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Directors Report of Goldstone Technologies Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty First Annual Report of your Company and the Audited Financial Accounts for the year ended on March 31,2015.

Financial Results :

(Rs. in Millions)

Standalone

Particulars 2014-15 2013-14

Net Sales/Income from Operations 290.66 261.76

Total Expenses 244.46 211.31

Profit from Operations before Other Income, Interest, Depreciation & Exceptional Items 46.20 50.45

Other Income 1.88 18.00

Profit before Interest, Depreciation & Exceptional Items 48.08 68.45

Interest 1.01 4.89

Depreciation 47.61 47.52

Profit after Interest but before Exceptional Items (0.54) 16.04

Exceptional Items - -

Profit before Tax (0.54) 16.04

Tax expenses 36.01 5.17

Net Profit/(Loss) after Tax (36.55) 10.87

Extraordinary Items (Net of Tax) 1.45 0.06

Net Profit for the period (38.00) 10.81

Equity Share Capital (1,87,82,066 Shares of Rs. 10/- each; Previous year 1,87,82,066 Shares of Rs. 10/- each) 187.82 187.82

E.PS (After Prior Period Items) (Rupees) (2.02) 0.58

Net Worth 476.74 521.25

Book Value (Face Value of Rs. 10/- each) 25.38 27.75

(Rs. in Millions)

Consolidated

Particulars 2014-15 2013-14

Net Sales/Income from Operations 697.18 736.49

Total Expenses 642.49 670.15

Profit from Operations before Other Income, Interest, Depreciation & Exceptional Items 54.69 66.34

Other Income 11.09 18.00

Profit before Interest, Depreciation & Exceptional Items 65.78 84.34

Interest 1.05 4.95

Depreciation 47.65 47.67

Profit after Interest but before Exceptional Items 17.08 31.72

Exceptional Items - -

Profit before Tax 17.08 31.72

Tax expenses 42.90 12.02

Net Profit/(Loss) after Tax (25.82) 19.70

Extraordinary Items (Net of Tax) 1.45 0.06

Net Profit for the period (27.27) 19.64

Equity Share Capital (1,87,82,066 Shares of Rs. 10/- each; Previous year 1,87,82,066 Shares of Rs. 10/- each) 187.82 187.82

E.PS (After Prior Period Items) (Rupees) (1.45) 1.05

Net Worth 619.83 653.60

Book Value (Face Value of Rs. 10/- each) 33.00 34.80

Review of Operations :

During the year under review, your Company has reached a consolidated turnover of Rs.697.18 Million as compared to Rs.736.49 Million for the previous financial year. The Standalone turnover was Rs.290.66 Million as against a turnover of Rs.261.76 Million during the previous year. The Consolidated Net (Loss) for the year 2014-2015 was (Rs.27.27) Million in comparison with Net profit of '19.64 Million during the previous year and the Standalone Net (Loss) is (Rs.38.01) Million during the year and in comparison with Net profit of '10.81 Million during the previous year. However the consolidated cash profit for the FY 2014-15 has been reported at Rs. 20.38 Million as compared to '67.30 Million in the previous year and Standalone cash profit has been reported at Rs.9.61 Million as compared to Rs.58.33 Million during the previous year.

Dividend :

During the year the Company does not have adequate profits and hence, your Board has not recommended any dividend for the financial year 2014-15.

Share Capital :

The Paid up capital as on 31st March, 2015 was Rs.18,78,20,660 (having 1,87,82,066 Equity Shares @ Rs. 10/- each). During the year under review the company has not issued any shares either to the public or to the promoters During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on March 31, 2015 none of the Directors of the Company hold shares or convertible instruments of the Company.

Finance :

Cash and cash equivalents as at 31st March, 2015 was Consolidated Rs.177.36 Million & Standalone '27.15 Million the Company continuous to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

Directors :

Mr. L.P.Sashikumar Director, who retires by rotation at the 21st Annual General Meeting and being eligible, offer himself for re- appointment.

As per the resolution passed by the Board of Directors in their meeting held on 27th May, 2015 Subject to the approval of the Members of the Company Mr.PS.Parthasarathy has been appointed as Managing Director of the Company for a period of two years with effect from 27th May, 2015.

Mr.K.S.Sarma, Mr. Vedula Venkata Ramana, Mrs. Promilla Shankar have been appointed as independent directors of the Company for a term of 5 (Five) years from 27th September, 2014 to 26th September, 2019 not liable to retirement by rotation.

Mrs. Promilla Shankar has resigned from her position w.e.f 12th July, 2015.

All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

Board Evaluation :

Pursuant to the Provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Remuneration Policy :

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Meetings :

During the year Seven Board Meetings and Four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Meeting of Independent Directors :

The details on the separate meeting of Independent Directors is reported in the Corporate Governance Report.

Familiarization Programme for Independent Directors :

The details on the familiarization programme for Independent Directors is reported in the Corporate Governance Report.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) The directors have 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 year and of the profit or loss of the Company for the year under review.

iii) The directors have 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.

iv) The directors have prepared the annual accounts on a going concern basis.

v) 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.

vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

Consolidated Financial Statements:

During the year the Board of Directors ('the Board') reviewed the affairs of the Subsidiaries. In accordance with Section 129 (3) of the Companies Act, 2013 and applicable Accounting Standards we have prepared consolidated financial statements of the Company and its subsidiaries which will form part of the Annual Report. Further a statement containing the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 are appended to the Board's report.

In accordance with Section 136 of the Companies Act, 2013 the Audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries are available on the website of the Company www.goldstonetech.com. These documents will also be available for inspection during the business hours at the registered office of the Company.

Subsidiaries and Associates

As on 31st March, 2015 we are having two wholly owned subsidiaries namely Staytop Systems Inc and Staytop Systems and Software Pvt Ltd. Till date Staytop Systems and Software Pvt Ltd has no business operations. Further the Company does not have any other Associates or Joint Ventures.

Further as per the revised Clause 49 of the Listing Agreement the Company has framed a policy on Material Subsidiaries as approved by the Board same has been uploaded on the Company's website www.goldstonetech.com.

During the year no further investments were made in the subsidiaries.

Statement containing salient features of financial statements of subsidiaries

Pursuant to sub-section (3) of Section 129 of the Act, the statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries, associate company or companies and joint venture or ventures is in the prescribed format AOC-1 are appended as Annexure 1 to the Board's report.

Report on the performance of Subsidiaries, Joint Ventures and Associates:

Further, brief about the business of the each of the Subsidiaries and Associates is given hereunder:-

Performance of the Staytop Systems Inc;

Staytop Systems, Inc., (a foreign wholly owned subsidiary company of Goldstone Technologies Limited) is engaged in business of IT Consulting and Staffing across USA.

The following is the brief summary of the financial performance during the year;

($ In Millions)

Particulars 2014-15 2013-14

Turnover 6.70 7.85

Profit before Tax 0.29 0.26

Net Profit/(Loss)

after Tax 0.18 0.15

Till date the Staytop Systems and Software

Pvt Ltd has no business operations and the Company has no associates as well as Joint Ventures.

Internal control systems and their adequacy:

The Company has an Internal Audit and Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit function monitors and evaluates 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. 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 recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

Insurance:

All the properties of your Company including its building, plant & machinery and stocks have been adequately insured.

Statutory Auditors:

M/s. P Murali & Company (FRN: 007257S), Chartered Accountants, Hyderabad, Statutory Auditors of the Company holds office in accordance with the provisions of the Companies Act, 2013 up to the conclusion of forth-coming Annual General Meeting and are eligible for re-appointment. Pursuant to the provisions of the Section 139 (2) of the Companies Act, 2013 and based on recommendations of the Audit Committee they being eligible, offer themselves for re-appointment. They have furnished a certificate stating that their re-appointment, if made, will be within the limits laid down under Section 141 (3) (g) of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules 2014.

The Audit Committee of your Company meets periodically with Statutory Auditors and Internal Auditors to review the performance of the Internal Audit, to discuss the nature and scope of statutory auditors functions, and to discuss auditing, internal control and financial reporting issues. To ensure complete independence, the statutory auditor and the internal auditor have full access to the Members of the Audit Committee to discuss any matter of substance.

Particulars of Loans, Guarantees or Investments;

The following are the details of the Loans, Guarantees given or Investments made by the Company during the Year.

S.No Loan/Guarantee/Investment given/Provided Description

1. Collateral Security; For the total credit facilities which have The Company has offered its land admeasuring been availed by the 26092 sq.yards situated at Sy No. 249(part), M/s. Goldstone Infratech 250 (part) & 251 (part) and buildings Limited from State Bank thereon at Cherlapally Village, of Hyderabad to the Ghatkesar mandal, Kapra Municipality as a extent of Rs. 89.00 security by way of mortgage in favour of Crores. the State Bank of Hyderabad for the credit facilities availed by the M/s. Goldstone Infratech Limited.

Corporate Guarantee;

Extended corporate guarantee in favour of State Bank of Hyderabad, Panjagutta Branch for and on behalf of the M/s. Goldstone Infratech Limited.

Related Party Transactions;

There are no materially significant related party transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www.goldstonetech.com none of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

The details of contracts or arrangements with related parties made by the company during the year 2014-15 is enclosed in form AOC-2 as Annexure-2 to the Board's report.

Secretarial Audit:

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s. VCSR & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as " Annexure 3 to the Board's Report"

Risk Management Policy

In terms of the requirements of Section 134 (3) (n) and clause 49 of the Listing Agreement read with relevant provisions of the Companies Act, 2013, the Company has developed and implemented the Risk Management Policy and constituted the Risk Management Committee and the Committee reviews the same periodically. The details of the Policy are reported in the Report on Corporate Governance which forms part of the Board's Report.

At present the company has not identified any element of risk which may threaten the existence of the company.

Code of Conduct:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.goldstonetech.com.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. In addition to the above as per Clause 49 of the Listing Agreement read with Schedule IV of the Companies Act, 2013 duties of the Independent Directors and code of Independent Directors have been placed on the website of the Company www.goldstonetech.com.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

Declaration given by Managing Director of the Company regarding compliance of Code of Conduct enclosed as Annexure to the Corporate Governance Report.

PREVENTION OF INSIDER TRADING:

In Pursuance of SEBI (Prohibition of Insider Trading) Regulations, 2015 the Company has framed adopted the following policies for regulating, monitoring and reporting of trading by Insiders and uploaded in website of the Company.

i) Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders;

ii) Code of Practices & Procedures for Fair Disclolsure of Unpublished Price Sensitive Information;

The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.

Vigil mechanism / whistle blower policy:

As per the provisions of the Section 177 (9) & (10) of the Companies Act, 2013 read with amended Clause 49 of the Listing. Agreement, the Board had its meeting held on 17th May, 2014 adopted a Vigil Mechanism called 'Whistle Blower Policy' for directors and employees to report the management /Audit Committee instances of unethical behavior, actual or suspected, fraud or violation of company's code of conduct or ethics policy. The Vigil Mechanism also provided adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit committee in exceptional cases further it has also been uploaded in the Company's web site; www.goldstonetech.com.

Extract of Annual Return:

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure 4 to the Board's Report".

Stock Exchange Listing:

Presently, the Equity Shares of the Company are listed on National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The Company confirms that it has paid Annual Listing Fees due to all the Stock Exchanges where the Company's securities are listed for the year 2015-16.

Corporate Governance and Management Discussion & Analysis Reports

As per the Clause 49 of the Listing Agreement the Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement.

Managing Director and CFO Certification:

As required under the SEBI Guidelines, the Managing Director and the CFO Certification is attached to Corporate Governance Report.

Material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year i.e., 31.03.2015 to which financial statements relate and the date of the Board's Report:

There were no material changes and commitments affecting the financial position of the company between the end of the financial year i.e., 31.03.2015 and date of this report.

Particulars of Conservation of energy / technology absorption, foreign exchange earnings and outgoings:

Particulars in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Companies (Disclosure of particulars in the Directors Report) Rules 1988 are as follows:

A. CONSERVATION OF ENERGY:

Your company's operations involve low energy consumption. However, adequate measures have been taken to conserve and reduce the energy consumption.

B. TECHNOLOGY ABSORPTION:

Your Company continues to use state-of-the- art technology for improving the productivity and quality of its products and services. To create adequate infrastructure, your company continues to invest in the latest hardware and software.

C. FOREIGN EXCHANGE EARNINGS AND OUT GO:

Rs. In Millions

Particulars 2014-15 2013-14

Foreign Exchange Earnings 30.72 190.21

Foreign Exchange Outgo 32.03 11.55

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is enclosed as Annexure 5 to the Board's report.

Personnel:

Personnel relations have remained very cordial during the period.

Acknowledgements:

Your Directors convey their sincere thanks to CITI Bank and Central Bank of India for their support, guidance and assistance.

Your Directors thank all the Employees of your company for their dedicated service, which enabled your company to achieve satisfactory results and performance during the year. Your Directors thank the shareholders for their support and confidence reposed in the company and the management and look forward to their continued co-operation and support.

For and on behalf of the Board

Sd/- Sd/- L P Sashikumar P.S.Parthasarathy Director Managing Director DIN: 00016679 DIN: 01837281

Place: Secunderabad Date: 05th August, 2015


Mar 31, 2013

To The Members Goldstone Technologies Limited

The Directors have pleasure in presenting the Nineteenth Annual Report of your company and the Audited Financial Accounts for the year ended on March 31, 2013.

Financial Results (Consolidated)

(Rs. in Millions)

Particulars 2012-13 2011-12

Net Sales/Income from Operations 735.68 677.57

Total Expenses 657.03 635.00

Profit from Operations before Other Income,

Interest & Exceptional Items 78.60 42.57

Other Income 2.63 8.54

Profit before Interest & Exceptional Items 81.28 51.11

Interest 9.94 15.57

Profit after Interest but before Exceptional Items 71.34 35.54

Exceptional Items 0.00 0.00

Profit before Tax 71.34 35.54

Tax expenses 25.56 5.95

Net Profit after Tax 45.75 29.59

Extraordinary Items (Net of Tax) 0.00 1.88

Net Profit for the period 45.75 27.71

Equity Share Capital

(1,87,82,066 Shares of Rs 10/- each; Previous year 1,87,82,066 Shares of Rs 10/- each) 187.82 187.82

E.P.S (After Prior Period Items) (Rupees) 2.44 1.48

Net Worth 594.87 574.23

Book Value (face Value of Rs. 10/- each) 31.67 30.57



Review of Operations

During the year under review, your Company has achieved a consolidated turnover of Rs. 735.68 Million as compared to Rs. 677.57 Million during the previous financial year. The standalone turnover was Rs.287.58 Million as against a turnover of Rs. 242.93 Million during the previous year. The consolidated net profit for the period increased to Rs.45.75 Million from Rs. 27.71 Million during the previous year and the standalone profit increased to Rs.20.63 Million from Rs. 16.43 Million.

Dividend

In order to conserve resources for future requirements, the Board has decided to retain the profits generated and consequently, your Board did not recommend any dividend for the financial year 2012-13.

Fixed deposits

The Company has not accepted any Fixed Deposits, falling within the purview of Section 58A of the Companies Act, 1956.

Insurance

All the properties of your Company have been adequately insured.

Subsidiaries

Your Company has a wholly owned subsidiary incorporated in USA, namely Staytop Systems Inc. Further, it has another subsidiary company in India namely Staytop Systems and Software Private Limited, which is yet to commence its operations.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

As required under listing agreement with Stock Exchanges, Consolidated Financial statements prepared in terms of Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India, are attached.

Auditors

M/s. P. Murali & Company [FRN:007257S] Chartered Accountants, Statutory Auditors of the Company, holds office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of forthcoming Annual General Meeting and are eligible for re- appointment.

Directors

Mr. K.S.Sarma and Mr.L.P.Sashikumar, Directors who retires by rotation at the 19th Annual General Meeting and being eligible, offers themselves for reappointment.

Stock Exchange Listing

Presently, the Equity Shares of the Company are listed on National Stock Exchange of India [NSE], Bombay Stock Exchange Limited [BSE]. The Company confirms that it has paid Listing Fees due to all the Stock Exchanges where the Company''s securities are listed for the year 2013-14.

Director''s Responsibility Statement

In accordance with the Section 217(2AA) of the Companies Act, 1956, the Board of Directors confirms that:

a) In the preparation of the Accounts for the twelve months period ending March 31, 2013; the applicable accounting standards have been followed and there are no material departures there from.

b) They have selected such accounting policies in consultation with Statutory Auditors of the Company and applied 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 as at March 31, 2013 and of the profit of the Company for the financial year.

c) They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) They have prepared accounts for the year ended March 31, 2013 on a going concern basis.

Corporate Governance and Management Discussion and Analysis Report

A separate report on Corporate Governance along with Auditors'' Certificate on its compliance and Management Discussion and analysis forming part of this report are annexed hereto.

Particulars of Employees

None of the employees are drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act'' 1956 read with the Companies (particulars of employees) Rules, 1975, as amended.

Particulars of Conservation of energy / technology absorption, foreign exchange earnings and outgoings

Particulars in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Companies (Disclosure of particulars in the Directors Report) Rules 1988 are as follows:

A. CONSERVATION OF ENERGY:

Your company''s operations involve low energy consumption. However, adequate measures have been taken to conserve and reduce the energy consumption.

B. TECHNOLOGY ABSORPTION:

Your Company continues to use state- of-the-art technology for improving the productivity and quality of its products and services. To create adequate infrastructure, your company continues to invest in the latest hardware and software.

Acknowledgements

Your Directors convey their sincere thanks to Central Bank of India, ICICI Bank and CITI Bank for their support, guidance and assistance.

Your Directors thank all the Employees of your company for their dedicated service, which enabled your company to achieve satisfactory results and performance during the year. Your Directors thank the shareholders for their support and confidence reposed in the company and the management and look forward to their continued co-operation and support.



For and on behalf of the Board

Place: Secunderabad Sd/- Sd/-

Date: 31.07.2013 L P Sashikumar P.S.Parthasarathy

Director Director


Mar 31, 2012

To The Members of Goldstone Technologies Limited

The Directors have pleasure in presenting the Eighteenth Annual Report of your company and the Audited Financial Accounts for the year ended on March 31, 2012.

Financial Results (Consolidated) (Rs in Millions)

Particulars 2011-12 2010-11

Net Sales/Income from Operations 677.57 617.60

Total Expenses 635.00 586.04 Profit from Operations before Other

Income, Interest & Exceptional Items 42.57 31.56

Other Income 8.54 10.67

Profit before Interest & Exceptional Items 51.11 42.23

Interest 15.57 14.56

Profit after Interest but before Exceptional Items 35.54 27.68 Exceptional Items Nil Nil

Profit before Tax 35.54 27.68

Tax expenses 5.95 5.97

Net Profit after Tax 29.59 21.70

Extraordinary Items (Net of Tax) 1.88 0.08

Net Profit for the period 27.71 21.62 Equity Share Capital(1,87,82,066 Shares of Rs 10/- each;

Previous year 1,87,82,066, Shares of Rs 10/- each) 187.82 187.82

E.P.S (After Prior Period Items) (Rupees) 1.48 1.15

Net Worth 574.23 557.80

Book Value (face Value of Rs. 10/- each) 33.57 29.70



Review of Operations

During the year under review, your Company has achieved a consolidated turnover of Rs. 677.57 Million as compared to Rs.617.60 Million during the previous financial year. The standalone turnover was Rs.242.93 Million as against a turnover of Rs.231.56 Million during the previous year. The consolidated net profit for

the period increased to Rs.27.71 Million from Rs.21.62 Million during the previous year and the standalone profit increased to Rs.16.43 Million from Rs.9.67 Million. In spite of having faced challenges like decreasing margins, talent acquisition and retention, inflation, and unclear business roadmap in terms of Goods and Services Tax (GST) and Direct Tax Code (DTC) in India,

the performance of the Company during the period under report can be considered as a reasonably good performance. Despite the challenges, we, at Goldstone, will continue to re-engineer our-self and will focus more on vertical focused service offerings and additional alliances and partnerships.

Dividend

In order to conserve resources for future requirements, the Board has decided to retain the profits generated and consequently, your Board did not recommend any dividend for the financial year 2011-12.

Fixed deposits

The Company has not accepted any Fixed Deposits, falling with in the purview of Section 58A of the Companies Act, 1956.

Insurance

All the properties of your Company have been adequately insured.

Subsidiaries

Your Company has a wholly owned subsidiary incorporated in USA, namely Staytop Systems Inc. Further, it has another subsidiary company in India namely Staytop Systems and Software Private Limited, which is yet to commence its operations.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the

related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

As required under listing agreement with Stock Exchanges, Consolidated Financial statements prepared in terms of Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India, are attached.

Auditors

M/s. P. Murali & Company [FRN:007257S] Chartered Accountants, Statutory Auditors of the Company, holds office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of this Annual General Meeting and are eligible for re-appointment.

Directors

During the year, Mr. S D Rama Krishna, Managing Director, resigned from Directorship of your Company with effect from 1st July, 2012.

Mr. Vedula Venkata Ramana, who retires by rotation at the 18th Annual General Meeting and being eligible, offers himself for reappointment.

Mr. Clinton Travis Caddell and Mr. P Partha Sarathy were appointed as Additional Directors of the company by the Board of Directors in their meeting held on 30th May 2012 and through the Notice of the 18th Annual General Meeting, the Management is seeking the approval of the Members for their appointment as Directors of the Company liable to retire by rotation.

Stock Exchange Listing

Presently, the Equity Shares of the Company are listed on National Stock Exchange of India [NSE], Bombay Stock Exchange Limited [BSE]. The Company has received the Delisting approval from Madras Stock Exchange Limited and consequently, with effect from 6th June 2012, the equity shares of the Company stands de-listed from the Madras Stock Exchange. The Company confirms that it has paid Listing Fees due to all the Stock Exchanges where the Company's securities are listed for the year 2012-13.

Director's Responsibility Statement

In accordance with Section 217(2AA) of the Companies Act, 1956, the Board of Directors confirms that:

a) In the preparation of the Accounts for the twelve months period ending March 31, 2012; the applicable accounting standards have been followed and there are no material departures there-from.

b) They have selected such accounting policies in consultation with Statutory Auditors of the Company and applied 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 as at March 31, 2012 and of the profit of the Company for the financial year.

c) They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) They have prepared accounts for the year ended March 31, 2012 on a going concern basis.

Corporate Governance and Management Discussion and Analysis Report

A separate report on Corporate Governance along with Auditors' Certificate on its compliance and Management Discussion and analysis forming part of this report are annexed hereto.

Particulars of Employees

None of the employees are drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act' 1956 read with the Companies (particulars of employees) Rules, 1975, as amended.

Particulars of Conservation of energy /technology absorption, foreign exchange earnings and outgoings

Particulars in respect of Conservation of Energy Technology, Absorption and Foreign Exchange Earnings and Outgo required under Companies (Disclosure of particulars in the Directors Report) Rules 1988 are as follows:

A. CONSERVATION OF ENERGY:

Your company's operations involve low energy consumption. However, adequate measures have been taken to conserve and reduce the energy consumption.

B. TECHNOLOGY ABSORPTION:

Your Company continues to use state-of-the- art technology for improving the productivity and quality of its products and services. To create adequate infrastructure, your company continues to invest in the latest hardware and software.

C. FOREIGN EXCHANGE EARNINGS AND OUT GO:

Rs. In Millions

Particulars 2011-12 2010-11

Foreign Exchange Earnings 198.19 127.56

Foreign Exchange Outgo 16.94 11.96

Acknowledgements

Your Directors convey their sincere thanks to CITI Bank, ICICI Bank and Central Bank of India for their support, guidance and assistance.

Your Directors thank all the Employees of your company for their dedicated service, which enabled your company to achieve satisfactory results and performance during the year. Your Directors thank the shareholders for their support and confidence reposed in the company and the management and look forward to their continued co-operation and support.

For and on behalf of the Board

Place: Secunderabad Sd/- Sd/- Date: 11.08.2012 L P Sashikumar Clinton Travis Caddell Director Director


Mar 31, 2010

The Directors have pleasure in presenting the Sixteenth Annual Report of your company and the Audited Financial Statements for the year ended on March 31, 2010.

Financial Results (Standalone Basis)

Rs in Millions

Particulars 2009-10 2008-09

Net Sales/Income from Operations 231.87 313.88

Other Income 8.61 6.44

Total Income 240.48 320.32

Operating Profit (PBIDT) 47.24 39.60

Interest 9.51 5.12

Depreciation and Write Offs 31.84 20.79

Profit Before Tax 5.89 13.68

Provision for taxation

- Current 1.18 1.95

- Deferred 0.55 2.04

Extra-Ordinary Items

- Prior period adjustments 0.12 (1.40)

Net Profit 4.04 11.09

Equity Share Capital

(1,87,82,066 Shares 187.82 187.82 of Rs 10/- each)

E.P.S (After Prior Period Items) (Rupees) 0.22 0.52

Net Worth 674.50 666.41

Book Value in Rs. (face 35.91 35.48 Value of Rs. 10/- each)

Review of Operations

During the year under review, your Company has achieved a turnover of Rs. 231.87 Millions as compared to Rs. 313.88 Millions during the previous financial year. Amidst tough economical conditions prevailed across the globe owing to the one of biggest global economic down turn after the great depression and consequent troublesome caused thereby particularly to small and medium size players to which your company belongs, achievement of a gross revenues of Rs. 240.48 millions during the year though, lower by about 25% may be viewed as satisfactory. The Net Profit was Rs. 4.04 Millions during the year as compared to Rs. 11.09 Millions for the previous year.

Dividend

In order to fuel its growth and future requirement of funds, Board has decided to retain the profits generated. Consequently your Directors do not recommend any dividend for the year 2009-10.

Fixed deposits

The Company has not accepted any Fixed Deposits, falling with in the purview of Section 58A of the Companies Act, 1956.

Insurance

All the properties of your Company including its building, plant & machinery and stocks have been adequately insured.

Subsidiaries

Your Company has two wholly owned subsidiaries incorporated in USA, namely Staytop Systems Inc., and Primesoft LLC, out of which the later has no operations to report. Further, it has another wholly owned subsidiary company in India namely Staytop Systems and Software Private Limited, which is yet to commence its operations.

During the year under review, Staytop Systems Inc., USA has earned revenues of US$ 7,325,476 (Rs. 347.37 Millions) as against US$ 8,124,613 (Rs. 373.00 Millions) in 2008- 09 and registered a Net Profit of US$ 253,278 (Rs. 12,010,450 Millions) as against US$ 253,449 (Rs. 11.64 Millions) in 2008-09.

As required under listing agreements with Stock exchanges, consolidated financial statements, prepared in terms of Accounting Standards 21 and 23 issued by the Institute of Chartered Accountants of India, are attached

A statement showing the particulars as required under Section 212(3) of the Act is also attached hereto

During the year, your company has withdrawn investments in 4G Informatics Private Limited.

Auditors

M/s. P. Murali & Co., Chartered Accountants, Statutory Auditors of the Company, holds office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of forthcoming Annual General Meeting and are eligible for re-appointment.

Directors

Mr. K S Sarma and Mr. D P Sreenivas, who retire by rotation at the 16th Annual General Meeting and being eligible, offer themselves for reappointment. Further, in terms of provisions of section 260 of the Act, Mr. T. Abhilash Chandran has been appointed as Additional Director of the company with effect from May 15, 2010 and Mr. Ram Sajja has been appointed as Additional Director of the company with effect from August 13, 2010 and they hold such office upto the date of forthcoming Annual General Meeting. The company has received notices under section 257 of the Act from its members, in respect of both Mr. T. Abhilash Chandran and Mr. Ram Sajja, proposing their candidature as Directors of the Company liable to retire by rotation. The Board recommends the above proposals.

Delisting

During the year under review, as a cost cutting measure, your company had applied in pursuance of regulations 6(a) read with regulation 7 of SEBI (Delisting of Equity Shares) Regulations, 2009 for delisting of its equity shares from Delhi Stock Exchange Limited, Ahmedabad Stock Exchange Limited and Madras Stock Exchange Limited. As a result, its shares are delisted from Ahmedabad Stock Exchange Limited with effect from January 6, 2010 and Delhi Stock Exchange Association Limited with effect from June 10, 2010 respectively. The application with Madras Stock Exchange Limited is in process. The Companys equity shares continue to remain listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).

Directors Responsibility Statement

In accordance with the Section 217(2AA) of the Companies Act, 1956, the Board of Directors confirm that:

(a) in the preparation of the Accounts for the twelve months period ending March 31, 2010, the applicable accounting standards have been followed and there are no material departures there-from.

(b) they have selected such accounting policies in consultation with Statutory Auditors of the Company and applied 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 as at March 31, 2010 and of the profit of the Company for the financial year.

(c) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) they have prepared accounts for the year ended March 31, 2010 on a going concern basis.

Corporate Governance and Management Discussion and Analysis Report

A separate report on Corporate Governance along with Auditors Certificate on its compliance and Management Discussion and analysis forming part of this report are annexed hereto.

Particulars of Employees

Information as per Section 217(2A) of the Companies Act 1956 read with the Companies (particulars of employees) Rules, 1975 is annexed hereto and forms part of this Report.

Particulars in respect of Conservation of Energy Technology, Absorption and Foreign Exchange Earnings and Outgo required under Companies (Disclosure of particulars in the Directors Report) Rules 1988 are as follows:

A. Conservation of Energy

Your companys operations involve low energy consumption. However, adequate measures have been taken to conserve and reduce the energy consumption.

B. Technology Absorption

Your Company continues to use state-of-the-art technology for improving the productivity and quality of its products and services. To create

adequate infrastructure, your company continues to invest in the latest hardware and software.

C. Foreign Exchange Earnings and Outgo

Rs. In Millions

Particulars 2009-10 2008-09

Foreign Exchange 155.70 68.38

Earnings

Foreign Exchange 18.45 41.72

Outgo

Acknowledgements

Your Directors convey their sincere thanks to Syndicate Bank, ICICI Bank and Central Bank of India for their support, guidance and assistance.

Your Directors thank all the Employees of your company for their dedicated service, which enabled your company to achieve satisfactory results and performance during the year. Your Directors thank the customers and shareholders for their support and confidence reposed in the company and the management and look forward to their continued co-operation and support.

For and on behalf of the Board Sd/- Sd/- D P Sreenivas L P Sashikumar Executive Director Director Place:Secunderabad Date:13.08.2010

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