The Directors are pleased to present their Eleventh Annual Report on
the business and operations of your Company and the Audited Financial
Results for the year ended 31st March, 2011.
Snapshot of Financial Results
The financial results of the Company for the Accounting year ended 31st
March, 2011 are presented below:
(Rs. In lacs)
Particulars Standalone Consolidated
Year ended 15 month Year ended 15 month
March 31, Period
ended March 31, Period
ended
2011 March 31, 2011 March 31,
2010 2010
Total Revenue 9,901.99 12,891.36 22,875.05 16,270.19
Total Expenditure 7,933.79 10,069.82 16,908.80 13,670.12
Profit Before Interest,
Depreciation & Tax 1,968.20 2,821.54 5,966.25 2,600.07
Profit Before Exceptional
Items, Depreciation & Tax 1,722.54 2,465.73 5,618.40 2,238.43
Profit Before Exceptional
Items and tax 835.66 1,195.83 4,344.30 670.79
Total Exceptional Items Nil (10,730.05) Nil 318.50
Profit / (Loss) Before Tax 835.66 11,925.88 4,344.30 989.29
Profit / (Loss) After Tax 788.79 8,643.43 4,293.82 (2,296.66)
Profit/(Loss) After Tax &
Minority Interest - - 4,497.87 (2,234.57)
Operations Review
After the turnaround of operations in FY2009-10, the focus at Aptech in
FY2010-11 was on consolidating the gains of FY2009-10 in order to build
a strong platform for future growth. The launch of our new corporate
identity and expansion of the Companys network have been important
highlights of the year.
Favourable economic conditions along with the Companys strategic
decision to draw synergies in operations across various product
offerings have yielded excellent results. Aptech added a total of 204
new centres across all brands and regions in FY 2010-11. In the
domestic market, the Company expanded into 43 new towns across the
Country. Aptech added the first international centre of Aptech Aviation
& Hospitality Academy in Malaysia. The Company also set up overseas
delivery outlets for Assessment & Training Solutions in Malaysia, UK
and Middle East during the year. The Company also launched the Aptech
English Learning Academy internationally at 8 new locations. To aid the
aggressive expansion of Aptech English Learning Academy
internationally, the Company has commenced in-house development of
English course content.
To enhance the value of offerings to our customers, the Company
continued to launch new products which are even more industry relevant
across brands and has also entered into several high-impact alliances
including Microsoft, Middlesex University and SAP.
The year saw Aptech Assessment & Testing Solutions foray into the
insurance sector. The Company was also shortlisted for NAC 2.0 tests by
NASSCOM.
Students of Aptech continued to carve an edge for themselves, winning
awards and accolades through their participation across various
competitive industry events. CricX, a 3D animated film created by MAAC
Creative Shop (MCS) – a collaboration of MAAC students with industry
professionals – was aired on Disney Channel.
Dividend
Your Directors are pleased to recommend for your consideration a
dividend of Rs. 2.50 per equity share of Rs. 10/- for the period ended
31st March, 2011.
Issue And Allotment Of Shares On Preferential Basis
Members of the Company would recall that in terms of the Share Purchase
Agreement that was executed on 27th January 2010 between the Company,
Maya Entertainment Limited (MEL) and shareholders of MEL, the Company
had allotted 17,17,103 equity shares of Rs. 10/- each at a premium of Rs.
206/- per share to 19 shareholders of MEL on 6th April 2010. One of the
shareholders of MEL viz, Bhukhanvala Holdings Private Limited (BHPL)
who could not comply with SEBI guidelines was not allotted equity
shares last year. On 22nd October 2010,
the said BHPL was allotted 4,79,670 equity shares at a premium of Rs.
148/- per share in accordance with SEBIs ICD Regulations after receipt
of shareholders approval at the last annual general meeting.
Employees Stock Option Scheme (ESOS), 2006
Pursuant to the approval accorded by the Shareholders on September 16,
2006, your Company had formulated the Employee Stock Option Scheme
(ESOS), 2006, (hereinafter the Scheme”) for the benefit of the
employees of the Company and its subsidiaries and for the Non Executive
Directors (NEDs). The said scheme is administered by the Compensation &
Remuneration Committee of the Board which has been empowered to issue
and allot equity shares not exceeding an overall limit of 15,00,000
equity shares under the Scheme which is valid for 7 years i.e. upto
September 15, 2013.
Under the said scheme, so far 14,00,000 stock options comprising
13,00,000 stock options for employees and 1,00,000 stock options for
NEDs was granted at an exercise price of Rs. 113/- per equity share. The
stock options granted to eligible employees are performance linked
options and have been granted with a vesting schedule spread over 4
years, accordingly the vesting period extends uptil 12, 24, 36 and 48
months respectively from the grant date. The exercise period is one
year from the respective vesting date of the qualified vested options.
The entire 1,00,000 stock options for NEDs has a vesting period of 12
months from the grant date and an exercise period of one year from the
respective vesting date.
In accordance with the SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 (hereinafter SEBI
guidelines”), the details in relation to the options granted, vested,
exercised, lapsed etc. under ESOS, 2006 , as on 31st March, 2011, are
given as under:
Description ESOS 2006
Total Number of Options granted 1,32,625 options granted during the
year.
Pricing formula/Exercise price Rs.113/-
Number of Options vested 2,26,168
Number of Options exercised 24,314
Total No. of Shares allotted as
a result of exercise of Options 24,314
during the year
Number of Options lapsed 3,06,130
Variation of terms of Options N.A.
Money realised by exercise of
Options Rs. 27,47,482/-
Total Number of Options in force 4,21,331
Grant to Senior Managerial
personnel 20,000
Grant to Non Executive Director
under the Scheme 1,00,000 options for the financial
period ended 31st March 2010
and 12,625 options for the financial
year ended 31st March 2011
Employees who were granted 5% or
more of the Total Number of None
Options granted during the year
Employees who were granted
Options equal to or exceeding 1% None
of the issued capital of the
Company at the time of grant
Diluted Earnings per Share
pursuant to issue of shares on
exercise Rs. 1.52
of Option calculated in
accordance with AS 20
Difference between the employee
compensation cost computed Rs. 4,770,795/-
using the intrinsic value of
Stock Options and the employee
compensation cost that shall
have been recognised had the
fair value of Options, being
used.
Impact of this difference on
profits of the Company Negative
Impact of this difference on
EPS of the Company Rs. 0.10
Weighted average exercise
price; Rs. 113/-
Weighted average fair value of
Options for options whose
exercise Rs. 150/-
price either equals or exceeds
or is less than the market
price of the share.
Description of the method
and significant assumptions
used Black Scholes Method
during the year to estimate the
fair value of Options, including
the following weighted – average
information:
(a) Risk-free interest rate, 5.39%
(b) Expected life 18 months
(c) Expected volatility 73.72%
(d) Expected dividends and 0
(e) The price of the underlying
share in the market at the
time of Rs. 150.25
Option grant.
Directors
In accordance with Sections 255 and 256 of the Companies Act, 1956, Mr.
Walter Saldanha, Mr. Yash Mahajan, Mr. Utpal Sheth and Mr. Pramod
Khera, Directors of the Company, retire by rotation at the ensuing
Annual General Meeting and being eligible are due for re-appointment.
Management Discussion And Analysis
A separate report on the Management Discussion and Analysis is attached
as a part of the Annual Report.
Corporate Governance
Effective corporate governance is necessary to retain the trust of
stakeholders and to achieve business success. Corporate governance is
about commitment to values and ethical business conduct. It is about
how an organisation is managed. It includes its corporate and other
structures, its culture, policies and the manner in which it deals with
various stakeholders. As shareholders across the globe evince keen
interest in the practices and performance of companies, corporate
governance has emerged at the centre stage of the way the corporate
world functions. Corporate governance is vital to enable companies to
compete globally in a sustained manner and let them flourish and grow.
A separate Report on Corporate Governance is attached and forms part of
the Annual Report. The Auditors Certificate regarding compliance of
the conditions of Corporate Governance is also annexed.
Directors Responsibility Statement
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statement in terms of Section 217(2AA) of the Companies Act,
1956:
(i) That in the presentation of the annual accounts for the year ended
31st March, 2011, applicable accounting standards have been followed
and that there are no material departures;
(ii) That they have, in the selection of the accounting policies,
consulted the statutory auditors and have applied them consistently and
made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company for
the year ended 31st March, 2011 and of the profit of the Company for
the year ended on that date;
(iii) That they have taken proper and sufficient care, to the best of
their knowledge and ability, for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956,
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) That the annual accounts have been prepared on a going concern
basis.
Consolidated Financial Statements
Your Directors have pleasure in attaching the Consolidated Financial
Statements pursuant to Clause 32 of the Listing Agreement entered into
with the Stock Exchanges and prepared with the Accounting Standards 21
issued by the Institute of Chartered Accountants of India.
Subsidiary Companies
Last year the Company had acquired the education division viz., Maya
Academy of Advanced Cinematics (MAAC) of Maya Entertainment Ltd. (MEL)
through the takeover of 89.66% equity shares of MEL. The balance shares
of 10.34% in MEL which was held by Intel Inc., USA were also acquired
on receipt of approval by Intel from Reserve Bank of India on 1st
February 2011. MEL has thus become a wholly owned subsidiary of the
Company. In terms of the Listing Agreement, MEL is Material Non-listed
Indian Subsidiary of the Company as the turnover of MEL has exceeded
20% of the consolidated turnover of Aptech and its subsidiaries as on
the close of the accounting year ended 31st March 2011. As required
under the listing agreement, Mr. C. Y. Pal who is one of the
Independent Directors on the Board of the Company has been appointed as
a director on the Board of Directors of MEL with effect from 30th May
2011.
During the year, an application made by Aptech Manpower Services
Limited, a wholly owned subsidiary under Easy Exit Scheme 2011 was
approved by the Ministry of Corporate Affairs and accordingly the said
company has been dissolved effective 21st April 2011.
The Ministry of Corporate Affairs (MCA) vide its circular no.
51/12/2007-CL-III dated 8th February 2011 has granted general exemption
under Section 212(8) of the Companies Act, 1956 to holding companies
from attaching the accounts of their subsidiaries in their annual
reports subject to fulfillment of certain conditions prescribed. The
Board of Directors of the Company at its meeting held on 30th May 2011
noted the provisions of the said circular and passed the necessary
resolution granting the requisite approval for not attaching the
Balance Sheet, Profit & Loss Account, Report of the Board of Directors
and Report of the Auditors of each of the subsidiary companies to the
accounts of the Company for the year ended 31st March 2011. The Company
will make available these documents/details upon request by any member
of the Company. These documents/details will be available on the
Companys website (www.aptech-worldwide. com) and will also be
available for inspection by any member of the Company at its registered
office during Companys business hours. A summary of key financials of
Companys subsidiaries is also included in this Annual Report giving
following information in aggregate for each subsidiary including
subsidiary of subsidiary: (a) Capital (b) Reserves (c) Total Assets (d)
Total Liabilities (e) Details of Investment (f) Turnover (g) Profit
Before Taxation (h) Provision for Taxation (i) Profit After Taxation
(j) Proposed Dividend.
Conservation of Energy, Technology Absorption, Research & Development
and Foreign Exchange Earnings and Outgo
Conservation of Energy
Adequate measures are taken to conserve energy although the Companys
operations are low energy intensive.
Technology Absorption
Your Company continues to use the latest technologies for improving the
productivity and quality of its services.
Research & Development
Technological obsolescence is certain. We encourage continuous
innovation and research and development for measuring future challenges
and opportunities.
Foreign Exchange Earnings and Outgo
The details of Foreign Exchange Earnings and Outgo are given in B 21
under Schedule 16.
Particulars of Employees
Particulars of employees pursuant to Section 217(2A) of the Companies
Act, 1956 read with Companies (Particular of Employees) Rules, 1975, as
amended, forms part of this Report. However, as permissible under
Section 219(1)(b)(iv) of the Companies Act, 1956, this Report is being
sent to all the Members of the Company excluding the aforesaid
information. The said particulars are made available at the Registered
Office of the Company. The Members desirous of obtaining the same may
write to the Company Secretary at the Registered Office of the Company.
Re-Appointment of Statutory Auditors
At the forthcoming Annual General Meeting, M/s. Khimji Kunverji & Co.,
Chartered Accountants who are the Statutory Auditors of the Company,
will retire and being eligible, have offered themselves for
re-appointment as the Companys Auditors. In terms of the provisions of
Section 224(1B) of the Companies Act, 1956, the Company has obtained a
written confirmation from M/s. Khimji Kunverji & Co. that their
re-appointment, if made, at the ensuing Annual General Meeting, would
be in conformity with the limits specified in the said Section.
Fixed Deposits
During the period under review, your Company has not accepted or
invited any deposits from the public.
Insurance
All the properties of the Company have been adequately insured.
Acknowledgement
Your Directors wish to acknowledge all their stakeholders and are
grateful for the excellent support received from the Shareholders,
Bankers, Financial Institutions, Government authorities, esteemed
corporate clients, customers and other business associates. Your
Directors recognise and appreciate the hard work and efforts put in by
all the employees of the Company and their contribution to the growth
of the Company in a very challenging environment.
For and on behalf of the Board of Directors
Rakesh Jhunjhunwala Ninad Karpe
Chairman Managing Director & CEO
Place : Mumbai
Date : 30th May, 2011
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