BOSTON EDUCATION & SOFTWARE TECHNOLOGIES LIMITED
ANNUAL REPORT 2000-2001
Your Directors have pleasure in presenting the Twenty First Annual Report
on the business together with the audited financial statements for the year
ended March 31, 2001.
The Company's education business performed exceedingly well. During the
year, the Company embarked upon going National as well as International.
The network of its training centres expanded to 185 as against 115 at the
beginning of the year. The Company signed up for setting up Franchise
Centres in Nepal and Gulf Countries. The Company's premium course "SAE"
(Software Application Engineering) continued to evoke excellent response
from Software Industry. In the later part of the year, the Company opened
its IT skill testing site edupertal "testvarsity.com" and educational
multi-media CDs. Both these have commenced contributing to the revenues
during the current financial year. The Company also signed an Acquisition
Agreement with M/s. Infinity Software Inc., a Florida, U.S.A, based Company
engaged in on-site consulting business having a revenue base of US $ 1.5 in
million for the year 2000. The Company also executed, though small, but
significant projects including highly commended "White House Project" for
University of North Carolina, U.S.A.
Total income of the Company registered sharp jump to Rs. 2,459.93 lacs,
51.5% higher than last year. Education business continued to be major
contributor, having 98% share in the total revenue.
Profits after tax substantially increased by over 191% to Rs.270.32 lacs as
against Rs.92.77 lacs in the previous year. This has been possible due to
significant improvement in operating margins on account of the Company
attaining critical mass..
With a view to conserve the resources by ploughing back the profits into
the business, your Directors have decided to skip the dividend for the year
Consequent upon issue of new Equity Shares to the shareholders of erstwhile
Boston Education & Software Technologies Pvt.Ltd.(BESTPL), pursuant to the
merger scheme, the Equity Share Capital of the Company increased to
Rs.466.80 lacs on April 11, 2000. The Company had also issued, pursuant to
the merger scheme, 9,000 new Equity Warrants of Series "A" and 91,500
Series "B" to the employees of BESTPL entitling to the Equity Shares of the
Members are aware that in the last year the Company had proposed a Public
Issue. In view of the adverse conditions prevailing in the Capital Markets,
the Directors have dropped the Public Issue proposal. Instead, plans are
being worked out, to raise funds, to meet the working capital requirement
and also to fund the new business activities. The exact modality, the
nature of instruments and the quantum of funds to be raised, are being
finalised, which will be subject to approval of the Members.
INDUSTRY / COMPANY OUTLOOK
Members are aware that recent US slow down has severely affected the Indian
IT Industry. Further, closure of Dotcom Companies have rendered programmers
particularly in Java Programming, surplus. This has resulted in almost
drying up the demand for professional courses such as Java, E-commerce etc.
Your Directors believe that this will result in big shake out in the IT
Training Industry which will make surviving quality brands and training
centres, the major gainers. Further, on U.S. coming out of recession
coupled with Indian Software Companies efforts in European Countries may
even create bigger opportunities.
Company's revenue currently is under severe pressure, in view of the
current down turn in the Industry. Company has initiated various strategic
measures to counter the recessionary effect, subject to raising additional
funds. Some of them are--
- Addition of new IT training segments, i.e. Embedded technologies,
- Foray into IT enabled services, which will be recession free,
- Substantially expanding the business of development and sale of Multi-
media educational CDs,
The Company has also taken various steps to conserve its resources by
substantially reducing its overheads and achieving higher efficiency at all
RESEARCH AND DEVELOPMENT
The Company's technology team continuously is in the process of developing
new products and delivery methods to support the education business. The
Company could launch its two portals namely "testvarsity.com" and
"eduunlimited.com" due to their aggressive efforts. Having already
developed and launched three titles of educational multi-media CDs under
the brand name Topper's Series, the team is currently in the process of
adding a few more new titles to its range of products.
The Company gives paramount importance to its human capital. It has been
its continuous endeavour to recruit, train, and institute various
motivational practices for its employees to enhance their skills and
competencies. This helps achieving the organisational commitment and value
to its customers. As a part of this process, an incentive plan has already
been introduced to reward the best talents in the Company. Further, the
Company, currently is in the process of finalising an innovative Employees
Stock Option Scheme.
Particulars of the employees, required to be furnished pursuant to the
provisions of Section 217(2A) of the Companies Act,1956, read with the
Companies (Particulars of Employees) Rules,1975, as amended, is annexed to
The Company's Wholly Owned Subsidiary, Nexus Infotech Limited, incurred
loss of Rs.10.93 lacs for the financial year ended March 31,2001. This has
been mainly due to lack of software projects. This Company has been
exploring the opportunities to source projects for software development.
A statement pursuant to Section 212 of the Companies Act,1956, relating to
the Subsidiary Company is enclosed.
The Company has not accepted any deposits from the public during the year
The Board, at its meeting held on September 22, 000, appointed Mr. Bipin R
Shah as an Additional Director of the Company. Mr.Bipin R Shah brings with
him rich experience with Lever Group. He held the Directorships of various
companies of repute including MNCs. He is currently,the President of Indus
Venture Management Limited. Mr. Bipin R Shah, will hold office of Director
upto the date of the forthcoming Annual General Meeting and is eligible for
Dr. Arvind A Shah and Mr. Dipankar Mukhopadhyay retire from the Board of
Directors by rotation and being eligible, offer themselves for re-
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act,195G with respect to Directors' Responsibility Statement, it is hereby
(i) That in the preparation of the annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relating to material departures;
(ii) That the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit or loss of the
Company for the year under review;
(iii) That 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) That the Directors have prepared the accounts for the financial year
ended March 31, 2001 on a 'going concern' basis.
AUDITORS & AUDITORS' REPORT
The Auditors, M/s. Deloitte Haskins and Sells, retire at the forthcoming
Annual General Meeting. They have consented to accept the office, if re-
With regard to Auditors comments, under para 2(f) of their Report, in
connection with the excess remuneration paid to the Managing Director, the
Directors would like to inform the Members that the Company has made
representation to the Central Government for their approval.
Although, currently the provisions of Clause 49 of the Listing Agreement
with the Stock Exchange, are not applicable to your Company, the Directors,
have taken initiative to comply with and implement most of the requirements
of the Corporate Governance code.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of foreign exchange earnings and outgo are mentioned in under
para 14 & 15 of Schedule 20, which form part of the Annual Accounts.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company, being in the Software Industry consumes very low energy. On an
ongoing basis, the existing processes and techniques are being reviewed to
make the infrastructure most energy efficient. Company's Technology Team
continuously endeavour to develop new methods of software educational
for and on behalf of the Bard
Dr. Arvind A Shah
Dated: July 20, 2001