Round-3 Mock Press

On 24th June 1987, Evershine Computer Services Ltd (Popularly known as Shine Computers) was incorporated by Gunashekar Bhattacharya, as a private limited company with just 20

employees for providing software development and consultancy services to large corporations (the company got converted into public in 1991) and got listed in both Bombay and National Stock Exchange. Mr. Gunashekar Bhattacharya, Chairman of Evershine, was awarded the IT Man of the Year 1995 Award by Dataquest. In 1997, Rajiv Gupta joined Evershine Computers and in 2000, he was appointed as the Chief Executive Officer. In 2002, Vinod Khosla was appointed as a new CFO of the company. Shine Infoway (Sify), a wholly owned subsidiary of Evershine Computer Services Ltd, was the first Indian Internet Company listed on NASDAQ. In 2001, Evershine became worlds first ISO 9001:2000 company to be certified by BVQI. In 2003, Evershine started providing IT services to World Bank and signed up a long term contract with it. By 2003, Evershine IT services businesses included 13,120 technical associates servicing over 300 customers. From 2003-2008, in nearly all financial metrics of interest to investors, the company grew measurably. Evershine generated USD $467 million in total sales. In 2005, Evershine was ranked 3rd in Corporate Governance Survey by Global Institutional Investors. By March 2008, the company had grown to USD $2.1 billion. The company demonstrated an annual compound growth rate of 35% over that period. Operating profits averaged 21%. Earnings per share similarly grew, from $0.12 to $0.62, at a compound annual growth rate of 40%. In 2008, Evershine acquired Crisil, a computer networking firm. In September 2008, the World Council for Corporate Governance awarded, Evershine with the Global Peacock Award for global excellence in corporate accountability.

PROBLEMS BEGIN
For the past 2 years, companys profit started to decline. Evershine did not declare dividend for these years. In a surprise move, the World Bank announced on 2012 that Evershine has been barred from business with World Bank for eight years for providing Bank staff with improper benefits and charged with data theft and bribing the staff. Share prices fell another 14% to the

lowest in over 4 years. A whistle blower whistles to media stating that company has manipulated its accounts and it has maintained 2 Balance Sheet within the Company. The company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. Towards this end, the company has adopted the Evershine Code of Conduct which lays down the principles and standards that should govern the actions of the Company and its employees. Any actual or potential violation of the Code, howsoever insignificant or perceived as such, would be a matter of serious concern for the company. The role of the employees in pointing out such violations of the Code cannot be undermined. There is a provision under the Code requiring employees to report violations, which states:

Reporting Concerns Every employee of a Evershine Company shall promptly report to the management any actual or possible violation of the Code or an event he becomes aware of that could affect the business or reputation of his or any other Evershine Company.

Audited Balance Sheet as at 31-03-2013 (Rs. Crores)

EQUITY AND LIABILITIES Shareholders Funds Share capital Reserves and Surplus

137.46 -415..47

-278.01

Non- current liabilities Secured loans Unsecured loans

30.49 1464.8

1495.29

Current liabilities Liabilities Provision TOTAL

1669.26 496.79

2166.05 3383.33

ASSET Non-current asset Fixed asset Investment Deferred tax asset (net) 1381.1 618.64 118.75

2118.49

Current asset Sundry debtors Cash and bank balances Interest accrued on fixed asset Loans and advances 490 272.62 0 502.22

1264.84

TOTAL

3383.33

INSIDER BALANCE SHEET as at 31-03-2013

(Rs crores) EQUITY AND LIABILITIES Shareholders Funds Share capital Reserves and Surplus 137.46 8392.23

8529.69

Non- current liabilities Secured loans Unsecured loans

30.49 234.8

265.29

Current liabilities Liabilities Provision TOTAL

1669.26 496.79

2166.05 10916.03

ASSET Non-current asset Fixed asset Investment Current asset Sundry debtors Cash and bank balances Interest accrued on fixed asset Loans and advances Deferred tax asset (net) 2651.36 5312.62 376.34 502.22 118.75 1381.1 618.64 1999.74

8961.29

TOTAL

10916.03

As a CEO and CFO defend the stand of the Company.