TANLA SOLUTIONS LIMITED
ANNUAL REPORT 2011-2012
Our Directors have pleasure in presenting the 16th Directors' Report on the
business and operations of our Company for the financial year ended on
March 31, 2012.
1. Results of Operations in Rs.
Financial performance of the Company (Standalone):
Particulars March 31, 2012 March 31, 2011
Income from operations 368328675 287050801
Operating Profit (EBIDTA) (6572494) 54547723
Less: Depreciation &
amortisation 139347846 312172843
Operating Profit before Tax (145920339) (257625120)
Add: Other Income 4918636 5340458
Profit Before Tax (141001703) (252284661)
Less: Provision for Tax (35127709) (73793030)
Profit after Tax (105873994) (178491631)
Dividend (incl. dividend tax) - 11833408
Transfer to General Reserve - -
Net Profit Transferred to
Reserves (105873994) (190325039)
Earnings per share:
Basic/Diluted (Rs.1 each) (1.04) (1.76)
Dividend Rate Nil 10%
Share Capital 101479593 101479593
Reserves & Surplus 6164224834 6270098828
Total shareholders funds 6265704427 6371578421
Book value per share
(Rs.1 each) 61.74 62.79
2. Further Issue Of Equity Shares On Preferential Basis
The company has not issued Equity Shares on Preferential basis during the
financial year 2011-12.
3. Public Deposits
The Company has not accepted any deposits within the meaning of Section 58A
of the Companies Act, 1956 and the rules made there under during the
financial year under review.
In accordance with the provisions of the Companies Act, 1956 and Articles
of Association of the Company, three Directors retire by rotation at the
forthcoming Annual General Meeting and being eligible, offer themselves for
re-appointment. A brief resume of the Directors seeking re-appointment is
annexed to the Notice. Details of Directors who resigned after the previous
AGM till the date of this Report:
1. Mr. Surjeet Kumar Palhan, Independent Director resigned from the Board
on September 30, 2011 after serving the Board since July 18, 2007.
2. Mr. Amit Gupta, Director Finance, resigned from the Board on November
01, 2011 after serving the Board since November 11 ,2005.
3. Mr. Anoop Roy Kundal, Director - Operations, resigned from the Board on
December 30, 2011 after serving the Board since October 27, 2004.
4. Mr. Navnit Chachan, Director & Chief Operating Officer, resigned from
the Board on June 30, 2012 after serving the Board since November 11, 2005.
5. Mr. Shrikanth Madan Chitnis, Independent Director resigned from the
Board on August 14, 2012 after serving the Board since December 28, 2005.
The Board placed on record appreciation for the services rendered by the
Directors during their tenure on the Board.
5. Management Discussion and Analysis
A separate Management Discussion and Analysis Report is also attached and
forms part of this report.
The subsidiaries of the Company are:
1. Mufithumb Entertainment Private Limited
2. Tanla Mobile Private Limited
3. Tanla Mobile Asia Pacific Pte Ltd., Singapore
4. Tanla Solutions (UK) Limited, U.K.
The step down subsidiaries of the Company are:
1. Tanla Mobile Ltd., UK a subsidiary of Tanla Solutions (UK) Ltd., UK.
2. Tanla Mobile Spain SL, Spain a subsidiary of Tanla Mobile Ltd., UK.
3. Tanla Mobile Middle East FZ LLC, Dubai
4. Tanla Mobile Inc., USA
5. Tanla Mobile South Africa Proprietary Ltd., South Africa
6. Tanla Mobile South Asia Pvt Ltd., Sri Lanka and
7. Tanla Mobile Ireland Pvt Ltd., Ireland are subsidiaries of Tanla Mobile
Asia Pacific Pte Ltd., Singapore
8. Tanla Mobile Finland Oy, a subsidiary of Tanla Mobile Middle East FZ
9. Tanla Oy, Finland, is a subsidiary of Tanla Mobile Finland Oy
TZ Mobile Private Limited, incorporated in July 2009 under the provisions
of the Companies Act, 1956 is a Joint Venture between Tanla Solutions Ltd
and Zed Worldwide Holdings SL, Spain each holding 50% of shareholding.
7. Consolidated Financial Statements
Pursuant to the exemption granted vide General Circular No. 2/2011 dated
February 08, 2011, by the Ministry of Corporate Affairs, Government of
India, a gist of the financial performance of the subsidiary companies is
contained in the Annual Report. The Annual Accounts of the subsidiary
companies are open for inspection by any member/investor and the Company
will make available these documents/details upon request by any member of
the company to any investor of its subsidiary companies who may be
interested in obtaining the same.
In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and
as prescribed by Accounting Standard 21 notified by the Government of India
under Section 211(3C) of the Companies Act, 1956, the Audited Consolidated
Financial Statements duly signed by the Statutory Auditors are annexed
elsewhere in this Annual Report.
8. Directors Responsibility Statement
In terms of Section 217(2AA) of the Companies Act, 1956, the Board of
Directors hereby confirm that:
(i) In the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
(ii) Appropriate accounting policies have been applied consistently,
judgements and estimates which are reasonable and prudent have been made 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 loss of the company for that
(iii) Proper and sufficient care has been taken 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) The annual accounts have been prepared on a going concern basis.
9. Corporate Governance
Pursuant to the provisions of Clause 49 of the Listing Agreement with Stock
Exchanges, a report on Corporate Governance together with a certificate
from M/s Ravi & Subramanyam, Practicing Company Secretaries, Hyderabad,
features as part of the Annual Report. The company will continue to
implement and adhere in letter and spirit to the policies of good corporate
10. Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975, as amended,
no employee /whole-time Director has been paid a remuneration equal to or
exceeding the remuneration prescribed under the above amended rules.
11. Conservation Of Energy, Research And Development, Technology
Absorption, Foreign Exchange Earnings And Outgo Conversation of Energy
The operations of the Company are not energy intensive. However, adequate
measures have been taken to conserve and reduce the energy consumption by
using energy efficient hardware, usage of natural light and other
equipment. Air Conditioners are used only when required and air-conditioned
areas have been treated with heat resistant material. We continue to
evaluate new technologies and invest to conserve and reduce energy
consumption. We believe energy saved is energy produced. Research &
Development, Technology Absorption
The company has rendered certain cost effective products and solutions to
its clients as a result of its constant endeavour to research and develop
new products, processes and methodologies for improving the productivity
and quality of its products and services. Foreign Exchange earnings and
The particulars regarding foreign exchange earnings and expenditure are
annexed hereto and forms part of this report.
12. Employee Stock Option
Options were granted to employees in October 2009, but no options were
vested with the employees pursuant to the grant.
Disclosures in compliance with Securities and Exchange Board of India
(Employees Stock Option Scheme and Employee Stock Purchase Scheme
Guidelines, 1999) as amended, are as under:
Nature of Disclosure Particulars
Options granted 41,75,000 options were granted on
October 16, 2009, each option gives
the grantee a right to subscribe to
equity share of face value of Re.1/-
At a discount of 20% on the latest
available closing market price prior to
The pricing formula the date of grant of options of the
company on the exchange having the
highest trading volume.
Options Vested No Options were vested during the year
Options Exercised No Options were exercised during the
Total number of shares arising No Options were exercised during the
as a result of exercise of year
Options lapsed No Options were vested during the year
Variation of terms of Options No variation has been done
Money realized by exercise of As no Options were exercised during
Options the year, no money was realized.
Total number of options in 41,75,000
force Details of Options
granted to senior managerial
Any other employee who receives No Options were granted during the
a grant in any one year of option year 2011-12
amounting to 5% or more of option
granted during the year
Identified employees who were No Options were granted during the
granted option, during any one year 2011-12
year, equal to or exceeding 1%
of the issued capital (excluding
outstanding warrants and
conversions) of the company at
the time of grant
Diluted Earnings per share (EPS) No shares were issued as no options
pursuant to issue of shares on were exercised.
exercise of option calculated
in accordance with Accounting
Standard(AS) 20 - Earnings Per
(i) Method of calculation of
employee compensation cost.
(ii) Difference between the
compensation cost using the
intrinsic value of the stock
options (which is the method
of accounting used by the
company) and the Compensation
cost that would have been
recognized in the accounts
if the fair value of options As no shares were allotted during
had been used as method of the year 2011-12, this section is
(iii) Impact of difference
mentioned above in (i) above
on the profits of the company.
(iv) Impact of the difference
mentioned in (i) above on the
EPS of the company
(i) Weighted Average exercise As no shares were allotted during
price of options the year 2011-12, this section is
(ii) Weighted Average fair
value of options
(i) Method used to estimate the
fair value of options
(ii) Significant assumptions
used (Weighted Average
information relating to
(a) Risk free interest rate As no shares were allotted during
the year 2011-12, this section
(b) Expected life of options is in-applicable
(c) Expected volatility
(d) Expected dividend yields
(e) Price of the underlying
share in market at the time/
of option granted
13. Transfer of Unclaimed Shares to Suspense Account
870 Equity Shares held by 15 shareholders, in the 'Tanla Solutions Limited
- Demat Suspense Account' in Axis Bank Ltd., Jubilee Hills Branch,
Hyderabad, as on March 31, 2012 in accordance with the provisions of Clause
5A of the Listing Agreement. The voting rights on these shares shall remain
frozen fill the rightful owner of these shares claims the shares.
14. Transfer of Unpaid/Unclaimed Dividend to the Investor Education and
Pursuant to Section 205A(5) of the Companies Act, 1956, and other
applicable guidelines,Rs. 1,28,579.00 (Rupees One lakh twenty eight
thousand five hundred and seventy nine only) representing the 'Un-paid and
Un-Claimed dividend for the year 2004-05' has been transferred to the
Investor Education and Protection Fund.
15. Industrial Relations
The company enjoyed cordial relations with the employees during the year
under review and the Management appreciates the employees of all cadres for
their dedicated services to the company, and expects continued support,
higher level of productivity for achieving the targets set for the future.
16. Auditors and Auditor's Report
M/s Ramasamy Koteswara Rao & Co., Chartered Accountants, Hyderabad, the
Statutory Auditors, retire at the ensuing annual general meeting and are
eligible for re-appointment. The company received confirmation that their
appointment, if made, would be within the prescribed limits under the
provisions of Section 224(1B) of the Companies Act, 1956.
The Auditors Report to the shareholders for the year ended March 31, 2012
does not contain any qualification and therefore does not call for any
List of Promoters including the Promoter Group of the company comprising
'Group' as defined under the Monopolies and Restrictive Trade Practices
Act, 1969 (54 of 1969) pursuant to Regulation 3(1)(e)(i) of the
SEBI(Substantial Acquisition of Shares & Takeovers) Regulations, 1997 are:
1. Mr. D. Uday Kumar Reddy
2. Mrs. D. Tanuja Reddy
3. Mr. Satish Kathirisetti
4. Mr. Gautam Sabharwal
The Directors wish to express their appreciation of the support and co-
operation of the Central and the State Governments, bankers, business
partners, employees, associates and expects the same in future as well for
sustaining the growth rates achieved in the past.
On behalf of Board of Directors
Date : 14 August, 2012 D. Uday Kumar Reddy
Place: Hyderabad Chairman & Managing Director
Foreign Exchange earnings & outgo:
a. Imports (valued on the cost, insurance and freight basis)
Particulars For the Year 2011-2012 For the Year 2010-2011
Import of capital goods 1725335 63878362
b. Activity in foreign
currency In Rs.
Particulars For the Year 2011-2012 For the Year 2010-2011
Earnings in foreign
(on accrual basis)
Income from software 141501021 190709339
products and offshore
Less: Expenditure in
(on accrual basis)
Cost of services 118302811 22503713
Foreign Travel Expenses 2233634 1558238
Professional Charges 320202 1493105
Net earnings in foreign exchange 18919039 101275921