubtful 133.55 —Less:- Provision for doubtful Debt (133. 55) —(includes unbilled debtors of Rs. 10,911 lacs;Previous Year Rs. 7,827 lacs) 37,295. 02 24,902.67Total Total 37,362.16 24,945.48SCHEDULE 8 - CA SH AND BANK BALANCESi) Cash on hand 13.98 13.33
  77. 77. ii) Balance with Scheduled Banks :— On Current Account 1,521.29 83.45— On Fixed Deposits(As margin against bank guarantee) 1.94 1.94iii) Bala nce with other Banks :— On Current Account 1,639.24 1,884.36Total Total 3,176.45 1,983.08SCHEDULE 9 - LOANS AND ADVANCES(Unsecured considered good)i) Advances Recoverable in cash or in kind orfor value to be recei ved 10,449. 27 7,183.77ii) Tax Deducted at Source (net of provision) 330.03 111.92iii) Deposits 1, 110.05 1,143.38iv) Inter-company Deposits 1,000.00 —Total Total 1 2,889.35 8,439.07March 31, March 31,2011 2010` Lacs ` LacsMarch 31, March 31,2011 2010` Lacs ` LacsSCHEDULE 5 - FIXED A SSE TS (` in Lacs)GROSS BLOCK* DEPRECIATION / AMORTIZATION* NET BLOCKParticulars As on Additions Deletions Foreign As on As on Additions Deletions Foreign As on As on As onApr. 1, 10 Currency Mar 31, 11 Apr. 1, 10 Currency Mar 31, 11 Mar 31, 11 Mar 31, 10
  78. 78. Translation TranslationAdjustment AdjustmentComputers and telecommunicationequipments equipments 42, 531.05 6,270.63 (188.93) 1,122.98 49,735.73 35,565.66 3,675.53 (183.83)1,008.96 40,066.32 9,669.41 6,965.39Plant and machinery Plant and machinery 1, 864.12 511.47 (23.21) 4.45 2,356.83 1,101.00 278.97(22.59) 1.50 1,358.88 997.95 763.13Office equipment Office equipment 1, 031.84 79.56 (11.46) 23.91 1,123.85 630.69 127.27 (6.75) 14.22765.43 358.42 401.15Furniture and fixtures Furniture and fixtures 7, 468.92 381.85 (6.89) 239.63 8,083.51 4,118.11 802.27(2.40) 147.53 5,065.51 3,018.00 3,350.81Leasehold improvements Leasehold improvements 11, 061.01 545.53 (1.99) 341.82 11,946.37 5,998.631,415.96 — 208.35 7,622.94 4,323.43 5,062.38Intangible assetsGoodwill 3,208.51 — — (33.69) 3,174.82 615.85 — — (122.37) 493.48 2,681.34 2,592.66Software 52.19 204.20 — — 256.39 52.19 0.14 — — 52.33 204.06 —Client acquisition cost 568.66 987.48 — (1.63) 1,554.51 194.73 228.59 — 155.35 578.67 975.84 373.93Motor car Motor car 51.82 5.66 (26.94) 1.33 31.87 29.86 11.64 (24.42) 0.42 17.50 14.37 21.96Total 67,838.12 8,986.39 (259.43) 1,698.80 78,263.88 48,306.72 6,540.36 (239.98) 1,413.96 56,021.0622,242.82 19,531.40Previous Year 62,132. 35 5,158.29 2,172.72 2,720.20 67,838.12 41,628.82 6,047.28 1,518.54 2,149.1648,306.72 19,531.40Note :The opening gross block of fixed assets, accumulated depreciation and net block has been reclassified asper the asset categori es, per se.*: Computers and Telecommunication equipments, office equipment, furniture and fixtures, leaseholdimprovement include assets ta ken on finance lease, grossblock of which is ` Nil, ` Nil, ` Nil, ` Nil (previous year ` 5,861.70 lacs, ` 3.75 lacs, ` 557.19 lacs and `1,475.20 lacs) and accumalated depreciation in respect of those
  79. 79. assets aggregate to ` Nil, ` Nil, ` Nil, ` Nil (previous year ` 4,918.24 lacs, ` 1.17 lacs, ` 149.54 and ` 403.44lacs) respectively.March 31, March 31,2011 2010` Lacs ` Lacs(19)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKSCHEDULE 10 - CURRENT LIABILITIES & PROVISIONSi) Sundry Creditors (including book overdraft ofRs. Nil; Previous Year. Rs. 476.65 Lacs) 22,716.90 18,619.91ii) Interest accrued but not due 248.24 251.11iii) O ther Liabilities 3,808.94 2,827.7326,774.08 21,698.75PROVISIONSi) Gratuity 62.65 31.92ii) Leave encashment 122.03 103.20184.68 135.12Total Total 26,958.76 21,833.87SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNTMarch 31, March 31,2011 2010` Lacs ` LacsSCHEDULE 11 - OTHER INCOMEi) Gain on Mutual Fund investment s 57.58 226.62ii) Interest Income
  80. 80. — on balance with banks 6.87 2.30— on inter-company deposits [TDS: Rs. 0.08 lacs(Previous Year Rs. 0.48 lacs)] 19.02 2.13iii) Gain on Foreign Exchange Fluctuations - Others — —iv) Miscellaneous Income 40.61 16.53Total 124.08 247.58SCHEDULE 12 - PERSONNEL EXPENSESi) Salaries & other empl oyee benefits 92,540.52 87,433.49ii) Contribution to provident & other f unds 1,272.42 942.00iii) Employee Compensati on under ESOP 450.38 126.15iv) Staff Welfare Expenses 9,482.25 8,198.64v) Gratuity (Refer Note 13 of schedule 17) 77.06 43.26Total 103,822.63 96,743.54SCHEDULE 13 - OTHER OPERATING EXPENSESFacility Expensesi) Rent Charges 6,294.43 5,952.38ii) Electricity expenses 2,069.90 1,627.31iii) House keeping expenses 216.84 147.24iv) Security charges 458.71 377.95v) Repairs & maintenance— Building — 71.26— Others 1,105.70 1,013.41vi) Hire Charges 216.65 182.18Technology Expensesvii) Con nectivity charges 884.56 1,002.19
  81. 81. Assets Utilization Charges — —viii) R epairs & maintenance - M achinery 1,074.44 1,146.92ix) Software & support expenses 874.87 835.80Total Total 13,196.10 12,356.64March 31, March 31,2011 2010` Lacs ` LacsMarch 31, March 31,2011 2010` Lacs ` LacsSCHEDULE 14 - ADMINISTRATIVE EXPENSESi) Legal & professional fees 1,862.33 1,575.69ii) Telephone expenses 2,801. 79 2,445.44iii) R ecruitment & relocation 1,059.06 649.74iv) Auditors remuneration— Audit fees 262.30 224.73— Out of pocket expenses 1.91 0.03iv) Vehicle Expenses 382.26 268.53v) Seminar and O utside Training Expenses 180.19 180.41vi) Printing and Stationery 5,345.25 4,630.58vii) Di rectors sitting fees 19.19 10.86viii) Insurance charges 310.43 235.38ix) Traveling expenses 2,242.74 1,501.63x) Loss on sale of Fixed Assets — 53.05xi) Rates and Taxes 5,024.87 4,720.88
  82. 82. xii) Provision for Doubtful D ebts 224.97 2.95xiii) Restructuring Cost — 1,668.67xiv) Loss on Foreign Exchange Fl uctuations (net) 65.23 2,443.26xv) Miscellaneous expenses 9,191.61 8,023.38Total Total 28,974.13 28,635.21SCHEDULE 15 - MARKETING / BUSINESS DEVELOPMENT EXPENSESi) Business promotion expenses 59.88 64.23ii) Advertisement expenses 169.18 108.80iii) Ente rtainment expenses 20.09 3.35iv) Website expensesv) Telemarketing registration & bonding expenses 8.69 16.05Total 257.89 192.43SCHEDULE 16 - FINANCIAL CHARGES & INTEREST COSTi) Arrangement Fees 96.66 427.56ii) Interest on External commercial borrowings and Term Loan 2,827.70 3,120.52iii) In terest on Working capital and Demand Loan 435.18 830.25iv) Other Financial Charges 173.86 314.10Total Total 3,533.40 4,692.43(20)ADITYA BIRLA MINACS WORLDWIDE LIMITEDCMYKSCHEDULE 17 - NO TES T O ACCOUNTS ON CONSOLIDA TED FINANCIALSTATEMENTS1. Basis of preparationThe consolidated financial statements (CFS) of Aditya Birla Minacs Worldwide Limited
  83. 83. (“the Company” or “ABMWL”) and its subsidiaries collectively referred to as “theGroup” are prepared under the historical cost convention and in accordance with therequirements of the Companies Act, 1956.2. Principles of Consolidationi. The financial statements of the Company and its subsidiary companies havebeen combined on a line-by-line basis by adding together the book values oflike items of assets, liabilities, income and expenses, after eliminating intra-group balances andtransactions as per Accounting Standard (AS) 21“Consolidated Financial Statements”.ii. List of companies included in Consolidation are mentioned in paragraph 3 below.iii. The CFS have been prepared using uniform accounting policies for liketransactions and other events in similar circumstances and are presented, tothe extent possible, in the same manner as the Company’s separate financialstatements3. Companies included in ConsolidationSubsidiaries Country of Proportion of Proportion ofIncorporation ownership ownershipinterest as on interest as onMarch 31 ,2011 March 31, 2010TransWorks Inc., USA(TW Inc) (Subsidiary ofABMWL)* USA 100% 100%AV TransWorks Limited,Canada (Subsidiary ofABMWL) Canada 100% 100%Aditya Birla Minacs

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