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HOV Services Directors Report, HOV Services Reports by Directors
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HOV Services
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Download Annual Report PDF Format 2014 | 2011 | 2011 | 2010
Directors Report Year End : Mar '14    « Dec 12
Dear members,
 
 The Directors are pleased to present the Company''s Twenty- Sixth
 Annual Report on the Business and Operations of HOV Services Limited
 (the Company or HOVS) together with the Audited Statement of
 Accounts for the fifteen months period ended March 31, 2014.
 
 The financial year was changed from calendar year to fiscal year i.e.
 April to March from April 1, 2014. Accordingly, the current financial
 statements are prepared for 15 (Fifteen) months period from January 1,
 2013 up to March 31, 2014 and therefore, are not comparable to the
 financial statements of previous year which comprises of the 12
 (Twelve) months year ended on December 31, 2012.
 
 FINANCIAL RESULTS AND OPERATIONS:                      Rs. In Million
 
                                     Consolidated           Standalone
 
                               Fifteen     Twelve   Fifteen     Twelve
 Particulars                    months     months    months     months
                                period       year    period       year
                              ended on   ended on     ended   ended on
                              March 31,  December  on March   December
                                  2014   31, 2012  31, 2014   31, 2012
 
 INCOME
 
 Income from Operations         173.26     140.20    159.24     113.60
 
 Other Income                    10.14      15.58     12.74      14.73
 
                                183.40     155.78    171.98     128.33
 
 EXPENDITURE
 
 Purchase for resale              -         21.20       -          -
 
 Staff Cost                     128.50      96.59    122.17      87.61
 
 General and Administrative
 Expenses                        69.92      36.59     31.72      15.43
 
                                198.42     154.38    153.89     103.04
 
 Profit/ (Loss) before 
 Interest, Depreciation 
 and Tax                       (15.02)     (1.40)     18.09      25.29
 
 Less: Interest                   1.60        -         -
 
 Less: Depreciation               9.74       4.99      4.03       3.42
 
 Profit / (Loss) before Tax     (26.36)     (3.59)    14.06      21.87
 
 Tax pertaining to earlier
 years                            0.04       0.70      0.04       0.70
 Less: Provisions for taxes
 
 Current Tax                      6.23       7.77      6.23       7.77
 
 Deferred Tax                    (1.94)     (0.83)    (0.74)     (0.83)
 
 Profit / (Loss) after Tax      (30.69)    (11.23)     8.53      14.23
 
 Less: Minority Interest         (6.41)     (8.80)       -         -
 
 Profit/(Loss) after
  minority interest             (24.28)     (2.43)       -         -
 
 Add: Share of Profit/(Loss) 
 from an Associate             (464.50)     51.23        -
 
 Profit / (Loss) after Tax & 
 Share of Profit/(Loss)
 from an Associate             (488.78)     48.80      8.53       14.23
 
 1. RESULTS OF OPERATIONS:
 
 Consolidated Financial Performance
 
 * Consolidated total Income for the current fifteen months period was
 Rs. 183.40 million.
 
 * EBIDT for the current fifteen months period was Rs. (15.02) million.
 
 * Net Profit / (Loss) was Rs. (488.78) million.
 
 * The basic and diluted Earnings per share (EPS) for the fifteen months
 period is Rs. (39.13).  Standalone Financial Performance
 
 * Total Income for the current fifteen months period was Rs. 171.98
 million.
 
 * EBIDT for the current fifteen months period was Rs. 18.09 million.
 
 * Net Profit was Rs. 8.53 million.
 
 * The basic and diluted Earnings per share (EPS) is Rs. 0.68 for the
 period under reporting.
 
 2.  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
 period.
 
 For the fifteen months period ended March 31, 2014 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 period ended
 on March 31, 2014.
 
 3.  Subsidiary companies
 
 The Company has the following subsidiary companies:
 
 i) HOVS LLC incorporated in Delaware under the laws of Unites States of
 America;
 
 ii) HOV Environment LLC incorporated in Nevada State under the laws of
 United States of America;
 
 iii) HOVS Holdings Limited incorporated under the Companies Ordinance
 of Hong Kong; and
 
 iv) HOV Environment Solutions Private Limited incorporated in
 Maharashtra under Indian Company Laws.
 
 4.  Significant developments
 
 i) On March 19, 2013, Citi Venture Capital International (CVCI Private
 Equity) invested in the SourceHOV as a new equity partner wherein CVCI
 Private Equity purchased all of the ownership interests of affiliates
 of Apollo Global Management, LLC (Apollo) and certain minority
 holders'' in SourceHOV. This new partnership positioned SourceHOV for
 accelerated growth through industry leading advisory formed by a
 tenured investment team with specialized technology and service
 industry experience. The HOVS owns an equity interest in SourceHOV.
 
 ii) On September 6, 2013 HOV Environment Solutions Private Limited
 (HOV ESPL) was made subsidiary of HOV Environment LLC, a subsidiary
 company of HOVS LLC. HOV ESPL earlier was indirect subsidiary of HOV
 Services Limited through HOVS Holdings Limited a wholly owned
 subsidiary (WOS) of HOV Services Limited. The change was made in order
 to streamline & strengthen execution of operations and work related to
 environmental projects. Post the change HOV ESPL will continue to be an
 indirect subsidiary of the Company through HOVS LLC.
 
 5.  ADR/GDR
 
 The shareholder''s in their Annual General meeting dated July 21, 2007
 granted approval for proposed 15,000,000 of ADR/GDR issue. However, so
 far none of the underlying equity shares were issued by the Company.
 
 6.  Share Capital of the Company
 
 During the quarter ended March 31, 2014 pursuant to the options
 exercised, 8,500 equity shares were allotted. Consequently after the
 allotment, the paid up share capital of the Company has gone up from
 12,491,022 equity shares of Rs. 10/- each aggregating to Rs.
 124,910,220/- to 12,499,522 equity shares of Rs. 10/- each aggregating
 to Rs.124,995,220/- Consequently the fully diluted outstanding share
 capital of the Company as at period ended March 31, 2014, on
 consolidated basis comprise of 12,499,522 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    Total
                  Approval       for employees   for employees
                  Date           of the Company  of subsidiary
                                                 companies
 
 HOVS Stock 
 Option           July 21, 2007        400,000      700,000    1,100,000
 Plan 2007
 
 HOVS Stock 
 Option           September 30,           0         750,000      750,000
 Plan 2008       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
 Exchange:
 
 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
 basis.
 
 Research and Development: The Company has not undertaken any R&D
 activity in any specific area during the period 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
 period 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 20.10 of Notes to the Financial Statements 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 period 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 period
 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 Directors'' report.
 
 14.  Management Discussion and Analysis
 
 Management Discussion and Analysis Report for the period 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
 report.
 
 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
 
 The Company had, pursuant to the provisions of clause 49 of the Listing
 Agreements entered into with Stock Exchanges, appointed Mr. B R Gupta,
 Mr. Harish Bhasin and Mr. Prakash Shukla as Independent Directors of
 the Company.
 
 As per section 149(4) of the Companies Act, 2013 (Act), which came into
 effect from April 1, 2014, every listed public company is required to
 have at least one-third of the total number of directors as Independent
 Directors. In accordance with the provisions of section 149 of the Act,
 Mr. B R Gupta and Mr. Harish Bhasin, are being appointed as Independent
 Directors to hold office as per their tenure of appointment mentioned
 in the Notice of 26th Annual General Meeting (AGM) of the Company. Mr.
 Prakash Shukla intends not to seek for his appointment.
 
 Mr. Surinder Rametra, Director, retires by rotation and being eligible
 has offered himself for re-appointment.
 
 None of the Director was materially interested in any contracts or
 arrangements existing during or at the end of the financial period 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
 statement of profit and loss, 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-C1-III dated February 8, 2011,
 issued by 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 registered office and
 will be available for inspection, upon request by any of shareholders
 of the holding and subsidiary companies. 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, Government 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
 year.
 
 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: May 21, 2014                       Chairman & Executive Director
Source : Dion Global Solutions Limited
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