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Directors Report of Coral Hub Ltd.

Jun 30, 2010

The Board of Directors ("Board") have pleasure in presenting the Sixteenth Annual Report along with the Audited Accounts for the period ended on 30th June, 2010 ("the period under review" "the period").


(Amount in Rupees)

Consolidated Standalone

Particulars 30.06.2010 31.03.2009 30.06.2010 31.03.2009 15 months 12 months 15 months 12 months

Total Revenue 99,01,44,690 66,56,53,585 89,11,85,506 61,73,94,267

Total Expenditure 78,45,47,210 47,32,63,773 62,11,46,147 44,09,05,276

PBDT 20,55,97,480 19,23,89,812 27,00,39,363 17,64,88,991

Interest 2,26,89,989 10,67,652 2,14,37,777 8,18,547

Depreciation 2,24,47,122 1,25,03,072 1,37,80,573 99,17,166

Profit before Tax 25,07,34,591 17,88,19,088 23,48,21,013 16,57,53,278

Provision for Income Tax 4,10,90,953 2,05,55,702 3,34,72,582 1,87,79,847

Fringe Benefit Tax 0 4,41,770 0.00 2,72,123

Deferred payment against tax 3,24,322 6,87,983 2,02,135 1,34,273

Profit after Tax 20,93,19,316 15,71,33,633 20,11,46,296 14,65,67,035

Add: - Balance brought forward 52,98,17,216 41,02,78,216 50,86,61,008 39,96,79,984 from previous year

Amount available for 73,91,36,592 56,74,11,849 70,98,07,304 54,62,47,019 Appropriation

Profit available for appropriation which is appropriated as follows:

Proposed Dividend 6%( 1,45,18,788 1,95,98,536 1,45,18,788 1,95,98,536 Previous year 12.5%)

Preference Share Dividend 8,562 8,562 0 0 Amount transferred to General 2,01,14,630 1,46,56,705 2,01,14,630 1,46,56,704 Reserve

Corporate Dividend Tax 24,11,389 33,30,771 24,11,389 33,30,771

Profit carried forward to Balance Sheet 68,96,52,088 52,98,17,276 66,03,31,362 50,86,61,008

EPS 0.85 1.39 0.92 1.41


Your Directors are pleased to recommend a final dividend @ 6 % i.e. Rs. 0.06 per Equity Share, subject to the approval of Shareholders in the Annual General Meeting.


During the period under the review, as per the Consolidated Accounts, the Company has achieved Sales income for the period ended 30th June, 2010 Rs. 99,01,44,690/- as against Rs.66,56,53,585/-forthe year ended 31st March, 2009 registering a marginal growth of 48.75 %. The Consolidated profit after tax for the current period is Rs.20,93,19,316/- as compared to Rs. 15,71,33,633/-for the previous year registering a raise of 33.21%. The profit before Interest, Depreciation and Tax for the current period is Rs. 20,55,97,480 as compared to Rs. 19,23,89,812/-for the previous year registering a raise of 6.87%.


Companys digitization activity has been stable through out the period and has added new services in its conversion activity especially in the E Publishing arena. The Company is now converting the data with current readable popular devices like iPad, Kindle & sony readers. More and more publishers are looking at the opportunity to convert their back titles compatible to these devices. The Company finds this as huge opportunity and actively pursuing with its existing clients and also expanded its horizon in marketing to other non-English speaking European publishers.

With opening of its subsidiary in UAE, Company is planning to shift the scanning and indexing business to subsidiary as it requires more and more on site support and logistically UAE will be able to support this activity much more easier.

The Company has also proposed to diversify its business through its Subsidiary, to start an e commerce platform called Coral Hub Online shopping. This e commerce portal has been floated by the subsidiary of the Company, very recently and caters to only Indian market. It has variety of products and made a soft launch to test the market. The real marketing of this portal would start from the New Year once we have many more products to offer. So far the response to this e commerce platform from Indian public is very encouraging.

Companys subsidiary Basiz Fund Accounting services continue to show very high profit margin and have won many more hedge funds accounts. It is expected to cross 5 mn USD turnover very shortly. It is also looking for acquisition abroad to expand its market reach.


The Company has extended its financial year for a further period of three months, that is the Companys financial year commencing from 1st April, 2009 and ending on 31st March, 2010 be extended upto and inclusive of 30th June, 2010 and that the accounts be prepared for the said financial year comprised of 15 months from 1st April, 2009 to 30,h June, 2010.


The name of the Company has been changed to Coral Hub Limited w.e.f. 9th July, 2010 subsequent to the approval of members obtained through Postal Ballot.

Further subsequent to the approval of Shareholders through Postal Ballot the Company has also altered its main objects and the other objects under the Object Clause no. Ill of the Memorandum of Association of the Company.


The Company would like to concentrate more in the arena of xml conversion and typesetting as publishing industry is going in that direction. The Company is planning to revamp its production infrastructure with investment in high performance hardware and will also add its software suites, as this is required in order to face the competition.

Since the delivery model of the books is slowly changing from print model to digital model and that too with introduction of multi functional devices the publishers are very keen to step up the availability of their books compatible to these devices. Your company finds this as a major opportunity to exploit and it has geared itself to take these challenges.

In order to exploit the growing on line shopping market, your company has diversified into this as major activity , through its Subsidiary and has opened up on line shopping plaza to cater to Indian market. The rationale behind starting this activity is that Indian online shopping market is estimated at Rs.100 billion and it is growing at the rate of 30% every year. Out of 60 million Internet users, about 10% shop online. With broadband & 3G penetration into interiors of India that would increase online shopping. According to Nielsen Report Online Shopping 2010,8 out of 10 Indian in metros shop online and out of this more than a quarter spend 11 % of their monthly purchases in online shopping. Your Company is all set to have a share in this market and can increase the shareholders value, as we would start the brand building exercise from the ensuing New Year.

The future prospects of all our subsidiaries are very exciting as they have great plans to expand their activity and market reach. Our subsidiaries in India and UAE are expected to post good results in the coming years.


In the month of November, 2009, the Company has invested in Ambition Clothing Private Limited (Earlier known as Ambition Industries Pvt. Ltd.) situated in MEPZ Special Economic Zone at Chennai, which is dealing in readymade Garments. The Company holds 91% Equity Shares of Ambition Clothing Private Limited .

During the period, the Company has also formed a Wholly Owned Subsidiary with the name VITL FZE, at Sharjah Airport International Free Zone (SAIF), UAE to carry on general trading activities.

The Company has three Indian subsidiaries namely Coral Hub Publishing Private Limited, (Earlier known as Coral Hub Online Services Pvt. Ltd.) Basiz Fund Service Private Limited, Ambition Clothing Private Limited, (Earlier known as Ambition Industries Pvt. Ltd.) and two foreign subsidiaries namely Digital Content Solutions Limited, United Kingdom and VITL FZE, UAE and three step down subsidiaries, namely Basiz India Fund Services Private Limited, Basiz Fa Services Singapore Pte. Limited, Singapore and Basiz Investment Accounting (UK) Limited, United Kingdom which are subsidiaries of Basiz Fund Service Private Limited.

As required under Section 212 of the Companies Act, 1956, the audited statement of accounts along with the Report of the Board of Directors and respective Auditors Report thereon of all the subsidiary companies for the period ended on respective financial year are annexed and forms part of this Annual Report.


Mr. D. M. Shirodkar and Mr. Ghanshyam Joshi, Directors of the Company, retire by rotation and being eligible, offers themselves for re-appointment at the ensuing Annual General Meeting (AGM). Pursuant to Clause 49 of the Listing Agreement, the detailed profile of the Directors retiring by rotation is provided in the Notice convening the Annual General Meeting.

Mr. G. S. Vishwanathan has resigned from position of Whole Time Director w.e.f. 1st August, 2010 and from directorship of the Company w.e.f. 30th August, 2010. The Board wishes to place record its appreciation for the service provided by him during the tenure as Director as well as Whole Time Director.


In pursuance of shareholders approval obtained on 23rd November, 2007 your Company formulated and implemented an Employee Stock Option Scheme (the ESOS 2008) for grant of Stock Options to all permanent employees and Whole Time Directors of the Company. The Remuneration Committee of the Board of Directors is entrusted with the responsibility of administering the Scheme and in pursuance thereof. The Remuneration Committee had granted Stock Options equivalent to 5,15,450 Equity Shares of Rs. 10/- each on 12th June 2008 to Employees and Whole Time Directors of the Company. Due to Sub-division of Equity Shares, all the employees and Whole Time Directors were entitled for 10 Equity Shares of Re.1/- each on exercise of each Option of the ESOS 2008.Thus Stock Options were increased from 5,15,450 to 51,54,500 Stock Options.

Out of 51,54,500 Stock Options, 44,05,800 Stock Options has been exercised at the exercised price of Rs. 5/- each by the employees and Whole Time Directors of the Company in April and May, 2009.

During the period under review, 1,88,660 Stock Options have been exercised at the exercised price of Rs. 5/- each by the employees the Company and the Company had allotted 1,88,660 Equity Shares of Re. 1/- each in the Meeting of Board of Directors held on 11th June, 2010 to the employees who have exercised options granted to them. Pursuant to the aforesaid allotment of Shares under ESOS, Paid Up Share Capital of the Company is increased to Rs. 24,19,79,795/-.

Additional information on ESOS as required by Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 is as Annexure I and forms part of this Report.

The Companys Auditors, M/s. K. P. Joshi & Co., Chartered Accountants, Mumbai have certified that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the members at the Extra-Ordinary General Meeting held on 23rd November, 2007.

The period between grant of option and vesting is not less than 12 months as per the SEBI guidelines. The vested options can be exercised by the grantee by communicating to the Company in writing to exercise.


The Company has not accepted any Public Deposits under Section 58Aof the Companies Act, 1956 during the period under review.


Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial period ended 30th June, 2010, 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 were 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 period and of the profit or loss of the company for the period under review.

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the Directors had prepared the accounts for the period under review on a going concern basis.


The information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) rules 1998 are detailed below.

Conservation of Energies: The operations of your Company are not energy intensive, therefore impact of energy saving devices are insignificant. Adequate measures have however, been taken to reduce energy consumption by using energy efficient Computer terminals and by the purchase of energy efficient equipment of latest technology.

Research & Development (R&D): Your Company continues to make investment in research and development which is crucial to its continued success.

Technologies absorption: Your Company continues to use the latest technologies for improving the productivity and quality of its services. Your Company has continued to invest in the latest services and workstations.

Foreign Exchange earnings and outgoings: During the period under review, earning in Foreign Exchange is Rs. 88,36,78,263/- (Previous year was Rs. 61,08,57,165/-) and Foreign Exchange Remittance is Rs.22,14,185/-(Previous yearwasRs. 10,45,325/-).


Statement pursuant to sub section 2A of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of this Report is given in Annexurell.


M/s. K. P. Joshi & Co., Chartered Accountants, Mumbai, who are the Statutory Auditors of the Company hold office upto the conclusion of the forthcoming Annual General Meeting. They have expressed their willingness to continue as Statutory Auditors for the financial period 2010- 11 and accordingly, a resolution proposing their appointment is being submitted to the ensuing Annual General Meeting. The members are requested to consider their re-appointment for the current financial period 2010-11 and authorize the Board of Directors to fix their remuneration.


As required under Clause 41 of the Listing Agreements with the Stock Exchanges, the Consolidated Financial Statements have been prepared in accordance with the requirements of Accounting Standards 21 Issued by the Institute of Chartered Accountants of India. The audited Consolidated Financial Statements form part of the Annual Report. The consolidated financial statements presented by the Company include the financial information of its subsidiary. The information for each subsidiary company is also in disclosure in a separate annexure with consolidated Balance Sheet.


Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the Management Discussion and Analysis Report, the Report on Corporate Governance and the certificate from the Auditor of the Company regarding compliance of conditions of Corporate Governance are annexed to this Report and forms part of this Annual Report.

With a view to strengthening the Corporate Governance framework, the Ministry of Corporate Affairs has incorporated certain provisions in the Companies Bill, 2009. The Ministry has issued a set of voluntary guidelines in the second half of December, 2009 for adoption by the Companies. The Guidelines broadly provide for appointment of directors (including independent directors),guiding principles to remunerate directors, responsibilities of the Board, risk management, the enhanced role of Audit Committee, rotation of audit partners and firms and conduct of secretarial audit. Your Company while already complying by and large with these various requirements has already initiated appropriate action for compliance.


The Directors take the opportunity to thank ail investors, business partners, clients, vendors, bankers and advisors for their continuous support during the period.

Your Directors also wish to place on record their appreciation for the dedication with which the employees at all levels performed their duties and for their cooperation and support during the period.

By order of the Board of Directors

Sd/- Sd/ (G. S. Chandrashekar) (Dilip Parekh) Chairman and Director Whole Time Director

PLACE: Mumbai DATE: 28.10.2010

Oct 21, 12:00 am
Oct 21, 4:14 pm
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