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Helios & Matheson Information Technology Ltd.

BSE: 532347 Sector: IT
NSE: HELIOSMATH ISIN Code: INE674B01012
BSE LIVE 15:22 | 22 Feb Stock Is Not Traded.
NSE 15:41 | 24 Sep Stock Is Not Traded.
OPEN 8.97
PREVIOUS CLOSE 9.44
VOLUME 5826
52-Week high 8.97
52-Week low 0.00
P/E 0.43
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.97
Sell Qty 62658.00
OPEN 8.97
CLOSE 9.44
VOLUME 5826
52-Week high 8.97
52-Week low 0.00
P/E 0.43
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.97
Sell Qty 62658.00

Helios & Matheson Information Technology Ltd. (HELIOSMATH) - Director Report

Company director report

DIRECTORS

To the members of the company your directors have great pleasure in presenting theannual report together with audited statement of accounts for the year ended September 302013.

(consolidated) (standalone)
financial highlights 2012-13 2011-12 2012-13 2011-12
in Rs in Rs in Rs in Rs
net revenue from operations 6585348871 4520581457 4489505679 3083919980
less expenditure 5109728244 3517278952 3313281507 2325257512
operating profit (pbidt) 1475620628 1003302505 1176224172 758662468
interest 285439350 205199592 271432642 183828194
profit before depreciation & tax (pbt) 1190181278 798102913 904791530 574834274
depreciation 503474226 423487038 349587981 297943411
profit before tax 686707052 374615875 555203549 276890863
provision for taxation 158929966 67485866 139874629 55315987
profit after tax 527777086 307130009 415328920 221574876
provision for deferred tax 20984814 13014433 18469264 11254813
profit after deferred tax 506792272 294115576 396859656 210320063
balance brought forward 610767157 516676293 231706088 221410737
profit available for appropriation 1117559429 810791869 628565744 431730800
appropriation
dividend paid 12290705
proposed dividend 132061645 43042192 132061645 43042192
dividend distribution tax 21423700 6982520 21423700 6982520
general reserve 150000000 150000000 150000000 150000000
balance carried forward in p&l a/c 801783378 610767157 325080399 231706088

Results of operation :

Consolidated

Income for the year ended September 30 2013 was Rs. 658.53 crore as compared to Rs.452.06 crore for the previous year. net profit after tax was Rs. 50.68 crore vis-a-vis Rs.29.41crore for fy 2011-12. earnings per share was Rs. 19.19 compared to Rs. 12.30 for theprevious year.

Standalone

Income for the year ended September 30 2013 was Rs. 448.95 crore as compared to Rs.308.39 crore for the previous year. net profit after tax was Rs. 39.68 crore vis-a-vis Rs.21.03 crore for fy 2011-12. earnings per share was Rs. 15.03 compared to Rs. 8.80 for theprevious year.

Share capital

The paid up share capital of the company as on September 30 2013 stood at Rs. 26.41 crand the reserves and surplus Rs. 235 cr (206.18 cr in the previous year) and onconsolidated level reserves and surplus Rs. 312.00 cr as against Rs. 268.29 cr in theprevious year. the company's shares are listed on the national stock exchange (nse)bombay stock exchange (bse) and madras stock exchange (mse). the company has paid theannual listing fees to all the stock exchanges and there are no arrears.

Allotment of equity shares against exercise of option on convertible warrants

In terms of the approval given by the shareholders of the company at the annual generalmeeting held on 29.03.2012 and upon receipt of requisite statutory approvals the boardof directors of the company allotted a total of 25 lakh fully paid up equity shares ofRs.10 each in 2 equal instalments on 15.02.2013 and 07.06.2013 to g muralikrishna and vramachandran two of the promoters of the company on preferential basis. the company doesnot have any convertible warrant outstanding as on date.

Dividend

Your directors are pleased to recommend an increased dividend of Rs. 5.00 per share onan enhanced paid up capital of Rs. 264123290. total dividend pay-out including dividenddistribution tax is Rs. 15.35 cr.

Business and prospects

while the business focus continues to be on banking and financial services andinsurance healthcare and technology verticals the company has taken the initiative tolaunch services in new horizontals such as big data and analytics cloud services andmobile technology solutions.

according to IDC these new generation offerings are estimated to drive 90% of thegrowth in the IT space between 2013 and 2020. it is expected to have a potential togenerate revenues in excess of a trillion dollars during this decade.

our company has set up a center of excellence for rolling out solutions on the mobileplatform. we have launched our 'predictive analytics practice' in May this year when thecompany had the privilege of ringing the nasdaq closing bell commemorating 15 years oflisting of our US subsidiary on the nasdaq.

these bold initiatives not only present a humungous opportunity but also establish yourcompany in the forefront of cutting edge technologies.

the company has long-standing relationships with large multinational corporations.focus on a few large clients has helped the company to strengthen the relationship andgain increased traction from existing clients.

the company works with eight of the top 20 global banks in the bfsi space. theseclients include universal banks investment banks capital market institutions insurancecompanies etc.

in the healthcare vertical the company caters to healthcare providers healthcarepayers and life sciences companies.

all these client organizations offer huge potential for the new age service offeringslaunched by the company.

knowledge services is yet another business segment that is non linear. the company madesignificant progress offering technology training to various corporates in India andoverseas. social sector has been added to the basket this year. the company is associatedwith nasscom as an accredited training partner for skill development in the IT and ITESsectors. this initiative is an integral part of a national mission for up-gradation ofskills. the national mission has an objective to cover 500 million persons under thisprogram by 2022.

Subsidiary companies and consolidated financial statements

with the gradual easing of the global slowdown and with the US economy looking up allthe subsidiaries have performed satisfactorily during the year.

as per section 212 of the companies act 1956 the company is required to attachdirectors report balance sheet and profit and loss account of the subsidiaries. theministry of corporate affairs government of India vide its general circular no: 2/2011dated 08.02.2011 has provided exemption to companies from complying with section 212provided the board approves the proposal and such companies publish the auditedconsolidated financial statements in the annual report. accordingly the annual report for2012-13 does not contain the financial statements of the subsidiaries. the audited annualaccounts and related information of the subsidiaries where applicable will be madeavailable upon request. these documents will also be available for inspection duringbusiness hours at the registered office of the company at chennai.

Particulars of employees

as required by the provisions of section 217 (2a) of the companies act 1956 read withcompanies (particulars of employees) rules 1975 as amended the names and otherparticulars of the employees are set out in annexure to the directors' report. however asper the provisions of the section 219(1) (b) (iv) of the companies act 1956 the reportof the directors is being sent to all the shareholders of the company excluding theaforesaid information. any shareholder of the company interested in obtaining suchinformation may write to the secretary at the corporate office of the company.

vmoksha - arbitration status

as reported already your company signed a definitive share purchase agreement (spa) toacquire 100% equity in three vmoksha entities based at bangalore singapore and USA in themonth of may 2005. however the sellers tried to renege the spa and hence your companyinitiated arbitration proceedings.

arbitration proceedings were presided by hon'ble justice mr.k.venkataswami judgesupreme court (retd) as the sole arbitrator. arbitration proceedings were conducted over aperiod of two years spread over 34 sittings. the first sitting was held on 28.10.2006 andthirty fourth sitting was held on 28.06.2008 and 5 volumes of 1370 pages of documents weresubmitted before the arbitrator. the hon'ble arbitrator posted the matter forpronouncement of award on 20.09.2008. at the request of the advocates of the respondentsthe award date was rescheduled to 29.09.2008. unfortunately hon'ble justicemr.k.venkataswami passed away on 26.09.2008 just 3 days before the revised pronouncementdate.

as the company wanted to settle the issue in a legally valid manner the companydecided to continue the arbitration proceedings. hence the company has filed a petitionbefore the hon'ble high court of madras seeking its directions for appointment of a newarbitrator for speedy disposal of the arbitration proceedings [ref o.p.no.336 of 2009].the petition is pending before the honble high court for disposal.

based on its present knowledge of facts and as per legal opinion obtained the currentlegal proceedings in the opinion of your management will not have a material adverseeffect on the results / operations of helios and matheson.

Directors' responsibility statement

pursuant to the requirement under section 217 (2aa) of the companies act 1956 withrespect to directors responsibility statement it is hereby confirmed that:

in the preparation of the annual accounts for the financial year ended September 302013 the applicable accounting standards have been followed along with proper explanationrelating to material departures.

the directors have selected such accounting policies and applied them consistently andmade judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for the year under review.

the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with provisions of the companies act 1956 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities.

the directors have prepared the accounts for the financial year ended September 30 2013on a "going concern" basis.

Directors

s.k patil retires by rotation at this annual general meeting and is eligible forelection. suresh kumar r was appointed as additional director of the company at the boardmeeting held on 29.10.2013 and holds office upto the date of the ensuing annual generalmeeting. notice has been received from a member of the company proposing the candidatureof suresh kumar r as a director of the company at the ensuing annual general meeting.necessary resolutions for approval of shareholders are proposed in the notice of theensuing annual general meeting for the reappointment of s.k patil and appointment ofsuresh kumar r as directors of the company.

Conservation of energy research & development technology absorption foreignexchange earnings and outgo

the provisions of subsection (1) (e) of section 217 of the companies act 1956 readwith companies (disclosure of particulars in the report of board of directors) rules1988 are set out in the annexure to this report.

Auditors

m/s.venkatesh & co. chartered accountants chennai retire at the ensuing annualgeneral meeting and are eligible for reappointment. a certificate under section 224 (1-b)of the companies act 1956 has been received from them.

Acknowledgement

your directors thank the clients vendors investors financial institutions andbankers for their continued support for the company's growth. your directors place onrecord their appreciation of the contribution made by the employees at all levels whothrough their competence hard work solidarity cooperation and support have enabled thecompany to achieve rapid growth.

your directors thank the government of India particularly the department ofelectronics software technology parks- chennai and bangalore department of commerce(mepz special economic zone) chennai ministry of information technology ministry ofcommerce the reserve bank of india the department of telecommunications the stategovernments and other government agencies for their support during the year and lookforward to their continued support in the future.

for and on behalf of the board
place: chennai
muralikrishna g.
date : 29.11.2013
chairman & managing director

Annexure to directors report

Conservation of energy

the operations of your company are not energy-intensive. adequate measures have howeverbeen taken to reduce energy consumption by using energy efficient computer terminals andby the purchase of energy efficient equipment incorporating the latest technology. yourcompany constantly evaluates new technologies and invests in them to make itsinfrastructure more energy efficient. these measures have enhanced energy efficiency. asenergy forms a very small part of the total cost the impact on cost is not material.

Research & development

research & development of new services designs frameworks and methodologiescontinue to be important to your company. this allows your company to reuse designs acrossprojects and thereby increase quality productivity and profitability.

Technology absorption and innovation

provision of state of art communication facilities to all the software developmentcenters and total technology solutions to its clients contribute to technology absorptionand innovation.

Foreign exchange

the details of foreign exchange earnings and outgoes are given in notes 28 & 29.

for and on behalf of the board
place: chennai muralikrishna g.
date : 29.11.2013 chairman & managing director

Details of directors retiring by rotation and eligible for reappointment/appointed atthe annual general meeting.

Name of the director sk patil suresh kumar r
date of birth 29.12.1961 05.01.1959
date of appointment 23.01.2007 29.10.2013
expertise in specific functional area s k patil has over 20 years of experience in IT. as an expert in setting up large e governance projects his focus is to drive the benefits of information and communication technologies to governments and businesses in both emerging and established markets. patil holds an engineering degree and an mba from iim ahmedabad. suresh kumar r is an advocate of 30 years standing enrolled with the bar council of tamil nadu. suresh kumar r is a dual degree holder in law and business administration and an alumnus of the prestigious lawrence school lovedale. his areas of expertise include finance corporate law mergers and acquisitions international contracts arbitration etc. suresh kumar r brings rich and varied experience to the board.
directorship held in other companies (excluding private & foreign companies one none
committee positions held in other companies none none
no. of shares held nil nil