HOV Services Directors Report, HOV Services Reports by Directors
HOV Services
BSE: 532761|NSE: HOVS|ISIN: INE596H01014|SECTOR: Computers - Software Medium/Small
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Directors Report Year End : Dec '12    « Dec 11
The Directors are pleased to present the Company''s Twenty- Fifth
 Annual Report on the Business and Operations of HOV Services Limited
 (the Company or HOVS) together with the Audited Statement of
 Accounts for the year end December 31, 2012.
 The financial statements are prepared for the year comprising of the 12
 (Twelve) months period ended on December 31, 2012 and are not
 comparable to the financial statements of previous year comprising of 9
 (Nine) months ended December 31, 2011, as the financial year was
 changed to the calendar year ended December 31 in 2011.
                                                      Rs. In Million
                         Consolidated             Standalone
                         months      Nine 
                                     months       Twelve
                                                  months      Nine 
 Particulars             ended on    ended on     ended on    ended on
                         December    December     December    December
                         31, 2012    31, 2011     31, 2012    31, 2011
 Income from Operation     140.20      105.42      113.60        94.10
 Other Income               15.58        9.88       14.73        10.01
                           155.78      115.30      128.33       104.11
 Purchase for resale        21.20         -           -            -
 Staff Cost                 96.59       57.58       87.61        57.65
 General and 
 Expenses                   36.59       35.05       15.43        19.75
                           154.34       92.63      103.04        77.40
 Profit / (Loss) 
 before Interest,
 Depreciation and Tax       (8.59)      22.67       25.29        26.71
 Less: Interest               -           -           -            -
 Less: Depreciation          4.99        2.76        3.42         2.76
 Profit / (Loss) before 
 Tax                        (3.60)      19.91       21.87        23.95
 Tax pertaining to 
 earlier years               0.70        0.21        0.70         0.21 
 Less: Provisions
 for taxes
 Current Tax                 7.77        8.38        7.77         8.38
 Deferred Tax               (0.83)      (0.64)      (0.83)       (0.64)
 Profit / (Loss) 
 after Tax                 (11.24)      11.96       14.23        16.00
 Less: Minority Interest    (8.80)        -           -            -
 Profit/(Loss) after 
 minority interest          (2.43)        -           -            -
 Add: Share of Profit/
 (Loss) from an Associate   51.23     (104.33)        -            - 
 Profit/ (Loss) after 
 Tax & Share of Profit/
 (Loss) from an Associate   48.80      (92.37)      14.23        16.00
 Consolidated Financial Performance for the Year ended December 31, 2012
 - Consolidated total Income for the current twelve month period was Rs.
 140.20 million.
 - EBIDT for the current twelve month period was Rs. 1.38 million.
 - Net Profit was Rs. 48.80 million.
 - The basic and diluted Earnings per share (EPS) for the twelve months
 period is 3.91.  Standalone Financial Performance:
 - Total Income for the current twelve month period was Rs. 113.60
 - EBIDT for the current twelve month period was Rs. 25.29 million.
 - Net Profit was Rs. 14.23 million.
 - The basic and diluted Earnings per share (EPS) is Rs 1.14 for the
 Year under reporting.
 During the year following developments took place;
 i) In April 2012, HOVS LLC (the WOS of the Company) invested in a new
 company named HOV Environment LLC, having equity interest of 61.10%;
 ii) In October 2012, the Company had acquired building property
 admeasuring 13,243 Square feet area situated at Vashi InfoTech Park,
 Vashi, Navi Mumbai.
 3.  Appropriations
 (i) Dividend:
 Your Company intends to conserve available resources to invest in the
 growth of the business and pursue strategic growth opportunities.
 Accordingly your Directors do not recommend any dividend for the year.
 For the financial year 2012 the Company does not have any unpaid
 dividend meant to be transferred to the Investor Education Protection
 Fund under Section 205C of the Companies Act, 1956.
 (ii) Transfer to Reserve: No amount was transferred to Reserve during
 the financial year ended December 31, 2012.
 4.  Subsidiary companies
 The Company has the following subsidiary companies:
 i) HOVS LLC incorporated in Delaware under the laws of United States of
 ii) HOVS Holdings Limited incorporated under the Companies Ordinance of
 Hong Kong;
 iii) HOV Environment LLC incorporated in Nevada under the laws of
 United States of America; and
 iv) HOV Environment Solutions Private Limited incorporated in
 Maharashtra under Indian Company Laws.
 5.  ADR/GDR
 In the earlier proposed 15,000,000 of ADR/GDR issue by the Company none
 of the underlying equity shares were issued.
 6.  Share Capital of the Company
 The fully diluted outstanding share capital of the Company on
 consolidated basis comprise of 12,491,022 equity shares of Rs. 10/-
 (Ten Only) each.
 7.  Employee Stock Option Plan (ESOP)
 Your Company instituted HOVS Stock Option Plan 2007 and HOVS Stock
 Option Plan 2008 for its employees and for employees of its subsidiary
 companies as detailed below:
 Plan             Shareholder''s    No. of 
                                   Options   No. of Options
                  Approval Date    for 
                                   employees of for employees  Total
                                   Company   of subsidiary 
 HOVS Stock 
 Option           July 21, 2007     400,000    700,000        1,100,000 
 Plan 2007
 HOVS Stock 
 Option           September               0    750,000          750,000 
 Plan 2008       30, 2008
 The information to be disclosed as per SEBI (Employees Stock Option
 Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is annexed
 to this report.
 8.  Conservation of Energy, Technology Absorption, and Foreign
 Particulars furnished pursuant to Companies (Disclosures of Particulars
 in the Report of Board of Directors) Rules, 1998:
 Conservation of Energy: Your Company''s operations involve low energy
 consumption. The Company strives to conserve energy on continuous
 Research and Development: The Company has not undertaken any R&D
 activity in any specific area during the year under review, and hence
 no cost has been incurred towards the same.
 Technology Absorption, Adaptation and Innovation: The Company is
 constantly developing and adopting modern technologies and standards to
 grow its competitive advantage, to better serve its clients, retain
 employees and improve productivity and performance, however during the
 year no such activities been carried out.
 Foreign Exchange Earnings and Outgo: Almost the entire earnings of the
 Company are from the export of services since the Company has no
 domestic business. The foreign exchange earnings and outgo is contained
 in the Note number 20.4 of Notes to the Accounts of the Annual Report.
 9.  Particulars of Employees:
 The Company has no employees drawing remuneration in excess of limits
 specified under Section 217(2A) of the Companies Act, 1956 read with
 the Companies (Particulars of Employees) Rules, 1975, as amended.
 10.  Human Resources:
 During the year the Company had maintained cordial relations with all
 its employees and has taken utmost care of its employees deployed. All
 employees are aligned under our value system which propagates and
 practices being open, transparent and honest, collaborative, honoring
 commitments and demanding excellence among them.
 11.  Directors Responsibility Statement:
 Information as per Section 217(2AA) of the Companies Act, 1956 is
 annexed and forms part of the report.
 12.  Fixed Deposit
 The Company has not accepted any deposits from the public within the
 meaning of Section 58A of the Companies Act, 1956, during the year
 under review.
 13.  Corporate Governance Report
 The Company adheres to corporate governance guidelines to fulfill its
 responsibilities to all its stakeholders i.e. investors, customers,
 vendors, government, employees. Company believes that good corporate
 governance enhances accountability and increases shareholder value.
 The Company complies with the corporate governance norms as stipulated
 under Clause 49 of the Listing Agreement with the Stock Exchanges and a
 report thereto is included in annexure to the Director''s report.
 14.  Management Discussion and Analysis
 Management Discussion and Analysis Report for the year under review, as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges is presented as a separate section forming a part of this
 15.  Statutory Auditors
 The Statutory Auditors M/s Lodha & Co, Chartered Accountants, Mumbai,
 hold office till the conclusion of ensuing Annual General Meeting and
 have expressed their willingness and being eligible to continue, if
 re-appointed. Your directors recommend their re-appointment. A
 resolution proposing their appointment at remuneration to be fixed by
 the Board of Directors is submitted at the Annual General Meeting.
 16.  Directors
 There is no change in the Board of Directors during the year under
 review. Mr. Prakash Shukla, Director is to retire by rotation at
 ensuing 25th Annual General Meeting. Mr. Prakash Shukla confirmed his
 eligibility and willingness to continue the directorship of the
 Company, if appointed. It is considered prudent that Company should
 continue to avail the services of Mr. Prakash Shukla and therefore the
 Board recommends approving the proposed resolution relating to his
 None of the Director was materially interested in any contracts or
 arrangements existing during or at the end of the financial year that
 was significant in relation to the business of the Company.
 17.  Subsidiary companies and consolidation of Accounts
 As per Section 212 of the Companies Act, 1956, the Company is required
 to attach the directors'' report, auditors'' report, balance sheet, and
 profit and loss account, schedules to account and notes to the account
 of subsidiaries of your Company along with the balance sheet of your
 Company. However, general exemption is granted in terms of General
 Circular No. 2/2011 and No. 5/12/2007-Cl-III dated February 8, 2011,
 issued bt the Ministry of Corporate Affairs under section 212(8) of the
 Companies Act, 1956 granting general exemption. Your Company is in
 compliance of the section read with the provisions of the circular and
 will not be attaching the accounts of the subsidiaries.
 The audited annual accounts and related information of subsidiary
 companies, where applicable, will be kept in the head office and will
 be available for inspection, upon request by any of shareholders. These
 documents will also be available for inspection during business hours
 at our registered office. A statement showing details on the subsidiary
 companies as prescribed vide general circular is attached in separate
 section of this Annual Report.
 18.  Acknowledgement
 Your Directors'' place on record their appreciation for co-operation and
 support received from the Software Technology Parks of India, the
 Government of India, Governments of Maharashtra, Reserve Bank of India,
 other governmental agencies and NASSCOM and the National Stock Exchange
 and the Bombay Stock Exchange and, bankers and shareholders during the
 Your Directors express their sincere appreciation for the efforts made
 by employees at all levels for their hard work, co-operation and
 support extended to your Company during the year.
                        For and on behalf of the Board of Directors
 Place: Mumbai                                   Sunil Rajadhyaksha
 Date: February 27, 2013              Chairman & Executive Director
Source : Dion Global Solutions Limited
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