SEVEN HILLS BUSINESS SOLUTIONS LIMITED Report FY07.pdf · NOTICE is hereby given that the SEVENTH Annual General Meeting of M/s YBRANT TECHNOLOGIES LIMITED will be held on Friday,

YBRANT TECHNOLOGIES LIMITED 7th ANNUAL REPORT 2006-2007

YBRANT TECHNOLOGIES LIMITED

7th ANNUAL REPORT

2006-2007


BOARD OF DIRECTORS Sri. M. Suresh Kumar Reddy : Chairman & Managing Director Sri. K. Ramakrishna Vijay Kumar : Chief Executive Officer Sri M.Vijaya Bhasker Reddy : Director Mr A.Raghunath : Director Mr S.Pulla Reddy : Director Mr. Y. Ramesh Reddy : Director

COMPANY SECRETARY Sri. Chandra Sekhara Prasad. C BANKERSING Vysya Bank Limited, Road No.2, Banjara Hills, Hyderabad – 500 034

REGISTERED OFFICE Plot No.7A, Road No.12, MLA Colony, Banjara Hills, Hyderabad – 500 034

AUDITORS M/s.P.MURALI & CO., Chartered Accountants 6-3-655/2/3, Somajiguda, Hyderabad - 500 082. REGISTRARS & SHARE TRANSFER AGENT M/s. AARTHI CONSULTANTS PRIVATE LIMITED 1-2-285, Domalguda, Hyderabad – 500 029.


NOTICE

NOTICE is hereby given that the SEVENTH Annual General Meeting of M/s YBRANT TECHNOLOGIES LIMITED will be held on Friday, the 28th day of September, 2007, at 11 A.M. at the Registered Office of the Company at Plot No.7A, Road No.12, MLA Colony, Banjara Hills, Hyderabad – 500 034 to consider the following Business: ORDINARY BUSINESS 1. To receive, consider and adopt the Balance Sheet as at 31st March 2007, Profit & Loss Account

on that date and the Reports of the Directors and Auditors thereon. 2. To appoint a Director in place of Sri. K. Ramakrishna Vijay Kumar who retires by rotation and

being eligible offers himself for reappointment. 3. To appoint Auditor and fix their remuneration. SPECIAL BUSINESS: 4. To consider, and if thought fit, to pass with or without modification(s), the following

resolution as an ordinary resolution:

“RESOLVED THAT Sri Vijaya Bhasker Reddy Maddi, who was appointed as an Additional Director of the Company by the Board of Directors, who holds office under section 260 of the Companies Act, 1956, upto the date of ensuing Annual General Meeting and in respect of whom the Company has received notice in writing proposing his candidature for the office of a Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”

5. To consider, and if thought fit, to pass with or without modification(s), the following


“RESOLVED THAT Sri Raghunath Allamsetty, who was appointed as an Additional Director of the Company by the Board of Directors, who holds office under section 260 of the Companies Act, 1956, upto the date of ensuing Annual General Meeting and in respect of whom the Company has received notice in writing proposing his candidature for the office of a Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”




“RESOLVED THAT Sri Sagrireddy Pulla Reddy, who was appointed as an Additional Director of the Company by the Board of Directors, who holds office under section 260 of the Companies Act, 1956, upto the date of ensuing Annual General Meeting and in respect of whom the Company has received notice in writing proposing his candidature for the office of a Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”



“RESOLVED THAT Sri Yerradoddi Ramesh Reddy, who was appointed as an Additional Director of the Company by the Board of Directors, who holds office under section 260 of the Companies Act, 1956, upto the date of ensuing Annual General Meeting and in respect of whom the Company has received notice in writing proposing his candidature for the office of a Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”


resolution as Special resolution:

“RESOLVED THAT pursuant to the Section 163 of the Companies Act, 1956 and other applicable provisions, if any, of the Companies Act, 1956, approval of the members of the company be and is hereby accorded to the keeping the Register of Members, the Index of Members, the Register and index of Debenture holders, and copies of all Annual Returns prepared under Section 159 and 160 of the said Act together with the copies of certificates and documents required to be annexed thereto under section 160 and 161, shall be kept with Company’ Registrars and Share Transfer Agent namely M/s. Aarthi Consultants Limited 1-2-285, Domalguda, Hyderabad - 500 029.”

BY ORDER OF THE BOARD OF DIRECTORS

for YBRANT TECHNOLOGIES LIMITED

SD/- CHAIRMAN & MANAGING DIRECTOR

PLACE: HYDERABAD DATE: 22-08-2007


NOTES a) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY

TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.

b) PROXIES TO BE EFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LATER

THAN 48 HOURS BEFORE COMMENCEMENT OF THE MEETING. c) THE RELAVANT EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL

BUSINESS SET OUT ABOVE, AS REQUIRED BY Sec.173 (2) OF THE COMPANIES ACT, 1956 IS ANNEXED HERETO.

Explanatory Statement

[Pursuant to Section 173(2) of the Companies Act, 1956] Item Nos: 4: Sri Vijaya Bhasker Reddy Maddi was appointed by the Board of Directors as an Additional Directors under Section 260 of the Companies Act, 1956. Sri Vijaya Bhasker Reddy Maddi holds office only unto the commencement of the ensuing Annual General Meeting of the members of the Company. The Company has received a notice in writing under Section 257 of the Companies Act, 1956, along with a requisite deposit from a member signifying his intention to propose the name of Sri Vijaya Bhasker Reddy Maddi as a candidature for the office of Director. The brief profile of Sri Vijaya Bhasker Reddy Maddi has been given elsewhere in this annual report for the information of members. The Board recommends the Resolution for the members’ approval in the Annual General Meeting. None of the Directors is in any way concerned or interested in this resolution except Sri Vijaya Bhasker Reddy Maddi.

Item Nos: 5: Sri Raghunath Allamsetty was appointed by the Board of Directors as an Additional Directors under Section 260 of the Companies Act, 1956. Sri Raghunath Allamsetty holds office only unto the commencement of the ensuing Annual General Meeting of the members of the Company. The Company has received a notice in writing under Section 257 of the Companies Act, 1956, along with a requisite deposit from a member signifying his intention to propose the name of Sri Raghunath Allamsetty as a candidature for the office of Director.


The brief profile of Sri Raghunath Allamsetty has been given elsewhere in this annual report for the information of members. The Board recommends the Resolution for the members’ approval in the Annual General Meeting. None of the Directors is in any way concerned or interested in this resolution except Sri Raghunath Allamsetty.

Item Nos: 6: Sri Sagrireddy Pulla Reddy was appointed by the Board of Directors as an Additional Directors under Section 260 of the Companies Act, 1956. Sri Sagrireddy Pulla Reddy holds office only unto the commencement of the ensuing Annual General Meeting of the members of the Company. The Company has received a notice in writing under Section 257 of the Companies Act, 1956, along with a requisite deposit from a member signifying his intention to propose the name of Sri Sagrireddy Pulla Reddy as a candidature for the office of Director. The brief profile of Sri Sagrireddy Pulla Reddy has been given elsewhere in this annual report for the information of members. The Board recommends the Resolution for the members’ approval in the Annual General Meeting. None of the Directors is in any way concerned or interested in this resolution except Sri Sagrireddy Pulla Reddy. Item Nos: 7: Sri Yerradoddi Ramesh Reddy was appointed by the Board of Directors as an Additional Directors under Section 260 of the Companies Act, 1956. Sri Yerradoddi Ramesh Reddy holds office only unto the commencement of the ensuing Annual General Meeting of the members of the Company. The Company has received a notice in writing under Section 257 of the Companies Act, 1956, along with a requisite deposit from a member signifying his intention to propose the name of Sri Yerradoddi Ramesh Reddy as a candidature for the office of Director. The brief profile of Sri Yerradoddi Ramesh Reddy has been given elsewhere in this annual report for the information of members. The Board recommends the Resolution for the members’ approval in the Annual General Meeting. None of the Directors is in any way concerned or interested in this resolution except Sri Yerradoddi Ramesh Reddy.


Item Nos: 8: The Board felt that it would be more economical and transparent to entrust the work of maintaining the Register of members and Index of members and Memorandum of Share Transfers and related documents to an Independent agency than to employ fresh personnel for handling this job. It was also kept in view that the company would like to enter into capital market through Public Issue and Dematerialization as well as tripartite agreement among and between NSDL/CDSL, Registrar and Company is necessary in terms of SEBI Rules and Regulation for an unlisted company intending to Public Issue. Accordingly, M/s. Aarthi Consultants Pvt. Ltd have been appointed as the Share Transfer Agent & Registrar for Registration and Certification of transfer of Shares, maintenance of Register of Members, Index of Members and other Registers and preparation of the necessary list required for the Annual Returns and similar other works. To enable the Transfer Agents and Registrar to carry on their work efficiently and expeditiously, the Register and Index of Members and other related books and documents required be placed at their office instead of the registered office of the company. Section 163 of the Companies Act, 1956, requires that, Register, books and documents, should be required to be kept at the registered office of the company unless a different place for keeping the same has been approved by a Special Resolution. The approval of the members is therefore sought by a Special Resolution to keep the Registers, indexes of members and other record as well as Annual Returns of the Company at the office of M/s. Aarthi Consultants Pvt. Ltd at 1-2-285, Domalguda, Hyderabad - 500 029. as required under the provisions of Section 163 of the Companies Act, 1956. The Board recommends the Resolution for the members’ approval in the Annual General Meeting. None of the Directors is in any way concerned or interested in this resolution.

BY ORDER OF THE BOARD OF DIRECTORS

for YBRANT TECHNOLOGIES LIMITED

SD/- CHAIRMAN & MANAGING DIRECTOR

PLACE: HYDERABAD DATE: 22-08-2007


DIRECTORS' REPORT

The Members of M/s. Ybrant Technologies Limited Hyderabad The Directors have pleasure in presenting the SEVENTH Annual Report of the company together with the Audited Accounts for the year ended 31st March 2007. FINANCIAL RESULTS (Rs. Lakhs)

Particulars Year ended 31.03.2007 Year ended 31.03.2006 Turnover 3739.59 368.65 Profit before Tax (+) / Loss (-) 887.81 75.45 Provision for Tax 0.68 0.59 Profit After Tax (+) / Loss (-) 887.14 74.86 Provision for Deferred Tax 416.76 14.64 Balance Brought Forward 61.15 0.93 Balance Carried Forward 531.53 61.15

OPERATIONS During the year the company made a turnover of Rs 373,653,823/- (Export Sales) and Rs.305,200/- (Domestic Income). And made a Profit before Tax of Rs. 88,780,888/-. During the year M/s.Ybrant Technologies Inc, amalgamated with M/s.Ybrant Technologies Limited. During the year under review, your Company achieved robust growth in terms of total income and net profit. Consolidated financial statements along with relevant particulars given elsewhere in this Annual Report. SUBSIDIARY COMPANIES The Company has 3 subsidiary outfits as on 31st March 2007. Your Company over a just one year has made four acquisitions outside India resulting in these acquired companies becoming our subsidiaries. The acquisitions were intended to facilitate our expansion in the US Market. The following are the names of the Subsidiaries;

1. International Expressions Inc., USA 2. Frontier Data Management Inc., USA 3. Pennyweb Inc., USA


The Statement pursuant to Section 212 of the Companies Act, 1956 has been annexed to this Annual Report. DIRECTORS Sri. K. Ramakrishna Vijay Kumar retires by rotation and being eligible offer himself for re-appointment. Sri Vijaya Bhasker Reddy Maddi, Sri Raghunath Allamsetty, Sri Sagrireddy Pulla Reddy and Sri Yerradoddi Ramesh Reddy were appointed as Additional Directors under Section 260 of the Companies Act, 1956, whose period of office is up to commencement of ensuing Annual General Meeting only. The Company has received notices u/s 257 of the Companies Act, 1956 from the shareholders with a proposal to appoint Sri Vijaya Bhasker Reddy Maddi, Sri Raghunath Allamsetty, Sri Sagrireddy Pulla Reddy and Sri Yerradoddi Ramesh Reddy as Directors liable to retire by rotation. Hence, the Board has recommended it for the members’ approval in the ensuing Annual General Meeting. During the year Sri M.Suresh Kumar Reddy appointed as Chairman and Managing Director and Sri.K.Ramakrishna Vijay Kumar appointed as Chief Executive Officer. Sri. Chandra Sekhara Prasad C. appointed as Company Secretary. During the year, Sri Rudraraju Rama Raju and Sri Sudhakiran Reddy Sunkerneni were resigned as Directors. The Board placed appreciation for their valuable services rendered during their tenure on the Board. DIRECTORS RESPONSIBILITY STATEMENT i) that in the preparation of the Annual Accounts, the applicable accounting standards had

been followed along with proper explanation relating to material departures; ii) that 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 sate of affairs of the Company at the end of the financial year and/ of the profit or loss of the company for that period;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate

accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the annual accounts on a going concern basis.


CORPORATE GOVERNANCE Your Company has been voluntarily adopted the good secretarial practices and Corporate Governance to the extent possible. A detailed report annexed to this Annual Report as Annexure A. AUDITORS M/s P. MURALI & Co., Chartered Accountants, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re -appointment. The company has received letters from the Auditors to the effect that their appointment, if made, would be with in the prescribed limits under section 224 (1B) of the Companies Act, 1956 and that they are not disqualified for such re appointment with in the meaning of section 226 of the Companies Act, 1956. The notes on accounts referred to in the auditors’ Report are self – explanatory and therefore do not call for any further comments PERSONNEL The relations between the management and the staff were very cordial throughout this year. Your Directors take this opportunity to record their appreciation for the Co-Operation and loyal services rendered by the employees. ADDITIONAL INFORMATION AS REQUIRED U/S 217(1))(e) OF THE COMPANIES ACT, 1956 (a) Conservation of energy The Company is monitoring the consumption of energy

and is identifying measures for conserving it. (b) (i) Technology absorption,

adaptation and innovation No technology – indigenous or foreign – is involved.

(ii) Research and development (R&D)

No research and development was carried out.

(c) Foreign exchange inflow Rs.193.70 lacs towards Export Sales. Foreign exchange outgo Rs.750.96 lacs towards advance payment for acquisition

of Companies PARTICULARS OF EMPLOYEES In pursuance of the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, the Directors are to report that two employees were in receipt of remuneration of Rs.24,00,000/- or more per annum or Rs.2,00,000/- or more per month where employed for a part of the year.


DEPOSITS The company has not accepted any deposits during the year pursuant to the provisions of Section 58A of the Companies Act, 1956. ACKNOWLEDGEMENTS Your Directors also wish to express their sincere thanks to the Stakeholders viz Shareholders, Financial Institutions, Bankers and customers, the various departments of the Government of India and the Government of Andhra Pradesh for their unstinted support during the year under review and look forward to their continued support.

for and on behalf of the Board for YBRANT TECHNOLOGIES LIMITED

Sd/- Sd/- Chairman & Managing Director Director

PLACE: HYDERABAD. DATE: 22-08-2007


Annexure –A

REPORT ON CORPORATE GOVERNANCE

COMPOSITION AND PROVISIONS AS TO THE BOARD AND COMMITTEES The Board of Directors of your Company has an optimum combination of Executive and Non-Executive Directors in terms of Corporate Governance. Accordingly not less than fifty percent of the Board of Directors comprises of Independent directors. a) The Company has Six Directors with One Chairman & Managing Director, One Executive

Director and four Independent Non Executive Directors. The Board is optimum combination of independent & Non- independent of which not less than 50% total strength includes Independent Directors.

b) None of the Directors on the Board is a Member of more than 10 committees or Chairman of more than 5 companies across all the Companies in which he is a Director. The Directors have made necessary disclosures regarding Committee positions in other public companies as on March 31, 2007.

c) The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorships and Committee Chairmanships / Memberships held by them in other companies is given below. Other Directorships do not include alternate directorships, directorships of private limited companies, section 25 companies and of companies incorporated outside India. Chairmanship / Membership of Board Committees include only Audit and Shareholders / Investors Grievance Committees.

Seven (7) Board Meetings were held during the year from April 01, 2006 to March 31, 2007 on the dates mentioned as follows: 27-05-2006, 28-09-2006, 20-10-2006, 01-11-2006, 01-12-2006, 20-01-2007 and 12-02-2007. The Last Annual General Meeting was held on 29th September 2006.


The attendance of each Director is as under:

Name of the Director Category No. of Other

Directorships No. of

Committees in which member

No. of Board

Meetings attended

Whether attended last AGM

Mr. M.Suresh Kumar Reddy

Chairman & Managing Director

4 Nil 7 Yes

Mr. Vijay Kancharla Executive Director

2 Nil Nil No

Mr. Raghunath Allamsetty

Non- Executive Director

2 3 4 No

Mr. Vijaya Bhasker Reddy

Independent Non-Executive

6 3 4 No

Mr. Sagireddy Pulla Reddy

Independent Non-Executive

4 2 Nil No

Mr. Y.Ramesh Reddy Independent Non-Executive

1 1 Nil No

None of the Non-Executive Directors have any material pecuniary relationship or transactions with the Company

AUDIT COMMITTEE The Audit Committee at the Board level will act as a link between the Management, the Statutory Auditors and the Board of Directors and oversee the financial reporting process and the disclosure of financial information to ensure that the financial statements are correct sufficient and credible. Besides, Audit Committee is authorized to exercise all such powers and roles in accordance with Section 292A of the Companies Act, 1956. The Committee’s recommendation on any matter relating to financial management shall be binding on the Board. If the Board does not agree with the recommendations, it must record the reasons thereof in the minutes of the Board Meeting and communicate the same to the Shareholders. The Committee was reconstituted in the meeting of Board of Directors held on May 1, 2007. The quorum is to be two members or one-third of the members of the committee; whichever is higher, so long as at least two members are independent directors. All the members of our audit committee are Independent - Non Executive Directors. The audit committee shall meet at least four times in a year and not more than four months shall elapse between two meetings. The Chairman of the Audit Committee shall be elected by the members amongst themselves. Mr. Chandrasekhara Prasad C., Company Secretary, acts as the Secretary to the Committee.


Composition of Audit Committee Sl. No Name of the Director Designation Nature of Directorship 1. Mr. Yerradoddi Ramesh Reddy Member Non Executive – Independent 2. Mr. Vijaya Bhasker Reddy Member Non Executive – Independent 3. Mr. A. Raghunath Member Non Executive – Independent The Audit Committee has the following powers: 1. To investigate any activity within its terms of reference; 2. To seek information from any employee; 3. To obtain outside legal or other professional advice; 4. To secure attendance of outsiders with relevant expertise, if it considers necessary. The Role of Audit Committee includes the following: 1) Oversight of the our Company’s financial reporting process and the disclosure of its

financial information to ensure that the financial statement is correct, sufficient and credible;

2) Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees;

3) Approval of payment to statutory auditors for any other services rendered by the statutory Auditors;

4) Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

i) Matters required that need to be included in the Director’s Responsibility Statement

to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956;

ii) Changes, if any, in accounting policies and practices and reasons for the same; iii) Major accounting entries involving estimates based on the exercise of judgment by

management; iv) Significant adjustments made in the financial statements arising out of audit

findings; v) Compliance with listing and other legal requirements relating to financial

statements; vi) Disclosure of any related party transactions; and vii) Qualifications in the draft audit report.

5) Reviewing, with the management, quarterly financial statements before submission to the

same to the Board for its approval. 6) Reviewing, with the management, performance of statutory and internal auditors, and/or

adequacy of the internal control systems. 7) Reviewing the adequacy of internal audit function, if any, including the structure of the

internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.


8) Discussion with internal auditors any significant findings and follow up there on. 9) 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.

10) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

11) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

The Audit committee shall also review the following information: 1) Management Discussion and Analysis of the financial condition and results of operation; 2) Statement of significant related party transactions (as defined by the Audit Committee),

submitted by the management; 3) Management letters/letters of internal control weaknesses; and 4) The appointment, removal and terms of remuneration of the Chief Internal Auditor. SHAREHOLDERS’ / INVESTORS GRIEVANCE – CUM – SHARE TRANSFER COMMITTEE The Board of Directors in its meeting held on May 1, 2007 constituted a Shareholders’ / Investors Grievance – Cum – Share Transfer Committee. The Committee shall redress the complaints of the shareholders in respect of matters pertaining to transfer of shares, non-receipt of annual report, dematerialization of shares, non-receipt of declared dividend etc. The investor grievance committee shall meet at least once in every quarter of the year. The Chairman of the Audit Committee shall be elected by the members amongst themselves. Mr. Chandrasekhara Prasad C., Company Secretary, shall act as the Secretary to the Committee. Composition of Shareholders’ / Investors Grievance – Cum – Share Transfer Committee Sr. No

Name of the Director Designation Nature of Directorship

1. Mr. Sagireddy Pulla Reddy Member Non Executive – Independent 2. Mr. Vijaya Bhasker Reddy Member Non Executive – Independent 3. Mr. Raghunath Alamsetty Member Non Executive – Independent REMUNERATION COMMITTEE The Board of Directors in its meeting held on May 1, 2007 constituted Remuneration Committee. Mr. Chandrasekhara Prasad C., Company Secretary, shall act as the Secretary to the Committee.


Composition of Remuneration Committee: Sr. No

Name of the Director Designation Nature of Directorship

1. Mr. Vijaya Bhasker Reddy Member Non-Executive – Independent Director 2. Mr. Raghunath Alamsetty Member Non-Executive –Independent Director 3. Mr. Sagireddy Pulla Reddy Member Non-Executive –Independent Director The Company Secretary shall act as the Secretary to the committee. The remuneration committee shall have powers to decide, the following: Policy on specific packages for independent directors; Review and recommend our Company’s policy on specific remuneration packages for whole-time/executive directors of our Company including pension rights and any compensation payment; and Any other matter as may be referred by the Board. The Chairman of the Remuneration Committee shall be present at the AGM of our Company. The Chairman of the Committee may answer the shareholders’ queries at the AGM, if any. The Committee shall meet at least once in every quarter of the year. The quorum for the committee shall be the presence of any two members. Details of Annual General Meetings: Location and time of the last Three AGMs

AGM Year Venue Date Time 6th 2006 Plot No.9, H.No.8-2-351/1/9, Road No.3,

Banjara Hills, Hyderabad – 500 034 29-09-2006 11.00 am

5th 2005 Plot No.9, H.No.8-2-351/1/9, Road No.3, Banjara Hills, Hyderabad – 500 034 30-09-2005 11.00 am

4th 2004 Plot No.9, H.No.8-2-351/1/9, Road No.3, Banjara Hills, Hyderabad – 500 034 30-09-2004 4.00 pm

Postal Ballot: No Business item has been transacted through postal ballot last year. Disclosures A. Disclosure on materially significant related party transactions i.e. transactions of the

company of material nature with its promoters, the directors or the management’s, their subsidiaries or relatives etc. that may have potential conflict with the interests of the company at large.

None


B. Details of non-compliance by the company, penalties, Strictures imposed on the company by stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

None

BRIEF PROFILE ABOUT THE DIRECTORS SEEKING RE-APPOINTMENT / APPOINTMENT Mr. RAGHUNATH ALLAMSETTY Mr. Raghunath Allamsetty, Director, aged 40 years. Mr. Allamsetty, is the CEO Aasra Archiventures Private Limited, a company in the business of infrastructure development. Mr. Allamsetty, has over 15 years experience in the areas of project development, technical management and business development. In his earlier days he was the managing director of Adaptec India Private Limited. He has vast experience in the areas of offshore back office support and software development. Mr. Allamsetty’s technological expertise extends into the areas of hardware engineering, software design and development. He was the Chairman of AMCHAM (American Chamber of Commerce)’s Hyderabad Chapter for the year 2004 and reelected for 2005 and is a very active member of the organizing committee of the Hyderabad section of the IEEE (Institute of Electrical and Electronic Engineers), Secretary to the Japanese Business Council affiliated to Indo Japanese Chambers of Commerce in India and was special honorary adviser of IT affairs, to State Chief Secretary of IT (Information Technology) Govt. of Andhra Pradesh. Mr. VIJAYA BHASKER REDDY Mr. Vijaya Bhasker Reddy, aged 44 years. Mr. Vijaya has vast experience in management and operations. He worked as general manager for Coca-Cola India (Operations), advisor to Vijayawada Bottling Company Limited, associate partner with PMS Engineering, Philadelphia, US. Mr. Vijaya completed his masters in food engineering from IIT Kharagpur and Business project Management Degree from IIM Ahmedabad. Mr. SAGIREDDY PULLA REDDY Mr. Sagireddy Pulla Reddy, aged 40 years, after graduating as a B. Tech (Computer Science) from Nagarjuna University and working for five years as a partner in a software distribution company, in Delhi, he has floated his own company SP Software Private Limited, in 1995. He is the Chairman of SP Foundation, a trust body created with the sole purpose of giving financial assistance for meritorious needy students. In the year 1999 he has received the Bharat Nirman Excellence Award and in the year 2000, the Rastriya Rattan Award for his role in the socio-economic development of the country.


Mr. YERRADODDI RAMESH REDDY Mr. Yerradoddi Ramesh Reddy, aged 40 years, is an engineering graduate from IIT Chennai and has a management degree in finance and marketing from XLRI, Jamshedpur. Mr. Reddy is the chief financial officer of Cambridge Technology Enterprises Limited (CTE). Mr. Reddy has handled various cross border transactions. Prior to joining CTE, Mr. Reddy was working with Virinchi Technologies Limited, a public listed e-business and web-based analytical solutions Software Company based out of Hyderabad, Andhra Pradesh and having its operations in US, Europe, Middle East and South East Asia. Mr. Reddy worked as Regional Marketing Manager of Support with HCL-Hewlett Packard (now HCL Infotech Limited) and looked after technical support services for the region. Mr. Reddy has also worked with Bakelite Hylam Limited as a product manager.

DISTRIBUTION OF SHAREHOLDING AS ON 31-03-2007

Share Holding of

Nominal Value Share Holders Share Amount

Rs. Rs. Numbers % of Total In Rs. % of Total (1) (2) (3) (4) (5)

Upto 5,000 8 8.08 26,000 0.02 5,001 10,000 4 4.04 37,000 0.02 10,001 20,000 6 6.06 96,000 0.06 20,001 30,000 5 5.05 142,000 0.09 30,001 40,000 4 4.04 139,700 0.09 40,001 50,000 8 8.08 400,000 0.25 50,001 1,00,000 10 10.10 930,000 0.58 1,00,001 and above 54 54.55 158,359,300 98.89

TOTAL 99 100.00 160,130,000 100.00

SHAREHOLDING PATTERN ON 31-03-2007 CATEGORY No. of

Shares held %of

shareholding (A) Shareholding of Promoter and Promoter

Group:

(1) Indian a. Individuals/Hindu Undivided Family 3,253,394 20.32 b. Central Government/State Government Nil Nil c. Bodies Corporate Nil Nil d. Financial Institutions / Banks Nil Nil Others:

e. Mutual funds Nil Nil f. Trusts Nil Nil

Sub-Total (A)(1) 3,253,394 20.32


(2) Foreign

a. Individuals (Non- Residents Individuals / Foreign Individuals)

3,022,195 18.87

b. Bodies Corporate 2,000,000 12.49 c. Institutions Nil Nil Others:

d. Overseas Corporate Bodies Nil Nil Sub-Total (A)(2) 5,022,195 31.36

Total Shareholding of Promoter and Promoter Group A = (A)(1)+ (A)(2)

8,275,589 51.68

(B) Public Shareholding (1) Institutions

a. Mutual funds / UTI Nil Nil b. Financial Institutions / Banks Nil Nil c. Central Government/State Government Nil Nil d. Venture Capital Funds Nil Nil e. Insurance Companies Nil Nil f. Foreign Institutional Investors Nil Nil g. Foreign Venture Capital Investors Nil Nil Others:

h. Foreign Companies Nil Nil Sub-Total (B)(1) Nil Nil

(2) Non- Institutions a. Bodies Corporate 3,040,101 18.99 b. Individuals i). Individual Shareholders holding

Nominal Share Capital upto Rs. 1 Lakh

648,070 4.05

ii). Individual Shareholders holding Nominal Share Capital in excess of Rs. 1 Lakh

385,100 2.40

Others: c. Non- Residents Individuals 282,600 1.76 d. Overseas Corporate Bodies 3,381,540 21.12 e. Trusts Nil Nil f. Employees Nil Nil g. Clearing Members Nil Nil

Sub-Total (B)(2) 7,737,411 48.32 Total Public Shareholding B = (B)(1) +

(B)(2) 7,737,411 48.32

TOTAL ( A+B) 16,013,000 100.00 (C) Shares held by Custodians and against

Depositories Receipts have been issued

Nil Nil

GRAND TOTAL (A+B+C) 16,013,000 100.00


(XIII) Outstanding GDRs/ADRs./Warrants or any Convertible instruments, conversation date and likely impact on equity.

The Company has not issued any GDRs./ADRs/ Warrants or any convertible

instruments.

(XIV) Address for Correspondence

Plot No.7A, Road No.12, MLA Colony, Banjara Hills, Hyderabad – 500 034, Andhra Pradesh, India

S.NO. PARTICULARS SCH AS AT AS ATNO. 31-03-2007 31-03-2006

(Rupees) (Rupees)

I SOURCES OF FUNDS

1. SHAREHOLDERS' FUNDSa. Share Capital 1 160,130,000 16,975,000 b. Share Premium 101,823,650 17,178,650 c. Reserves and Surplus 2 53,152,794 6,114,326

2. LOAN FUNDSa. Unsecured Loans - 402,397

3. CURRENT LIABILITIES AND PROVISIONS 7 609,538,024 6,334,925

4. DEFERRED TAX LIABILITY 44,377,964 2,702,253

TOTAL 969,022,432 49,707,551

II APPLICATION OF FUNDS

1. FIXED ASSETSa. Gross Block 3 611,110,280 31,234,263 b. Less: Depreciation 48,312,751 2,944,070 c. Net Block (a-b) 562,797,529 28,290,193

2. PRODUCT DEVELOPMENT 73,072,053 2,345,314

3. INVESTMENTS 224,978,539 -

4. CURRENT ASSETS, LOANS & ADVANCESa. Cash and Bank Balances 4 8,872,472 2,763,868 b. Sundry Debtors 5 93,471,939 10,080,022 c. Loans and Advances and Deposits 6 5,829,900 6,228,154

NOTES TO ACCOUNTS 9

TOTAL 969,022,432 49,707,551

As per our report of even date For and on behalf of the BoardFor P.Murali & Co. Ybrant Technologies Limited CHARTERED ACCOUNTANTS

SD/- SD/- SD/-

P.MURALI MOHANA RAO CHAIRMAN & DIRECTORPARTNER MANAGING DIRECTOR

Place : HyderabadDate: 22-08-2007

Ybrant Technologies Limited

BALANCE SHEET AS AT 31ST MARCH 2007

YEAR YEARS.NO. PARTICULARS SCH ENDED ENDED

NO. 31-03-2007 31-03-2006(Rupees) (Rupees)

1 INCOMEExport Income 373,653,823 36,370,233 Domestic Income 273,562 494,943 Other Income 31,638 -

TOTAL 373,959,023 36,865,176

2 EXPENDITUREPersonnel Expenses 74,730,765 19,308,104 Administration and Other Expenses 8 164,637,769 8,414,755 Financial charges 440,920 22,862 Depreciation 45,368,681 1,574,747

TOTAL 285,178,135 29,320,468

3 PROFIT / (LOSS) BEFORE TAX AND AFTER DEPRECIATION 88,780,888 7,544,708

4 PROVISION FOR TAX 37,000 34,095

5 PROVISION FOR FRINGE BENEFIT TAX (FBT) 29,709 25,043

6 PROFIT AFTER TAX (3-4-5) 88,714,179 7,485,570

7 PROVISION FOR DEFERRED INCOME TAX 41,675,711 1,464,147

8 PROFIT AFTER PROVISION FOR INCOME TAX AND DEFERRED TAX 47,038,468 6,021,423

9 BALANCE BROUGHT FORWARD 6,114,327 92,904

10 BALANCE CARRIED FORWARD TO BALANCE SHEET 53,152,795 6,114,327

NOTES TO ACCOUNTS 9 -


SD/- SD/- SD/-




PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2007

PARTICULARS AS AT AS AT31-03-2007 31-03-2006(Rupees) (Rupees)

SCHEDULE 1

SHARE CAPITAL

AUTHORISED2,60,00,000 Equity Shares of Rs.10/- each 260,000,000 - Previous :20,00,000 Equity Shares of Rs.10/- each - 20,000,000

ISSUED,SUBSCRIBED AND PAID UP : 1,60,13,000 Equity Shares of Rs.10/- each 160,130,000 - Previous : 16,97,500 Equity Shares of Rs.10/- each - 16,975,000

- 160,130,000 16,975,000

SCHEDULE 2

RESERVES AND SURPLUS

Balance Carried Forward 6,114,326 92,904 Surplus in Profit and Loss Account during the year 47,038,468 6,021,422

53,152,794 6,114,326


SCHEDULES FORMING PART OF THE ACCOUNTS

SCHEDULE 3

FIXED ASSETS

S.NO. PARTICULARS GROSS BLOCK ADDITIONS GROSS BLOCK DEPRECIATION DEPRECIATION DEPRECIATION NET BLOCK NET BLOCKAS ON AS AT AS AT DURING AS AT AS AT AS AT

01-04-2006 31-03-2007 31-03-2006 THE YEAR 31-03-2007 31-03-2007 31-03-2006Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

1 Computers 10,412,413 79,078,055 89,490,468 2,172,761 23,838,228 26,010,989 63,479,479 8,239,652 2 Office Equipments 2,815,397 31,654,270 34,469,667 215,681 1,581,559 1,797,240 32,672,427 2,599,716 3 Furniture and Fixtures 13,275,586 12,783,053 26,058,639 492,034 1,541,340 2,033,374 24,025,265 12,783,552 4 Electrical Fittings 4,269,508 2,606,815 6,876,323 63,595 268,692 332,287 6,544,036 4,205,913 5 Leasehold Buildings 461,359 2,681,845 3,143,204 - - - 3,143,204 461,359 6 Good will - 451,071,979 451,071,979 - 18,138,862 18,138,862 432,933,117 -

31,234,263 579,876,017 611,110,280 2,944,070 45,368,681 48,312,751 562,797,529 28,290,193


SCHEDULE 4

CASH AND BANK BALANCES

Cash on Hand 294,439 10,634 Bank Balances 8,578,033 2,753,234

8,872,472 2,763,868

SCHEDULE 5

SUNDRY DEBTORS

Debtors within 6 months 93,471,939 10,080,022 (Considered good)

93,471,939 10,080,022

SCHEDULE 6

LOANS, ADVANCES and DEPOSITS

Deposits 2,401,572 4,932,508 Advances 3,428,328 1,295,646

5,829,900 6,228,154



SCHEDULE 7

CURRENT LIABILITIES AND PROVISIONS

Sundry Creditors and others 4,008,057 669,232 Creditors of Expenses 445,069 585,583 Provisions and Outstanding Expenses 8,549,380 5,080,110 Demand Promisory Notes 596,535,518 -

609,538,024 6,334,925

SCHEDULE 8

ADMINISTRATION AND OTHER EXPENSES

Rent, Rates and Taxes 9,875,947 1,377,985 Printing and Stationery 290,440 101,709 Postage, Telephones and Internet Charges 1,788,698 1,126,285 Traveling and Conveyance 4,003,012 58,113 Electricity charges 1,545,574 584,650 Office Maintenance 1,425,283 331,549 Directors Remuneration 2,610,000 360,000 Auditors Remuneration 104,490 44,896 Professional Charges 7,160,037 2,268,561 Computer Maintenance Charges 2,805,102 1,622,137 ROC Charges 961,543 240,420 Sales and Marketing Expenses 127,881,501 - Other Administrative Expenses 4,186,142 298,451

164,637,769 8,414,756


SCHEDULE- 9 (A) SIGNIFICANT ACCOUNTING POLICIES (1) AS- 1 SYSTEM OF ACCOUNTING:

(a) These accounts are prepared on the historical cost basis except and on the accounting principles of a going concern.

(b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

(2) AS-6 DEPRECIATION:

Depreciation is provided on Straight Line Method on pro-rata basis and at the rates and manner specified in Schedule XIV of Companies Act, 1956 on straight-line basis.

(3) AS- 9 REVENUE RECOGNITION:

Software & Consultancy Revenue

The Contracts between the Company and its customers are either time and material contracts or fixed price contracts.

Revenue from fixed-price contracts is recognized according to the milestones achieved as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, conditions and estimated profitability may result in revisions and corresponding revenues and costs are recognized in the period in which such changes are identified. Deferred revenue represents amounts billed in excess of revenue earned for which related services are expected to be performed in the next operating cycle.

In respect of time and material contract, revenue is recognized in the period in which the services are provided.

Revenue from product sale and licensing arrangements are recognized on delivery and installation.

Other Incomes

Other incomes are recognized on an accrual basis. .

(4) AS- 10 FIXED ASSETS:

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties, taxes and incidental expenses thereto.

(5) AS-11 FOREIGN EXCHANGE TRANSACTIONS:

Current Assets and Liabilities denominated in foreign currency will be translated at the rate of exchange prevailing as at Balance sheet date.

Income and Expenditure items involving foreign exchange are translated at the exchange rate prevailing on the dates of transaction.

Exchange differences, if any, arising on account of fluctuations in foreign exchange have been duly reflected in the Profit & Loss Account except in respect of acquisition of fixed assets.

(6) AS – 13 -INVESTMENTS:

Long term investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Current investments are stated at lower of cost and quoted/fair value computed category wise.

(7) AS – 14 – ACCOUNTING FOR AMALGAMATIONS: The Accounting Standard regarding merger is not applicable to the Company. (8) AS- 15 RETIREMENT BENEFITS:

Company’s contribution to Provident Fund and ESI are charged to Profit and Loss Account. The company has not made any provision for gratuity to its employees. Gratuity payable will be accounted as and when payments are made and aas such the liability has not been ascertained.

(9) AS- 17 SEGMENT REPORTING: The Company operates only in one segment i.e., Software Development

(10) AS-22 ACCOUNTING FOR TAXES:

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset and liability are measured as per the tax rates/laws that have been enacted or substantively enacted by the Balance Sheet date.

(11) AS-26 ACCOUNTING FOR INTANGIBLE ASSETS: Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

(12) EARNING PER SHARE

The earning considered in ascertaining the company’s earning per share comprises net profit after tax. The number of shares used in computing basic earning per share is the weighted average number of shares outstanding during the year.

(B) NOTES ON BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

1) Number of Employees in respect of remuneration of Rs. 24, 00,000/- P.A. or more if employed throughout the financial year (or Rs. 2, 00,000/- P. M. if employed for the part of the period) is two.(excluding US Subsidiary employees)

2) In the opinion of the Board of Directors all the Current assets, Loans and Advances

have a value on a realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. (The bal. of Sundry Debtors, loans & Advances and other Current Assets are subject to confirmations)

3) During the current financial year the Company has acquired US based software

companies as given below and goodwill of Rs.451.07 millions has been considered as detailed below:

(Rs. In Millions) S.N

o Name of the Company

Date of Acquisition

Purchase Consideration

Net Assets

Goodwill

(1) (2) (3) (4) (5) (6 = 4-5) 1 DW Ventures

LLC (MediosOne)

01-04-2006 174.36 30.15 144.21

2 Seenetix D.O.O. (VoloMP)

01-04-2006 65.39 36.09 29.29

3 Pennyweb Inc (AdDynamix)

01-07-2006 435.90 158.33 277.57

GRAND TOTAL 675.65 224.57 451.07

4) The Company has no amounts payable to small scale industrial undertakings for period more than 30 days. NIL for all years

5) Directors Remuneration:

Particulars Current Year

(Rs. In lacs) Previous Year (Rs. In lacs)

Directors Remuneration 26.10 3.60

6) Auditors Remuneration:

Particulars Current Year (Rs. In lacs)

Previous Year (Rs. In lacs)

Auditors Remuneration 1.00 0.45

7) The Company is engaged in the development of Computer Software and services.

The production and sale of such software and services cannot be expressed in any generic unit. Hence, it is not possible to give the quantity details of sales and the information as required under Paragraphs 3 and 4C of Part II of Schedule VI to the Companies Act, 1956.

8) Foreign Exchange as reported by the Company to Government of India and as certified by the Management.

Particulars Current Year (Rs. In lacs)

Previous Year (Rs. In lacs)

Foreign Exchange Inflows towards export of software

193.70 175.17

Foreign Exchange Outflows towards advance payment for acquisition of companies

750.96 NIL

9) In accordance with Accounting Standard 22 (AS 22) issued by the ICAI, the Company

has accounted for deferred income tax during the year. The deferred income tax provision for the current year amounts to Rs.4,16,75,711 towards deferred income tax liability (Previous Year Rs.14,64,147/- towards deferred income tax liability)

10) Previous year figures have been regrouped wherever necessary. 11) The figures have been rounded off to the nearest rupee.

SIGNATURES TO THE SCHDULES 1 to 9 As per our report of even date For and on behalf of the Board For P.MURALI & CO. YBRANT TECHNOLOGIES LIMITED CHARTERED ACCOUNTANTS SD/- SD/- SD/- P.MURALI MOHANA RAO CHAIRMAN & DIRECTOR MANAGING DIRECTOR PLACE : HYDERABAD DATE : 22-08-2007

S.NO. PARTICULARS Sch. YBRANTNo. CONSOLIDATED

AS ON31-03-2007

Rs.

I SOURCES OF FUNDS

1. SHAREHOLDERS' FUNDSa. Share Capital 1 160,130,000 b. Share Premium 101,823,650 c. Reserves and Surplus 2 223,315,885

2. LOAN FUNDSa. Secured Loans 3 4,939,793

3. CURRENT LIABILITIES AND PROVISIONS 9 671,750,081

4. DEFERRED TAX LIABILITY 44,377,963

TOTAL 1,206,337,372

II APPLICATION OF FUNDS

1. FIXED ASSETSa. Gross Block 4 746,275,037 b. Less: Depreciation 63,037,411 c. Net Block 683,237,627

2. PRODUCT DEVELOPMENT 105,444,297

3. CURRENT ASSETS, LOANS & ADVANCESa. Cash and Bank Balances 5 74,269,622 b. Sundry Debtors 6 180,419,979 c. Loans and Advances and Deposits 7 10,655,815 d. Other Assets 8 145,436,424 e. Foreign Currency Translation Reserve 6,873,609

TOTAL 1,206,337,372

Notes to Accounts 11


SD/- SD/- SD/-



CONSOLIDATED BALANCE SHEET AS ON 31ST MARCH 2007


S.NO. PARTICULARS YBRANTSCH CONSOLIDATEDNO AS ON

31-03-2007Rs.

1 INCOMEExport Income 1,087,443,472 Domestic Income 273,562 Other Income 31,638

TOTAL INCOME 1,087,748,672

2 EXPENDITUREPersonnel Expenses 74,730,765 Administration and Other Expenses 10 644,845,228 Depreciation 60,093,340 Financial charges 5,009,911

TOTAL EXPENSES 784,679,243

3 PROFIT / (LOSS) 303,069,428

4 PROVISION FOR TAX 25,751,625

5 PROVISION FOR FBT 29,709

6 PROFIT AFTER TAX (3-4-5) 277,288,094

7 PROVISION FOR DEFERRED INCOME TAX 41,675,710

8 DIVIDEND 18,410,825

9 PROFIT AFTER PROVISION FOR INCOME TAX AND DEFERRED TAX 217,201,559

10 BALANCE BROUGHT FORWARD 6,114,327

11 BALANCE CARRIED FORWARD TO BALANCE SHEET 223,315,886

Notes to Accounts 11


SD/- SD/- SD/-




CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2007

PARTICULARS YBRANTCONSOLIDATED

AS ON31-03-2007

Rs.SCHEDULE 1

SHARE CAPITAL

Authorised Capital 2,60,00,000 Equity Shares of Rs.10/- each 260,000,000

Issued, Subscribed and Paid Up Capital 1,60,13,000 Equity Shares of Rs.10/- each 160,130,000

160,130,000

SCHEDULE 2

RESERVES AND SURPLUS

Balance Carried Forward 6,114,326 Surplus in Profit and Loss Account during the year 217,201,559

223,315,885

SCHEDULE 3

Loan FundsAuto Loans Payable 4,939,793

4,939,793


CONSOLIDATED SCHEDULES FORMING PART OF ACCOUNT

SCHEDULE 4

CONSOLIDATED FIXED ASSETS

S.NO. PARTICULARS GROSS BLOCK ADDITIONS GROSS BLOCK DEPRECIATION DEPRECIATION DEPRECIATION NET BLOCK NET BLOCKAS ON AS AT AS AT DURING AS AT AS AT AS AT

01-04-2006 31-03-2007 31-03-2006 THE YEAR 31-03-2007 31-03-2007 31-03-2006

1 Computer Equipment 10,412,413 205,067,352 215,479,765 2,172,761 37,386,698 39,559,459 175,920,307 8,239,652 2 Computer Software - - - - - - - - 3 Office Equipments 2,815,397 34,070,551 36,885,948 215,681 2,052,636 2,268,317 34,617,631 2,599,716 4 Furniture and Fixtures 13,275,586 12,783,053 26,058,639 492,034 1,541,340 2,033,374 24,025,265 12,783,552 5 Electrical Fittings 4,269,508 2,606,815 6,876,323 63,595 268,692 332,287 6,544,036 4,205,913 6 Leasehold Buildings 461,359 2,681,845 3,143,204 - - - 3,143,204 461,359 7 Automobiles - 6,759,179 6,759,179 - 705,112 705,112 6,054,067 - 8 Domain Name - - - - - - - - 9 Good will - 451,071,979 451,071,979 - 18,138,862 18,138,862 432,933,117 -

31,234,263 715,040,774 746,275,037 2,944,071 60,093,340 63,037,411 683,237,628 28,290,193


AS ON31-03-2007

Rs.SCHEDULE 5

CASH AND BANK BALANCES

Cash on Hand 294,439 Bank Balances 73,975,183

74,269,622

SCHEDULE 6

SUNDRY DEBTORS

Debtors within 6 months (considered good) 180,419,979

180,419,979

SCHEDULE 7

LOANS, ADVANCES AND DEPOSITS

Deposits 2,401,572 Advances 3,428,328 Security Deposit 4,825,915

10,655,815

SCHEDULE 8

OTHER ASSETS

Other Current Assets 3,120,041 Other Assets 142,316,383

145,436,424



AS ON31-03-2007

Rs.

SCHEDULE 9

CURRENT LIABILITIES AND PROVISIONS

Sundry Creditors and others 4,008,057 Creditors of Expenses 445,069 Provisions and Outstanding Expenses 8,549,380 Demand Promisory notes 596,535,518 Accounts Payable 37,392,977 Accrued Liabilities - Taxes Payable 24,683,079 Other Current Liabilities 136,001

671,750,081

SCHEDULE 10

ADMINISTRATION AND OTHER EXPENSES

Rent, Rates and Taxes 9,875,947 Printing and Stationery 290,440 Postage, Telephones and Internet Charges 1,788,698 Traveling and Conveyance 4,003,012 Electricity charges 1,545,574 Office Maintenance 1,425,283 Directors Remuneration 2,610,000 Auditors Remuneration 104,490 Professional Charges 4,763,970 Computer Maintenance Charges 2,805,102 ROC Charges 961,543 Sales and Marketing Expenses 127,881,501 Other Administrative Expenses 4,186,142 Cost of revenue 194,620,234 General and Administrative Expenses 287,983,292

644,845,228


SCHEDULE 11

NOTES TO ACCOUNTS

A. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of Ybrant Technologies Limited and its subsidiaries (The Group) are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. Being the first occasion that consolidated financial statements are presented for the year ended March 31, comparative figures for the corresponding previous period are not given in line with the transitional provisions of the Accounting Standard 21, Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and hence the Consolidated Cash Flow Statement has also not been presented for the period ended 31st March 2007. Accounting policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing Accounting Standard requires a change in the accounting policy hitherto in use. The significant accounting policies adopted by the Group are detailed below: 1.1 Principles of consolidation The financial statements of the subsidiary companies used in for consolidation are drawn up to the same reporting date as of the company. The consolidated financial statements have been prepared on the following basis: a) The financial statements of the company and its subsidiary companies have

been combined on a line–by-line basis by adding together like items of assets, liabilities, income and expenses. All material inter company transactions, balances and unrealized surpluses and deficits on transactions between group companies are eliminated. Consistency in adoption of accounting policies among all group companies is ensured to the extent practicable.

b) The excess of cost to the company of its investments in subsidiary companies

over its share of equity of the subsidiary companies at the dates, on which the investments in subsidiary companies are made, is recognized as ‘Goodwill’ being an asset in the consolidated financial statements. Alternatively, where the share of equity in the subsidiary companies as on the date of investment, is in excess of cost of investment of the company, it is recognized as ‘Capital Reserve’ in the consolidated financial statements.

c) Minority interest in the net assets of consolidated subsidiaries consist of the

amount of equity attributable to the minority shareholders at the dates on which investments are made by the company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investment.

1.2 Use of estimates

In case of Indian Company

The preparation of the financial statements in conformity with the GAAP requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Examples of such estimates include provision for income tax and useful life of the assets.

In case of subsidiaries:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are often based on judgments, probabilities and assumptions that management believes are reasonable but that are inherently uncertain and unpredictable. As a result, actual result could differ from those estimates.

Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness. Appropriate adjustment, if any, to the estimates used are made prospectively based on such periodic evaluations.

1.3 Significant Accounting policies: The significant accounting policies pertaining to the principal business segments of the company are set out below and the other policies have been detailed in the standalone financial statements. In case of subsidiaries: The financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP); consequently, revenue is recognized when services are rendered and expenses reflected when costs are incurred.

1.4 Revenue Recognition Software & Consultancy Revenue The Contracts between the Company and its customers are either time and material contracts or fixed price contracts. Revenue from fixed-price contracts is recognized according to the milestones achieved as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, conditions and estimated profitability may result in revisions and corresponding revenues and costs are recognized in the period in which such changes are identified. Deferred revenue represents amounts billed in excess of revenue earned for which related services are expected to be performed in the next operating cycle. In respect of time and material contract, revenue is recognized in the period in which the services are provided. Revenue from product sale and licensing arrangements are recognized on delivery and installation. Other Incomes Other incomes are recognized on an accrual basis. Revenue Recognition in case of subsidiaries: The Company recognizes revenue on time-and-materials contracts as the services are performed for clients. Revenues on fixed-price contracts are recognized using the percentage of completion method. Percentage of completion is determined by relating the actual cost of work performed to date to the estimated total cost for each contract. If the estimate indicates a loss on a particular contract, a provision is made for the entire estimated loss without reference to the percentage of completion. 1.5 Software Product Development Cost Internally developed software products are valued based on costs directly attributable to the development of such software and allocated indirect cost and they are capitalised individually once their technical feasibility is established in accordance with the requirements of Accounting Standard 26, ‘Intangible Asset’ issued by Institute of Chartered Accountants of India. Expenses incurred during research phase till the establishment of commercial feasibility is charged off to Profit and Loss Account. Products capitalised are being amortized over a period of three to five years from the launch date and the unamortised product costs as at Balance Sheet date are shown under Assets separately.

In case of Frontier Data Management Inc, USA Product development and domain name costs are not amortized as amortization will start after the development of the products. In case of Pennyweb Inc, USA Product development costs are not amortized as amortization will start after the development of the products. 1.6 Foreign Currency Transactions/ Translation As per Accounting Standard (AS-11) – The effects of changes in Foreign Exchange rates, for the purposes of consolidation the operations of overseas subsidiaries are considered as non-integral in nature and accordingly their assets and liabilities of non-Indian subsidiaries are translated at the period-end exchange rate and income and expenditure items are translated at the average rates during the period. The resultant translation adjustment is reflected as a separate component of Shareholders' funds as 'Foreign currency translation reserve'.

(a) the assets and liabilities, both monetary and non-monetary, of the non-integral foreign operation has been translated at the closing rate;

(b) income and expense items of the non-integral foreign operation has been

translated at average rates during the period; and

(c) all resulting exchange differences has been accumulated in a foreign currency translation reserve

1.7 Depreciation Depreciation is provided on a pro-rata basis on the Straight Line Method (SLM) over the estimated useful lives of the assets determined as follows: The estimated useful lives are as follows:

S.No. Name of the Asset Estimated Useful Life 1. Computers 1 to 5 years 2. Office Equipments 2 to 3 years 3. Furniture and Fixtures 1 to 2 years 4. Leasehold

improvements Shorter of lease period or estimated

useful lives

1.8 Taxation Tax expenses comprising of both current tax and deferred tax are included in determining the net results for the period. Deferred tax reflects the effect of timing differences between the assets and liabilities recognized for financial reporting purposes and the amounts that are recognized for current tax purposes. As a matter of prudence deferred tax assets are recognised and carried forward only to the extent, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Current tax is determined based on the provisions of the Income Tax Act of the respective countries. 1.9 Particulars Subsidiary Companies Name of the Subsidiary

Proportion of ownership interest as at March 31, 2007

Country of Incorporation

Effective Date of Consolidation for New acquisitions

Frontier Data Management Inc,

100% United States of America

01st April 2006

International Expressions Inc,

100% United States of America

01st April 2006

Pennyweb Inc, 100% United States of America

01st July, 2006

Organisation and Description of Business of Subsidiary Companies (a) Frontier Data Management Inc, USA Frontier Data Management, Inc is an international online media network with market presence in Europe, North and South America. Frontier provides the most comprehensive portfolio of online lead generation and media buying from it vast and well established advertising networks. They provide a wide range of eMarketing products and services that enable advertisers, agencies and publishers to cost- effectively reach, recruit, and retain consumers online. As a pioneer of the performance-based advertising model, Frontier achieves high performance by providing marketers with the most cost-effective methods that consistently produce measurable results. Frontier Data Management, Inc is a corporation registered in March 2, 2006 in the State of Delaware. (b) International Expressions Inc, USA International Expressions Inc is into e-marketing industry. They provide a wide range of eMarketing products and services that enable advertisers, agencies and publishers to cost-effectively reach, recruit, and retain consumers online. International Expressions achieve high performance by providing marketers with the most cost-effective methods that consistently produce measurable results. International Expressions, Inc is a corporation registered on 10th November, 2005 in the State of Delaware.

(c) Pennyweb Inc, USA Pennyweb Inc, (DBA*: AdDynamix)(the “Company”) is into online media, ad management and publishing technology with a results-driven attitude and customer-focused approach to doing business. They Offer online advertising and marketing programs and services to publishers and advertisers. AdDynamix provides software programs and services to Advertisers/Sellers to achieve their marketing objectives like branding, unique visitors, or customer acquisitions. AdDynamix Possess a wide reach of Ad network (publishers – website owners). Ad Network comprised of 11 groups of audiences hence it enable sellers to target specific audience. Different groups of content channels are Automotive, Business & Finance, Entertainment, Games, Health & Fitness, News & Information, Shopping, Sports & Recreation, Technology & Electronics Travel, web Communities. 1.10 Segment Reporting The company operates only in one segment i.e, Software Development. 1.11 Provisions, Contingent Liabilities and Contingent Assets A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent Liabilities: Contingent liabilities Rs. Nil. (Previous Year Rs. Nil). 1.12 Accounts Receivables in case of Subsidiary Companies

In case of Frontier Data Management Inc, USA

Frontier Data Management, Inc determines the allowance for doubtful accounts based on assessed customers’ ability to pay, historically write-off experience, and economic trends. Such allowance for doubtful accounts is the company’s best estimate of the amount of probable credit losses in the company’s existing accounts receivable. At March 31, 2007 the allowance for bad debts was $ 19,802.

In case of International Expressions Inc, USA

International Expressions, Inc determines the allowance for doubtful accounts based on assessed customers’ ability to pay, historically write-off experience, and economic trends. Such allowance for doubtful accounts is the company’s best estimate of the amount of probable credit losses in the company’s existing accounts receivable.

In case of Pennyweb Inc, USA

Pennyweb, Inc determines the allowance for doubtful accounts based on assessed customers’ ability to pay, historically write-off experience, and economic trends. Such allowance for doubtful accounts is the company’s best estimate of the amount of probable credit losses in the company’s existing accounts receivable. At March 31, 2007 the allowance for bad debts was $ 42,577.

1.13 Property and Equipment in case of Subsidiary Companies


Property and equipment is stated at cost. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets ranging from three to seven years.

At March 31, 2007 the property and equipment consisted of the following:

Computers $ 1,679,832 Less: Accumulated Depreciation $ 86,238 Net Assets $ 1,593,504

The company charges repairs and maintenance costs that do not extend the lives of the assets to expenses as incurred.


Property and equipment is stated at cost. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets for 5 years.


Computers $ 1,013,985 Less: Accumulated Depreciation $ 132,512 Net Assets $ 881,473



Property and equipment is stated at cost. The Company provides for depreciation of property and equipment using the straight-line method over the estimated useful lives of the related assets ranging from .


Computer Equipment $ 593,498 Computer Software $ 110,685 Office equipment and furniture $ 119,524 Automobiles $ 190,146

Gross Assets $ 1,013,853 Less: Accumulated Depreciation $ 725, 809

Net Assets $ 288,044


1.14 Commitments in case of Subsidiary Companies


The company leases office space in Delaware under non-cancelable operating lease agreement expiring thru October 31, 2008. The following is a schedule of future minimum lease payments required under the lease: For the year ending

March 31,2008 $ 24,000 March 31,2009 $ 14,000

Total $ 38,000


The company leases office space in Delaware under non-cancelable operating lease agreement expiring on 30th June 2008. The following is a schedule of future minimum lease payments required under the lease: For the year ending,

March 31,2008 $ 30,000 March 31,2009 $ 7,500

Total $ 37,500


The company leases office space in Delaware under non-cancelable operating lease agreement expiring on February 28, 2011. The following is a schedule of future minimum lease payments required under the lease: For the year ended,

March 31,2008 $ 109,600 March 31,2009 $ 112,000 March 31,2010 $ 112,000 March 31,2011 $ 102,667

Total $ 436,267 1.15 Short Term Loan in case of Subsidiary Company


The company has a sanctioned line of credit of $1,250,000 with a Bibby Financial Services (CA), Inc. The line is secured by all the assets of the company and personal guarantees of stockholder and cross corporate guaranty from Hula Direct LLC. The Company repaid the loan in full in March 2007.

NOTES ON BALANCE SHEET AND PROFIT AND LOSS ACCOUNT IN CASE OF INDIAN COMPANY

1) Number of Employees in respect of remuneration of Rs. 24, 00,000/- P.A. or more if employed throughout the financial year (or Rs. 2, 00,000/- P. M. if employed for the part of the period) is two.(excluding US Subsidiary employees)

2) In the opinion of the Board of Directors all the Current assets, Loans and

Advances have a value on a realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. (The bal. of Sundry Debtors, loans & Advances and other Current Assets are subject to confirmations)

3) During the current financial year the Company has acquired US based software companies as given below and goodwill of Rs.451.07 millions has been considered as detailed below:

(Rs. In Millions) S.No Name of the

Company Date of

Acquisition Purchase

Consideration Net

Assets Goodwill

(1) (2) (3) (4) (5) (6 = 4-5) 1 DW Ventures LLC

(MediosOne) 01-04-2006 174.36 30.15 144.21

2 Seenetix D.O.O. (VoloMP)

01-04-2006 65.39 36.09 29.29

3 Pennyweb Inc (AdDynamix)

01-07-2006 435.90 158.33 277.57

GRAND TOTAL 675.65 224.57 451.07 In case of Frontier Data Management Inc, USA

Effective from April 1, 2006, Frontier Data Management, Inc entered into a forward triangular merger with MediosOne LLC, an Internet advertising network, which was previously known as Hula Direct LLC and prior to that was known as DW Ventures LLC and Wordcents for purchase consideration of $ 4,000,000.


Effective from April 1, 2006, Ybrant Technologies Limited has acquired 100 percent stockholding in International Expressions, Inc for purchase consideration of $ 2,000,000. The company entered into a forward triangular agreement to merge with Seentix D.O.O. (DBA: VoloMP). In case of Pennyweb Inc, USA Effective July 01, 2006, Ybrant Technologies acquired Pennyweb, Inc for purchase consideration of $ 10,000,000.

4) The Company has no amounts payable to small scale industrial undertakings

for period more than 30 days. NIL for all years

5) Auditors Remuneration: Audit Fees – Rs. 0.1 millions

6) Directors Remuneration:

Remuneration paid or provided in accordance with Sec 198 of the Companies Act, 1956 to Managing Director and Whole Time Director is Rs.2.610 millions

7) Secured Loans:

Secured Loans - Rs.4.94 Millions

8) Earnings in Foreign Currency Inflow: Software Export Earnings: Rs. 19.37 Millions 9) Expenditure in Foreign Currency outflow: Acquisition of Software Companies: Rs. 75.10 Millions 10) Inter Company Transactions

(a) Income and Expenditure

$ 52,905 revenue was generated by Ybrant Technologies (taken in export sales) from Pennyweb Inc (taken in professional charges) during the financial year march 2007. The same has been removed from consolidation of accounts.

(b) Secured and Unsecured Loans

There are no secured and unsecured loans relating to inter companies.

. 11) Stock Distribution in case of Subsidiary Companies In case of Frontier Data Management, Inc

Frontier Data Management, In has received money towards issuance of stock to Ybrant Technologies Limited

12) Consolidated cash flow statement is not given, as the subsidiaries were formed / taken over during the year and hence consolidation has not been considered for the previous year 31st March, 2006

SIGNATURES TO THE SCHDULES 1 to 11 As per our report of even date For and on behalf of the Board For P.MURALI & CO. YBRANT TECHNOLOGIES LIMITED CHARTERED ACCOUNTANTS SD/- SD/- SD/- P.MURALI MOHANA RAO CHAIRMAN & DIRECTOR MANAGING DIRECTOR PLACE : HYDERABAD DATE : 22nd August, 2007

……………………………………………cut here…………………………………………………………..



PLOT NO.7A, ROAD NO.12, MLA COLONY, BANJARA HILLS, HYDERABAD – 500 034

PROXY FORM

I/We ……………………………………………………………………………………… of …………………………………………………………………… being a member/members of the above named company hereby appoint of ………………………………… as my/our proxy to vote for me/us on my/our behalf at the 8th Annual General Meeting of the company to be held on Friday, the 28th day of September, 2007, at 11 A.M. at the Registered Office of the Company at Plot No.7A, Road No.12, MLA Colony, Banjara Hills, Hyderabad – 500 034 and at any adjournment thereof.

Signed this……………………… day of ___________ 2007.

NOTE: a) A Member entitled to attend and vote at the meeting is entitled to appoint

a proxy and vote instead of himself. b) Proxy need not be a member.

c) The proxy form duly completed should be deposited at the registered office of the company not less than 48 hours before the time fixed for holding the meeting.

YBRANT TECHNOLOGIES LIMITED PLOT NO.7A, ROAD NO.12, MLA COLONY,

BANJARA HILLS, HYDERABAD – 500 034

ATTENDANCE SLIP (Please present this slip at the entrance of the meeting venue)

Regd. Folio ……………. Shares held ……………….. I hereby record my presence at the 8th Annual General Meeting of the company to be held on Friday, the 28th day of September, 2007, at 11 A.M. at the Registered Office of the Company at Plot No.7A, Road No.12, MLA Colony, Banjara Hills, Hyderabad – 500 034 Name of the Shareholder : Name of the Proxy : Signature of member/proxy : Note: 1) To be signed at the time of handing over this slip.

Members are requested to register their names at least 15 minutes prior to the commencement of the meeting.


Statement pursuant to Section 212 of the Companies Act, 1956, related to subsidiary companies

Name of the subsidiary companies Sr. no. Particulars

Frontier Data Management

Inc, USA

International Expressions Inc,

USA

Pennyweb Inc, USA

1. Financial year April to March April to March July to June 2. Shares of the subsidiary held by the Company on the

above date:

a) Number and face value 1500 shares at no par value

1500 shares at no par value

6525100 shares at no par value

b) Extent of holding 100% 100% 100% 3 The net aggregate of profit/(loss) of the subsidiary for

the above financial year so far as they concern the members of the Company and is not dealt with in the accounts of the Company:

a) For the financial year ended on 31st March, 2007 N.A. N.A. N.A. b) For the previous financial year of the subsidiaries since

it became a subsidiary N.A. N.A. N.A.

4 The net aggregate of profit/(loss) of the subsidiary for the above financial year so far as they concern the members of the Company and is dealt with in the accounts of the Company:

a) For the financial year ended on 31st March, 2007 (Rs. In lacs)

960 442 483

b) For the previous financial year of the subsidiaries since it became a subsidiary

N.A. N.A. N.A.

5. Change in the holding company’s interest in the subsidiaries between the end of the financial year of the subsidiary and the end of the holding Company’s financial year.

No Change No Change No Change

6 Material changes which have occurred between the end of the aforesaid financial year of the subsidiaries and the end of the holding company’s financial year in respect: a) the subsidiaries fixed assets b) its investments c) money lent by the subsidiary company d) the money borrowed by it for any purpose other

than that of meeting current liabilities

Documents

SEVEN HILLS BUSINESS SOLUTIONS LIMITED Report FY07.pdf · NOTICE is hereby given that the SEVENTH Annual General Meeting of M/s YBRANT TECHNOLOGIES LIMITED will be held on Friday,