AFFLUENCE

DIRECTORS’ REPORT TO THE MEMBERS

Your directors are pleased to present the Eleventh Annual Report of your Company with the audited accounts for the year ended March 31, 2012.

Financial  Results:

The Total Income during the current year stood at Rs.  8,706.04 as against Rs. 8233.49 million in the previous year, registering a growth of 5.74%.  The Net Profit after Tax of the Company stood at Rs. 1055.49 million as against Rs. 1219.81 million in the previous year.

Subsidiary Companies:

Intelenet (UK) Limited and its Subsidiaries.

Intelenet (UK) Limited, incorporated in the United Kingdom, which is a wholly owned subsidiary of Intelenet Global Services Private Limited, seeks it clientele from the United Kingdom. The Company envisages major tripartite contracts between, itself, prospective clients & Intelenet (UK) Limited. During the year, the name of Intelenet (UK) Limited was changed to Serco Global Services (UK) Limited

Intelenet European Services Sp z.o.o., Poland, is a wholly owned subsidiary of Intelenet (UK) Limited incorporated on 13th October, 2009 to provide Business Process Outsourcing Services in the European markets During the year, the name of Intelenet European Services Sp z.o.o., Poland was changed toSerco European Services Sp. z.o.o.

The name of  Intelenet (UK) Services Limited which is a direct subsidiary of Serco Global Services (UK) Limited ( formerly known as Intelenet (UK) Limited ) was changed to Serco (UK) Services Limited

Intelenet Inc.

Intelenet Inc. is the wholly owned subsidiary company of  Intelenet Global Services Private Limited, incorporated in the United States, and provides necessary assistance for the tripartite agreements already existing between itself, the clients and Intelenet Global Services Private Limited. During the year, the name of Intelenet (UK) Limited was changed to Serco Global Services Inc

Snow Holding Company Limited (Mauritius) and its Subsidiaries.

Snow Holding Company Limited (Snow) incorporated in Mauritius on November 28, 2007, is a wholly owned subsidiary of Intelenet Global Services Private Limited.

Windfall Investment Company Inc.

Windfall Investment Company Inc is a wholly owned subsidiary of Snow Holding Company Limited and Windfall Investment Company Inc owns Intelent America LLC, a Pennsylvania incorporated company and I-Service Inc, a Delaware company which was incorporated on 3rd June, 2008 with the purpose of doing US Collection Business. I-Service Inc does not have operations till the date of this report.

During the year the name of Intelenet America LLC was changed to Serco Global Services LLC, Intelenet (Mauritius) Limited a Mauritius incorporated company, is a wholly owned subsidiary of Intelenet America LLC.

Intelenet Global Philippines Inc.

Intelenet Global Philippines Inc incorporated in the Philippines on September 13, 2007, is a wholly owned subsidiary of Intelenet Global Services Private Limited and carries on the business of a Call Centre, transaction and data processing, web enabled customer care, data digitization, IT enabled services, etc.

Intelenet LAT AM Services, Sociedad Anonima

Intelenet LAT AM Services, Sociedad Anonima is incorporated in Guatemala on 28th May 2010 and is wholly owned subsidiary of Intelenet and carries on the business of business process outsourcing services to its clients including call center,transaction and data processing, web enabled customer care, data digitization, IT enabled services, etc. During the year the name of Intelenet LAT AM Services, Sociedad Anonima was changed to Serco LAT AM Services, Sociedad Anonima.

Intelenet BPO Services FZ-LLC

Intelenet BPO Services FZ-LLC is incorporated in Dubai on 13th February 2011 and is a wholly owned subsidiary of Intelenet for the purpose of providing business process outsourcing services to its clients including call center, transaction and data processing, web enabled customer care, data digitization, IT enabled services, etc.

Sparsh BPO Services Limited:

Sparsh BPO Services Limited is a step down subsidiary of the Companyand Intelenet Global Services Private Limited and carries on the business of a Call Centre, transaction and data processing, web enabled customer care, data digitization, IT enabled services, etc in the domestic space.The Company holds 78.22% of the paid up capital of Sparsh BPO Services Limited. 

The audited statement of accounts along with the Directors’ Report of the Company’s subsidiaries are attached as required under the provisions of Section 212 of the Companies Act, 1956.

Scheme of arrangement in the nature of amalgamation

A scheme of arrangement in the nature of amalgamation has been proposed pursuant to provisions of section 391 to 394 read with section 78 and 100 to 104 and other applicable provisions of the Companies Act, 1956 by and between SKR BPO Services Private Limited (Transferor Company 1) and Intelenet Global Services Private Limited (Transferor Company 2) with Serco BPO Private Limited (Transferee Company) and their respective shareholders creditors & debenture holders. The appointed date of the scheme is 7th July, 2011. The scheme inter alia provides for transfer of entire undertaking and assets and liabilities of SKR BPO Services Private Limited and Intelenet Global Services Private Limited into Serco BPO Private limited by way of merger.

The scheme will be implemented after it is sanctioned by the Honourable High Court of Judicature at Bombay as required under the Companies Act, 1956 and certified copy of the order of the Honourable High Court of Judicature at Bombay is filed  with  the Registrar of Companies, Mumbai, Maharashtra.

No effect has been given of the provisions of the scheme so far as they relate to the company in the financial statements of the company for the year ended 31st March 2012, as the said scheme is subject to sanction of the Honourable High Court of Judicature at Bombay.

Internal Control & Audit

The Audit Committee comprising of Mr. Susir Kumar M and Mr. Thomas Richard Phineas Riall as its members. The Audit Committee met 3 times during this year and also on 9th May, 2012 and has reviewed extensively the risk and governance framework as also the controls within your Company. They also ensured the efficient use and protection of the resources and compliance with the procedures, policies and statutes. Ernst & Young Private Limited,, Internal Auditors of the Company have conducted internal audits (as per the audit calendar approved by the Board) and have reported their findings to the Audit Committee.

Particulars of Employees

In accordance with the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees in receipt of remuneration of Rs. 60 Lacs or more per annum, are set out in the annexure to this Director’s Report. This Directors’ Report is being sent to all Shareholders of the Company excluding the annexure. Any Shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Particulars Regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Since the Company does not own any manufacturing facility, the particulars relating to Conservation of Energy and Technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are not applicable. 

Foreign Exchange Earnings: Rs. 6886.55 Million (Previous Year: 6782.16 Million)

Directors  

During the year  Mr. David Skillen, Mr. Akhilesh Gupta, Mr.Amit Dixit, Mr. Paul IV Carl Schorr, Mr. Gautam Chakravarti , Mr. Patrick Joseph Bourke III , Mr. Keki Mistry and Mr. Wijayaraj Anandakumar Mahadeva resigned as directors of the Company with effect from 7th July, 2011. The Board wishes to place on record its appreciation for the services rendered during their tenure as Directors of the Company.

During the Year, Dr. Robert Clayton McGuiness, Mr.Guy William Leach and  Mr. Thomas Richard Riall were appointed as Additional Directors with effect from 7th July, 2011, 29th September, 2011 and 29th September, 2011 respectively. During the year Mr. Thomas Richard Phineas Riall was designated as the Executive Chairman of the Company.

However, Dr. Robert Clayton McGuiness and Mr.Guy William Leach resigned as director of the Company with effect from 24th April, 2012. The board wishes to place on record its appreciation for the services rendered during their tenure as directors of the Company.

By virtue of Section 260 of the Companies Act, 1956, Mr. Thomas Richard Phineas Riall holds office upto the date of the ensuing Annual General Meeting and is eligible for appointment.

The Directors of the Company recommend the appointment of Mr. Thomas Richard Phineas Riall as Director of the Company

Further, Mr. Thomas Richard Phineas Riall was redesignated as the CEO & Managing Director of the Company and Mr. Susir Kumar M. was redesignated as an Executive Chairman of the Company with effect from 1st June 2012 .

None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 274 (1) (g) of the Companies Act, 1956.

Auditors

Messrs Deloitte Haskins & Sells, Baroda, Chartered Accountants (Registration Number: 117364W), Auditors of the Company, hold office until the conclusion of ensuing Annual General Meeting and are eligible for re-appointment.

You are requested to appoint Auditors and to fix their remuneration

Auditors Observations

Your attention is drawn to the observation made in the Auditors report regarding Note 31 on investment in a subsidiary. The said note no.31  is  self explanatory and therefore, does not require any further clarification/explanation.

Directors’ Responsibility Statement

The Directors pursuant to Section 217(2AA) of the Companies Act 1956 confirm:

(i) that in the preparation of the annual accounts, the applicable accounting standards (except accounting standard 13 as stated by the Auditors in their report ) have been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) that the directors have taken proper and sufficient care 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 directors have prepared the annual accounts on a going concern basis.

Acknowledgements

The Directors wish to place on record their appreciation to employees at all levels for their dedication and commitment to work.

The Directors thank the Company’s customers, vendors, investors, business associates, bankers, Software Technology Park of India and the Central & State Governments for their support and guidance to the Company.

                                                                 On behalf of the Board of Directors

Mumbai                                        Susir Kumar M         Thomas Richard Phineas Riall

                                                          Director                                                   Director

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