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Corporate Governace  
     
 
   
 
 
  1. Company's Philosophy On Code Of Governance
   
 
Effective corporate governance is necessary to maintain public trust and to achieve business success. Blue Star Infotech's formal governance policies describe management guidelines including requirements that a majority of our board members be independent, as well as outlining the various board committees, their responsibilities and membership requirements. We are also committed to rigorously and diligently exercise our oversight responsibilities throughout the Company, managing our affairs in a manner consistent with the highest principles of business ethics, and exceeding the corporate governance requirements. Good governance is about doing the right things in the right way for Blue Star Infotech and its shareholders. This has always been our priority.
   
   
 
   
   
  2. Board Of Directors
   
 
a. Composition of the Board of Directors
 
The Board of Directors of the Company represent an optimum combination of Executive and Non-Executive Directors for its independent functioning. The Board comprises six Directors, of which one is Managing Director and five Non-Executive Directors. The above composition is consistent with the relevant provisions of Clause 49 of the Listing Agreement with Stock Exchanges.
   
 
b. Board Meetings
 
During the financial year 2007-2008, four Board Meetings were held on May 15, 2007; July 20, 2007; October 31, 2007 and January 29, 2008. The Company held its last Annual General Meeting on August 14, 2007.
   
 

Name

Category

Category

Suneel M Advani

Promoter-Executive Director

Chairman & Managing Director

Ashok M Advani

Promoter-Non Executive Director

Vice Chairman

Sanjay N Vaswani *

Promoter-Non Executive Director

Director

Suresh N Talwar

Independent Director

Director

Prakash G Hebalkar

Independent Director

Director

Naresh K Malhotra

Independent Director

Director

  *Mr. Sanjay N Vaswani is a resident of USA.
   
  Details of Directors' attendance and other particulars are given below:
 

Director

Number of Board Meetings attended

Number of Board Meetings held

Last AGM Attendance
(Yes/No)

Number of Directorships in the Board of other public Companies

Number of Committee Memberships in all Public Companies

Number of Committee Chairmanships in all Public Companies

Suneel M Advani

4

4

Yes

2

1

-

Ashok M Advani

4

4

Yes

2

2

-

Sanjay N Vaswani *

4

1

No

-

-

-

Suresh N Talwar

4

4

Yes

15

5*

4

Prakash G Hebalkar

4

4

Yes

-

2

-

Naresh K Malhotra

4

4

Yes

2

4*

3

  * Includes committees in which he holds the position of a Chairman and Membership in Committees of the Company.
   
 
Leave of Absence was granted to the Directors who could not attend meetings.
Alternate Directorships, Directorships in private companies, Directorships in foreign companies and Memberships in governing councils, chambers and other bodies are not included.
None of the Directors hold Directorships in more than 15 companies.
None of the Directors is a member of more than 10 Committees, or is Chairman of more than five committees across all companies in which he is acting as a Director. For the purpose of reckoning the aforesaid limit, Chairmanships/Memberships of the Audit Committee and the Shareholder's Grievance Committee are ony considered.
   
   
 
   
   
  3. Audit Committee
   
 
Terms of Reference

The Audit Committee has inter-alia the following mandate:

 
Review of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information is disclosed.
Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services.
Reviewing the financial statements and draft audit report, including quarterly / half yearly financial information.
Reviewing with management, the annual financial statements before submission to the Board.
Reviewing the Company's financial and risk management policies.
Reviewing with the management, external and internal auditors, and the adequacy of internal control systems.
Reviewing statement of significant related party transactions, management letter/letters of internal control weakness, and appointment, removal and terms of remuneration of the Internal Auditor.
   
 
Composition
 

Naresh K Malhotra

Chairman

Suresh N Talwar

Member

Prakash G Hebalkar

Member

   
  Secretary
 

V Sudarshan

Company Secretary

   
  Meetings and attendance during the year
 

Members

Meetings Held

Meetings Attended

Naresh K Malhotra

4

4

Suresh N Talwar

4

4

Prakash G Hebalkar

4

4

   
 
The Company has a qualified and independent Audit Committee consisting of three Non-Executive Independent Directors, having adequate financial and accounting knowledge. The constitution, powers, duties and responsibilities of the Audit Committee are in line with Clause 49 of the Listing Agreement with the stock exchanges. During the financial year, Audit Committee Meetings were held on May 15, 2007; July 20, 2007; October 31, 2007 and January 29, 2008.
   
   
  ---top---
   
  4. Remuneration To Directors
   
 
The remuneration of the Managing Director and Non-Executive Directors is recommended by the Board of Directors and approved by the shareholders. Hence, no separate Remuneration Committee has been constituted.

The Managing Director is also an Executive Director/Managing Director in Blue Star Limited. In accordance with the terms of his appointment as Managing Director, as approved by the shareholders at the Annual General Meeting held on July 25, 2005, he was not paid any remuneration directly by the Company. The Company shared the remuneration received by him from Blue Star Limited, as per the terms and conditions of his appointment with that Company, on a pro rata basis. Non-Executive Directors are paid by way of commission, based on the net profits of the Company, partly by way of fixed amount and partly based on the number of Board and Audit committee meetings attended by them. Besides, they are paid sitting fees of Rs. 5,000 for each Board and Audit Committee meeting attended.
   
 
Details of remuneration paid/payable to Directors for financial year 2007-08 are as follows: (Rs. In 000)
 

Name

Salary & Perquisites

Commission

Sitting fees

Total

Suneel M Advani *

Nil

N.A

N.A

Nil

Ashok M Advani

Nil

98

20

118

Sanjay N Vaswani

Nil

68

2

73

Suresh N Talwar

Nil

136

40

176

Prakash G Hebalkar

Nil

136

40

176

Naresh K Malhotra

Nil

136

40

176

 
* Blue Star Infotech Limited has during the year reimbursed to Blue Star Limited, Rs. 1,585,838 as its share towards Chairman & Managing Director's remuneration.
   
 
Details of Shareholdings of Non-Executive Directors as at March 31, 2008
 

Name of the Director

Shareholding
(No. of Shares)

Ashok M Advani

459,490

Sanjay N Vaswani

14,750

Naresh K Malhotra

Nil

Prakash G Hebalkar

Nil

Suresh N Talwar

11,575

   
   
 
   
   
  5. Shareholders' Grievance Committee
   
  The Committee facilitates effective redressal of investor complaints and oversees share transfers.
   
 
Composition
 

Ashok M Advani

Chairman

Suneel M Advani

Member

Prakash G Hebalkar

Member

   
  Secretary
 

V Sudarshan

Company Secretary

   
  Meetings and attendance during the year
 

Members

Meetings Held

Meetings Attended

Ashok M Advani

1

1

Suneel M Advani

1

1

Prakash G Hebalkar

1

1

   
 
The constitution, duties and responsibilities of the shareholders' grievance committee are in line with Clause 49 of the Listing Agreement with the stock exchanges. During the financial year, Shareholders' Grievance Committee meeting was held on January 29, 2008.

The total number of shareholders' complaints received and replied to by the registrar to the satisfaction of shareholders during the year under review was 29. All complaints of shareholders were satisfactorily resolved. No requests were pending as at March 31, 2008 .
   
   
 
   
   
  6. General Body Meetings
   
  The location and time of the last three annual general meetings (AGMs) of the Company are given below:
 

Year

Date Venue

Time

2004 - 2005

July 25, 2005 Jai Hind College Hall, 23-24, Backbay Reclamation,
'A' Road, Churchgate, Mumbai 400 020.

3.30 p.m.

2005 - 2006

August 29, 2006 Jai Hind College Hall, 23-24, Backbay Reclamation,
'A' Road, Churchgate, Mumbai 400 020.

2.30 p.m.

2006 - 2007

August 14, 2007 Jai Hind College Hall, 23-24, Backbay Reclamation,
'A' Road, Churchgate, Mumbai 400 020.

2.30 p.m.

   
  Following special resolutions were passed in the previous three AGMs:
 

Subject

Date of Meeting

Commission to Non-Executive Directors

July 25, 2005

Ratification of the disclosures of ESOP Scheme 2003

July 25, 2005

Re-pricing of ESOPs

August 29, 2006

  No special resolution was passed last year or is proposed to be conducted through postal ballot.