INNOVATION SOFTWARE EXPORTS LIMITEDEXPORTS LIMITED · 2010. 11. 16. · Innovation Software Exports...

INNOVATION SOFTWARE INNOVATION SOFTWARE INNOVATION SOFTWARE INNOVATION SOFTWARE

EXPORTS LIMITEDEXPORTS LIMITEDEXPORTS LIMITEDEXPORTS LIMITED

ANNUAL REPORT

(2009-2010)

INNOVATION SOFTWARE EXPORTS LIMITED

Regd. Office: No.3/5, Alankar Adarsh, 7th Avenue, Ashok Nagar, Chennai-600 083.

.

Eighteenth Annual Report

Board of Directors

N Aravind

Director

A Anitha

Director

P Thirumalai kumar

Director

CK Kothari (up to 30.03.2010)

Director

H C Kothari

Director

Registered Office

No.3/5, Alankar Adarsh,

7th Avenue, Ashok Nagar,

Chennai-600 083.

Auditors M/s Ramraj & Co.,

Chartered Accountants, No.23/31, 3rd Cross Street, Lakshmi Nagar IV Stage,

Nanganallur, Chennai-600061.

Registrars & Share Transfer Agents

CAMEO CORPORATE SERVICES LIMITED

Subramanian Building, No.1, Club House

Road, Chennai – 600 002.

Equity Shares Listed At

The Madras Stock Exchange Ltd.,

Chennai

The Bombay Stock Exchange Ltd.,

Mumbai

COMMITTES

Share Transfer Committee N Aravind,Chairman

A Anitha, Member

H C Kothari, Member

Shareholder / Investors Grievance

Committee A. Anitha,Chairman

N Aravind, Member

H C Kothari, Member

Audit Committee H C Kothari,Chairman

A Anitha, Member

N Aravind, Member

.

CONTENTS

Sl.No.

Particulars

Page No.

1.

Notice 1

2.

Report of Directors 3

3. Management Discussion & Analysis 5

4. Report on Corporate Governance 7

5. Compliance Certificate 12

6.

Auditor’s Report 17

7

Balance Sheet 22

8.

Profit & Loss Account 23

9.

Schedules 24

10.

Cash Flow Statements 26

11.

Significant Accounting policies &

Notes on Accounts

28

12.

Balance Sheet Abstract 31

Innovation Software Exports Limited

1

NOTICE

NOTICE is hereby given that the Eighteenth Annual General Meeting of the

Shareholders of the Company will be held at 10.00 A.M. on Thursday, the 30th day of

September 2010, at No.3/5, Alankar Adarsh, 7th Avenue, Ashok Nagar, Chennai-600

083.

ORDINARY BUSINESS:

1. To receive, consider and adopt the accounts of the Company for the

financial year ended 31st March 2010, the Balance Sheet as at that date and

the Report of the Board of Directors, Compliance Certificate and Auditors

Report thereon.

2. To Appoint the statutory auditos of the Company from the conclusion of this

Annual General Meeting until the next AGM and to fix their remuneration.

3. To appoint a Director in the place of Mrs. A.Anitha who retires by rotation and

being eligible, offers herself for re-appointment.

By ORDER OF THE BOARD

Sd/-

N Aravind

Director

PLACE : CHENNAI

DATE : 2nd September 2010

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint a

proxy to attend and vote instead of himself and such proxy need not be a

member of the Company. The proxy forms, in order to be valid, must be

reached at the Registered Office of the company not less than 48 hours

before the commencement of the meeting.

2. Members are requested to notify to the Company’s Registrars and Transfer

Agents(RTA) M/s. CAMEO CORPORATE SERVICES LIMITED, Subramanian

Building, No.1, Club House Road, Chennai – 600 002

a) Any Change in their Registered Addresses along with PIN Code

Number;

b) Details about their Bank account number, name of bank, bank’s

branch name and address to enable the Company to draw

dividend warrant payable accordingly.

Please quote your Registered Folio Number in all correspondence with the

Company/RTA.

3. Members holding shares in the same name or same order of names under

different Ledger Folios are requested to apply for consolidation of such Folios,

to the Company’s Registrars and Transfer Agents, at the address as stated at

Note No.3 above.


2

4. Members may please address all their documents/correspondence relating to

the equity shares of the Company directly to the Company’s Registrars and

Transfer Agents, at the address as stated in Note No.3 above.

5. Nomination facility for shares is now available for members. The prescribed

format in this regard can be obtained from the Company’s Registrars and

Transfer Agents.

6. Members attending the Annual General Meeting are requested to bring with

them the following:

a) Members holding shares in dematerialized form – their DP details &

Client ID.

b) Members holding shares in physical form – their Folio Numbers.

c) No copy of the Annual Report would be distributed at the Meeting.

d) The attendance Slip duly completed and signed in terms of

specimen signature shall be lodged with the Company.

The Company would accept only the Attendance Slip from members actually

attending the meeting; or from the person attending as proxy under a valid proxy

form registered with the company not less than 48 hours prior to the meeting.

Attendance slips of members/valid proxies not personally present at the meeting, or

relating to proxies which are invalid, will not be accepted from any other

member/person.

The meeting is for members or their proxies only. Please avoid being accompanied

by non-members/children.

7. The Share Transfer Register and Register of Members will remain closed from

25th September 2010 to 30th September 2010 (both days inclusive).

8. Information pursuant to clause 49 of the listing agreement in respect of

proposed appointment / reappointment of Directors:

Mrs. A.Anitha:

Name Mrs. A Anitha

Age 45

Qualifications Commerce Graduate

Other Directorships- Name of the

Company

M/s. Crazy Infotech Limited. M/s. Agrata Biotech

Limited, M/s.Aanjaay Software Limited

Committee Memberships, if any,

with position

Chairman in shareholder/investor grievance

committee and member in Share Transfer Committee

& Audit Committee.

Date of Appointment 15-07-2008


3

DIRECTORS’ REPORT

& MANAGEMENT DISCUSSION AND ANALYSIS

To the Members,

Your Directors hereby present the Eighteenth Annual Report of your Company with the

Audited Accounts for the period ended 31st March 2010.

Financial Results

(Rs. in

Lakhs)

Particulars Period ended

31.03.2010

Period ended

31.03.2009

Profit / (Loss) before depreciation & tax 41.88 31.26

Less: Depreciation 0.49 0.49

Profit / (Loss) before extra ordinary items 41.39 30.77

Investment in business written off - 29.61

Profit / (Loss) after extra ordinary items 41.39 1.16

Less: Provisions for tax 0.12 0.36

Add: deferred tax Asset 41.27 0.80

Profit / (Loss) after tax 0.29 2.93

Add: Profit / (Loss) b/f from previous year (166.17) (169.91)

Net Profit / (Loss) carried over (124.60) (166.17)

Dividend

Your Directors’ are unable to recommend any Dividend for the period, due to the

insufficient of profit earned by your Company.

Performance Overview

During the period under review, your Company has done quite good business to the

tune of turnover in Rs. 248.00 Lacs and the profit before tax was Rs.41.39 Lacs.

Issue of Shares

During the period under review, your Company has not issued any shares.

Fixed Deposits

The public liability in the form of Public Deposits is nil as there is no public deposit

accepted.

Internal Controls and adequacy

The Internal control systems are commensurate to the size of the operation of the

Company. Whenever it is required, the systems and procedures are upgraded to suit

the changing business needs.

Corporate Governance and due Compliances

Your Company has taken necessary steps to give effect to the Corporate

Governance. Your Company has complied with the requirements regarding

corporate governance as required under Clause 49 of the Listing Agreement of the

Stock Exchanges where its shares are listed. A Certificate from the Statutory Auditor


4

regarding compliance of conditions of corporate governance is attached to this

report.

Directors

Your Company is taking necessary steps to increase the board size. Your board will

add few well known and experts in the Industry in which your company is proposed to

do business as Independent Directors.

Auditors

The retiring auditors, M/s.Ramraj & Co., Chartered Accountants have expressed their

willingness to continue in office, if appointed. They have furnished to the Company a

certificate of their eligibility for appointment as auditors, pursuant to section 224(1B) of

the Companies Act, 1956. The Board of Directors recommends to the members to

appoint them as auditors and fix their remuneration.

Your Company is in the process of obtaining confirmation of balances from various

parties mentioned in the Auditors’ Report.

The Company has also taken steps to appoint suitable in house personnel in order to

strengthen the internal control procedures.

The qualifications given in the Auditors’ Report are self explanatory.

Directors’ Responsibility Statement

1. In the preparation of the Annual accounts for the year ended 31st March

2010, the applicable accounting standards have been followed along with

proper explanation relating to material departures.

2. The directors had selected such accounting policies and 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 at the end of the year ended 31st March 2010 and of the profit or

loss of the company for the period.

3. The directors had taken proper and sufficient care for the maintenance of

adequate accounting records in accordance with the provisions of this Act

for safeguarding the assets of the company and for preventing and detecting

fraud and other irregularities.

4. The directors had prepared the annual accounts on a going concern basis.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

Your Company has no business activities in relation to conservation of Energy,

Technology Absorption, Foreign Exchange Earnings & Outgo.

Particulars of Employees

No employee has received remuneration, which will apply the provisions of Section

217(2A) of the Companies Act, 1956 read with the Companies (particulars of

Employees) Rules, 1975.


5

Acknowledgement

Your Directors thank the Investors, Bankers and Business associates for the continued

support extended to your Company. Your Directors also thank various Government

departments for the support extended by them. Finally, Your Directors also wish to

place on record their appreciation to the employees at all levels for their hard work,

dedication and commitment.

For and On behalf of the Board of Directors

Sd/- Sd/-

N Aravind A Anitha

Director Director

Place : Chennai

Date : 02nd September 200

MANAGEMENT DISCUSSION AND ANANLYSIS

a. Industry Structure and developments.

The Indian economy is trying to sustain its growth and its visible improvement creates

investor confidence. With the specialization in the computer industry is taking to

shape the company need to develop and nurture and recruit the workforce of the

company so as to suit the standards.

b. Opportunities and Threats

Your company intends to benefit from this steady growth in the outsourcing

opportunities and has taken the necessary initiatives in this direction. Recruitment

cum training drive has been initiated and the required up gradation in the existing

infrastructure and is also being taken up. Your company plans a modest beginning

subsequently moving up the value chain thereby increasing the margins.

c. Segment-wise or Product-wise performance.

Your company operates only in one segment, hence there are no separate segments

to be reported.

d. Outlook

Apart from expanding the facilities to meet the requirements from the growth both

from existing as well as new customers, your Company has also identified various

areas which will drive the company’s growth plans. Some of the key growth drivers

are domain expertise, enhancement of service portfolio to clients, tap new

geographies, strengthening marketing teams and inorganic initiatives.

e. Risks and concerns

The Main risks causing concern to the IT industry and your company as well are

Economic slowdown, ability to attract and retain talent, withdrawal of Tax Benefits,

currency Exchange risks, etc.


6

f. Internal control Systems and their adequacy

The Company is trying to develop the Internal Control Systems suitable to the business

which it envisages to start.

g. Discussion on financial performance with respect to operational performance

There is no operation during the financial year. Hence, we are unable to provide.

h. Material developments in Human Resources / Industrial Relations front,

including number of people employed.

The Company has identified certain new projects for which it may require adequate

human sources. It may find the suitable system for HR and Industrial Relations for the

proposed business.


7

CORPORATE GOVERNANCE

The Company submits its report on the matters mentioned in Clause 49 of the Listing

Agreement with the Stock Exchanges as follows

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNENCE

Innovation Software Exports Limited’s philosophy on corporate governance envisages

the attainment of the highest levels of transparency, accountability and equity, in all

facets of its operations, and in all its interactions with its stakeholders, including

shareholders, employees, the government and lenders.

Innovation Software Exports Limited is committed to achieving the highest standards

of corporate governance.

Innovation Software Exports Limited believes that all its operations and actions must

serve the underlying goal of enhancing overall shareholder value, over a sustained

period of time.

2. BOARD OF DIRECTORS

During the year, the composition and category of Directors were as follows:

Category Name of the Director.

Non- Executive Directors Mr. H C Kothari

Mr. C K Kothari (up to 30.03.2010)

Non-Executive and Independent

Directors

Mr. N Aravind

Mrs. A Anitha

Mr. P Thirumalai Kumar

Attendance of each Director at the Board Meetings (held during the year 2009-10),

last Annual General Meeting and Number of other Directorship and

Chairmanship/Membership of Committee of each Director in various Companies:

Attendance

Particulars

No. of other directorship and committee

member/chairmanship

Name of the Director Board

Meeting

Last

AGM

Other

Director

ship

Committee

Memberships

Committee

chairmanship

HC Kothari 5 Yes 1 2 1

CK Kothari 4 Yes 2 Nil Nil

P Thirumalai Kumar 4 No Nil Nil Nil

N Aravind 6 Yes 3 2 1

A Anitha 6 Yes 3 2 1

3. AUDIT COMMITTEE

The Audit Committee comprised of two independent, Non-Executive Directors viz.,

Mr. N Aravind, Mrs. A. Anitha and one Non- Executive Director Mr. H C Kothari as

Chairman. The constitution of Audit Committee also meets with the requirements

under Section 292A of the Companies Act, 1956. The Committee met four times

during the financial year under review.


8

The terms of reference stipulated by the Board to the Audit Committee are, as

contained under Clause 49 of the Listing Agreement:

a. Oversight of the Company’s financial reporting process and the disclosure of

its financial information.

b. Recommending the appointment and removal of external auditors, fixation of

audit fee and also approval for payment for any other services.

c. Reviewing with management the annual financial statements before

submission to the board, focusing primarily on (i) any changes in accounting

policies and practices, (ii) major accounting entries based on exercise of

judgment by management, (iii) qualifications in draft audit report, (iv)

significant adjustments arising out of audit, (v) the going concern assumption,

(vi) compliance with accounting standards, (vii) compliance with Stock

Exchange and legal requirements concerning financial statements and (viii)

any related party transactions i.e., transactions of the company of material

nature, with promoters or the management, their subsidiaries or relatives etc.,

that may have potential conflict with the interests of Company at large.

d. Reviewing with the management, external and internal auditors, the

adequacy of internal control systems.

e. Reviewing the adequacy of internal audit functions.

f. Discussion with internal auditors any significant findings and follow up there on.

g. Reviewing the findings of any internal investigations by the internal auditors

into matters where there is suspected fraud or irregularity or a failure of

internal control systems of a material nature and reporting the matter to the

board.

h. Discussion with external auditors before the audit commences nature and

scope of audit as well as to have post-audit discussion to ascertain any area

of concern.

i. Reviewing the company’s financial and risk management policies.

j. To look into the reasons for substantial defaults in the payment to the

shareholders (in case of non-payment of declared dividends) and creditors.

4. REMUNERATION / COMPENSATION COMMITTEE

The Compensation committee was set up to evaluate compensation and benefits for

Executive Directors and to frame policies and systems.

It has been constituted with two Non-Executive & Independent Directors and One

Non-Executive Director.

1. Mr. H C Kothari , Chairman (Non-executive Director)

2. Mr. N Aravind, Member (Non-Executive &Independent Director)

3. Mrs. A. Anitha, Member (Non Executive & Independent Director)


9

During the year the Committee met 4 times and all members attended all meetings.

None of the directors has pecuniary relationship / transaction with company and

other related parties. During the year, no sitting fees has been paid to any of the

Directors for the Board meetings or of any Committees of the Board attended by

them.

5. SHAREHOLDERS’/INVESTORS’ GRIEVANCE COMMITTEE

The Shareholders’/Investors’ Grievance Committee comprised of two independent,

Non-Executive Directors viz., Ms. A Anitha (as Chairman), Mr. N Aravind and one Non-

Executive Director Mr. H C Kothari. The committee oversees and reviews all matters

connected with the securities transfers. The committee also looks into redressing of

shareholders’ complaints like transfer of shares, non-receipt of balance sheet, non-

receipt of declared dividends, etc. The Committee oversees the performance of the

Registrar and Transfer Agents, and recommends measures for overall improvement in

the quality of investor services. The Board of Directors has delegated the power of

approving transfer of securities to the Share Transfer Committee.

The total number of complaints which were received and replied to the satisfaction

of shareholders during the year under review was NIL. Outstanding complaints as on

31st March, 2010 were nil.

6. GENERAL BODY MEETINGS

Location and time for last 4 Annual General Meetings

Financial Year

Ended

AGM Location Date Time

31-03-2006 AGM No.3, Moorthy

Lane, 1st Floor, Off

Devaraj Mudali

Street, Ratan

Bazaar, Chennai-

600 003

30-09-2006 10.30 AM

31-03-2007 AGM No.3, Moorthy

Lane, 1st Floor, Off

Devaraj Mudali

Street, Ratan

Bazaar, Chennai-

600 003

29th

September

2007

11.00 AM

31.03.2008 AGM No.3/5,Alankar

Adarsh, 7th

Avenue,

Ashok Nagar,

Chennai – 600 083

25.09.2008 11.00 AM

31.03.2009 AGM No.3/5,Alankar

Adarsh, 7th

Avenue,

Ashok Nagar,

Chennai – 600 083

25.09.2009 10.00 AM


10

7. DISCLOSURES

a. No resolution requiring a postal ballot under Section 192-A of the Companies

Act, 1956, was placed before the last Annual General Meeting.

b. No special resolution requiring a postal ballot is being proposed at the ensuing

Annual General Meeting.

c. Disclosures on materially significant related party transactions i.e., transactions

of the Company of material nature, with its promoters, the directors or the

management, their subsidiaries or relatives, etc., that may have potential

conflict with the interests of the company at large.

None of the transactions with any of the related parties were in conflict with

the interest of the Company

d. Details of non-compliance by the Company, penalties, and strictures imposed

on the Company by Stock Exchanges or SEBI, or any statutory authority, on

any matter related to capital markets, during the last three years.

None.

e. The Company has formed good whistle blower policies and confirmed that no

personnel have been denied access to the audit committee.

f. The Company has not made any payment in the form of sitting fees or

remuneration to any directors as all directors have waived off their monetary

rights / claims because of the continuous loss in the Company.

g. The Company has complied with all the mandatory requirements of

Corporate Governance, as required under the Listing Agreement.

8. MEANS OF COMMUNICATION

The Half-Yearly and Quarterly results are published in the Trinity Mirror and Makkal

Kural. All material information about the Company is promptly sent through fax to the

concerned stock exchanges wherein the Company’s Shares are listed. Besides, these

are all given to Press for information of the Public at large. Moreover, Company

disseminates information through press meets and analyst meets.

Management discussion and analysis has been made a part of the annual report.

9. GENERAL SHAREHOLDER INFORMATION

Sl. No. Particulars Description

1 Financial Calendar Year Ended March 31, 2010

2 Book Closure Date 22nd September 2009 to 25th September

2009

3 Listed Stock Exchange The Madras Stock Exchange Ltd, Chennai

The Bombay Stock Exchange Ltd, Mumbai.

4 Stock Price Performance Scrip suspended from trading at

BSE.entrading at


11

5 Registrar & Transfer Agents

(share transfer and

communication regarding share

certificates and change of

address).

M/s. CAMEO CORPORATE SERVICES LIMITED

Subramanian Building, No.1, Club House

Road, Chennai – 600 002.

6 Share Transfer System Presently, the share transfers which are

received in physical form are processed and

the share certificates returned within a

period of 15 to 20 days from the date of

receipt, subject to the documents being

valid and complete in all respects.

7 Dividend Payment Date No dividend declared

8 Stock Code Scrip Name : INSOE

Scrip Code : 517433

9 Market Price data No Trading as the scrip was suspended from

trading at BSE.

10 Address for Correspondence No.3/5, Alankar Adarsh, 7th Avenue,

Ashok Nagar, Chennai-600 083.

Shareholding Pattern as on 31st March 2010

NO. OF % OF

CATEGORY SHARES SHARE

HOLDING

A PROMOTER'S HOLDING

1 Promoters *

- Indian Promoters 214800 7.16

- Foreign Promoters - -

2 Persons acting in Concert ** 0 0.00

SUB-TOTAL 214800 7.16

B NON-PROMOTERS HOLDING

3 Institutional Investors

a Mutual Funds and UTI Nil 0.00

b Banks, Financial Institutions, Insurance Nil 0.00

Companies (Central/State Government

Institutions/Non-Government Institutions)

c Foreign Institutional Investors - -

SUB-TOTAL Nil Nil

4 Others

a Private Corporate Bodies 61714 2.06

b Indian Public 2714187 90.47

c NRIs/OCBs 9299 0.31

SUB-TOTAL 2785200 92.84

GRAND TOTAL 3000000 100.00


12

COMPLIANCE CERTIFICATE

(Pursuant to Section 383A of the Companies Act, 1956)

CIN No. of the Company : L30006TN1992PLC023734

Nominal Capital : Rs.3,00,00,000/-

Paid-up Capital : Rs.2,99,95,124/-

To

The Members of the Company,

Innovation Software Exports Limited,

Chennai.

I have examined the registers, records, books and papers of Innovation Software

Exports Limited, as required to be maintained under the Companies Act, 1956, and

the rules made there under and also the provisions contained in the Memorandum

and Articles of Association of the Company for the financial year ended 31st March,

2010. In my opinion and to the best of my information and according to the

examinations carried out by me and explanations furnished to me by the Company,

its officers and agents, I certify that in respect of the aforesaid financial year:

1. The Company has kept and maintained all registers as stated in Annexure `A’ to

this certificate, as per the provisions and the rules made there under and all

entries therein have been recorded.

2. The Company has filed the forms and returns as stated in Annexure `B’ to this

certificate, with the Registrar of Companies, Regional Director, Central

Government, Company Law Board or other authorities under the Act and the

rules made thereunder.

3. The Company being Public Limited Company has the minimum prescribed paid-

up capital.

4. The Board of Directors duly met 6 (Six) times during the year in respect of which

meetings proper notices were given and the proceedings were properly

recorded in the Minutes Book maintained for the purpose.

5. The Company closed its Register of Members from 22nd September 2009 to 25th

September 2009 and necessary compliance of Section 154 of the Act has been

made.

6. The Annual General Meeting for the financial year ended on 31.03.2009 was held

on 25.09.2009 after giving due notice to the members of the Company and the

resolutions passed threat were duly recorded in minutes book maintained for the

purpose..

7. No Extraordinary General Meeting was held during the financial year.

8. The Company has not advanced any loan to its directors and/or persons or firms

or companies referred in the Section 295 of the Companies Act, 1956 during the

financial year.

9. The Company has not entered in to any contract falling within the purview of

Section 297 of the Companies Act, 1956.


13

10. The Company has made necessary entries in the register maintained under

Section 301 of the Act.

11. As there were no instances falling within purview of Section 314 of the Act, the

Company was not required to obtain necessary approvals from the Board of

Directors, members and previous approval of the Central Government, as the

case may be.

12. The Company has not issued any duplicate share certificates during the financial

year.

13. The Company:

(i) has effected all the transfers within the time and share certificates were

dispatched. There was no allotment/transmission of securities during the

year.

(ii) was not required to deposit any amount in a separate bank account as

no dividend was declared during the financial year.

(iii) was not required to post dividend warrants to any member of the

Company as no dividend was declared during the financial year.

(iv) was not required to transfer the amounts to Investor Education and

Protection Fund as there was no such amount outstanding during the

financial year under review.

(v) has generally complied with the requirements of Section 217 of the Act.

14. The Board of Directors of the Company is duly constituted. There was no

appointment of Additional Directors, Alternate Directors and Directors to fill casual

vacancies during the year. During the year under review, there was cessation of

one Director due to resignation.

15. The Company has not appointed any Managing Director/ Whole-time Director/

Manager during the financial year under scrutiny.

16. The Company has not appointed any sole-selling agent during the financial year.

17. The Company was not required to obtain any approvals of the Central

Government, Company Law Board, Regional Director, Registrar or such other

authorities as may be prescribed under the various provisions of the Act during

the financial year.

18. The directors have disclosed their interest in other firms/companies to the Board of

Directors pursuant to the provisions of the Act and the rules made there under.

19. The Company has not issued any shares during the financial year.

20. The Company has not bought back any shares during the financial year.

21. The Company has no preference shares; hence, redemption of the same does

not arise.

22. There was no transaction necessitating the Company to keep in abeyance the

rights to dividend, rights shares and bonus shares pending registration of transfer

of shares.

23. The Company has not accepted deposits from public during the financial year.


14

24. The Company has not made any borrowings during the financial year under

review.

25. The Company has not made any loans or advances, or given guarantees or

provided securities to other bodies corporate and consequently no entries has

been made in the register kept for the purpose.

26. The Company has not altered the provisions of the memorandum with respect to

situation of the Company’s registered office from one state to another during the

financial year under review.


the objects of the Company during the financial year.


name of the Company during the financial year.


share capital of the company during the year under scrutiny.

30. The Company has not altered its articles of association during the financial year.

31. As per explanations given to us, there was no prosecution initiated against or

show cause notices received by the Company and no fines/penalties or any

other punishment imposed on the Company during the financial year for offences

under the act.

32. The Company has not received any security deposit from its employees during

the financial year under scrutiny.

33. The provisions of Section 418 of the Act are not applicable to the Company.

Place: Chennai A.KUMAR REDDY

Date: 22.08.2010 Practising Company Secretary

C P No.: 7843


15

ANNEXURE -A

Registers as maintained by the Company

SI. No.

Under Section Name of the Register

1

150

Register of Members

2

193

Minutes of all Board of Directors and General Meetings

3

143

Register of Charges

4

303

Register of Directors

5

307

Register of Directors' Share holding

6

301

Register of Contracts, Companies and firms in which the

directors are interested.

ANNEXURE -B

Returns / Documents / Forms as filed by the Company with the Registrar of Companies /

Regional Director / Company Law Board/Central Government or other authorities from

01.04.2009 to 31.03.2010.

SI.

No.

Form No. Under

Section

Description Date o filing

1. 20B 159 Annual Return made up to the date of AGM

i.e. 25.09.2009.

15.02.2010

2. 23AC &

23ACA

220 Balance Sheet and Profit & Loss Account for

the financial year ended 31.03.2009.

09.02.2010

3. 66 383A Compliance Certificate for the financial year

ended 31.03.2009

09.02.2010

4. 20B 159 Annual Return made up to the date of AGM

i.e. 25.09.2008.

05.08.2009

5. 23AC &

23ACA

220 Balance Sheet and Profit & Loss Account for

the financial year ended 31.03.2008.

05.08.2009


16

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

To

The members of M/S Innovation Software Exports Limited.

Chennai.

We have examined the compliance of conditions of Corporate Governance by

Innovation Software Exports Limited for the year ended on March 31, 2010 as

stipulated in clause 49 of the Listing Agreement of the said Company with Stock

Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the

management. Our examination was limited to procedures and implementation

thereof, adopted by the Company for ensuring the compliance of the conditions of

the Corporate Governance. It is neither an audit nor an expression of opinion on the

financial statements of the Company.

In our opinion and to the best of our information and according to the explanations

given to us, we certify that the Company has compiled with the conditions of

Corporate Governance as stipulated in the above Listing Agreement.

We state that no grievance(s) is / are pending for the period exceeding one month

against the Company as per the records maintained by the Investors Grievance

Committee.

We further state that such compliance is neither an assurance as to the future viability

of the Company nor the efficiency or effectiveness with which the management has

conducted the affairs of the Company.

For RAMRAJ & Co.

Chartered Accountants

Sd/- A.AMARNATHA REDDY

Partner

M. No.213102

Chennai

22nd August 2010


17

AUDITOR’S REPORT

To

The members of Innovation Software Exports Limited.

1. We have audited the attached Balance Sheet of Innovation Software Exports

Limited, Chennai as at 31st March, 2010 the Profit and Loss Account and the cash

flow statement for the year ended on that date. These financial statements are the

responsibility of the Company’s Management. Our responsibility is to express an

opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally

accepted in India. These standards require that we plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free from

any material misstatements. An audit includes, examining on a test basis, evidence

supporting the amounts and disclosures in the financial statements. An audit also

includes, assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial

statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report), Order 2003 issued by the

Central Government in terms of Section 227(4A) of the Companies Act, 1956, we

enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of

the said order.

4. Further to our comments in the annexure referred to in paragraph ‘1’ above we

report that:

a) We have obtained all the information and explanations which to the best to

our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law have been kept

by the company so far as appears from our examination of such books.

c) The Balance Sheet, Profit and Loss Account and cash flow statement are in

agreement with the books of accounts.

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash flow

statement comply with the Accounting Standards referred to in sub section

(3C) of Section 211 of the Companies Act, 1956.

e) On the basis of the information and explanations given to us and

representations obtained by the company there are no directors of the

company who, as at 31st March 2010, are disqualified under section 274(1)(g)

of the Companies Act,1956, from being appointed as Directors.

f) The Company has not levied or collected any cess for the purpose of

rehabilitation or revival or production of the assets of the sick Industrial

Company on its annual turnover and has not paid to the credit of the Central

Government, the said levy as required u/s 441 A of the Companies Act as the

same has not been notified by the Central Government.

g) In our opinion and to the best of our information and according to the

explanations given to us, the said account read along with the notes thereon

give the information required by the Companies Act, 1956 in the manners


18

required and also give a true and fair view in conformity with the accounting

principles generally accepted in India.

i. In so far as it relates to the Balance Sheet of the state of affairs of the

Company as at 31st March, 2010 and

ii. In so far as it relates to the Profit and Loss Account of the Profit of the

Company for the year ended on that date.

iii. In so far as it relates to the Cash flow statement, of the cash flow for

the year ended on that date.

For RAMRAJ & Co.,


Sd/- A. AMARNATHA REDDY Chennai Partner

Date: 22nd August, 2010. M. No.213102


19

ANNEXURE TO THE AUDITOR’S REPORT (Referred to in paragraph ‘3’ of our report of even date)

As required by the Companies (Auditor’s Report) order, 2003 issued by the Central

Government in terms of section 227 (4A) of the Companies Act, 1956 and on the basis

of such checks of the books and records of the Company, as we considered

appropriate and according to the information and explanations given to us during

the course of the audit, we report that,

1. The Company has maintained proper records showing full particulars

including quantitative details and situation of Fixed Assets. All the assets have

been physically verified by the management during the year which in our

opinion is reasonable having regard to the size of the Company and the

nature of its assets. No serious discrepancies were noticed on such verification.

None of the Fixed Assets were disposed off during the year and therefore do

not affect the going concern status of the Company.

2. In our opinion, the company has not taken / granted loans during the year

from / to parties listed in the register maintained under section 301 of the

Companies Act, 1956.

3. In our opinion and in accordance with the information and explanations

given to us, there is adequate internal control procedure commensurate with

the size of the company and nature of its business, for purchases of inventory

and fixed assets and with regard to the sale of goods.

4. In our opinion, and according to the information and explanations given to us,

there are no transactions for purchase / sale of goods, services made in

purchase of contracts or arrangements required to be entered in the register

maintained under section 301 of the register, aggregating during the year to

Rs.5,00,000/- or more in respect of each party.

5. In our opinion, and according to the information and explanations given to us,

the company has not accepted any deposits from public.

6. In our opinion, the company does not have an internal audit system, the

scope and coverage of which needs to be strengthened to make it

commensurate with the size and nature of its business.

7. The Company is not required to maintain any cost records as prescribed by

the Central Government under section 209(1) (d) of the Companies Act, 1956

as the same is not applicable to the Company.

8. According to the explanations given to us, the provisions of the Employees

Provident Fund and Miscellaneous Provisions Act, 1952 and Employees State

Insurance Act, 1948 are not applicable to the Company.

9. According to the information and explanations given to us, there are no

undisputed amounts payable in respect of Sales Tax, Customs Duty and Excise

Duty as at 31st March, 2010, for a period of more than six months from the

date they became payable. Further, according to the information and

explanations give to us, there are no disputed statutory dues pending

payment.


20

10. On the basis of the financial statements, the Company has accumulated loss

of Rs.12,460,387 and the Company has not incurred cash losses during the

year.

11. The Company has not issued any debentures. According to the records of the

Company examined by us, the Company has not availed any term loan or

working capital limits from any bank of financial institution.

12. The Company has not granted loans and advances on the basis of security by

way of pledge of shares, debentures and other securities. Accordingly, clause

4(xii) of the Order is not applicable.

13. The Company is not a Chit Fund, Nidhi, Mutual Benefit Fund or a Society.

Accordingly, clause 4(xiii) of the order is not applicable.

14. According to the information and the explanations given to us and based on

the records examined by us, the company is maintaining proper records in

respect of the shares dealt and the said investments (subject to note on

investment) have been held by the company in its own name as per the

provisions of the Section 49 of the Companies Act, 1956.

15. On the basis of information and explanations given to us, the company has

not given guarantee to any Bank or Financial Institution on behalf of other

parties.

16. The Company has not taken any term loans. Hence clause (xvi) of para’4(A) is

not applicable.

17. On the basis of our examination of the books of account and the information

and explanation given to us, in our opinion, the funds raised on short term

basis have not been used for long term investment.

18. The Company has not made any preferential allotment of shares to any party

listed in the register maintained under section 301 of the Companies Act,

1956. Hence clause 4(xviii) of the Order is not applicable.

19. The Company has not issued debentures. Hence, clause 4(xix) of the Order is

not applicable.

20. The Company has not raised any money by way of public issues during the

year. Hence clause 4(xx) of the Order is not applicable.

21. According to information and explanations furnished to us no fraud on or by

the company has been noticed or reported during the year other than the

shortage of cash of Rs.12, 79,248/- reported as on 31.03.2002 and same has

been charged to profit and loss account during the previous year.

22. On the basis of financial statements, it is explained by the management that

diminution in value of investments, which are not realizable as on 31.03.2010

has been charged to Profit& Loss Account. In the later year, if realizable,

would be credited to Profit & Loss Account.


21

23. The nature of the business of the company is such that the clauses II, XIII, XIV of

paragraph 4 of the Companies Act (Auditor’s Report) order 2003 are not

applicable.

For RAMRAJ & Co.,


Sd/-

Chennai A. AMARNATHA REDDY

Date: 22nd August, 2010. Partner

M. No.213102


22

INNOVATION SOFTWARE EXPORTS LIMITED

No.3/5, Alankar Adarsh, 7th Avenue, Ashok Nagar, Chennai-600 083

BALANCE SHEET AS AT 31ST MARCH, 2010

Particulars SCH 31.03.2010 31.03.2009

SOURCES OF FUNDS Rs. Rs.

Share Holders Fund

Share Capital 1 29,995,124 29,995,124

TOTAL 29,995,124 29,995,124

APPLICATION OF FUNDS

Fixed Assets

Gross Block 10,342,111 10,342,111

Less : Depreciation 9,744,284 9,695,668

Net Block 2 597,827 646,443

Investments 3 - -

Deferred Tax Assets 4 1,421,184 1,333,934

Current Assets Loans & Advances

Sundry Debtors 5 16,107,820 11,037,700

Cash & Bank Balances 6 62,707

359,210

Loans, Advances & Deposits 7& 8 1,138,019 1,138,019

17,308,546 12,534,929

Less: Current Liabilities & Provisions 9 1,792,820 1,137,656

Net Current Assets 15,515,726 11,397,273

Miscellaneous Expenses

Profit & Loss Account 12,460,387 16,617,474

TOTAL 29,995,124 29,995,124

Notes on Accounts & Significant accounting policies As per report of even date

For Innovation Software Exports Ltd., For Ramraj & Co

Sd/- Sd/- Sd/-

N.Aravind A.Anitha A.AMARNATHA REDDY

Director Director Partner

M.No.213102

Place: Chennai

Date: 22nd August 2010.


23

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH, 2010

Particulars SCH 31.03.2010 31.03.2009

INCOME Rs. Rs.

Sales 24,870,104 22,205,450

Other Income 10 111,480 111,480

TOTAL 24,981,584 22,316,930

EXPENDITUTRE

Purchases 20,308,187 18,905,450

Administrative Expenses 11 484,980 285,000

Depreciation 48,616 48,616

Profit/Loss Before Tax 4,139,801 3,077,864

LESS: Provisions for Investment - (1,682,000)

LESS: Provisions for Cash Shortage - (1,279,248)

Profit after Provisions Before Tax 4,139,801 116,616

Provision for Income Tax 12,370 36,035

Profit after Tax 4,127,431 80,581

ADD: Deferred Tax Reversal - -

ADD: Deferred Tax Asset 29,656 293,276

Balance Brought forward (16,617,474) (16,991,331)

Balance carried forward (12,460,387) (16,617,474)

Notes on accounts and significant

accounting policies 12

Earnings per share 1.38 0.08

Number of Shares 3,000,000 3,000,000

Notes on Accounts & Significant accounting policies As per report of even date

For Innovation Software Exports Ltd., For Ramraj & Co

Sd/- Sd/- Sd/-


Director Director Partner

M.No.213102

Place: Chennai



24

Particulars

As at

31.03.2010

As at

31.03.2009

SCHEDULE- 1 : Share Capital Rs. Rs.

Authorised Capital

3,000,000 Equity Shares of Rs.10/- each 30,000,000 30,000,000

Issued, subscribed & paid up

30,00,000 Equity Shares of Rs.10/- each 30,000,000 30,000,000

LESS: Calls in Arrears 4,876 4,876

TOTAL 29,995,124 29,995,124

SCHEDULE – 3 - Investments

(at cost or market price which ever is low)

QUOTED

38,200 shares if Innovation Medi Equip Ltd.,

(Face Value of Rs.10/- each fully paid)

(Market value as on 31.03.09 Rs.0/- per share) - -

1,30,000 shares of ISI consulting Ltd.,

at the rate of Rs.10/- each fully paid

(Market value as on 31.03.2009 Rs.0/- per share) - -

UNQUOTED

20,000 Shares of Dhawani Commodities Broker P

Ltd.,

- -

at the rate of Rs.10/- each fully paid - -

(Face value of Rs.10/- each)

TOTAL - -

SCHEDULE – 4 -Deferred Tax Assets

Balance as on 01.04.2009 1,333,934 1,040,658

Add: For the current Year 87,250 293,276

TOTAL 1,421,184 1,333,934

SCHEDULE – 5 - Sundry Debtors

Outstanding for less than 6 months considered

good

14,462,070 1,000,000

Outstanding for more than6 months considered

good

1,645,750 10,037,700

TOTAL 16,107,820 11,037,700

SCHEDULE - 6 - Cash & Bank Balance

Cash Balance

Cash on hand 46,254 198,318

Bank Balance

Indian Overseas Bank 16,453 160,892

TOTAL 62,707 359,210


25

Particulars

As at

31.03.2010

As at

31.03.2009

SCHEDULE – 7 - Loans & Advances

(Unsecured Considered Good)

Tax Deducted at source - Old 79,538 79,538

Tax Deducted at source – 2006-07 13,233 13,233

Tax Deducted at source- 2007-08 7,200 7,200

Jagdish V Thakkar 495,000 495,000

Hasmukh M.Thakkar 434,000 434,000

TOTAL 1,028,971 1,028,971

SCHEDULE – 8 - Deposits

Deposits – Sales Tax 95-96 Appeal 26,448 26,448

Deposits – Sales Tax 95-96 Appeal 79,600 79,600

Deposits – Sales Tax NSC 3,000 3,000

TOTAL 109,048 109,048

SCHEDULE – 9- Current Liabilities& Provisions

Sundry Creditors 1,755,450 1,005,450

Sales Tax Payable - 71,171

Cameo Corporate Services Limited - -

Ramraj & Co 25,000 25,000

Income Tax Provision 12,370 36,035

TOTAL 1,792,820 1,137,656

SCHEDLES – 10 - Other Income

Interest on Loan 111,480 111,480

Misc. Income 0 0

TOTAL 111,480 111,480

SCHEDULES – 11 - Purchses

Purchases 20,308,187 21,005,450

Total 20,308,187 21,005,450

ADMINISTRATIVE AND OTHER EXPENSES

Salary 294,980 156,000

Bank Charges 1,065 3,560

Professional & Consultancy Charges 20,000 30,000

Audit Fees 25,000 25,000

Miscellaneous Expenses 76,485 2,394

Listing Fees & Registrar Charges 24,000 24,000

Postage & Telegrams 13,450 10,000

Share Transfer & Depositories Ser. Charges 30,000 34,046

TOTAL 484,980 285,000


26

CASH FLOW STATEMENT FOR THE YEAR ENDING 31.03.2010.

Amount in '000

Particulars

As at

31.03.2010

As at

31.03.2009

Cash flow from Operating Activities

Net Profit before tax 4,139 117

Adjustment for Depreciation 49 49

Deferred Tax Asset (30) (293)

Provision for Cash Shortage - (1,279)

Operating Profit before Working Capital changes

4,158 (1,406)

Adjustments for Increase/Decrease

Loans and Advances & Debtors

(5,109) 2,830

Current liabilities 655 (1,513)

Net cash flow from operations (296) (89)

Cash flow from investing activities

Increase/Decrease in Fixed Assets - -

Increase/Decrease in Investments - (1,682)

Cash flow from financing activities

Increase/Decrease in Long term Loans -

-

Net Increase /decrease in cash & cash equivalents (296) (1,771)

Cash & Cash equivalents in the beginning of the

period

359 2,130

Cash & cash equivalents at the end of the period

63 359


27

SCHEDULE - 2

INNOVATION SOFTWARE EXPORTS LIMITED Schedule of Depreciation as at 31.03.2010 as per Companies Act, 1956

Gross Block Depreciation Net Block

Particulars 01.04.09 Addition Deletion 31.03.2010 1.04.2009 Dep. During

the year

31.03.2010 31.03.2010 31.03.2009

Plant & Machinery 267,450 - - 267,450 174,968 11,318 186,286 81,164 92,482

Furniture & Fitting 809,822 - - 809,822 720,127 36,450 756,577 53,245 89,695

Computer 9,240,242 - - 9,240,242 8,778,230 - 8,778,230 462,012 462,012

Office Equipment 24,597 - - 24,597 22,343 848 23,191 1,406 2,254

Total 10,342,111 - - 10,342,111 9,695,668 48,616 9,744,284 597,827 646,443

Previous year Fig. 10,342,111 - - 10,342,111 9,647,052 65,134 9,695,668 695,059 7,60,193


28

SCHEDULE – 12

STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR

THE YEAR ENDED 31ST MARCH, 2010

A).SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting

The financial statements are prepared under the historical cost convention on a

going concern basis and accordance with the requirements of the Companies Act,

1956 and applicable accounting standards.

2. Recognition of Revenue

Finance charges on Hire purchase Contracts have not been recognized during the

year in the absence of its virtual certainty.

3. Fixed Assets and Depreciation

Fixed Assets are stated at actual cost less accumulated depreciation. Depreciation

on Fixed Assets is computed on written down value method at the rates and in the

manner specified under schedule XIV to the Companies Act, 1956.

4. Payment of Gratuity has not arisen and therefore not recognized in the accounts.

5. All other expenditure has been accounted on accrual basis.

6. The Company does not carry any inventory.

B). NOTES ON ACCOUNTS

1. Accounting period

The period of accounts under review is for 12 months

2. Share Capital

During the period under review, the authorized share capital of the Company was

not changed.

3. Audit fees comprise the following.

Particulars As on 31.03.2010 As on 31.03.2009

Statutory Audit 25000 25000

Tax Audit 10000 10000

Certification & other

matters

Total 40000 40000

4. No Remuneration or sitting Fees has been paid to any Directors.

5. Figures have been rounded off to the nearest rupee.


29

6. Previous year figures have been regrouped / reclassified wherever considered

necessary.

For Innovation Software Exports Ltd., For Ramraj & Co.,


Sd/- Sd/- Sd/-


DIRECTOR DIRECTOR PARTNER

M.No.213102

Place: Chennnai



30

AUDITOR’S CERTIFICATE

We have examined the attached the cash flow statement of Innovation Software

Exports Limited for the year ended 31st March, 2010. The Statement has been

prepared by the Company in accordance with the requirements of Clauses 32 of the

listing the agreement and is based on and in agreement with the corresponding Profit

& Loss Account and Balance Sheet of the Company covered by our report of 22nd

August, 2010 to the members of the Company.

For Ramraj & Co.,


Sd/- A.AMARNATHA REDDY

PARTNER

Place: Chennai M.No.213102

Date: 22nd August 2010


31

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

A. Registration Details Rs.in '000

Registration Number :

State code : 18

Balance Sheet date : 31.03.2010

B. Capital Raised During The Year

Public Issue : NIL

Right Issue : NIL

Bonus Issue : NIL

Private Placement : NIL

C. Position of Mobilisation and Deployment of Fund

Total Liabilities and Shareholders Funds : 29,995

Total Assets : 29,995

Sources of Funds

Paid up Capital : 29,995

Reserve and Surplus : NIL

Secured Loans : NIL

Unsecured Loans : NIL

Deferred Tax Liabilities : NIL

Application of Funds

Net Fixed Assets : 598

Deferred Tax Asset 1,421

Investment : NIL

Net Current Assets : 15,516

Micellaneous Expenditure : NIL

Profit and Loss Account : 12,460

D. Performance Of the Company

Turnover : 24,982

Total Expenditure : 20,842

Profit/(Loss) before tax : 4,140

Profit/(Loss) after tax : 4,127

Earning per Share in Rs. : 0.014

Dividend Rate % : NIL

E. Generic Names of Three Principal Products/Services of the Company

Item Code No.(ITC Code) : N A

Product Description

:

Software

Development

For and on behalf of the board

Sd/- Sd/-

Place : Chennai N. ARAVIND A.ANITHA

Date : 22nd August 2010 Director Director


32

PROXY FORM

I / We __________________________________________ of

____________________________________ being a Member / Members of INNOVATION

SOFTWARE EXPORTS LIMITED hereby appoint _______________________________________

of _________________________________ or failing him

_______________________________________________________________________ for me / us

on my / our behalf at the 18th ANNUAL GENERAL MEETING of the said Company to

be held 10.00 A.M. on Thursday, the 30th September 2010 at No.3/5, Alonkar

Aadharsh, 7th Avenue, Ashok Nagar, Chennai-600 083, and at any adjournment

thereof.

Signed this ___________________day ________________ of 2010

Signature(s) of the Member(s) ______________________________

Folio No. _______________________________________________

N.B. (i) This proxy must be deposited at the Registered Office of the Company, not

latter than 48 hours before the time of the meeting. A proxy need not be a member

of the Company. Shareholder / Proxy holder wishing to attend the meeting must bring

the Attendance Slip to the Meeting and handover the same at the entrance duly

signed.

………………………………………………………..TEAR HERE………………………………………

INNOVATION SOFTWARE EXPORTS LIMITED No. 3/5, Alonkar Adarsh, 7th Avenue, Ashok Nagar, Chennai-600083

ATTENDANCE SLIP

To be handed over at the entrance of the Meeting Hall hereby record my presence

at the 18th ANNUAL GENERAL MEETING at 10.00 A.M. on Thursday, the 30th

September 2010 at No.3/5, Alonkar Aadharsh, 7th Avenue, Ashok Nagar, Chennai-

600 083.

Name of the Member

____________________________________________________________________

Folio No.

______________________________________________________________________________

Name of Proxy / Representation (In Block Letter)

______________________________________________

(To be filled in the Proxy attends instead of the Member)

Signature of the Member / Proxy present

_____________________________________________________

Revenue

Stamp

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