Mar 31, 2015
DEAR MEMBERS,
The Directors present herewith the Eighteenth Annual Report on the
business and operations of the Company together with the audited
Financial Statements for the year ended 31 March 2015.
1. FINANCIAL RESULTS:
The company''s operating performance during the year ended 31 march 2015
as compared to the previous year is indicated in brief below:
(Rs. in Lacs)
Consolidated Standalone
2014-15 2013-14 2014-15 2013-14
Total income 27,064 27,657 14,415 13,234
Profit before interest,
depreciation and tax 2,987 2,669 1,959 1,844
depreciation and Amortisation 438 380 349 339
Profit before tax 2,474 2,184 1,559 1,458
Provision for tax 627 592 390 420
Profit brought forward from
previous year 1,817 1,487 1,169 1,038
Balance brought forward from
previous year 6,449 5,552 6,207 5,759
Profits available for
appropriation 8,266 7,038 7,376 6,797
Less: Transfer to General
Reserve 117 104 117 104
Translation Adjustment (Net) 63 - 68 -
Dividend (Proposed) 432 415 432 415
Tax on Proposed Dividend 90 71 90 71
Balance carried forward to
Balance Sheet 7,564 6,449 6,669 6,207
Publication of results of subsidiary companies
Section 129 (3) of the Companies Act, 2013, requires the company to
attach along with the financial statement, a separate statement
containing the salient features of the financial statement of its
subsidiaries. The performance and financial position of the
subsidiaries and associate of the company, included in the consolidated
financial statement, forms part of the Annual Report and is an integral
part of the Directors'' Report.
The Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and the Report of the Auditors of the subsidiary Companies
have not been attached with the Balance Sheet of the Company. If any
member so desires, the Company will make available these documents /
details upon specific request by the member of the Company.
2. DIVIDEND
Your Directors are pleased to recommend payment of a dividend of Rs.
4/- per equity share of Rs. 10/- each during the year subject to the
approval of the shareholders. (Previous year Rs. 4 per share of Rs.
10/- each).
3. operating results and business
During the year under review, total income of the Company was Rs. 144
Crores as compared to Rs. 132 Crores in the previous financial year,
i.e. an increase of 9%. On a consolidated basis, total income decreased
from Rs. 276 Crores to Rs. 271 Crores, a decline of around 2%.
The net profit after tax on a standalone basis for the year ended 31
March 2015 was Rs. 11.69 Crores as against Rs. 10.38 Crores in the
previous year, an increase of around 13%. On a consolidated basis, the
net profit after tax for the year ended 31 March 2015 was Rs. 18.17
Crores as compared to Rs. 14.87 Crores for the previous financial year
marking an increase of 22% on a year to year basis.
4. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors had, on the recommendation of the Nomination and
Remuneration Committee appointed Ms. Kalpana Trivedi as an Additional
Director of the Company with effect from 30 March 2015. Her appointment
as an Independent director for a period of 5 years will be subject to
the members'' approval at the Annual General Meeting.
the erstwhile chief Financial officer and company Secretary Mr. V
Sudarshan resigned from the services of the company effective 31 may
2014. Mr. Aloke Ghosh was appointed the chief Financial officer and
company Secretary of the company effective 2 June 2014.
5. A STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS
a statement on declaration of Independence required to be made under
section 149 of the companies act, 2013 has been obtained from each of
the Independent Directors confirming their independence.
6. BOARD EVALUATION
Pursuant to the provisions of the companies Act, 2013 and clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of the directors individually as well as the evaluation of
the working of its Audit, Nomination and Remuneration and other
committees. the criteria on the basis of which the evaluation has been
carried out has been explained in the corporate Governance report.
7. POLICY ON NOMINATION AND REMUNERATION
the Board on the recommendation of the Nomination and Remuneration
committee has framed a policy for selection and appointment of
Directors, Senior Management and their remuneration. the highlights of
the policy on Nomination and Remuneration is provided as a part of the
Directors'' report. the detailed policy is available on the website of
the company.
8. meetings of the board
the Board of Directors met four (4) times on 14 may 2014, 23 July 2014,
17 october 2014 and 19 January 2015 during the financial year 2014-15.
9. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
the company at present has the following subsidiary companies:
a) Blue Star Infotech America, Inc. (BSIA)
the wholly owned subsidiary of the company, Blue Star Infotech America,
Inc. achieved a total income of uS$ 196,35,989 (equivalent of Rs.
120.07 crores) for the financial year ending 31 march 2015 as compared
to uSS 2,21,38,707 (equivalent of Rs. 134.19 crores) for the previous
year. Despite a lower turnover, essentially due to reduction in low and
negative margin business, a concerted effort to keep costs under check,
the company reported a net profit of uSS 2,74,867 (equivalent of Rs.
1.68 crores) this year compared to a net loss of uSS 2,49,867
(equivalent of Rs. 1.50 crores) for the previous year marking a
turnaround in profits after four consecutive years. the performance of
the subsidiary is satisfactory and expected to progress in the ensuing
year as well.
Your company made an additional investment of uSS 5,00,000 (equivalent
of Rs. 3.04 crores) at par in the equity of the subsidiary in order to
further the growth, operations and business of the company. with this
investment, the paid-up capital of the subsidiary as at year end is uSS
23,50,000 (18,50,000 in the previous year). The investment is in
shares of uSS 1 each.
b) Blue Star Infotech (UK) Ltd.
The total income of this wholly owned subsidiary, Blue Star Infotech
(UK) Limited was £ 23,92,092 (equivalent of Rs. 23.59 crores) for the
financial year ended 31 March 2015 as compared to £ 23,04,183
(equivalent of Rs. 23 Crores) for the previous year. The company
registered a net profit of £ 207,016 (equivalent of Rs. 2.04 Crores)
for the financial year ending on 31 March 2015 compared to net profit
of £ 2,15,409 (equivalent of Rs. 2.15 Crores) for the previous year.
The shrinkage in profits is due to addition of manpower in the sales
team. The business is stable.
c) Blue star Infotech (singapore) Pte. Limited
The total income of the wholly owned subsidiary, Blue Star Infotech
(Singapore) Pte. Limited was SGD 30,75,977 (equivalent of Rs. 14.62
Crores) for the financial year ended 31 March 2015 as compared to SGD
21,67,203 (equivalent of Rs. 10.45 Crores) for the previous year. The
subsidiary registered a net profit of SGD 476,804 (equivalent of Rs.
2.27 Crores) for the financial year ending on 31 March 2015 compared to
a net profit of SGD 3,46,802 (equivalent of Rs. 1.92 Crores) for the
previous year.
Blue Star Infotech Singapore Pte. Ltd. has two wholly owned
subsidiaries, one each, in Singapore and Malaysia viz. Blue Star
Infostack Solutions Pte. Ltd. and Blue Star Infostack (Malaysia) Sdn.
Bhd. which caters to the Banking and Insurance sector. The performance
of the subsidiary is satisfactory. Blue Star Infotech Singapore Pte.
Ltd. has made an additional investment of RM 500,000 in the equity of
Blue Star Infostack (Malaysia) Sdn. Bhd. in order to further the
growth, operations and business of the Company. With this investment,
the paid-up capital of the subsidiary as at year end is RM 1,000,000.
10. directors'' responsibility statement
The Directors would like to inform the members that the Audited
Accounts for the financial year ended 31 March
2015 are in full conformity with the requirement of the Companies Act,
2013. The Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit and
loss of the company for that period;
(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern
basis;
(e) the directors, had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively;
11. reservations and/or qualifications in the statutory auditors''
report
The Directors would like to inform that there were no qualifications,
reservations or adverse remarks made by the
Auditors of the Company in their Audit Report.
12. reservations and/or qualifications in the secretarial auditors''
report
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s. Jayshree Dagli &
Associates, Practising Company
Secretaries to undertake the Secretarial Audit of the Company. The
Report of the Secretarial Audit Report provided in the Annual report
forms part of the Directors'' report. the Directors would like to inform
that there were no qualifications, reservations or adverse remarks made
by the Secretarial Auditors of the company in their audit report.
13. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS
There were no orders passed by any regulators or courts or tribunals
which can impact the going concern status and the company''s operations
in future. Hence, the company has no information to furnish in this
regard.
14. LOANS AND GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Particulars of Loans and Guarantees covered under the provisions of
Section 186 of the companies act, 2013 forms part of the Directors''
report and is provided in the annual report.
15. PARTICULARS OF CONTRACTS AND ARRANGEMENTS UNDER SECTION 188 OF THE
COMPANIES ACT, 2013
The Particulars of the contracts and arrangements, provided in form Aoc
2, forms part of the annual report and is an integral part of the
Directors'' report.
16. PARTICULARS OF EMPLOYEES
Information as per provisions of section 197(12) of the companies act
2013, read with rule 5(1) of the companies (Appointment and
Remuneration of Managerial Personnel) rules, 2014, and the names of
every employee employed throughout the financial year and in receipt of
Rs. 60 Lakhs or more, or employed for part of the year and in receipt
of Rs. 5 Lakhs or more a month, under rule 5(2) of the companies
(Appointment and Remuneration of Managerial Personnel) rules, 2014, is
a part of the Board''s report. However, this information is not being
provided as part of the annual report but will be available to the
shareholders on request to the company Secretary.
It may be noted that particulars of employees posted and working in a
country outside India, not being directors or their relatives, drawing
more than Rs. 60 Lakhs per financial year or Rs. 5 Lakhs per month, are
not circulated to the members in the Board''s report, but such
particulars shall be filed with the Registrar of companies while filing
the financial statement and Board reports:
Particulars shall be made available to any shareholder on a specific
request made by them in writing before the date of such annual General
Meeting wherein financial statements for the relevant financial year
are proposed to be adopted by shareholders and such particulars shall
be made available by the company within three days from the date of
receipt of such request from shareholders and in case of request
received even after the date of completion of annual General Meeting,
such particulars shall be made available to the shareholders within
seven days from the date of receipt of such request.
17. MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments other than what is
already stated in the financials which will affect the financial
position of the company during the period 31 March 2015 till the date
of the report.
18. CONSERVATION OF ENERGY, TECHNOLOGY Absorption, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as per Section 134(3)(m) of the companies act 2013 read
with rule 8 of the companies (Accounts) rules, 2014, relating to the
conservation of energy, technology, absorption, foreign exchange
earnings and outgoings respectively, is annexed to and forms part of
this report.
19. RISK MANAGEMENT
The company has adopted a risk management policy which is elaborated in
the Management Discussion and analysis report which is part of the
annual report and forms part of the Directors'' report.
20. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company was required to spend Rs. 24.83 Lakhs by 31 March 2015
towards charitable and social causes, as part of its commitment to
corporate Social Responsibility. the Board decided to expend these
funds in support of the HRD Minister''s nationwide campaign of "Swachh
Bharat/ Swachh vidyalaya" to build toilets in schools. Since the
process of identifying NGOs specialised in this field has taken more
time than anticipated, these funds could not be expended in the
financial year 2014-15.
The Report on CSR activities is provided in the Annual Report and forms
part of the Directors'' Report.
21. INVESTMENTS
The Company invests its surplus funds in debt based broad-based mutual
funds or with reputed scheduled banks in liquid funds or short-term
deposits, respectively, which are considered safe.
22. DIRECTORS
Mr. Sanjay Vaswani, Non-Executive-Promoter Director of the Company is
liable to retire by rotation.
In accordance with the provisions of sections 152 of the Companies Act,
2013, Mr. Sanjay Vaswani, Director retires by rotation and, being
eligible, offers himself for reappointment at the ensuing Annual
General Meeting. The profile of the Director is stated in the
explanatory statement to the notice of the Annual General Meeting.
23. EMPLOYEES STOCK OPTION PLAN (ESOP)
Disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ESOP and
Companies Act, 2013 are given in note 2.1 of the Notes to the Financial
Statements, forming part of the Accounts. The diluted EPS on
considering unvested ESOPs is Rs. 9.24 per share as on 31 March 2015.
A brief summary of ESOPs is provided below:
Sr. Particulars ESOP Scheme 2003 (Amended 2015)
No.
1 Options granted 15,18,000 (Including ESOP''s issued against
lapsed options). Outstanding ESOP''s at no
point of time have exceeded 14,71,000
grants as against 15,00,000 grants
approved by shareholders.
2 Options vested 4,74,375
3 Options exercised 4,15,075
4 Vested and unexercised 49,400
5 Options lapsed 1,17,525
6 The exercise price Rs. 60 - grants made on 31 August 2012
Rs. 57 - grants made on 29 March 2013
Rs. 52 - grants made on 29 May 2013
Rs. 83 - grants made on 18 December 2013
Rs. 188 - grants made on 18 December2014
7 Variation of terms of Nil
options
8 Money realised by
exercise of options Rs. 2,53,74,025
9 Total number of options
in force 9,85,400
10 Employee wise details
of options granted to
a. key managerial Sunil Bhatia- Chief Executive Officer
personnel; and Managing Director (982,000)
Aloke Ghosh-chief Financial officer and
company Secretary (20,000)
b. any other employee NIL
who receives a grant in
any one year of option
amounting to 5% or more
of options granted during
that year.
c. identified employees Sunil Bhatia- chief executive officer
who were granted option, and managing Director (982,000)
during any one year,
equal to or exceeding 1%
of the issued capital
(excluding outstanding nishith mathur-chief operating
warrants and conversions) officer (226,000)
of the company at the time
of grant;
24. AUDITORS
M/s walker, chandiok & co. HP, (formerly walker, chandiok & co)
chartered Accountants, (firm Registration No.: 001076N) mumbai, have
been appointed as the Statutory Auditors of the company in the annual
General meeting held on 23 July 2014. The company has placed the matter
relating to their appointment, for ratification of members in the
ensuing annual General meeting, for the residual portion of their term.
A written certificate from the Auditors has been obtained by the
company to the effect that the re-appointment, if made, would be in
accordance with the limits specified under section 139 of the companies
Act, 2013 read with section 142 of the companies Act, 2013.
25. AUDIT COMMITTEE
the composition of the Audit committee is covered in the corporate
Governance report forming part of the Board''s report. the Board has
accepted all the recommendations made by the Audit committee to the
Board.
26. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
the company has an Internal control System, commensurate with the size,
scale and complexity of its operations. the scope and authority of the
Internal Audit (IA) function is pre- defined. the internal auditor
function is entrusted to an independent firm of chartered Accountants
of repute. To maintain its objectivity and independence, the Internal
Auditors report to the chairman of the Audit committee of the Board.
the Internal Auditors monitor and evaluate the efficacy and adequacy of
internal control system in the company, its compliance with operating
systems, accounting procedures and policies at all locations of the
company and its subsidiaries. Based on the report of internal audit
function, process owners undertake corrective action in their
respective areas and thereby strengthen the controls. Significant audit
observations and corrective actions thereon are presented to the Audit
committee of the Board.
27. WHIsTLE Blower POLICY
the company has a vigil mechanism named the whistle Blower Policy to
deal with instances of fraud and mismanagement, if any.
this Policy of the company allows for disclosure by employees,
customers and/or third-party intermediaries of such matters internally,
without fear of reprisal, discrimination or adverse employment
consequences, and also permits the company to address such disclosures
or complaints by taking appropriate action, including but not limited
to, disciplining or terminating the employment and/or services of those
responsible.
The Whistle Blower Policy is available on the website of the Company.
During the year, no instances of fraud on the company or by the company
were reported.
28. CORPORATE GOVERNANCE
the company has complied with the recommendations of the corporate
Governance code as provided in clause 49 of the Listing Agreement with
the stock exchanges.
A separate section on corporate Governance, together with a certificate
from the company''s auditors confirming compliance, is set out
separately, forming part of this Report.
29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
the Management Discussion and analysis report has been attached to the
annual report and forms part of the Directors'' Report.
30. EXTRACT OF ANNUAL RETURN
the details forming part of the extract of the annual return is annexed
to and forms part of the Directors'' report.
31. GREEN INITIATIVE IN CORPORATE GOVERNANCE
Pursuant to the "Green Initiative in corporate Governance" by the
Ministry of corporate affairs in allowing paperless compliances, the
company has implemented the policy of sending the Notice with Balance
Sheet, Profit and Loss account, Auditor''s Report, Director''s Report and
Explanatory Statement etc. through email to those shareholders whose
email addresses are registered with the company''s Registrar. Out of
12,345 shareholders, 4,424 shareholders (around 36%) have opted for
receiving documents in electronic mode as of 31 March 2015.
32. ACKNOWLEDGEMENT
The Board places on record their sincere acknowledgement of the support
from all the stakeholders of the company viz. clients, Vendors,
Bankers, Employees and other Business Associates etc. for the support
received from them during the year.
For and on behalf of the Board of Directors
Suneel Advani
Mumbai Chairman and Managing Director
14 May 2015 blue Star Infotech Limited
Mar 31, 2013
Dear Members,
The Directors present herewith the Sixteenth Annual Report on the
business and operations of the Company together with the Audited
Financial Statements for the year ended March 31, 2013.
1. FINANCIAL RESULTS
The Company''s operating performance during the year ended March 31,
2013 as compared to the previous year is indicated in brief below:
(Rs. in Lakhs)
2012-13 2011-12
Total income 10,902 10,771
Proft before interest,
depreciation and taxation 987 1,103
Depreciation 281 296
Proft before taxation 706 807
Provision for taxation 172 253
Proft after taxation 534 554
Balance brought forward 5,521 5,262
Profts available
for appropriation 6,055 5,816
Less: Transfer to General reserve 53 55
Dividend (Proposed) 208 208
Corporate dividend tax 35 34
Add: Excess Provision for
Dividend 2
Distribution Tax
written back
Balance carried forward 5,759 5,521
2. DIVIDEND
Your Directors are pleased to recommend payment of a dividend of Rs.2/-
per equity share of Rs.10/- each during the year subject to the approval
of the shareholders (Previous year Rs.2/- per share of Rs.10/- each).
3. OPERATING RESULTS AND BUSINESS
During the year under review, total income of the Company was Rs.109
Crore as compared to Rs.108 Crore in the previous fnancial year, i.e. an
increase of 1%. On a consolidated basis, total income increased from
Rs.134 Crore to Rs.195 Crore, which is the highest ever for your Company
till date.
The effects of the global recession continued to dominate the economic
scenario for IT companies as well as other industries for a large part
of FY 12-13. Despite a robust increase in sales volumes, your company
had to invest signifcantly in business expansion which had an effect on
the overall proftability growth. Tight control over costs and continued
insistence on higher manpower productivity and other operational
effciencies ensured that the business was proftable. The net proft
after tax on a consolidated basis for the year ended March 31, 2013 was
Rs.4.99 Crore as compared to Rs.3.57 Crore for the previous fnancial year.
4. LIQUID INVESTMENTS
The Company invests its surplus funds in debt based mutual funds and
fxed deposits with banks, which are considered safe. As on March 31,
2013 about Rs.1.13 Crore were invested in liquid debt mutual fund schemes
and Rs. 6.74 Crore in bank deposits.
5. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS The
Company at present has the following subsidiary companies:
a) Blue Star Infotech America, Inc. (BSIA)
A 100% wholly owned subsidiary of the Company, Blue Star Infotech
America, Inc. posted a total income of USD 16,324,379 (equivalent of
Rs.88.77 Crore) for the fnancial year ending March 31, 2013 as compared
to USD 13,084,898 (equivalent of Rs.65.86 Crore) for the previous year.
The Company reported net loss of USD 309,399 (equivalent of Rs.1.68
Crore) this year compared to a net loss of USD 413,674 (equivalent of
Rs.2.07 Crore) for the previous year.
As at the year end, there has been further erosion in the net worth of
Blue Star Infotech America Inc. which is refected in the reduced net
worth of the subsidiary. The management is of the view that this
business loss is a temporary phenomenon arising due to strategic
investments in substantially expanding the overseas sales teams and
associated sales costs. Hence, no impairment of the investment in the
subsidiary is deemed necessary at this time.
The company''s Joint Venture in the US titled Blue7 Solutions LLC with
Trisept Technology LLC based in Milwaukee, State of Wisconsin provides
expertise in travel services domain. The performance of the joint
venture was satisfactory.
b) Blue Star Infotech (UK) Ltd.
The total income of this wholly owned subsidiary of the Company was
£2,549,538 (equivalent of Rs.20.93 Crore) for the fnancial year ended
March 31, 2013 as compared to £2,760,596 (equivalent of Rs.22.00 Crore)
for the previous year. It registered a net proft of £145,520
(equivalent of Rs.1.19 Crore) for the fnancial year ending on March 31,
2013 compared to net proft of £13,807 (equivalent of Rs.0.11 Crore) for
the previous year.
c) Blue Star Infotech (Singapore) Pte. Limited
A 100% wholly owned subsidiary of the Company, was incorporated in
Singapore as on 27th January 2012 to cater to the needs of our existing
global clients in the Asia Pacifc Region.
The total income of this wholly owned subsidiary of the Company was SGD
1,409,152 (equivalent of Rs.6.16 Crore) (Previous Year of SGD Nil) for
the fnancial year ending March 31, 2013. It registered a net proft of
SGD 195,875 (equivalent of Rs.0.86 Crore) for the fnancial year ending on
March 31, 2013 compared to net proft of SGD Nil for the previous year.
The Company has a wholly owned subsidiary in Singapore titled Blue Star
Infostack Solutions Pte. Ltd. which caters to the Banking, Financial
Services and Insurance sector in Singapore and Malaysia. The
performance of the subsidiary is satisfactory.
The Company has also setup a wholly owned subsidiary named Blue Star
Infostack Malaysia Sdn. Bhd. in 2013 for catering to Malaysian clients.
Publication of results of subsidiary companies
Section 212(8) of the Companies Act, 1956 exempts the holding company
from attaching the Balance Sheet and Proft and Loss Account of its
subsidiaries. The Ministry of Corporate Affairs vide its circular No.
2/2011 dated 8th February, 2011 granted, subject to certain terms and
conditions, permission on a general basis, to the Board of Directors of
the holding company to allow for publication of the Annual Report
without the subsidiary company''s fnancials. Accordingly, the Balance
Sheet, Proft and Loss Account, Report of the Board of Directors and the
Report of the Auditors of the subsidiary companies have not been
attached with the Balance Sheet of the Company. The Company will make
available these documents/details upon request by any member of the
Company interested in obtaining the same. However, pursuant to
Accounting Standard AS-21 issued by the Institute of Chartered
Accountants of India, Consolidated Financial Statements presented by
the Company include the fnancial information of its subsidiaries.
6. DIRECTORS
In accordance with the provisions of the Companies Act, 1956, two of
the Directors, Mr. Suresh N. Talwar and Dr. Prakash G. Hebalkar retire
by rotation and being eligible, offer themselves for reappointment at
the ensuing Annual General Meeting. Brief profles of these Directors
are given in the notes to the notice of the ensuing AGM.
7. EMPLOYEES STOCK OPTION PLAN (ESOP)
Disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ESOP are
given in note no. 2.1 of Notes to the Financial Statements, forming
part of the Accounts.
8. DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors would like to inform the members that the Audited
Accounts for the fnancial year ended March 31, 2013 are in full
conformity with the requirement of the Companies Act, 1956. The
Directors hereby confrm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed.
b) For recognising exchange gains or loss on foreign exchange, the
Institute of Chartered Accountants of India has announced and
recommended new accounting standard AS30 to be adopted. Your Directors
have thought that it is prudent and appropriate to adopt this standard
with effect from April 1, 2008 although it is yet to become mandatory.
In accordance with this standard, foreign exchange gains or losses not
related to the operations for the period are transferred to an account
called Hedging Reserve in the Balance Sheet.
c) The accounting policies are consistently applied, and reasonable,
prudent judgments and estimates are made so as to give a true and fair
view of the state of affairs of the Company at the end of the fnancial
year, and of the profts of the Company for that period.
d) The Directors have taken proper and suffcient 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 providing and detecting frauds and other irregularities.
e) The Directors have prepared the annual accounts on a going concern
basis.
9. AUDITORS
The Statutory Auditors M/s Walker, Chandiok & Co, Chartered
Accountants, Mumbai, who retire at the conclusion of the ensuing Annual
General Meeting, being eligible, offer themselves for re-appointment. A
written certifcate from the proposed Auditors has been obtained by the
Company to the effect that the re-appointment, if made, would be in
accordance with the limits specifed under Section 224(1B) of the
Companies Act, 1956.
10. CORPORATE GOVERNANCE
The Company has complied with all the recommendations of the Corporate
Governance code as provided in clause 49 of the Listing Agreement with
the stock exchanges.
A separate section on Corporate Governance, together with a certifcate
from the Company''s Auditors confrming compliance, is set out
separately, forming part of this Report.
11. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required by clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report is attached
separately in the Annual Report, and forms part of the Directors''
Report.
12. PARTICULARS OF EMPLOYEES
Particulars of Employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, form part of this report. However, in
pursuance of Section 219(1) (b) (iv) of the Companies Act, 1956, this
report is being sent to all the shareholders of the Company excluding
the aforesaid information. The said particulars will be made available
on request, and also made available for inspection at the Registered
Offce of the Company. Members interested in obtaining such particulars
may write to the Company Secretary at the Registered Offce of the
Company.
13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as per Section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, relating to the conservation of energy,
technology, absorption, foreign exchange earnings and outgoings
respectively, is annexed and forms part of this report.
14. GREEN INTIATIVE IN THE CORPORATE GOVERNANCE
Pursuant to the "Green Initiative in Corporate Governance" by the
Ministry of Corporate Affairs in allowing paperless compliances, the
Company has implemented the policy of sending the Notice with Balance
Sheet, Proft and Loss Account, Auditor''s Report, Director''s Report and
Explanatory Statement etc. through email after obtaining consent of the
shareholders who are willing to receive the aforementioned document
through electronic mode.
15. ACKNOWLEDGEMENT
The Board wishes to place on record its appreciation of the sincere
efforts put in by the employees of the Company, in helping it reach its
current growth levels.
Your Directors appreciate the continued support of employees, clients,
investors, business associates, bankers, vendors, regulatory
authorities and other stakeholders.
For and on behalf of the Board of Directors of
Blue Star Infotech Limited
Place: Mumbai Suneel M Advani
Date: 9 May 2013 Chairman and Managing Director
Mar 31, 2012
The Directors present herewith the Fifteenth Annual Report on the
Business and Operations of the Company together with the Audited
Financial Statements for the year ended March 31, 2012.
1. FINANCIAL RESULTS:
The Company's operating performance during the year ended March 31,
2012 as compared to the previous year is indicated in brief below:
(Rs in Lakhs)
2011-2012 2010-2011
Total income 10,771 11,004
Profit before interest,
depreciation and taxation 1,103 1,496
Depreciation and Amortisation 296 228
Profit before taxation 807 1,268
Provision for taxation 253 377
Exceptional item Nil 64
Profit after taxation and
Exceptional item 554 827
Balance brought forward 5,262 4,867
Profits available for appropriation 5,816 5,694
Less: Transfer to General Reserves 56 83
Dividend (Proposed) 207 300
Corporate Dividend Tax 34 49
Balance carried forward 5,519 5,262
2. DIVIDEND
Your Directors are pleased to recommend payment of a dividend of Rs 2/-
per equity share of Rs 10/- each during the year subject to the approval
of the shareholders. (Previous year Rs 3/- per share of Rs 10/- each).
3. OPERATING RESULTS AND BUSINESS
During the year under review, total income of the Company was Rs 108
Crore from Rs 110 Crore, i.e.; a decline of 2%. On a consolidated
basis, total income increased by 4% to Rs 134 Crore from Rs 129 Crore.
The global economic scenario continued to be subdued for IT companies
as well as other industries for a large part of FY 11-12. Exchange rate
volatility was witnessed in the latter half of the financial year.
Despite unchanged sales volumes, your company witnessed pressure on its
operating costs. This was despite a prudent hedging of foreign currency
thereby minimising foreign currency exchange losses, tight control over
costs and continued insistence on higher manpower productivity and
other operational efficiencies. The net profit after tax on a
consolidated basis for the year ended March 31, 2012 was Rs 3.57 Crore
as compared to Rs 8.40 Crore for the last financial year.
4. INVESTMENTS
The Company invests its surplus funds in debt based mutual funds which
are considered safe. As on March 31, 2012 about Rs 5.55 Crore was
invested in liquid debt mutual fund schemes.
5. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company at present has following three subsidiary companies:
a) Blue Star Infotech America, Inc.
A 100% wholly owned subsidiary of the Company, Blue Star Infotech
America, Inc. posted a total income of US$ 13,002,875 (equivalent of Rs
65.44 Crores) for the financial year ending March 31, 2012 as compared
to US$ 13,617,635 (equivalent of Rs 62.06 Crores) for the previous year.
The Company reported a net loss of US$ 413,674 (equivalent of Rs 2.07
Crores) this year compared to net loss of US$ 168,575 (equivalent of Rs
0.75 Crores) for the previous year.
As at the year end, there was further erosion in the net worth of Blue
Star Infotech America Inc. which is reflected as erosion in the net
worth of the subsidiary. The company infused further capital of US $ 1
Million (Rs 5.01 Crores) during the year in the subsidiary. The
management is of the view that the business loss is a temporary
phenomenon arising in unstable market conditions. As business volumes
increase and economic growth gets recouped, the company is expected to
see a turn around in profitability. As a result, no impairment of the
investment in the subsidiary is considered necessary.
b) Blue Star Infotech (UK) Ltd.
The total income of this wholly owned subsidiary of the Company was ã
2,760,596 (equivalent of Rs 22.00 Crores) for the financial year ending
March 31, 2012 as compared to ã 3,298,601 (equivalent of Rs 23.35
Crores) for the previous year. It registered a net profit of ã 13,807
(equivalent of Rs 0.11 Crores) for the financial year ending on March
31, 2012 compared to net profit of ã 97,082 (equivalent of Rs 0.70
Crores) for the previous year.
c) Blue Star Infotech (Singapore) Pte. Ltd.
This subsidiary was incorporated in January 2012 but has no tangible
financial operations as of the date of this report.
Section 212(8) of the Companies Act, 1956 exempts the holding company
from attaching the Balance Sheet and Profit and Loss Account of its
Subsidiaries. The Ministry of Corporate affairs vide its circular No.
2/2011 dated 8th February, 2011 granted subject to certain terms and
conditions, permission on a general basis, to the Board of Directors of
the holding company to allow for publication of the Annual Report
without the subsidiary company's financials. Accordingly, the Balance
Sheet, Profit and Loss Account, Report of the Board of Directors and
the Report of the Auditors of the Subsidiary Companies have not been
attached with the Balance Sheet of the Company. The Company will make
available these documents/details upon request by any member of the
Company interested in obtaining the same. However, pursuant to
Accounting Standard AS-21 issued by the Institute of Chartered
Accountants of India, Consolidated Financial Statements presented by
the Company include the financial information of its subsidiaries.
6. DIRECTORS
In accordance with the provisions of the Companies Act, 1956, two of
the Directors, Mr. Ashok Advani and Mr. Naresh Malhotra retire by
rotation and, being eligible, offer themselves for reappointment at the
ensuing Annual General Meeting. Brief profiles of these Directors are
given in the notice to the ensuing AGM.
7. EMPLOYEES STOCK OPTION PLAN (ESOP)
Disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ESOP are
given in note no. 2.1 of Notes to the Financial Statements, forming
part of the Accounts.
8. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors would like to inform the members that the Audited
Accounts for the financial year ended March 31, 2012 are in full
conformity with the requirement of the Companies Act, 1956. The
Directors hereby confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed.
b) For recognising exchange gains or loss on foreign exchange, the
Institute of Chartered Accountants of India has announced and
recommended new accounting standard AS30 to be adopted. Your Directors
have thought it prudent and appropriate to adopt this standard with
effect from April 1, 2008 although it is yet to become mandatory. In
accordance with this standard, foreign exchange gains or losses not
related to the operations for the period are transferred to an account
called Hedging Reserve in the Balance Sheet.
c) The accounting policies are consistently applied, and reasonable,
prudent judgments and estimates are 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 profits of the Company for that period.
d) The Directors have 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 providing and detecting frauds and other irregularities.
e) The Directors have prepared the annual accounts on a going concern
basis.
9. AUDITORS
The Statutory Auditors M/s Walker, Chandiok & Co, Chartered
Accountants, Mumbai, who retire at the conclusion of the ensuing Annual
General Meeting, being eligible offer themselves for re-appointment. A
written certificate from the proposed Auditors have been obtained by
the Company to the effect that the re-appointment, if made, would be in
accordance with the limits specified under Section 224(1B) of the
Companies Act, 1956.
10. CORPORATE GOVERNANCE
The Company has complied with all the recommendations of the Corporate
Governance code as provided in clause 49 of the Listing Agreement with
the stock exchanges.
A separate section on corporate governance, together with a certificate
from the Company's Auditors confirming compliance, is set out
separately, forming part of this Report.
11. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report have been attached, and
forms part of the Directors' Report.
12. PARTICULARS OF EMPLOYEES
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, form part of this report. However, in
pursuance of Section 219(1) (b) (iv) of the Companies Act, 1956, this
report is being sent to all the shareholders of the company, excluding
the aforesaid information. The said particulars will be made available
on request and also made available for inspection at the Registered
Office of the Company. Members interested in obtaining such
particulars may write to the Company Secretary at the Registered Office
of the Company.
13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as per Section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, relating to the conservation of energy,
technology, absorption, foreign exchange earnings and outgoings
respectively, is annexed and forms part of this report.
14. GREEN INITIATIVE IN THE CORPORATE GOVERNANCE
The Ministry of Corporate Affairs has recommended a "Green Initiative
in the Corporate Governance" by allowing paperless compliances by the
Companies after considering Sections 2, 4, 5 and 81 of the Information
Technology Act, 2000 for legal validity of compliances under Companies
Act, 1956 through electronic mode.
In this regard, the Company has implemented this green initiative of
sending the Notice with Balance Sheet, Profit & Loss Account, Auditor's
Report, Director's Report and Explanatory Statement etc. through email
after obtaining consent of the shareholders who are willing to receive
the aforementioned document through electronic mode. The company has
printed 11,000 copies of the Annual Report this year as compared to
15,000 copies last year.
15. ACKNOWLEDGEMENT
The Board wishes to place on record its appreciation of the sincere
efforts put in by employees of the Company.
Your Directors appreciate the continued support of its clients,
investors, business associates, bankers, vendors, regulatory and other
authorities.
For and on behalf of the Board
of Directors of Blue Star Infotech Limited
Suneel M Advani
Chairman and Managing Director
Place: Mumbai
Date : 3 May 2012
Mar 31, 2011
The Directors present herewith the Fourteenth Annual Report on the
Business and Operations of the Company together with the Audited
Financial Statements for the year ended March 31, 2011.
1. FINANCIAL RESULTS
The Companys operating performance during the year ended March 31,
2011 as compared to the previous year is indicated in brief below:
(Rs. in Lakhs)
2010-2011 2009-2010
Total Income 11,004 11,162
Profit before interest, depreciation
and taxation 1,496 1,704
Depreciation 228 223
Profit before taxation 1,268 1,481
Provision for taxation 377 87
Exceptional Item 64 Nil
Profit after taxation and Exceptional Item 827 1,394
Balance brought forward 4,866 4,197
Profits available for appropriation 5,694 5,591
Less: Transfer to General Reserves 83 139
Dividend (Proposed) 300 500
Corporate Dividend Tax 49 85
Balance carried forward 5,262 4,867
2. DIVIDEND
Your Directors are pleased to recommend payment of a dividend of Rs.
3/- per equity share of Rs. 10/- each during the year subject to the
approval of the shareholders. (Previous year Rs. 5.00/- per share of
Rs. 10/- each).
3. OPERATING RESULTS AND BUSINESS
During the year under review, total income of the Company was Rs. 110
Crore from Rs. 112 Crore, i.e.; a decline of 2%. On a consolidated
basis, total income declined 5% to Rs. 129 Crore.
The global recession continued to dominate the economic scenario for IT
companies as well as other industries for a large part of FY10-11.
Despite decrease in sales volumes, your company was able to maintain
its profitability. It was mainly the result of prudent hedging of
foreign currency thereby virtually eliminating forex losses, tight
control over costs and continued insistence on higher manpower
productivity and other operational efficiencies. The net profit after
tax on a consolidated basis for the year ended March 31, 2011 was Rs.
8.39 Crore as compared to Rs. 13.78 Crore for the last financial year.
4. INVESTMENTS
The Company invests its surplus funds in debt based mutual funds which
are considered safe. As on March 31, 2011 about Rs. 17 Crore were
invested in liquid debt mutual fund schemes.
5. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company at present has following two subsidiary companies:
a) Blue Star Infotech America, Inc. (Formerly, USIN International,
Inc.)
A 100% wholly owned subsidiary of the Company, Blue Star Infotech
(America), Inc. posted a total income of US$ 13,617,635 (equivalent of
Rs. 6,206 Lakhs) for the financial year ending March 31, 2011 [Previous
year
US$ 16,284,543 (equivalent of Rs. 7,728 Lakhs)]. The Company reported
net loss of US$ 168,575 (equivalent of about Rs. 75 Lakhs) this year
compared to a net profit of US$ 24,932 (equivalent of about Rs. 3
Lakhs) last year.
As at the year end, there was an erosion in the net worth of Blue Star
Infotech America Inc. which is reflected as negative net worth of the
subsidiary. The management is of the view that this business loss is a
temporary phenomenon arising in recessionary market conditions. As
economic growth in the U.S. resumes, it is expected that the new year
will see the company post better financial results. Hence, no
impairment of the investment in the subsidiary is deemed necessary at
this time.
b) Blue Star Infotech (UK) Ltd.
The total income of this wholly owned subsidiary of the Company was ã
3,298,601 (equivalent of Rs. 2,335 Lakhs) [Previous Year of ã 28,42,865
(equivalent of Rs. 16 Lakhs)]for the financial year ending March 31,
2011. It registered a net profit of ã 97,082 (equivalent of Rs. 69
Lakhs) for the financial year ending on March 31, 2011 compared to net
profit of ã 24,932 (equivalent of Rs. 16 Lakhs) for the previous year.
Section 212(8) of the Companies Act, 1956 exempts the holding company
from attaching the Balance Sheet and Profit and Loss Account of its
Subsidiaries, subject to the approval of the Central Government.
Accordingly, the Board in their meeting held on 25th January 2011, had
resolved to make an application to the Central Government to waive the
requirement of attaching the Balance Sheet and profit and loss account
of the companys subsidiaries in the Annual Report. The ministry vide
its circular No. 2/2011 dated 8th February, 2011 granted subject to
certain terms and conditions, permission on a general basis, to the
Board of Directors of the holding company to allow for publication of
the Annual Report without the subsidiary companys financials.
Accordingly, the Balance Sheet, Profit and Loss Account, Report of the
Board of Directors and the Report of the Auditors of the Subsidiary
Companies have not been attached with the Balance Sheet of the Company.
The Company will make available these documents/ details upon request
by any member of the Company interested in obtaining the same. However,
pursuant to Accounting Standard AS-21 issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements
presented by the Company include the financial information of its
subsidiaries.
6. DIRECTORS
In accordance with the provisions of the Companies Act, 1956, two of
the Directors, Mr. Sanjay N Vaswani and Mr. Suresh N Talwar retire by
rotation and, being eligible, offer themselves for reappointment at the
ensuing Annual General Meeting. Brief profiles of these Directors are
given in the notes to the notice of the ensuing AGM.
Further, the Board of Directors unanimously decided at their meeting
held on 15th to appoint Mr. Sunil Bhatia as the Companys Managing
Director & CEO and Mr. K. P. T. Kutty as an independent Director of the
company with effect from 15th April 2011, subject to the approval of
the shareholders in the ensuing AGM. Brief profiles of these new
Directors are given in the notes to the notice of the ensuing AGM.
7. EMPLOYEES STOCK OPTION PLAN (ESOP)
Disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ESOP are
given in note no. B (5) of Schedule J Significant Accounting Policies
and Notes, forming part of the Accounts.
Further, amendment in the ÃBlue Star Infotech Employees Stock Option
Scheme, 2003 is proposed for members approval at the ensuing Annual
General Meeting. Details of the modification proposed are contained in
the notes to the notice of the ensuing AGM.
8. DIRECTORS RESPONSIBILITY STATEMENTS
The Directors would like to inform the members that the Audited
Accounts for the financial year ended March 31, 2011 are in full
conformity with the requirement of the Companies Act, 1956. The
Directors hereby confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed.
b) For recognising exchange gains or loss on foreign exchange, the
Institute of Chartered Accountants of India has announced and
recommended new accounting standard AS30 to be adopted. Your Directors
have thought it prudent and appropriate to adopt this standard with
effect from April 1, 2008 although it is yet to become mandatory. In
accordance with this standard, foreign exchange gains or losses not
related to the operations for the period are transferred to an account
called Hedging Reserve in the Balance Sheet.
c) The accounting policies are consistently applied, and reasonable,
prudent judgments and estimates are 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 profits of the Company for that period.
d) The Directors have 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 providing and detecting frauds and other irregularities.
e) The Directors have prepared the annual accounts on a going concern
basis.
9. AUDITORS
The Statutory Auditors M/s Walker, Chandiok & Co, Chartered
Accountants, Mumbai, who retire at the conclusion of the ensuing Annual
General Meeting, being eligible offer themselves for re-appointment. A
written certificate from the proposed Auditors have been obtained by
the Company to the effect that the re-appointment, if made, would be in
accordance with the limits specified under Section 224(1B) of the
Companies Act, 1956.
10. CORPORATE GOVERNANCE
The Company has complied with all the recommendations of the Corporate
Governance code as provided in clause 49 of the Listing Agreement with
the stock exchanges.
A separate section on corporate governance, together with a certificate
from the Companys Auditors confirming compliance, is set out
separately, forming part of this Report.
11. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report have been attached, and
forms part of the Directors Report.
12. PARTICULARS OF EMPLOYEES
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, form part of this report. However, in
pursuance of Section 219(1) (b) (iv) of the companies Act, 1956, this
report is being sent to all the shareholders of the company excluding
the aforesaid information. The said particulars will be made available
on request, and also made available for inspection at the Registered
Office of the Company. Members interested in obtaining such particulars
may write to the Company Secretary at the Registered Office of the
company.
13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as per Section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, relating to the conservation of energy,
technology, absorption, foreign exchange earnings and outgoings
respectively, is annexed and forms part of this report.
14. GREEN INTIATIVE IN THE CORPORATE GOVERNANCE
The Ministry of Corporate Affairs has taken a ÃGreen Initiative in the
Corporate Governanceà by allowing paperless compliances by the
Companies after considering Sections 2,4,5 and 81 of the Information
Technology Act, 2000 for legal validity of compliances under Companies
Act, 1956 through electronic mode.
In this regard, the Company intends to implement this green initiative
of sending the Notice with Balance Sheet, Profit & Loss Account,
Auditors Report, Directors Report and Explanatory Statement etc.
through email after obtaining consent of the shareholders who are
willing to receive the aforementioned document through electronic mode.
The company has printed 15,000 copies of the Annual report this year as
compared to 16,500 copies last year.
15. ACKNOWLEDGEMENT
The Board wishes to place on record its appreciation of the sincere
efforts put in by employees of the Company, in helping it reach its
current growth levels.
Your Directors place on record their appreciation for the support and
assistance received from customers, investors, business associates,
bankers, vendors, regulatory and governmental authorities.
For and on behalf of the Board of Directors of Blue Star Infotech
Limited
Suneel M Advani
Chairman and Managing Director
Mumbai, May 19, 2011
Mar 31, 2010
The Directors present herewith the 13th Annual Report on the Business
and Operations of the Company together with the Audited Financial
Statements for the year ended March 31, 2010.
1. FINANCIAL RESULTS
The Companys operating performance during the year ended March 31,
2010 as compared to the previous year is indicated in brief below:
(Rs. in Lakhs)
2009-2010 2008-2009
Total Income 11,162 12,901
Profit before interest,
depreciation and taxation 1703 1,609
Depreciation 223 249
Profit before taxation 1,480 1,360
Provision for taxation 87 Nil
Fringe Benefit Tax Nil 47
Profit after taxation 1,393 1,313
Balance brought forward 4,197 3,601
Profits available
for appropriation 5,590 4,913
Less: Transfer to General
Reserves 139 131
Final Dividend (Proposed) 500 500
Corporate Dividend Tax 85 85
Balance carried forward 4,866 4,197
2. DIVIDEND
Your Directors are pleased to recommend payment of a dividend of Rs.
5/- per equity share of Rs. 10/- each during the year subject to the
approval of the shareholders. (Previous year Rs. 5/- per share of Rs.
10/- each).
3. OPERATING RESULTS AND BUSINESS
During the year under review, total income of the Company was Rs.
111.62 Crores as compared to Rs. 129.01 Crores last year, i.e.; a
decline of 13%. On a consolidated basis, total income declined 13% to
Rs. 136.16 Crores.
The global recession continued to dominate the economic scenario for IT
companies as well as other industries for a large part of FY 09-10.
Despite decrease in sales volumes, your Company was able to maintain
its profitability. It was mainly the result of prudent hedging of
foreign currency thereby virtually eliminating forex losses, tight
control over costs and continued insistence on higher manpower
productivity and other operational efficiencies. The net profit after
tax on a consolidated basis for the year ended March 31, 2010 was Rs.
13.78 Crores as compared to Rs. 15.55 Crores for the last financial
year.
Barring any unforeseen situation, your Directors expect the growth in
operational profitability to continue in the current year as well.
4. INVESTMENTS
The Company invests its surplus funds in debt based mutual funds which
are considered safe. As on March 31, 2010 about Rs. 27.51 Crores were
invested in liquid debt mutual fund schemes.
5. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company at present has following two subsidiary companies:
a) Blue Star Infotech America, Inc. (Formerly, USIN International,
Inc.)
The 100% wholly owned subsidiary of the Company, Blue Star Infotech
America, Inc. posted a total income of US$16,284,543 (equivalent of Rs.
77 Crores) for the financial year ending March 31, 2010. The Company
reported net profit after tax of US$ 4,789 (equivalent of about Rs. 3
Lakhs) this year compared to a net profit of US$141,531 (equivalent of
Rs. 72 Lakhs) for the previous year.
b) Blue Star Infotech (UK) Ltd.
The total income of this wholly owned subsidiary of the Company was ã
2,842,865 (equivalent of Rs. 22 Crores) for the financial year ending
March 31, 2010. It registered a net profit of ã 24,932 (equivalent of
Rs. 16 Lakhs) for the financial year ending March 31, 2010 compared to
net profit of ã 60,146 (equivalent of Rs. 44-Lakhs) for the previous
year.
In terms of approvals granted by the Central Government, Ministry of
Company Affairs vide its letter no 47/147/2009-CL-lll dated March 16,
2010 under Section 212(8) of the Companies Act, 1956, a copy of the
Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and the Report of the Auditors of the Subsidiary Companies
have not been attached with the Balance Sheet of the Company. The
Company will make available these documents/details .upon request by
any member of the Company interested in obtaining the same. However,
pursuant to Accounting Standard AS-21 issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements
presented by the Company include the financial information of its
subsidiaries.
6. DIRECTORS
In accordance with the provisions of the Companies Act, 1956, two of
the Directors, Dr. Prakash G Hebalkar and Mr. Naresh K Malhotra retire
by rotation and, being eligible, offer themselves for reappointment at
the ensuing Annual General Meeting (AGM). Brief profiles of these
Directors are given in the notes to the notice of the ensuing AGM.
7. EMPLOYEES STOCK OPTION PLAN (ESOP)
Disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ESOP are
given in note no. B (6) of Schedule J Significant Accounting Policies
and Notes, forming part of the Accounts.
8. DIRECTORSRESPONSIBILITY STATEMENTS
The Directors would like to inform the members that the Audited
Accounts for the financial year ended March 31, 2010 are in full
conformity with the requirement of the Companies Act, 1956. The
Directors hereby confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed.
b) For recognising exchange gain or loss on foreign exchange, the
Institute of Chartered Accountants of India has announced and
recommended new accounting standard AS30 to be adopted. Your Directors
have thought it prudent and appropriate to Adopt this Standard with
effect from April 1, 2008 although it is yet to become mandatory. In
accordance with this standard, foreign exchange gains or losses not
related to the operations for the period are transferred to an account
called Hedging Reserve in the Balance Sheet.
c) The accounting policies are consistently applied, and reasonable,
prudent judgments and estimates are 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 profits of the Company for that period.
d) The Directors have 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 providing and detecting frauds and other irregularities.
e) The Directors have prepared the annual accounts on a going concern
basis.
9. AUDITORS
The Statutory Auditors M/s Walker, Chandiok & Co, Chartered
Accountants, Mumbai, who retire at the conclusion of the ensuing AGM,
being eligible offer themselves for re-appointment. A written
certificate from the proposed Auditors have been obtained by the
Company to the effect that the re-appointment, if made, would be in
accordance with the limits specified under Section 224(1 B) of the
Companies Act, 1956.
10. CORPORATE GOVERNANCE
The Company has complied with all the recommendations of the Corporate
Governance Code as provided in Clause 49 of the Listing Agreement with
the Stock Exchanges.
A separate section on corporate governance, together with a certificate
from the Companys Auditors confirming compliance, is set out
separately, forming part of this Report.
11. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report have been attached, and
forms part of the Directors Report.
12. PARTICULARS OF EMPLOYEES
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, as amended, form part of this report. However, in
pursuance of Section 219(1)(b) (iv) of the Companies Act, 1956, this
report is being sent to all the shareholders of the Company "excluding"
the aforesaid information.The said particulars will be made available
on request, and also made available for inspection at the Registered
Office of the Company. Members interested in obtaining such particulars
may write to the Company Secretary at the Registered Office of the
Company.
13. CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information as per Section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, relating to the conservation of energy,
technology absorption, foreign exchange earnings and outgoings
respectively, is annexed and forms part of this report.
14. ACKNOWLEDGEMENT
The Board wishes to place on record its appreciation of the sincere
efforts put in by employees of the Company, in helping it reach its
current growth levels.
Your Directors place on record their appreciation for the support and
assistance received from customers, investors, business associates,
bankers, vendors, regulatory and governmental authorities.
For and on behalf of the Board of Directors
of Blue Star Infotech Limited
Suneel M Advani
Chairman and Managing Director
Mumbai, May 13, 2010