You are here » Home » Companies » Company Overview » Edserv Softsystems Ltd

Edserv Softsystems Ltd.

BSE: 533055 Sector: IT
BSE 05:30 | 01 Jan Edserv Softsystems Ltd
NSE 05:30 | 01 Jan Edserv Softsystems Ltd

Edserv Softsystems Ltd. (EDSERV) - Director Report

Company director report

Your Directors have pleasure in presenting their report for the year ended 31st March2012 together with the Balance Sheet as at 31st March 2012 and the Profit and Loss accountfor the year ended on that date.

Financial Highlights

(Rs.)in lakhs

Particulars Audited Financial Statement for the year ended March 31st 2012 Audited Financial Statement for the year ended March 31st 2011
TOTAL INCOME 10295.70 10777.29
TOTAL EXPENDITURE 9951.82 10219.95
Profit Before Tax 343.58 557.34
Less: Provision for Income Tax and Deferred Tax 929.78 334.70
Less: Provision for Fringe Benefit Tax - -
Profit / Loss After Tax -585.90 222.64

Fixed Deposit

During the year under review, the Company has not accepted any Fixed Deposit from thepublic.

Capital Issues During The Year (upto date of this report) & their utilization

1. Issued of 2500000 Equity Shares on preferential Basis to Non-Promoters forconsideration otherwise than for cash:

During the year the company has issued 25,00,000 Equity Shares of face value Rs.10/-each at a premium of Rs. 130 per share aggregating to Rs. 35,00,00,000 to Prosel VenturesPrivate Limited for acquisition of Elearning online contents in animated format/pre-recorded teaching content relating to Legal, accounts, finance and more particularlycovering ACA/ ACS/ IFRS and other educational courses.

2. Issue of 700935 Equity Warrants to Non- Promoters:

During the year the company has issued 700935 Equity Warrants at a price of Rs. 214 perwarrant of Rs. 10 each a premium of Rs. 204 per warrant aggregating to Rs. 15,00,00,090 onpreferential basis to Non-Promoters i.e. D.B.Corp, a Body Corporate towards advertisementarrangement.

3. Issue of 93458 Equity Shares to Non- Promoters:

During the year the company has issued 93458 Equity Shares at a price of Rs. 214 perwarrant of Rs.10 each a premium of Rs. 204 per share aggregating to Rs. 2,00,00,012 onpreferential basis to Non-Promoters i.e., Jagran Prakashan Limited, a Body Corporatetowards advertisement arrangement.

Subsidiary Company

Your directors are pleased to inform you that we have incorporated a wholly ownedsubsidiary on 30th December 2009 in the name of "Vidhyadhana Education PrivateLimited", the Academy of Excellence for Industry Demand Aligned Education, to enhancethe quality of learning among students so as to find and map their interest and naturalbackground to an appropriate career stream at their young age. Vidhyadhana encompassesfun-filled learning for primary education, improving the academic performance of studentsfrom primary to higher secondary, imparting the students with career orientation apartfrom improving the teachers' training skills and the overall quality of schools withbetter infrastructure and management. Leading Educationalist shall govern the Academy tomonitor and improve the said objectives of the academy.

A school partnering with Vidhyadhana shall be directly managed by the Academy with theteachers and management on the rolls of the Academy. The school owner continues to own theschool and gets an opportunity to also work for the school. A statement in respect ofdetails of subsidiary company viz Vidhyadhana Eduction Private Limited pursuant to Section212 of the Companies Act, 1956 is attached herewith to this report.

The directors of the company are Mr. S. Giridharan, Mrs. G. Gita and Mr. T. S.Ravichandran.

Performance Review

Your directors are happy to present the performance of the company for the year2011-12. During the year of operations, your company opened up several initiativesincluding the brick-and-mortar training centers for students and job aspirants. Yourcompany also made headways in new relationships in mobile solutions during the year.


EdServ Training Institute (ETI), the first-of-its-kind Instructor-Led-Training usingFranchisee network centers offering a rich Bouquet of academic support and vocationaltraining courses that will include Tuition, Coaching, Test Prep and Job Oriented Trainingwas launched during the year. EdServ already has a wide range of e-contents as part of itsflagship that shall power the brick-and-mortar learning services.

As part of the launch offering, each student enrolling into the ETI shall get a TABLETPC free with specific pre loaded course content. EdServ has tied up with A-Team EdutechLtd, a TN based Tablet PC Company for the supply of Tablet PCs to the EdServ TrainingInstitute.

The training courses will comprise of Coaching for CA, IITJEE, AIEEE, AIPMT exams,academic support tuition from KG right up to PG that include CBSE, Stateboard subjects aswell as Engineering semester exam support, Job skills and Life skills training thatinclude Spoken English, Softskills, IT Skills all under one roof in a Brick-and-Mortartraining center with TABLET PC based extended learning support to every student.

While the morning and evening sessions will be targeted towards school and collegestudents, the afternoon training sessions will be targeted at Housewives and Job Seekers.The day sessions will also be targeted at Children aged below 5years for whom ETI couldserve as a pre-school joint where they could learn through fun filling Multimedia basededucation model including Pre-School concepts.

The physical presence of EdServ through the Training Institutes across the country isexpected to drive faster growth of its flagship online ( model.eLearning education students will now be able to have access both to Training Institute aswell as the online training classes. All the ETIs will have lampsglow assisted Labfacility for the Students. In addition, the students will be able register for theeLearning Courses at any of the ETIs.

During the year of consideration, your company also announced that the company’sMobile Education apps, HumThum, became available on Aircel, the country’s leadingmobile operator with a strong presence in Tamil Nadu and Eastern India. As part of this,all mobile users of Aircel will be able to access the entire range of education content ofEdServ through the HumThum apps on their mobile smart phones. This follows the agreementEdServ signed with Tata Docomo recently for their ‘Tutor on Mobile’ service.

With its education apps on Aircel, EdServ expects over 2million students to access itseducation content that includes Tuition, Test prep, Academics and Skill Developmentthrough the HumThum apps.

As part of its expansion into the Rs. 2000 cr CA training market in India, during theyear, the company has also struck a partnership with, the country’sbiggest Online Platform for Finance Professionals with more than 6 lakh members. Around70,000 professionals and students visit the site every day.

As per the partnership, delivers EdServ’s CA coaching content tothe 6lakh Student base. EdServ will provide training in web-based mode at affordableprices as compared to contact classes and ILT (Instructor Led Training) based classroomcoaching. EdServ will also provide online access to expert classroom Videos andAssessments to CA aspirants. All subjects / papers will be covered through web basedlectures as recorded in live classrooms including doubts classifications and videoreplays.

EdServ had earlier this year forayed into the online CA coaching services through a JVwith Chennai based Sreeram Coaching Point (SCP), the first by a National branded playerinto the online CA training space. EdServ is also focusing on launching its CA coachingservices in overseas markets like the Middle East. The company expects to generaterevenues of Rs. 200cr from its overall CA Coaching services business that includes thecurrent partnership with CAClub India.

During the year, the company raised funds through Global Depository Receipts (GDRs) tothe tune of USD 23 million for its overseas expansion and global learning servicespurposes. The company has acquired the businesses and contents of a UAE based firm as anon-going entity out of GDR proceeds. This is part of its strategy to expand its businessproviding on-line learning and career solutions through mobile and tablet platforms. Withthis purchase and acquisition, the company is confident of penetrating deeper markets inAsia and Middle East, which would help the company to develop more greatly.

Future Outlook

The year ahead will see your company emerging to be an important player in Schoolsupport solutions using the SchoolMATE ERP providing the crucial teacher and studentempowerment through IT enabling. Your company has also plans to engage more intoGovernment projects through PPP model to be part of the knowledge development of thesociety for our country in a bigger way.


Mr. Ilango Balakrishna, Director of the company, retire at the ensuing Annual GeneralMeeting of the company pursuant to the provisions of Section 255 of the Companies Act,1956 and he being eligible, seek reappointment. The Brief Profile of the aforesaidDirector is given hereunder.

Dr.Ilango Balakrishna, aged (75 years), is an Independent Non-Executive Director ofEdServ Softsystems Limited and is a Former Vice Chancellor, Bharathiar University,Coimbatore. He has completed his Bachelors Degree in Engineering, M.Sc., (Engineering) inUniversity of Madras and Ph.D in Electrical Engineering in IIT Kanpur. He has receivedvarious awards from various organizations in India and Abroad and is a member of variousPristegious Committes including ISTE, Accreditation committee of NBA, AICTE etc.,.

During the year under review Ms.G.Gita, Managing Director had tendered her resignationfrom directorship w.e.f 10.10.2012 and the board placed its appreciation on record for theservices rendered by her during her tenure as Managing Director

Mr.S.Giridharn’s designation was changed from Chairman & CEO to Chairman &Managing Director w.e.f. 10.10.2012, consequent to the resignation of Ms.G.Gita asmentioned above, subject to the approval of the Shareholders in the ensuing AGM.

Mr.K.T.Srinivasan has also been appointed as the Whole Time Director of the Companyw.e.f. 15.11.2012 and his complete profile has been given elsewhere in this Annual Report,subject to the approval of the Shareholders in the ensuing AGM.


The Statutory Auditors, M/s. Raj and Ravi, Chartered Accountants, retire at theconclusion of the ensuing Annual General Meeting and are eligible for re-appointment forthe current financial year. The auditors have expressed their willingness to continue inoffice if re-appointed. Your Board recommends their re-appointment.


The reply to the remarks made by the auditors in their report are detailed in the Noteson Accounts. Since the information provided therein are self explanatory they do not callfor any further comments by the Board of Directors.

Particulars as required under Section 217(1)(e) of the Companies Act, 1956 A)Conservation of Energy

Though the company has not carried on any manufacturing activities, it had taken stepsto conserve energy in its office/godown use, consequent to which energy consumption hasbeen minimized. No additional Proposals/Investments was made to conserve energy. Since thecompany has not carried on any industrial activities, disclosures regarding impact ofmeasures on cost of production of goods, total energy consumption, etc. Are notapplicable.

B) Technology Absorption

The company has not adopted/intend to adopt any technology for its business and henceno reporting is required to be furnished under the heading.

C) Foreign Exchange Earned & Used

Since the company has not carried on any export during the financial year under review,the disclosure requirement relating to exports , initiatives taken to increase exports:development of new export markets for products and services and export plans is notapplicable to the company.

Foreign Exchange earned during the year : Rs. Nil(PY Rs. 31,16,02,000)

Foreign Exchange used during the year : Rs. Nil (PY Rs.18,11,833)

Particulars of Employees Pursuant to Section 217(2A) of the Companies Act, 1956

As required under the provisions section 217(2A) of the Companies Act, 1956, read withthe Companies (Particulars of Employees) Rules, 1975, as amended, the names and otherparticulars of employee are set out in the Annexure to this report.

Directors' Responsibility Statement

The Directors confirm that

a) In the preparation of the annual accounts, the applicable accounting standards havebeen followed

b) Appropriate accounting policies have been selected and applied consistently andjudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as on 31st March, 2012 and of the profit ofthe company for the year ended 31st March, 2012

c) Proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

d) The annual accounts have been prepared on a going concern basis.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, CorporateGovernance Report and Auditor' certificate regarding compliance of the same are made partof this Annual Report.


The Directors acknowledge with gratitude and wish to place on record their appreciationfor the valuable support and kind co-operation extended to the company by the Company'sBankers, Financial Institutions, Government Authorities, Shareholders,

For and on behalf of the Board of Directors
Place: Chennai S.Giridharan
Date: 26.11.2012 Chairman & Managing Director

Annexure To Directors' Report

Statement of particulars of employees pursuant to section 217 (2A) of the companiesact, 1956.

Name S. Giridharan
Designation Chairman & Managing Director
Remuneration received (Rs.) 60,09,360
Nature of employment, whether contractual or otherwise Resolution passed by the Board and the Members
Other terms and conditions As per the terms of resolution
Nature of duties To manage the day to day affairs
Qualifications and experience M.S. (System and Information)
Date of commencement of Employment 01.04.07
Age 49
Previous employment Onspec Technology Solutions Pvt. Ltd
The percentage of equity held 2.98% as on (31.03.2012)