16 ANNUAL REPORT CORAL HUB LIMITED

Transcription

1 TH 16 ANNUAL REPORT CORAL HUB LIMITED

2 th 16 Annual General Meeting th Date : 28 December, 2010 Day : Tuesday Time : 9.00 a.m. Place : GRT GRAND BUSINESS HOTEL, 120, Sir Thyagaraya Road, T Nagar, Chennai, Tamil Nadu Book Closure rd th Dates: Thursday, 23 December, 2010 to Tuesday, 28 December, 2010 (both days inclusive) Contents Key Management Team... 2 Business Model Directors' Report Report on Corporate Governance General Shareholder Information Management Discussion & Analysis Report Auditors' Report on Consolidated Financial Statements Consolidated Financial Statements Auditors' Report Balance Sheet Profit and Loss Account Schedules forming part of accounts Balance Sheet Abstract Cash Flow Statement Statement U/S Subsidiary Companies

3 KEY MANAGEMENT TEAM BOARD OF DIRECTORS Mr. G. S. Chandrashekar Chairman Mr. D. M. Shirodkar Director Mr. Harish Kumar Sahu Director Mr. Dilip Parekh Whole Time Director Mr. Ghanshyam Joshi Director COMPANY SECRETARY Ms. Deepali Nirmal A-19, Sunder Nagar CHS Ltd, New Link Road, Opp. Blue Empire Kandivali (West), Mumbai AUDITORS K. P. Joshi & Co. Chartered Accountants 607, Sharda Chambers, 15, New Marine Lines, Mumbai BANKERS United Bank of India Punjab National Bank. REGISTERED OFFICE Kingsley Chambers, Block No. 26, Ramasamy Street, Off. Usman Road, T. Nagar, Mambalam, Guindy Taluk, Chennai , India. Tel: Fax: investors@coralhublimited.com Website : CORPORATE OFFICE C-409, Solaris 1, Opp L & T Gate No.6, Saki Vihar Road, Andheri (East), Mumbai , India. Tel: / 42 Fax:

4 REGISTRAR & TRANSFER AGENT Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (W), Mumbai , India. Tel: Fax: AUDIT COMMITTEE Mr. Ghanshyam Joshi - Chairman Mr. D. M. Shirodkar Mr. Harish Kumar Sahu REMUNERATION COMMITTEE Mr. Ghanshyam Joshi - Chairman Mr. D. M. Shirodkar Mr. Harish Kumar Sahu SHARE TRANSFER & SHAREHOLDERS' / INVESTORS' GRIEVANCE COMMITTEE Mr. G. S. Chandrashekar - Chairman Mr. Ghanshyam Joshi Mr. D. M. Shirodkar 3

5 BUSINESS MODEL Data Capture & Digitization Data Conversion E-Publishing Digital Library Solutions Online Books Stores Classic Books Publishing Fund Accounting Services Customer Application Development e-education On-line Shopping Plaza TARGET INDUSTRY Government and Semi Organizations, Large and Medium Sized Companies, NGO's, Universities, Publishing Houses, Legal Entities Fund Administrators Mutual & Hedge Fund AMC's Print on Demand Companies General Indian Public for online shopping plaza FACILITIES Chennai & Mumbai, India London, UK Singapore Dubai and Sharjah at UAE 4

6 DIRECTORS' REPORT To: The members of Coral Hub Limited (Earlier known as Vishal Information Technologies Limited) Your Board of Directors ( Board ) have pleasure in presenting the Sixteenth Annual Report th along with the Audited Accounts for the period ended on 30 June, 2010 ( the period under review the period ). FINANCIAL PERFORMANCE: Particulars months Consolidated months months (Amount in Rupees) Standalone 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, ,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: - from previous year 52,98,17,276 41,02,78,216 50,86,61,008 39,96,79,984 Amount available for Appropriation 73,91,36,592 56,74,11,849 70,98,07,304 54,62,47,019 Profit available for appropriation which is appropriated as follows: Proposed Dividend 6%( Previous year 12.5%) 1,45,18,788 1,95,98,536 1,45,18,788 1,95,98,536 Preference Share Dividend 0.01% 8,562 8, Amount transferred to General Reserve 2,01,14,630 1,46,56,705 2,01,14,630 1,46,56,704 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

7 DIVIDEND: Your Directors are pleased to recommend a final 6 % i.e. Rs per Equity Share, subject to the approval of Shareholders in the Annual General Meeting. OPERATIONS: During the period under the review, as per the Consolidated Accounts, the Company has th achieved Sales income for the period ended 30 June, 2010 Rs. 99,01,44,690/- as against st Rs.66,56,53,585/- for the year ended 31 March, 2009 registering a marginal growth of %. 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%. ACTIVITIES DURING THE PERIOD: Company's 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. Company's 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. EXTENSION OF FINANCIAL YEAR : The Company has extended its financial year for a further period of three months, that is the st st Company's financial year commencing from 1 April, 2009 and ending on 31 March, 2010 be th extended upto and inclusive of 30 June, 2010 and that the accounts be prepared for the said st th financial year comprised of 15 months from 1 April, 2009 to 30 June,

8 CHANGE OF NAME AND OBJECTS OF THE COMPANY : th The name of the Company has been changed to Coral Hub Limited w.e.f. 9 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. III of the Memorandum of Association of the Company. FUTURE PROSPECTS: 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. SUBSIDIARY COMPANIES: 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. 7

9 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. DIRECTORS: 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. st Mr. G. S. Vishwanathan has resigned from position of Whole Time Director w.e.f. 1 August, th 2010 and from directorship of the Company w.e.f. 30 August, 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. EMPLOYEE STOCK OPTION SCHEME 2008: rd In pursuance of shareholders approval obtained on 23 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 th granted Stock Options equivalent to 5,15,450 Equity Shares of Rs. 10/- each on 12 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, 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 th Equity Shares of Re. 1/- each in the Meeting of Board of Directors held on 11 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/-. 8

10 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 Company's 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, 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. PUBLIC DEPOSITS: The Company has not accepted any Public Deposits under Section 58A of the Companies Act, 1956 during the period under review. DIRECTORS' RESPONSIBILITY STATEMENT: 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) (ii) (iii) (iv) th that in the preparation of the annual accounts for the financial period ended 30 June, 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures. 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. 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. that the Directors had prepared the accounts for the period under review on a 'going concern' basis. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUT GO: 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. 9

11 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 year was Rs. 10,45,325/-). PARTICULARS OF EMPLOYEES: 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 Annexure II. AUDITORS: 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 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 and authorize the Board of Directors to fix their remuneration. CONSOLIDATED FINANCIAL STATEMENTS: 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. MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE: 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. 10

12 With a view to strengthening the Corporate Governance framework, the Ministry of Corporate Affairs has incorporated certain provisions in the Companies Bill, 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. ACKNOWLEDGEMENTS: The Directors take the opportunity to thank all 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 PLACE: Mumbai DATE: Sd/- Sd/ (G. S. Chandrashekar) (Dilip Parekh) Chairman and Director Whole Time Director 11

13 ANNEXURE I TO DIRECTOR REPORT: DISCLOSURES PURSUANT TO THE PROVISION OF SEBI (ESOS AND ESPS) GUIDELINES 1999: Sr. No. Particulars ESOP st April 2009 to 30 th June, 2010 Grant I Grand II 1 Details of Meeting Extra Ordinary Meeting held on November 23, Option Granted 44,05,800 7,48, Exercise Price Rs. 5/- Rs. 5/- 3. Pricing Formula At fair Market Value At fair Market Value 4. Option Vested 44,05,800 2,47,070 5 Option Exercised 44,05,800 1,88, Total Number of shares arising as 44,05,800 1,88,660 a result of exercise of option 7 Option lapsed * None 58,410 8 Variation of terms of Option None None 9 Money realized by exercise of Option** Rs. 2,20,29,000 Rs. 9,43, Total Number of Option In force None 5,01, Details of Option Granted to Senior Management Personnel Mr. G. S. Vishwanathan, Whole Time Director-20,00,000 Options granted on Mr. Dilip Parekh, Whole Time Director - 20,00,000 Options granted on Any other employee who receives a grant in any one year of option amounting to 5% or More of option granted during the year 13 Identified Employee who were granted option, during the one year equal to or exceeding 1% of the Issued Capital ( Excluding outstanding warrants and conversion) of the company at the time of grant None Mr. G. S. Vishwanathan, Whole Time Director-20,00,000 Options Mr. Dilip Parekh, Whole Time Director - 20,00,000 Options 12

14 * Lapsed Options include options forfeited and options cancelled/lapsed. ** The Company had allotted the aforesaid Equity Shares of Rs. 1/- under ESOS 2008 at the premium of Rs. 4/- each on the above mentioned date. 14. PROFORMA ADJUSTED NET INCOME AND EARNING PER SHARES : Particulars Rs. Net Income as Reported ( In Millions) ADD. Intrinsic Value Compensation Cost Less. Fair Value Compensation Cost (In Millions) Adjusted Proforma Net Income (In Millions ) Basic Earning Per Shares As Reported Adjusted Proforma Diluted Earnings per Shares ---- As Reported Adjusted Proforma 15. ASSUMTIONS USED TO ESTIMATED THE FAIR VALUE OF OPTIONS USING BLACK- SCHOLES OPTION PRICING MODEL: 16. (i) WEIGHTED- AVERAGE EXERCISE PRICE OF OPTIONS GRANTED DURING THE YEAR : (ii) WEIGHTED AVERAGED FAIR VALUE OF OPTIONS GRANTED DURING THE YEAR Sr. No Particulars Grant I Grant II 1. Risk Free Interest Rate 8.75% 8.90% 2. Expected Life Expected Volatility 4.00% 4.50% 4. Expected Dividend Yield 0.05% 0.06% 5. Price of the Underlying Shares in Market at the Time of Option Grants Sr. No Particulars Amount 1. Exercise Price equals Markets Price N. A. 2. Exercise Price is greater than Market Price N. A. 3. Exercise Price is less than Market Price 3.85 Sr. No Particulars Amount 1. Exercise Price equals Markets Price N. A. 2. Exercise Price is greater than Market Price N. A. 3. Exercise Price is less than Market Price 4.10

15 ANNEXURE II TO THE DIRECTOR'S REPORT (A) Particulars required under section 217(2A) of the Companies Act 1956 and the Companies (Particular of Employees) Rules forming part of Report for the period ended th 30 June, Name Mr. G. S. Vishwanathan Mr. Dilip Parekh Date of Birth Designation Whole Time Director Whole Time Director Remunerati on Received including PF Contributio n Qualification & Experience Date of Commenc ement of Employm ent 36,00,000/- B.Sc ,00,000/- B.SC., LLB, DFM 0 Details of previous Employme nt Boehringe r Knoll Ltd. Business B) Part of the Year: : Nil Notes: 1. Remuneration as shown above includes Salary, contribution to Provident Fund, and Perquisites. 2. Nature of employment is contractual 3. No Employee is related to any of these Directors. DATE: PLACE: Mumbai By order of the Board of Directors Sd/- Sd/ (G. S. Chandrashekar) (Dilip Parekh) Chairman and Director Whole Time Director 14

16 REPORT ON CORPORATE GOVERNANCE 1. Company's Philosophy on Code of Corporate Governance Corporate Governance helps to serve corporate purposes by providing a framework within which stakeholders can pursue the objectives of the organisation most effectively Traditional views of governance as a regulatory and compliance requirement have given way to adoption of governance tailored to the specific needs of the Company Clause 49 of the Listing Agreements has set the benchmark compliance rules for a listed Company and the baseline for the governance standards The Company strongly believes in the efficacy of adhering to uncompromising Corporate Governance practices and has full support of the Board of Directors for its Corporate Governance Practices. The Board of Directors plays a central role in implementing the Corporate Governance philosophy of the Company. It will be our constant aim to raise the standards of Corporate Governance practices that we follow and to ensure the complete satisfaction of our most valued stakeholders. A company which has a robust Corporate Governance system commands great respect among its stakeholders and competitors alike and is greatly admired by the society at large. This enhances its corporate image thereby enabling it to gain a distinct advantage over its competitors and elevates it to an enviable position. 2. Board of Directors a) Composition Board of Directors and other provisions: i) The Board of Directors as on June 30, 2010 comprised six Directors with a Non- Executive Chairman, out of them four are Non-Executive and three are Independent Directors. The composition of the Board is in conformity with Clause 49 of the Listing Agreements entered into with the Stock Exchanges. ii) iii) None of the Directors on the Board is a Member of more than 10 Committees or chairman of more than 5 Committees across all the Companies in which he is a Director. The names and categories of the Directors on the Board, their attendance at Board Meetings held during the period and the number of Directorships and Committee Chairmanships/Memberships held by them in other companies as on June 30, 2010 are given below: 15

17 Name of Director Mr. G. S. Chandrashekar Mr. Dilip Parekh Mr. G. S. Vishwanathan Mr. Ghanshyam Joshi Mr. D. M. Shirodkar Mr. Harish Kumar Sahu Category (Executive/ Non- Executive/ Independent Non Executive Director & Chairman Executive Director Executive Director Non-Executive & Independent Non-Executive & Independent Non-Executive & Independent No. of Board Meetings Atte nded Attendance at previous AGM On September 30, 2009 No. of outside Director ships Held * No. of Committee positions held in other Public Companie s # 9 Present Present Present Nil Nil 15 Present 2 Nil Nil * Excludes directorships in Indian Private Limited Companies, Foreign Companies, Companies under Section 25 of the Companies Act, # Excludes Committees other than Audit Committee and Shareholders' Grievance Committee. iv) Fifteen Board Meetings were held during the financial period ended June 30, 2010 and the gap between the two meetings did not exceed four months. The dates on which the meeting are held as follows: April 29, 2009; May 25, 2009; June 23, 2009; June 30, 2009; July 28, 2009; July 30, 2009; August 12, 2009; September 22, 2009; October 31, 2009; January 27, 2010; January 30, 2010; March 4, 2010; May 3, 2010; May 15, 2010; June 11, v) Agenda and Notes on Agenda are circulated to the Directors, in advance, in the defined Agenda format. All material information is incorporated in the Agenda for facilitating meaningful and focused discussions at the meeting. Where it is not practicable to attach any document to the agenda, the same is tabled before the meeting. vi) The important decisions taken at the Board / Committee meetings are communicated to the departments/divisions concerned promptly. Action taken report on the decisions/ minutes of the previous meeting(s) is placed at the immediately succeeding meeting of the Board/Committee for noting by the Board/Committee. 16

18 vii) All the Independent Directors of the Company furnish declaration at the time of their appointment or re-appointment as also annually that they qualify the conditions of their being Independent. All such declarations are placed before the Board. viii) No Director is related to any other director on the Board in terms of definition of Relative given under the Companies Act, 1956 except Mr. G. S. Vishwanathan who is relative (Elder Brother) of Mr. G. S. Chandrashekar. b) Code of Conduct The Board of Directors of the Company has laid a Code of Conduct for its Board members and senior management personnel. This Code is available on the Company's web site. All the Board members and senior management personnel have affirmed compliance with the said Code of Conduct for the financial period ended June 30, A declaration to this effect signed by Mr. G. S. Chandrashekar, Chairman, enclosed at the end of this Report forms a part of this Annual Report. 3. Board Committees The Board has constituted the following three Committees of Directors: I. Audit Committee II. Remuneration Committee III. Share Transfer and Shareholders' / Investors' Grievance Committee I. Audit Committee a) Composition of Audit Committee & Attendance at Meeting: The Audit Committee comprises of all three Non Executives and Independent Directors. Five Audit Committee Meetings were held during the period on the following dates: June 30, 2009, July 30, 2009, October 31, 2009, January 30, 2010 and May 15, The necessary quorum was present for all the Meetings. The Audit Committee Meeting are usually held at the Corporate Office of the Company and are normally attended by the Chairman, Directors and representative of the Statutory Auditor and representative of the Internal Auditor. The composition and attendance of the members at the Audit Committee Meetings are as follows: Name of the Member Designation Category Mr. Ghanshyam Joshi Chairman Independent Director Mr. Harish Kumar Sahu Member Independent Director Mr. D. M. Shirodkar Member Independent Director 17

19 b) Meeting and Attendance Name of the Member No. of Audit Committee Meetings held 18 No. of Audit Committee Meetings Attended Mr. Ghanshyam Joshi 5 5 Mr. Harish Kumar Sahu 5 4 Mr. D. M. Shirodkar 5 2 Mr. Ghanshyam Joshi, Chairman of the Audit Committee was present at the Last Annual General Meeting held on September 30, 2009 to answer the shareholders' queries. Company Secretary of the Company acts as Secretary to the Committee. The minutes of the Audit Committee Meetings form part of the documents placed before the meetings of the Board of Directors. In addition, the Chairman of the Audit Committee appraises the Board members about the significant discussions at Audit Committee Meetings. c) Terms of Reference: The Terms of Reference of the Audit Committee are in accordance with those specified in Clause 49 of the Listing Agreements and Section 292A of the Companies Act, The Terms of reference powers of the Audit Committee are broadly as under 1 To investigate any activity within its terms of reference 2 To obtain outside legal or other professional advice 3 To oversee the Company s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct sufficient and credible 4 To recommend to the Board the appointment the re appointment and if required the replacement or removal of the statutory auditor and the fixation of audit fees and also approval for payment for any other services 5 To review with the management the annual financial statements before submissions to the Board for approval 6 To review with the management performance of statutory and internal auditors the adequacy of internal control systems 7 To review the Company s financial and risk management policies 8. To review the adequacy of the internal audit function 9 To ensure compliance of internal control systems etc II. Remuneration Committee a) Composition of Remuneration Committee & Attendance at Meeting: The Remuneration Committee comprises of all three Non Executive and Independent Directors. Two Remuneration Committee Meetings were held during the period on the following dates: June 30, 2009 and January 30, The necessary quorum was present for all the Meetings.

20 The composition and attendance of the members at the Remuneration Committee Meetings are as follows: Name of the Member Designation Category Mr. Ghanshyam Joshi Chairman Independent Director Mr. Harish Kumar Sahu Member Independent Director Mr. D. M. Shirodkar Member Independent Director b) Meeting and Attendance Name of the Member No. of Remuneration Committee Meetings Held 19 No. of Remuneration Committee Meetings Attended Mr. Ghanshyam Joshi 2 2 Mr. Harish Kumar Sahu 2 2 Mr. D. M. Shirodkar 2 1 b) Terms of reference 1. Review the overall compensation policy, service agreement and employment condition of the Whole Time Director and other employee of appropriate cadres with a view to motivating the best managerial talents, their remuneration packages. 2. Evaluate the remuneration paid by comparable organization. 3. Reviews the performance of the Managing Director and Whole Time Directors and recommend to the board in this regard. 4. Monitor and implement the ESOS Scheme and also formulate such schemes hereafter for grant of stock options to the employee including Whole Time Director in accordance with the relevant regulations for the time being in force and recommend the same to the board for its consideration and monitor proper implementation thereof. 5. Such other matters as the board may from time to time request the Remuneration Committee to examine and recommend / approval. c) Remuneration Policy Remuneration to the Whole Time Directors is paid in accordance with the provisions of the Companies Act, 1956 and the same is governed by the Letter of Appointment issued to them by the Company, the terms and conditions of which was approved by the Board and the shareholders. The remuneration structure comprises of salary, perquisites and allowances, contributions to provident fund and gratuity funds. The Committee recommends the remuneration payable to Whole Time Director or any Executive Directors based on their contribution to the growth and development of the Company, keeping in mind the remuneration package of the industry.

21 d) Remuneration to Directors 1. Remuneration to Executive Directors th The members of the Company in 12 Annual General Meeting of the Company held on September 28, 2006 had approved the appointment of Mr. Dilip Parekh and Mr. G. S. Vishwanathan as Whole-Time Directors of the Company w.e.f February 05, 2006 to February 04, Further the approval of the members of the Company in Extra Ordinary General Meeting of the Company held on February 16, 2009 approved the revision of terms and remuneration of Mr. Dilip Parekh and Mr. G. S. Vishwanathan as a Whole Time Directors of the Company. The details of remuneration paid to Mr. Dilip Parekh and Mr. G. S. Vishwanathan, Whole Time Directors of the Company for the financial period are as follows: Name & Designation Mr. Dilip Parekh Whole Time Director Mr. G. S. Vishwanathan Whole Time Director Salary (Rs. per month) 2,25,000/- 75,000/- 2,25,000/- 75,000/- Perquisites and allowances (Rs. per month) 2. Remuneration to Non Executive Directors The Non-Executive Directors neither draw any remuneration nor any sitting fees or any commission from the Company. e) Service Contract, Notice Period and severance fees The Remuneration of Mr. Dilip Parekh and Mr. G. S. Vishwanathan, as a Whole Time st Directors of the Company respectively was revised w.e.f 1 August 2008 for a period of Two years on such terms and conditions and on such remuneration as per explanatory statement to the Notice convening Extra Ordinary General Meeting held on February 16, Mr. Dilip Parekh and Mr. G. S. Vishwanathan or the Company is entitled to terminate the Agreement of their respective appointment by giving a prior notice of not less than three calendar months in writing to the Company. f) No. of Equity Shares held by Non- Executive Directors as follows: Name Mr. Ghanshyam Joshi Mr. D. M. Shirodkar Mr. Haish Kumar Sahu Total 20 Number of Equity Shares held as on June 30, 2010 Nil Nil Nil Nil

22 Mr. Ghanshyam Joshi Chairman of the Remuneration Committee was present at the last Annual General Meeting of the Company held on September 30, III. Share Transfer and Shareholders' / Investors' Grievance Committee: a) Composition of Share Transfer and Shareholders' / Investors' Grievance Committee: The Share Transfer and Shareholders' / Investors' Grievance Committee comprising of total three Directors out of which two are Independent Directors. Three meetings of the Committee were held during the period on the following dates: July 30, 2009, January 30, 2010 and May 15,2010. The composition of the members at the Share Transfer and Shareholders' / Investors' Grievance Committee: Meetings are as follows: - Name of the Member Mr. G. S. Chandrashekar Mr. Ghanshyam Joshi Mr. D. M. Shirodkar Designation Chairman Independent Director Independent Director b) Meeting and Attendance Name of the Member No. of Meetings Held Mr. G. S. Chandrashekar 3 No. of Meetings Attended 3 Mr. Ghanshyam Joshi Mr. D. M. Shirodkar c) Terms of reference The Committee was formed to look into various issues relating to shareholders including redressal of shareholders and investors complaints such as : 1. Transfer / transmission / transposition of Shares 2. Issue of duplicated shares 3. Non Receipt of Balance Sheet, Dividend, Annual Report and other Demat related Matters M/s. Link Intime India Private Limited is the Registrar and Transfer Agent of the Company and the Committee oversees the performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement in the quality of investor's services. The Committee also advises on the matter enabling better investor services and relations. 21

23 Name and designation of Compliance Officer: Name Mr. Navneet Bhalani Ms. Deepali Nirmal Designation Company Secretary and Compliance Officer Company Secretary and Compliance Officer Date of Appointment Date of Resignation January 01, 2009 June 01, 2010 June 15, Status of complaints received for the period from April 01, 2009 to June 30, 2010 No. of Complaints received - 24 No. of Complaints resolved - 24 No. of Complaints pending - Nil Quorum Quorum for Board as well as Committee Meetings is one third or two Directors/ Members of Committees, as the case may be, whichever is higher. Note on appointment or re-appointment of Directors: Particulars of Directors to be re-appointed at the ensuing Annual General Meeting is given under the heading Note No. II of the Notice convening the meeting. Selection of Independent Directors Considering the requirement of the skill-sets on the Board, eminent persons having an independent standing in their respective field/ profession and who can contribute to the Company's business and policy decisions are considered by the Company for appointment of the independent directors on the Board. What constitutes Independence of Directors? For a Director to be considered independent, the Board determines that the Director does not have any direct or indirect material pecuniary relationship with the Company. The Board has adopted policy and guidelines which are in line with applicable legal requirements. 4. Subsidiary Company a. The Company has three Indian Subsidiaries namely Basiz Fund Service Private Limited, Coral Hub Publishing Private Limited (Earlier known as Coral Hub Online Services Pvt. Ltd.), Ambition Clothing Private Limited (Earlier known as Ambition Industries Pvt. Ltd.) and two Subsidiaries outside India, namely Digital Content Solutions Limited and VITL FZE. b. The Clause 49 defines a Material Non Listed Indian Subsidiary as unlisted subsidiary, incorporated in India, whose turnovers or net worth (i.e paid up capital and free reserves) exceeds 20 percent of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year. 22

24 c. Coral Hub Limited (Formerly known as Vishal Information Technologies Limited) did not have a 'Material Non Listed Indian subsidiary 'with the meaning of the above definition. During the period, the Audit Committee once reviewed the financial statements of its unlisted subsidiaries, in particular the investments made by it. d. The Board Minutes of Unlisted Subsidiary Companies are placed at the Board Meeting of the Company. 5. General Body Meetings: 1. Details of Special Resolution passed in the previous three Annual General Meetings: The Details of the last three Annual General Meetings (AGMs) are given in table below: Year Venue Date & Time Special Resolution Passed , Ramasamy Street, Off. Usman Road, T. Nagar, Chennai th September, a.m. Appointment of Mr. Prashant Chandrashekar, son of Mr. G. S. Chandrashekar, Director of the Company as Manager - Fund Accounting in Basiz Fund Service Private Limited, which is subsidiary of the Company , Ramasamy Street, Off. Usman Road, T. Nagar, Chennai th July, a.m. No Special Resolution Passed GRT Grand Business Hotel, 120, Sir Thyagaraya Road, T. Nagar, Chennai, Tamil Nadu th September, a.m. All the Resolutions were passed with requisite majority. Appointment of Mr. Harish Kumar Sahu as Director 2. Postal Ballot: Two Special Resolutions for alteration of Main Object Clause and Other Object Clause of Memorandum of Association of the Company pursuant to Section 17 and 149 of the Companies Act, 1956 and Change of name of the Company to Coral Hub Limited pursuant to Section 17 of the Companies Act, 1956 as contained in the Notice to the Shareholders dated May 15, 2010 were passed during the period under a Postal Ballot. Mrs. Amita Desai of M/s. Amita Desai & Co., Practicing Company Secretaries, Mumbai was appointed as the scrutinizer for the Postal ballot process. 23

25 Details of the Resolutions passed under the Postal Ballot are as follows: Resolution No. 1 Description of Resolution Particulars Total Postal ballots / votes received Less-Invalid Postal ballots / votes received Net Valid Postal ballots / votes received Postal ballots / votes with assent Postal ballots / votes with dissent Result Special Resolution for alteration of Main Object clause and Other Object clause of the Memorandum of Association of the Company pursuant to Section 17 and 149 of the Companies Act, 1956 No. of Postal Ballot Forms No. of Equity Shares of Re. 1/- each (Votes) % of Votes Received Passed by the requisite majority Resolution No. 2 Description of Resolution Particulars Total Postal ballots / votes received Less-Invalid Postal ballots / votes received Net Valid Postal ballots / votes received Postal ballots / votes with assent Postal ballots / votes with dissent Result Special Resolution for Change of name of the Company to Coral Hub Limited pursuant to Section 17 of the Companies Act,1956 No. of Postal Ballot Forms No. of Equity Shares of Re. 1/- each (Votes) % of Votes Received Passed by the requisite majority 24

26 The procedure prescribed under Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 has been followed for the Postal Ballot conducted during the period for the resolutions mentioned above. The results of the Postal Ballot were announced by Mr. Subramani S., authorized representative appointed by the Chairman at the Registered Office of the Company on July 02, 2010 and advertised in the newspapers. 6. Other Disclosures: a. Related Party Transaction There is no materially significant related party transactions i.e transaction, material in nature, with its promoters, directors, their relatives or the management, subsidiaries of the Company etc. having potential conflict with the interest of the Company at large. All material transactions during the financial period ended June 30, 2010 either with related parties or others were at arms length. b. Statutory Compliance, Penalties and structures The company has complied with the mandatory requirements of the Stock Exchanges, SEBI and other statutory authorities on all matters related to capital markets during the period. No penalties or structures have been imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to capital markets, during the period. c. Whistle Blower Policy Though the Company does not have a Whistle Blower Policy in place, the Company encourages the employees to freely express their views on various issues faced by them and the HR head follow up the same for necessary resolution of it. The Company also encourages the employees to report to the Company about unethical behavior, actual or suspected fraud or violation of the company's code of conduct. The employees have free access to the audit committee. d. Accounting Standard In preparation of the financial statements, the Company follows Accounting Standards issued by the Institute of Chartered Accountants of India. e. Prohibition of Insiders Trading In compliance with the SEBI Regulation on prevention of Insider Trading, the Company has framed a Code of Conduct for Insider Trading Regulations, which is applicable to all directors and officers of the Company who are expected to have access to unpublished price sensitive information relating to the Company. The Code lays down guidelines which advices them on procedure to be followed and disclosures to be made, while dealing with the shares of the Company. f. Risk management The Company has formulated and laid down the procedure on Risk Assessment and Minimization. These procedures have been considered by the Board and a properly defined framework is being laid down to ensure that executive management controls the identified risks. 25

27 g. Proceeds from Public Issue During the financial period, the Company did not raise any proceeds through Public Issue, Right Issue and/or Preference Issue h. Report of Corporate Governance All the mandatory items of Clause 49 have been complied with and covered in this report. In respect of Non Mandatory requirement of Clause 49, the Company has complied with appointment of all three Non Executive Directors as members of Remuneration Committee. The composition of this Committee has been detailed earlier in this report. Mr. Dilip Parekh, the Chairman of this Committee is an Independent Director. i. CEO/ CFO Certification: The CEO and CFO certification of the financial statements and the cash flow statements for the financial period ended June 30, 2010 issued to the Board of Directors is enclosed at the end of this Report and forms part of this Annual Report. j. Training of Board of Directors: Directors of the Company are well informed about the Company's vision, strategic direction, core values including ethics, corporate governance practices, financial matters and business operations. They are also provided with the necessary documents / brochures, reports and internal policies from time to time to familiarize them with the Company's procedures and practices. Periodic presentations are made at the Board and Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are circulated to the Directors. k. Meetings of Independent Directors The Independent Directors of the Company meet management of the Company as and when they deem appropriate without the presence of Executive Directors. These meetings are conducted in an informal manner to enable the Independent Director to discuss matters pertaining to the affairs of the Company. 7. Means of Communications 1. The channel of communication included in Annual Report covering the Directors Report, Report of Board of Directors on Corporate Governance, Management's Discussion and Analysis Report and the Audited financial result. 2. The quarterly, half yearly results and annual financial results are sent to the Stock Exchanges immediately after they have been taken on record by the board. The same are published in newspapers in Regional Language (Makkal Kural) and English (Trinity Mirror). 3. The Company has a website The quarterly and annual Financial Result as well as Shareholding Pattern and Code of Conduct of the Board of Directors and Senior Management and Code of Conduct for prohibition of Insider Trading were posted on the Company's website for the benefit of its shareholders 26

28 4. Presentation if made to the Institutional Investors and analysts after the declaration of the quarterly, half yearly and annual results are also put up on the website for wider dissemination. 5. Whenever the Company issues any press release, it is sent to the Stock Exchanges as well as posted on the Company's website. 8. Management Discussion & Analysis Report The Management Discussion and Analysis Report is appended to and forms part of the Annual Report. 9. General Shareholder Information It is provided in the section styled as General Shareholder Information published elsewhere in this Annual Report. 10. Auditors Certificate on Compliance of conditions of Corporate Governance Certificate from the Auditors in respect of compliance of clause 49 of Listing Agreement with the Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) regarding Corporate Governance is enclosed in this Annual Report. th DATE: 28 October, 2010 PLACE: Mumbai By order of the Board of Directors Sd/- (G. S. Chandrashekar) Chairman & Director 27

29 General Shareholder Information: 1) DATE, TIME AND VENUE OF AGM 2) FINANCIAL YEAR : April 1- June 30 : Tuesday, 28 th December, 2010, at 9.00 a.m. at GRT GRAND BUSINESS HOTEL, 120, Sir Thyagaraya Road, T. Nagar, Chennai, Tamil Nadu ) DATES OF BOOK CLOSURES : 23 rd December, 2010 to 28 th December, 2010 (both the days inclusive) 4) DIVIDEND PAYMENT DATE : on or after 3 rd January, ) LISTING ON STOCK EXCHANGE : Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), Luxembourg Stock Exchange (LuxSE) (in respect of outstanding Global Depository Receipts) 6) STOCK CODE : BSE CORALHUB NSE CORALHUB Series EQ LuxSE - CoralHub GDR ne 7) ISIN NO. : INE108J