DIRECTORS REPORT
To,
The Members of
Glodyne Technoserve Limited
Your Directors have pleasure in presenting the Fifteenth Annual Report
of your Company on the business and operations of the Company, together with the
Audited Accounts for the financial year ended March 31, 2012.
FINANCIAL RESULTS:
|
|
(Rs. Lakhs) |
| Particulars |
Standalone |
|
March 31, 2012 |
March 31,2011 |
| Total Income |
161247.06 |
98881.83 |
| Profit / (Loss) Before Taxes |
37769.79 |
20025.01 |
| Less: Provision for Income Tax (net off short/(excess) provision for earlier years) |
12979.80 |
5100.00 |
| Less: Provision for deferred tax/wealth Tax/fringe benefit tax |
914.86 |
508.85 |
| Profit / (Loss) After Taxes |
25704.84 |
14416.16 |
| Profit available for Appropriation |
25704.84 |
14416.16 |
| Less: Transfer to General Reserve |
- |
1441.62 |
| Less: Proposed Dividend @ 0.15 per share |
67.62 |
1845.80 |
| Less: Provision for Tax on Dividend |
10.97 |
299.44 |
| Add: Balance Brought forward from last year |
28683.04 |
17853.74 |
| Balance carried to Balance Sheet |
54309.27 |
28683.04 |
REVIEW OF PERFORMANCE:
On a Standalone basis, your Company has recorded a total income of 1,61,247.06 Lakhs
for the financial year ended March 31, 2012, an increase of 63.07% compared to last years
figure of Rs. 98,881.83 Lakhs. The Earnings before Interest, Tax, Depreciation and
Adjustments (EBITDA) stood at Rs. 46,130.47 Lakhs as compared to last years Rs. 24,427.80
Lakhs, recording a growth of 88.84%. The Companys profit after tax stood at Rs. 25,704.84
Lakhs as compared to previous years Rs. 14,416.16 Lakhs, recording a growth of 78.31%.
Due to subdued performance of the US subsidiary in view of the non availability of the
working capital at US and hence delayed integration, the Consolidated results were lower
as compared to the standalone for the year. The detailed analysis of the Companys
financial results for the year end is given in the Management Discussion and Analysis
(MD&A) Report which is separately annexed as part of the Annual Report.
DIVIDEND:
The Company as per its profit sharing policy, has been extending the profit
participation to its shareholders through distribution of dividend. Your Company has been
a consistent dividend paying company. Although the performance of your Company during the
year under review, had been satisfactory, considering the need to plough back profit for
sustaining growth of the Company and to maintain liquidity for timely meeting of business
needs, your Directors revised its recommendation for dividend to Rs. 0.15/- per share as
against earlier recommended at Rs. 4.60/- per share for the year. This was also in
accordance with the approvals from the Lenders. The Board at its meeting held on December
6, 2012 accordingly also approved the changes in the final accounts approved in the
earlier meeting and adopted the revised financial statements, giving effect to the new
dividend recommendation.
The total dividend payout is Rs. 67.62 lakhs in comparison to the previous year
dividend of Rs. 1845.80 lakhs (Previous year a dividend of Rs. 4.20/-on equity share of
Rs. 6/- each), excluding the Corporate dividend tax.
FINANCE AND CAPITAL STRUCTURE:
A) Strategic Acquisitions / Mergers: Domestic Acquisition:
Your Company continued on its growth path through a healthy mix of organic and
inorganic route. As a part of the Companys strategy of growing and strengthening its
leadership position in services business, your Company had announced the acquisition of
Comat Technologies Pvt. Limited (Comat), a leading provider of e-governance services in
India, which is pending for closure due to completion of the customary closing conditions.
As the acquisition is pending for closure the Consolidated Results do not include the
financials of Comat. Comat subsequent to the closure of the acquisition, may act a
subsidiary of your Company or may be merged with your Company in order to derive the
necessary business and fiscal benefits, subject to necessary approvals.
Comat has been in the business of delivering essential Government and Private services
to rural India. Comat has been a pioneer in e-governance services and ran a network of
thousands of centers in rural areas for door step delivery of Government services. In
addition to delivery of services, Comat has worked with Government in re-engineering
processes and using technology to bring efficiency and cost savings to the Government.
Most recently, Comat has been involved with piloting and subsequently scaling the UID
initiative in several states.
The Comat acquisition together with our technology and service offerings, will help in
creating value for all constituents, it will also facilitate the Company to expand its
reach in new states and add several key partnerships and relationships with governments
for providing citizen centric programs.
B) Warrants issued under the preferential guidelines:
As per the approval granted by the members of the Company at the 14th Annual General
Meeting, the Company during the year under review, on receipt of the requisite Stock
Exchanges Approvals had issued 15,00,000 warrants, carrying the entitlement of conversion
of 1(one) equity share of Rs. 6/- each (Rupees Six only) at Rs. 400/-per warrant to
Glodyne Global Private Limited, a promoter group Company. The warrants are due for
conversion in April, 2013.
C) Increase in Share Capital:
(i) Allotment on exercise of stock options under Employee Stock Option Scheme:
During the year, 167,930 equity shares of the face value of Rs. 6/- each (post
subdivision) has been issued on the exercise of Stock Options under the Employee Stock
Option Scheme 2006 of the Company. As a result of the above, the Companys paid up capital
stood increased to Rs. 26,39,59,260 consisting of 4,39,93,210 equity shares of Rs. 6/-
each.
(ii) Allotment on Conversion of warrants issued under the preferential guidelines:
On June 23, 2010, 6,00,000 warrants were issued to Glodyne Global Pvt. Limited, a
promoter group Company, as per members approval granted at 13th Annual General Meeting.
The said warrants carried entitlement of conversion in to 1(one) equity share of Rs. 10/-
each (Rupees Ten only). Post split, the allotted warrants were effected into 10,00,000
warrants, carrying the entitlement of conversion of 1(one) equity share of Rs. 6/- each
(Rupees Six only). The Promoter Warrant holder has exercised its right and converted the
warrants into equity shares at a price of Rs. 432 per share. Accordingly, during the year
under review, 10,00,000 equity shares were allotted to Glodyne Global, thereby increasing
the paid up equity share capital from 4,39,93,210 to 4,49,93,210 shares of Rs. 6/- each
(Rupees Six only) as on March 31, 2012.
DIRECTORS:
Pursuant to the provisions of the Companies Act, 1956 and in accordance with the
Articles of Association of the Company, Mr. Alok Sharma will be retiring by rotation at
the ensuing Annual General Meeting. Due to his other business plans and pre occupations,
Mr. Sharma has not sought his re-appointment.
During the year, Mr. Bryan Sanderson, Dr. Mohan Kaul and Mr. Samar Ray who were
appointed as Additional Directors on the Board, were appointed as Directors liable to
retire by rotation, as per the shareholders approval granted at the Annual General Meeting
dated 15th September 2011.
Subsequent to the year end, Mr. Shantanu Rooj, Whole time director of the Company has
ceased to be director of the Company.
Shareholders attention is drawn to the relevant items appearing in the Notice of the
A.G.M. and the explanatory statement, seeking the approval of the members in this matter.
EMPLOYEES STOCK OPTION SCHEME
In accordance with the Glodyne Employees Stock Option Scheme, 2010 of the Company, a
total number of 680220 Stock Options (post subdivision no.) were granted during the year
by the Compensation Committee. No fresh grants were made under the Employee Stock Option
Scheme, 2006 of the Company. The particulars required under the SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are annexed to and form
part of this report. No employee was issued Stock Option during the year equal to or
exceeding 1% of the issued capital of the Company at the time of grant. The Scheme is
applicable to the eligible employees which include employees and directors of the Company
and its subsidiary companies.
CORPORATE GOVERNANCE
Your Company has complied with the Corporate Governance norms as stipulated under the
provisions of the Listing Agreement entered into with the Stock Exchanges. A separate
section on Corporate Governance Report and a Certificate from the Companys Statutory
Auditors confirming compliance with the conditions of Corporate Governance by the Company
as stipulated in Clause 49 of the Listing Agreement are annexed to and forming part of
this report.
STATUTORY INFORMATIONS:
CONSERVATION OF ENERGY, EFFORTS FOR EXPORT MARKET
DEVELOPMENT, R & D ACTIVITIES, FOREIGN EXCHANGE EARNINGS & OUTGO AND TECHNOLOGY
ABSORPTION:
As required under Section 217(1) (e) of the Companies Act, 1956 and the rules made
thereunder, the necessary details are given hereunder:
Conservation of Energy
As your Companys business comprises of Technology IMS, which is service driven, the
operations are not energy intensive. Hence there are no particulars required to be
furnished in respect of conservation of energy. However, as a responsible corporate
citizen, the Company carries out various energy conservation measures, including use of
equipments for minimizing power consumption.
Export Market Development
The Company has export market in terms of its services and the primary market overseas
has been the US. The Company has been making further efforts to offshore the activities
carried out in the US by its subsidiaries, which includes internal outsourcing and client
servicing. The Company focuses on offshore servicing of US clients, thereby increasing
export share.
Research & Development Activities
There is a constant endeavour at your Company to upgrade its products / services
offerings. For such purposes, the Company invests and carries out the research and
development activities. To enhance the capabilities of service delivery, Company has in
house developed mobile application for its on field support services. It has resulted in
efficiency improvements and cost savings. The Company also carried out virtualization of
the Data Centers at US, which resulted in better performance of the data centers and
efficiency.
Foreign Exchange Earnings and Outgo / Technology Absorption
During the year under review, the Company has earned Rs. 2,377.76 Lakhs in foreign
currency (Previous year Rs. 15,223.08 Lakhs) and has spent Rs. 193.58 Lakhs (Previous year
Rs. 37.28 Lakhs). Details of the same are available vide note nos. B - 28 and 29 of the
Notes forming part of the Audited Accounts, attached herewith.
The Company has not imported any foreign technology and hence the requisite particulars
in this regard are Nil.
Explanation in respect of Auditors comments in the Audit Report.
The Board gives the following explanations on the comments of Auditors reported in the
Annexure to Auditors Report:
1) Refer point (ix) (a) of the Annexure to the Auditors Report to the members - There
are certain delays in the payment of certain statutory dues. However, the Company has been
generally regular in depositing the same and the post the year end the process of payment
of the same was already initiated. The management opines that in future, your Company will
be able to meet its obligation in time.
2) Refer point 4 of the Auditors Report to the members on Consolidated Financial
Statements - Even though there is no mandatory requirement of conducting audit of the
said subsidiary as per the US laws, the US GAAP and Indian GAAP Audit of the Decision One
Corporation have been carried out by the US Auditors. However, the pending certain
previous year confirmations, the report in respect of the year under review was pending
for release by them on the date of adoption of the accounts.
DISCLOSURE OF PARTICULARS UNDER SECTION 217(2A):
The disclosure about the details of the employees drawing remuneration in excess of the
limits specified under Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, during the year under review forms part of the
Directors Report. However, having regard to the provisions of Section 219 (i) (b) (iv) of
the Companies Act, 1956, the Annual Report excluding the aforesaid information is being
sent to all the shareholders of the Company and others entitled thereto. Any shareholder
interested in obtaining a copy of the same may write to the Company Secretary at the
Registered Office of the Company. The statement is also available for inspection at the
registered office during working hours upto the date of the forthcoming Annual General
Meeting (AGM).
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the
Directors hereby confirm:
(i) that in the preparation of the accounts for the inancial year ended March 31, 2012,
the applicable accounting standards have been followed along with 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 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
inancial year under review and of the proit for the year under review;
(iii) that the Directors have taken proper and suficient 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;
(iv) that the Directors have prepared the accounts for the inancial year ended March
31, 2012 on a going concern basis.
SUBSIDIARY COMPANIES:
As on March 31, 2012, your Companys subsidiaries included Glodyne Peoplepower Limited,
Smaarftech Technologies Private Limited, Glodyne Technoserve Inc., DecisionOne Corporation
USA and its 2 US subsidiaries, Glodyne Technoserve East Inc., Front Office Technologies,
Inc., Compulink USA Inc., Compulink Software Pte. Ltd., Compulink Europe Ltd.
Ministry of Corporate Affairs has granted general exemption under Section 212(8) of the
Companies Act, 1956 exempting companies from attaching copies of the Balance Sheet, Profit
and Loss Account, Reports of the Board of Directors and Auditors of Subsidiaries as
specified under Section 212(1) of the Companies Act, 1956 subject to publication of
certain summarised financial information of the subsidiaries in the Annual Report. Also,
as required, the Company has attached to this report, Consolidated Audited Accounts of the
Company and all its subsidiaries. Accordingly these documents related to subsidiaries are
not attached to the Balance Sheet and the summarised financial information related to
subsidiaries is included in the Annual Report. The annual accounts of the subsidiaries
along with the related information will be made available to the Members seeking such
information at any point of time. The annual accounts of the subsidiaries are also
available for inspection during business hours at the Registered Ofice of the Company for
inspection by any interested shareholder.
FIXED DEPOSITS:
The Company has not accepted any deposits falling within the purview of Section 58A of
the Companys Act, 1956 during the year under review, and as such, no principal or
interest amount was outstanding on the date of the Balance sheet.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES: Green Initiative
As permitted by the Ministry of Corporate Affairs (MCA) in its circular "Green
Initiative in Corporate Governance" issued towards encouraging paperless compliances,
the Company intends to disseminate the Annual Report and related communications for FY-
2011-2012 in electronic mode.
Going forward also the Companys communications / documents (including Notice of
General Meetings, Audited Financial Statements, Directors Report, Auditors Report and
all other documents including Postal Ballot documents) as may be allowed from time to
time, by MCA will be send in electronic mode to the registered e-mail addresses of the
Members as provided / updated by you and made available to the Company by the
Depositories, which will be deemed to be your registered e-mail address for serving the
necessary communications / documents.
Your directors also requests you to register your e-mail address with your DP for the
purpose of serving of documents by the Company in electronic mode, if your e-mail address
is not registered with your Depository Participant (DP).
Glodyne Care Foundation
The Company through its social trust titled "Glodyne Care Foundation"
supports its social initiatives. The foundation is setup with the object of imparting
education, helping the down trodden, etc. The Foundation embodies corporate systems and
processes driven organization operating on a not for proit basis, with the overall aim to
create and support meaningful and innovative activities that will address some of Indias
most pressing development challenges.
AUDITORS:
The Present Statutory Auditors of the Company M/s. N M Kapadia and Co, Chartered
Accountants, Mumbai, hold their office until the conclusion of the ensuing Annual General
Meeting. The present auditors have confirmed their willingness and eligibility under
Section 224(1B) of the Companies Act, 1956 for their reappointment for the financial year
ending 2012-13 at a remuneration to be decided by the Board of Directors or Committee
thereof.
Your Directors recommend their re-appointment at the ensuing Annual General Meeting for
your approval.
HUMAN CAPITAL:
The Companys present human capital comprises organic resources and additions made
through the overseas acquisitions. The Company has a strong outsourced model for various
projects which creates local employment. The Company carries out various initiatives for
the talent management within the organization and to this intent, various employee centric
programs such -Excellence workshops, etc have been designed and are carried out to promote
healthy competition, motivate the workforce, and aligning them to the organizations
objectives. Your Company is an equal opportunities Employer.
QUALITY INITIATIVES:
The Company has been certified with by International Organization for Standardization
(ISO) with ISO 27001, the highest certification standard on information security. The
Company is also an ISO 9001:2000 certified and CMMi level 3 compliant Company. The Process
methodologies are followed to ensure quality deliverables to clients.
AWARDS & ACCOLADES:
During the year under review, your Company was awarded with the following Awards:
• Best Under a Billion 2011 award for the year by Forbes Asia
• Outstanding Entrepreneurship Award awarded to Mr. Annand Sarnaaik at the The
Asia Pacific Entrepreneurship Awards 2011
• E-Shakti project of Glodyne was adjudged as the winner at EDGE awards at
INTEROP 2011 .
• E-Shakti was declared as the best ICT initiative in the Country at the PC
Quest 2011 Awards
• Glodyne was chosen as the best "Best Government to Citizen Initiative"
Company at the E-World Awards 2011
• Glodynes Education Managed Services was announced as the winner at "World
Education Award 2011"
• Glodyne received Asias Best Employer Brand Award 2011 under the categories of
Best Employer Brand - Talent Management and in the Continuous Innovation at HR Strategy
• Ranked as one of the top performing mid sized companies by Inc India
• Winner at the Deloitte Technology Fast 500 AsiaPac Program 2011 and Deloitte
Technology Fast 50 India Program 2011
ACKNOWLEDGEMENTS:
The Board of Directors put on record their sincere thanks to the clients, vendors,
bankers, media, analysts for their continued support and cooperation.
Your Directors place on record their appreciation for the business associates and
shareholders. Your Directors also thank all the Government and regulatory authorities
connected with the Companys business for their support during the year.
Your Directors also appreciate and value the contribution of each member of Glodyne
family including the contribution of the employees at all levels in the growth of the
organization.
For and on Behalf of the Board
Sd/-
Annand Sarnaaik
Chairman & Managing Director
Place: Mumbai
Date: 6th December, 2012
Annexure to the Directors Report
Information to be disclosed under the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (during the F.Y.
ended March 31, 2012):
A. Summary of Status of ESOPs Granted
The position of the existing schemes is summarized as under -
| Sr. No. |
Particulars |
ESOP 2006 |
ESOP 2010 |
| 1 |
Details of the Meeting |
Authorized by Shareholders of the Company on 29th September 2006 |
Authorized by Shareholders of the Company on 24th December 2010 |
| 2 |
The Pricing Formula |
"Market price" as defined by SEBI |
"Market price" as defined by SEBI |
| 3 |
Options Granted* |
2,959,773 |
18,61,200 |
| 4 |
Options Vested and Exercisable* |
382,807 |
45,108 |
| 5 |
Options Exercised* |
15,70,450 |
0 |
| 6 |
Options Cancelled* |
587,276 |
382,601 |
| 7 |
Options Lapsed* |
0 |
1353 |
| 8 |
Total Number of Options in force * |
802,047 |
14,77,246 |
| 9 |
Variation in terms of ESOP |
Not Applicable |
Not Applicable |
| 10 |
Total number of shares arising as a result of exercise of options |
15,70,450 |
0 |
| 11 |
Money realized by exercise of options during the year (Rs. In Lakhs) |
730.54 |
0 |
*The options have been adjusted for split - Face value of Rs. 10 split to face value of
Rs. 6 as on February 10,2011 and a bonus of 1:1 share as on August 20,2009
B. Employee-wise details of options granted during the financial
year 2011-12 to:
| (i) Senior managerial personnel no. |
10 |
| (ii) Employees who were granted, during any one year, options amounting to 5% or more
of the options granted during the year |
4 |
| (iii) Identified employees who were granted option, during any one year equal to or
exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the
company at the time of grant. |
Nil |
C. Weighted average Fair Value of Options granted during the year whose
| (a) Exercise price equals market price |
134.06 |
| (b) Exercise price is greater than market price |
NA |
| (c) Exercise price is less than market price |
230.50 |
Weighted average Exercise price of options granted during the year whose
| (a) Exercise price equals market price |
280.10 |
| (b) Exercise price is greater than market price |
NA |
| (c) Exercise price is less than market price |
6.00 |
D.
| Where the company has calculated the employee compensation cost using the intrinsic
value of the stock options, the difference between the employee compensation cost so
computed and the employee compensation cost that shall have been recognized if it had used
the fair value of the options, shall be disclosed. The impact of this difference on
profits and on EPS of the company shall also be disclosed. |
The stock-based compensation cost calculated as per the intrinsic value method for the
financial year 2011-12 is Rs. 21.19 Lakhs. If the stock-based compensation cost was
calculated as per the fair value method, the total cost to be recognised in the financial
statements for the year 2011-12 would be Rs. 841.41 Lakhs. The profits would have been
lower by Rs. 841.41 lakhs and basic and diluted earnings per share would have been lower
by Rs. 1.86 & Rs. 1.76 respectively. |
E. Method and Assumptions used to estimate the fair value of options granted during the
year:
The fair value has been calculated using the Black Scholes Option Pricing model.
The Assumptions used in the model are as follows:
| Variables |
30-Aug-11 |
6-Mar-12 |
| 1. Risk Free Interest Rate |
8.30% |
8.29% |
| 2. Expected Life (years) |
3.50 |
3.50 |
| 3. Expected Volatility |
61.14% |
58.03% |
| 4. Dividend Yield |
1.03% |
1.03% |
| 5. Price of the underlying share in market at the time of the option grant. (Rs.) |
280.10 |
243.60 |
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