Dion Global Solutions Limited
Your Directors have immense pleasure in presenting this 16th Annual Reporton the business and operations of the Company together with Audited Accounts for thefinancial year ended March 31, 2011.
The brief highlights of Standalone and Consolidated financial results of the Companyfor the Financial Years (FY) 2010-11 and 2009-10 are as under:
(INR in million)
|Particulars ||Standalone ||Consolidated |
| ||2010-11 ||2009-10 ||2010-11 ||2009-10 |
|Income from Operation ||306.76 ||232.48 ||1,288.81 ||905.45 |
|Operating Expenses ||358.02 ||336.91 ||1,211.74 ||1,089.26 |
|Operating Profit/(Loss) ||(51.26) ||(104.43) ||77.07 ||(183.80) |
|Non Operating Income ||35.69 ||175.03 ||12.02 ||103.45 |
|Non Operating Expenses ||196.31 ||159.51 ||225.68 ||166.04 |
|Net Profit/ (Loss) Before Tax ||(211.87) ||(88.91) ||(136.59) ||(246.40) |
|Tax Expense/ (Credit) ||- ||1.44 ||12.44 ||0.86 |
|Net Profit/ (Loss) After Tax ||(211.87) ||(90.35) ||(149.03) ||(247.25) |
|Share of Minority Interest ||- ||- ||17.45 ||- |
|Net Profit/(Loss) for the year ||(211.87) ||(90.35) ||(166.49) ||(247.25) |
|Issue of Bonus Shares ||- ||- ||- ||(0.40) |
|Loss arising on Merger ||- ||30.56 ||- ||190.03 |
|Brought Forward Loss ||(456.97) ||(397.18) ||(718.29) ||(660.67) |
During the year under review, the Company has earned Consolidated Income of INR 1288.81Million as against Consolidated Income of INR 905.45 Million during the previous financialyear. The Company has earned operating profit of INR 77.07 Million on consolidated basisfor the year under review as against operating loss of INR 183.80 Million on consoldatedbasis during the previous financial year. The Company has recorded consolidated net lossof INR 166.49 Million during the year under review as against consolidated net loss of INR247.25 Million in the previous financial year. Your Directors are continuously looking foravenues for future growth of the Company in its business operations related to global BFSIled IT Products and Solutions.
Keeping in view the losses of the Company during the year under review, your Directorshave decided not to recommend any dividend for the financial year ended March 31, 2011.
RESTRUCTURING OF BUSINESS OF THE COMPANY
The Hon’ble High Court of Delhi vide its order dated July 28, 2010 has sanctionedthe Scheme of Arrangement (Scheme) which inter-alia involve demerger ofservices business from its subsidiaries i.e. Religare Technova Business Intellect Limited,Religare Technova IT Services Limited and Religare Technova Global Solutions Limited(RTGSL) into Religare Technologies Limited and the subsequent amalgamation of ResidualRTGSL (excluding services business) into the Company. The Scheme became effective onAugust 16, 2010 with effect from the appointed date i.e. April 1, 2009.
The successful implementation of the above de-merger process has demonstrated ourability to identify market opportunity to seed new businesses, grow rapidly to gainleadership in businesses which are large enough to be independent and thereby create valuefor its shareholders. This move is in line with our strategy of expanding our businessoperations of global BFSI led IT products and solutions. The BFSI sector has entered intoa high growth trajectory and will continue to witness good growth in near future. There isa demand for IT and software solutions to optimize and increase the efficiencies ofvarious organizations. We are confident that the Company will achieve new heights and willemerge as a leader in its domain.
ACQUISITION OF CHASE COOPER LIMITED
Dion Global Solutions Pty Limited (step down subsidiary of your Company) has acquired44% equity stake in AEOIU Limited and thereby formed a strategic partnership with ChaseCooper Limited, wholly owned subsidiary of AEOIU. Chase Cooper is a leading internationalprovider of Enterprise Wide Operational Risk Management and Compliance solutions. ChaseCooper has established a track record for advising and assisting global organizations onhow to implement enterprise wide operational risk and compliance solutions. Chase Cooperhas also been an innovator in its application of financial analytics and modelling ofoperational risk factors to help organizations more accurately quantify the economicimpact of operational risks.
As per Section 212 of the Companies Act, 1956 (the Act) it is required toattach the Balance Sheet, Profit and Loss Account, Directors’ Report andAuditors’ Report of your Company’s subsidiaries to the Annual Report of yourCompany. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated February 8, 2011 has exempted companies from complying with the provisions ofSection 212 subject to compliance of conditions stated in the circular. In compliance withrequirement of aforesaid circular, the Board of Directors has passed a resolution in itsmeeting held on May 12, 2011, for not attaching the documents of the subsidiaries of yourCompany as prescribed under Section 212(1) of the Companies Act, 1956.
Accordingly, the Annual Report of the Company for the financial year 2010-2011 does notcontain the Annual Accounts of your Company’s subsidiaries. However, the AnnualAccounts of the subsidiary companies and the related detailed information are open forinspection by any member and your Company will make available those document/details uponrequest by any member of the Company or its subsidiary companies who may be interested inobtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Instituteof Chartered Accountants of India, Consolidated Financial Statements presented by yourCompany includes financial information of its subsidiaries duly audited by the StatutoryAuditors and the same is published in your Company’s Annual Report. The financialinformation of the subsidiary companies, as required by the said circular, is disclosed inthe Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management’s Discussion and Analysis Report for the year under review, asstipulated under Clause 49 of the Listing Agreement with the Stock Exchange, is presentedin a separate section forming part of the Directors’ Report.
EMPLOYEES STOCK OPTION SCHEME
The Company has instituted an Employee Stock Option Scheme titled Dion GlobalEmployee Stock Option Scheme 2011 (Scheme) to enable itsemployees and the employees of its subsidiaries to participate in the future growth andfinancial success of the Company. The Scheme is in accordance with the Securities andExchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines, 1999 (SEBI Guidelines). The Company’s shareholdersapproved the Scheme for the issuance of Stock Options to Employees through Postal Ballot.
Details as required under SEBI Guidelines pertaining to the Scheme are disclosed in theReport on Corporate Governance and forms part of the Directors’ Report.
CHANGE OF NAME
During the year under review, the name of your Company has been changed fromReligare Technova Limited to Dion Global Solutions Limited witheffect from December 28, 2010.
The names of overseas subsidiaries of your Company have also been changed to reflectthe new identity of the Holding Company.
CHANGES IN CAPITAL STRUCTURE
During the financial year ended March 31, 2011, the paid-up share capital of theCompany has been changed from INR 403.97 Million to INR 438.66 Million pursuant to theScheme of Arrangement and the revised share capital of the Company has been listed on theBombay Stock Exchange Limited. The Authorised Share Capital of the Company has alsoincreased from INR 470 Million to INR 745 Million pursuant to the Scheme.
The Authorized Share Capital of the Company has been re-classified from INR 745.00Million divided into 74,500,000
Equity Shares of INR 10 each to INR 745 Million divided into 59,500,000 Equity Sharesof INR 10 each and 15,000,000 Preference Shares of INR 10 each.
WRITING OFF ACCUMULATED LOSSES OF THE COMPANY
As at March 31, 2011, your Company has accumulated losses of INR 668.84 Million onStandalone basis and consequently, Capital of the Company was not adequately representedby the available assets and improvements in the performance of the Company cannot beappropriately reflected unless past losses are written off.
The Board of Directors of your Company, subject to the necessary approval ofShareholders and other regulatory authorities, decided to undertake a financialrestructuring of the Company which would result in the right sizing of the Balance Sheetof the Company leading to an updated presentation to the Shareholders based on currentfactual situation.
Accordingly, the accumulated losses of INR 668.84 Million will be written off againstthe Reserves & Surplus and partly by reducing the existing paid-up equity sharecapital of the Company from INR 438.66 Million to INR 219.33 Million. The total loss to bewritten off will be INR 624.95 Million out of total loss of INR 668.84 Million and thebalance loss of INR 43.88 Million represent the unabsorbed depreciation and business lossof the financial year 2010-11.
Mr. Shivinder Mohan Singh, Mr. Harpal Singh, Mr. J W Balani and Dr. Sunita Naidoo,Directors of the Company resigned from the Board of Directors of the Company with effectfrom October 15, 2010. The Board of Directors placed on record their appreciation for thevaluable services and guidance provided by them during their tenure as Directors of theCompany.
Mr. Shachindra Nath, Mr. Pradeep Ratilal Raniga and Mr. R. K. Shetty were appointed asAdditional Directors of the Company with effect from October 15, 2010 and were appointedas Directors within the meaning of Section 257 of the Companies Act, 1956 with effect fromDecember 21, 2010.
Mr. Ralph James Horne was appointed as an Additional Director of the Company on October15, 2010 and was appointed as Director within the meaning of Section 269 read with Section2(26) and Schedule XIII to the Companies Act, 1956 designated as Global CEO & ManagingDirector of the Company with effect from October 15, 2010 for a period of three years andthe said appointment was also approved by the Shareholders at the Annual General Meetingheld on December 21, 2010.
In accordance with provisions of the Companies Act, 1956 and Articles of Association ofthe Company, Mr. Malvinder Mohan Singh, Dr. P. S. Joshi and Mr. Padam Bahl are liable toretire by rotation at the ensuing Annual General Meeting of the Company and being eligiblehave offered themselves for re-appointment.
Brief resume of the Directors proposed to be re-appointed, nature of their expertise inspecific functional areas and names of Companies in which they hold directorships andmemberships/chairmanships of Board Committees and number of shares held in the Company, asstipulated under Clause 49 of Listing Agreement entered into with Stock Exchanges, areprovided in the Report on Corporate Governance forming part of the Annual Report.
Your Company has neither invited nor accepted any deposits from public within themeaning of Section 58A of the Companies Act, 1956 read with Companies (Acceptance ofDeposit) Rules, 1975 during the year under review.
LISTING WITH STOCK EXCHANGE
The Equity Shares of your Company continue to be listed on the Bombay Stock ExchangeLimited. The Annual Listing Fee for the financial year 2011-12 has been paid to theExchange.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
In view of the nature of activities which are being carried on by your Company, theparticulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read withCompanies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988regarding Conservation of Energy and Technology Absorption are not applicable to theCompany.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company has incurred expenditure of INR 15.02 Million (Previous Year: INR 7.06Million) in Foreign Exchange and earned income of INR 123.57 Million (Previous Year: INR121.25 Million) in Foreign Exchange during the year under review on a standalone basis.
DIRECTORS’ RESPONSIBILITY STATEMENT
In terms of provisions of Section 217(2AA) of the Companies Act, 1956, your Directorsconfirm that:
(i) In the preparation of the annual accounts, the applicable accounting standards havebeen followed along with proper explanations relating to material departures, whereverapplicable;
(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31, 2011, and of the loss ofthe Company for the year;
(iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;and
(iv) The Directors have prepared the annual accounts on a ‘going concern’basis.
Your Company continues to be committed to uphold the standards of Corporate Governanceand adhere to the requirements set out by Clause 49 of the Listing Agreement with theStock Exchanges.
A detailed Report on Corporate Governance along with the Certificate of M/s. RB &Associates, Company Secretaries in Practice, confirming compliance of conditions ofCorporate Governance as stipulated in Clause 49 is set out in this Annual Report and formspart of the Annual Report.
M/s. R. V. Shah & Co., Chartered Accountants, retires as Statutory Auditors of theCompany at the conclusion of the ensuing Annual General Meeting and have confirmed theireligibility and willingness to accept the office of the Statutory Auditors, ifre-appointed.
The observations of the Auditors in their report read together with the Notes onAccounts are self explanatory and therefore, in the opinion of the Directors, do not callfor any further explanation.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company believes in formulating adequate and effective Internal Control Systemsand implementing the same strictly to ensure that assets and interests of the Company aresafeguarded and reliability of accounting data and accuracy are ensured with proper checksand balances. The Internal Control Systems is improved and modified continuously to meetthe changes in business conditions, statutory and accounting requirements.
The Audit Committee of the Board of Directors and the Business Heads are periodicallyapprised of the Internal Audit findings and corrective actions taken.
The Audit Committee actively reviews the adequacy and effectiveness of Internal ControlSystem and suggests improvements for strengthening them.
STATEMENT OF PARTICULARS OF EMPLOYEES
Statement of Particulars of Employees as required under Section 217(2A) of theCompanies Act, 1956 (the Act) and the rules framed there under, forms part of the AnnualReport. However, in terms of the provisions of Section 219(1) (b) (iv) of the Act, thisReport and Accounts are being sent to all the Shareholders excluding the Statement ofParticulars of Employees under Section 217(2A) of the Act. Any Shareholder interested inobtaining a copy of the Statement may write to the Company Secretary at the RegisteredOffice of the Company.
The Company seeks to nurture a mutually beneficial relationship with its employees.This relationship is characterized by the investment which the Company makes in itsemployees by providing challenging roles and assignments opportunities for personalgrowth, relevant and timely performance support, training and an enabling environment. TheCompany seeks to create a workplace which combines achievement orientation with care foremployees. The Company lists ‘people’ as one of its stated core values.
The Company has a structured induction process at all locations and managementdevelopment programmes to upgrade skills of managers. Objective appraisal systems based onKey Result Areas (KRAs) are in place for senior management staff.
We compete in a dynamic and evolving industry in which value and differentiation aredefined at each turn by the Company’s most precious asset: its human capital. Webelieve that continuing to invest in the skills and career development of our employees isa primary driver of client value.
Your Company takes the pride in the Commitment, Competence and dedication shown by itsemployees in all areas of business. Various HR initiatives are taken to align the HRPolicies to the growing requirements of the business.
Your Directors wish to thanks the Bankers, Regulatory Authorities, Stakeholdersincluding Financial Institutions and other business associates for their continued supportand faith reposed in the Company.
Your Directors also wish to place on record their appreciation for the contributionmade by employees at all levels as without their hard work, solidarity and support, yourCompany’s achievements would not have been made possible.
For and on behalf of the Board
For Dion Global Solutions Limited
| ||Sd/- ||Sd/- |
|Place : New Delhi ||Ralph James Horne ||Maninder Singh Grewal |
|Date : August 02, 2011 ||Global CEO & Managing Director ||Director |