DIRECTORS
Your Directors are pleased to present the 18th Annual Report together with
the statement of audited accounts of the Company for the financial year ended on December
31, 2011.
Financial Highlights
The following table summarizes the financial highlights of your Company, on a
standalone basis, for the financial year under review:
| Particulars |
Year ended 31st December, 2011 |
Year ended 31st December, 2010 |
|
(12 months) |
(18 months) |
| Total Income |
53,65,07,714 |
119,29,85,522 |
| Profit Before Interest, Depreciation and Taxes |
7,26,35,079 |
39,83,74,913 |
| Less: (a) Interest |
1,87,82,500 |
4,30,58,343 |
| (b) Depreciation |
17,71,48,232 |
37,01,00,290 |
| Profit/(Loss) Before Tax |
(12,32,95,653) |
(1,47,83,720) |
| Less: Provision for - (a) Provision for Current Tax |
10,72,000 |
1,21,90,000 |
| (b) Deferred Tax |
(1,03,70,322) |
(1,68,84,584) |
| Profit/(Loss) After Tax |
(11,39,97,331) |
(1,00,89,136) |
Note: The figures for the current year are for a period of 12 months as against 18
months in the previous period and hence, are not comparable.
Financial Review
The turnover of the Company for the financial year ended 31st December,
2011, reported a decrease of 55.03% from Rs. 11929.85 lakhs in the previous year to Rs.
5365.08 lakhs in the year under review.
The Company has reported a Profit before interest, depreciation and tax of Rs. 726.35
lakhs and after providing Rs. 187.83 lakhs towards interest, Rs. 1771.48 lakhs towards
depreciation and adjusting Rs. 92.98 lakhs towards tax, the net loss amounts to Rs.
1139.97 lakhs.
Business Review
During the current financial year ended December 31, 2011, the businesses across all
verticals met with a substantial setback on account of factors both external and beyond
the control of the management and internal relating to issues such as marketing structure
and reach, product pricing etc. Dhanus has, over the past two years, been trying to make
efforts to reverse the downslide in business by attempting to restructure its businesses
and salvage the Companys business clientele and marketing reach.
Telecom
With the Company facing a recession throughout the year under review, and on account of
growing financial instability and economic downturn across various parts of the globe,
more significantly in Europe, and making an impact in India, the tourism industry suffered
substantially thus adversely influencing the overseas travels of Indians. The Companys
telecom services were thus impacted as Indians traveling abroad happen to be the exclusive
target customer segment in this vertical. V-tel continues to contribute a major share to
the Companys top line. The Company continues to make efforts to arrest this negative
trend by reviewing and drawing new plans both on the product and marketing front.
Telematics
The Companys telematics vertical brand Fleetrac showed a significant negative growth
on account of recession in the transportation and automobile sector. The Company is having
a relook at the Companys marketing strategies, client reach, pricing policies and
strategies. Your Company plans to revisit its business model in this segment and review
its financial viability and thereafter decide on its renewed launch.
IT/ITES
The marginal reversal in the recessionary conditions in the US did not do much in terms
of reviving the fortunes of the outsourcing business of your Company. Morover, the
anti-sourcing sentiments prevailing in the US also added to lack of fresh business from
the US. This has affected the Companys main customer segment, and the anti-outsourcing
sentiments prevailing in the US on account of large scale unemployment continued to impact
this segment of Companys business this year too. The BPO business had sustained a
negative growth in its business and the Company succumbed to pricing and margin pressures.
Trading Activities
The Company had forayed into a new business segment viz., Trading Activity in November
2010. The Company primarily was engaged in the trading of computer products, accessories
and peripheral items. The Company started this business in the first week of November,
2010 and did robust business in this segment initially, although with nominal margin
levels. However, the Company continued this business till June 2011 anticipating increased
volume of business and also upward scalability in the profit margins. The Company however
realized that it was not to happen and it was essentially a low-margin with not much of
perceptible scalability and therefore decided to suspend this activity in the second
quarter of the financial year under review till a comprehensive review of this segment of
business and its viability is analyzed.
Current strategy:
The Companys primary aim is to be a global communications company, utilizing emerging
technologies to provide convergent communication services. The business model of the
Company revolves around its core competence i.e., Telecom & Networking.
The Company proposes to review its entire gamut of existing businesses, marketing
structure and strategy and adopt a pragmatic approach in analyzing its ability to achieve
a dedicated revival plan in each of these businesses.
The Companys business opportunities are undoubtedly high in various parts of the world
wherever there is a perceptible presence of Indian diaspora.
Management Discussion and Analysis
A detailed report on Management Discussion & Analysis for the financial year ended
December 31, 2011 as stipulated under Clause 49 of the listing agreement with the Stock
Exchanges in India is provided as a separate chapter in this Annual Report.
Issue of Convertible Warrants
As mentioned in our earlier Report for the financial year 2009-10, your Company made
firm financial arrangements to take advantage of business opportunities that may arise in
future, as the Company believes that it needs to have an inorganic-growth approach till a
self-sustaining financial strength is reached.
The Company therefore issued 15,00,00,000 Convertible Equity Warrants to select group
of investors/allottees on February 21, 2011. Thereafter, on receipt of full consideration,
your Company converted 8,32,68,333 Warrants into Equity Shares of equivalent amount on
March 31, 2011 and the balance 6,67,31,667 Warrants into Equity Shares of equivalent
amount on July 9, 2011.
Bonus Shares
Your Company decided to capitalize its existing reserves by issuing Bonus Shares to its
Equity Shareholders in the ratio of 12:5 (i.e., 12 equity shares for every 5 equity shares
held as on the Record Date). Your Company, after receiving the requisite approvals from
the Stock Exchanges, successfully made the allotment of 40,30,62,312 Bonus Shares.
Public Deposits
Your Company has not accepted any public deposits.
Directors
In compliance with the provisions of the Companies Act, 1956 and in accordance with the
Companys Articles of Association, Shri. G. Rathan Kumar and Shri. A.D. Sudhindra,
Directors, retire by rotation at this Annual General Meeting scheduled on September 25,
2012 and, being eligible, offer themselves for re-appointment.
It needs to be mentioned here that the Company had seven Directors at the end of
financial year 2009-10. However, one of the independent Directors expired consequent to
which the strength of the Board reduced to six at the end of the financial year ended 31st
December, 2011. Amongst the remaining six, the resignation of two independent Directors
was accepted by the Board in its meeting on 18th March, 2012. In the same
meeting, three Additional Directors were appointed bringing the strength of the Board to
seven. The Additional Directors would come up for confirmation as Directors in the ensuing
Annual General Meeting.
During the year and the intervening period post the closure of the financial year and
the date of this Report, the following developments in the Board took place:
Shri. Darshan Suryakant Shah, Non-Executive and Independent Director of the Company
resigned on February 24, 2012 and ceased to be a Director. His resignation was accepted by
the Board in its meeting held on March 18, 2012.
Shri. R. Radhakrishna, Non-Executive and Independent Director of the Company resigned
on August 9, 2011 and ceased to be a Director. His resignation was accepted by the Board
in its meeting held on March 18, 2012.
Consequent to the untimely demise of Shri. S. Manoharan, Non-Executive &
Independent Director, his name was removed from the Board in its meeting on May 14, 2011.
During the period between the end of the financial year 2011 and the date of this
Report, Shri. Kumar Raichand Madan, Shri. U. Parthasarathy and Shri. S. Sriram were
appointed as Additional Directors w.e.f March 18, 2012. They will hold office till the
conclusion of the ensuing Annual General Meeting of the Company. The Board welcomes Shri.
Kumar Raichand Madan, Shri. U. Parthsarathy and Shri. S. Sriram on board and looks forward
to their active participation on various deliberations.
The Board appreciates the contributions made by Shri. Darshan Suryakant Shah, Shri. R.
Radhakrishna and Shri. S. Manoharan during their tenure as Directors of the Company.
The Board of Directors inform the members that all the directors of your Company have
confirmed that, in terms of Section 274(1)(g) of the Companies Act, 1956, they are not
disqualified to act as directors of your Company.
Directors Responsibility Statement
Pursuant to the requirements of sub-section 2AA of Section 217 of the Companies
(Amendment) Act 2001, the Directors confirm that:
(i) In preparation of the annual accounts, the applicable accounting standards have
been followed and proper explanations have been provided for material departures, wherever
applicable.
(ii) 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 as at 31st
December, 2011 and the loss of the Company for the financial year ended 31st
December, 2011.
(iii) The Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companys Act, 1956,
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
(iv) The Directors have prepared the annual accounts on a going concern basis.
Auditors
M/s. P.C. Acharya & Co., Chartered Accountants, the Statutory Auditors, will retire
at the conclusion of the forthcoming Annual General Meeting and are eligible for
re-appointment. The Audit Committee and your Board recommend their reappointment as
Auditors of the Company for a further period of one year and to fix their remuneration.
They have furnished to the Company a certificate of their eligibility for appointment as
auditors, pursuant to section 224 (1B) of the Companies Act, 1956.
The Board of Directors shall subsequent to their appointment determine the terms and
conditions of their appointment, scope of work, and allocation of responsibilities such as
statutory audit, internal audit, taxation, tax audit etc and to accordingly fix their
remuneration.
Auditors Report
With regard to the qualifications and emphasis of matter contained in the Auditors
Report of Dhanus Technologies Limited, our explanations are given below:
i. Note (b) and (c) of the 4th para of the Auditors Report - Note 1.2 (a)
and (b) of Schedule 1 & 2 - Notes to Accounts to the financial statements
The Company has four business verticals and has a large number of debtors and creditors
as its business across various service verticals is of retail nature. Also, the Companys
services and products have a wide geographical reach as well. Consequently, the
reconciliation and control accounts of receivables and payables are not fully complete,
although substantially covered. The Company however believes that non-reconciliation in
such accounts will not have any serious and perceptible impact on the revenues and
expenses recognized.
ii. Note (d) of the 4th para of the Auditors Report
The Company has maintained a proper system of accounts. The Company confirms that the
purported deviation from Accounting Standards prescribed under AS-6, AS-9, AS-10, AS-22
and AS-28 will in no way have any material adverse impact on the Profit & Loss Account
and also the Asset Liability position of the Company. The Company shall however make extra
efforts to bring the systems in line with the accounting Standards expected of the
Company.
iii. Note (e) & (f) of the 4th para of the Auditors Report
The Company agrees that reconciliation of Trade Receivables and Payables is yet to be
fully completed. However, the Company firmly believes that non-reconciliation and control
accounts of receivables and payables will not have any serious and perceptible impact on
the revenues and expenses recognized as substantial and critical reconciliations have not
provided any adverse indication or cause for concern.
iv. Note (g) of the 4th para of the Auditors Report
The inability to quantify the value of current assets including debtors, loans and
advances from a mark to market perspective will not have any material impact on the asset
liability position of the Company. The Companys fixed assets being very large in number
as it primarily comprises of high-value routers, switches, servers, computing systems,
integrators etc., the Company is in the process of completing the physical verification of
its fixed assets. The Company certifies that it fully owns the title to the assets and the
cost of purchase and depreciation levied on them is accurate and in terms of generally
accepted accounting principles. Kindly refer to Note 1.1 on Fixed Assets and corresponding
write up on depreciation on assets.
v. Note (h) of the 4th para of the Auditors Report
The Board agrees with the statement that the investment in M/s Borusan Telekom, Turkey
is possibly irrecoverable. The Company however proposes to attempt recovering the initial
advance given towards share purchase, although the Company agrees that the attempt may be
an exercise in futility and accordingly appropriate steps in this regard would be followed
to write off the investment after all possible efforts towards recovery are completely
exhausted.
The Company disagrees with the view that the amount advanced to M/s Sreeven Infocom
Limited is irrecoverable. Sreeven Infocom is a healthy company and the Company is in talks
with the management of Sreeven Infocom to recover the amount advanced earlier.
Since the qualifications made by the Auditors in the Report on the Consolidated
financial statements is similar to the ones made in the Standalone financial statements,
the above explanations apply equally to those as well.
Audit Committee
The Audit Committee consists of three members namely Shri. G. Rathan Kumar, Justice
(Retd.) Shri. S. Kalyanam and Shri. U. Parthasarathy, all of whom are independent. Shri.
G. Rathan Kumar is the Chairman of the Audit Committee. All members of the Audit Committee
possess sufficient knowledge and experience in the field of Finance and Accounts.
Subsidiary Companies
Dhanus Global Medicare Limited, India and Dhanus Technologies Inc., USA continues to be
wholly owned subsidiaries of your company. The statement under section 212 of the
Companies Act, 1956 along with a statement of additional information of subsidiaries is
attached herewith.
Listing
The Equity Shares continue to be listed on Bombay Stock Exchange Limited (BSE) and
National Stock Exchange of India Limited (NSE). Both these exchanges have nation-wide
terminals and therefore, shareholders/investors are not facing any difficulty in trading
the shares of the Company from any part of the country. The Company has paid the annual
listing fee for the year 2012-13 to the BSE and NSE and the annual custodial fee to
National Securities Depository Limited (NSDL) and Central Depository Services (India)
Limited (CDSL).
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.
Information as required under section 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988,
is annexed as an Annexure to this Report.
Particulars of Employees
In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules 1975 as amended, there was no employee during
the year drawing remuneration more than the stipulated amount in the said rules.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed
compliance report on Corporate Governance systems and practices together with a
certificate from the statutory auditors confirming compliance with the conditions of
corporate governance stipulated in the said clause is annexed to this report.
The Board laid down a "Code of Conduct" for all Board members and senior
management of the Company and the "Code of Conduct" has been posted on the
website of the Company, www.dhanus.net.
Acknowledgements
Your Directors take this opportunity to place on record their sincere appreciation for
the continued support and confidence reposed by the clients, business associates and the
shareholders. The Directors also convey their appreciation to the employees at all levels
for their enormous personal efforts as well as collective contribution.
|
For and on behalf of the Board of Directors |
| Place: Chennai |
Capt. D.S. Srinivasan |
A.D. Sudhindra |
| Dated: August 18, 2012 |
Managing Director |
Director |
ANNEXURE TO THE DIRECTORS REPORT
Information under Section 217(1) (e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, and forming
part of Directors Report as under:
A. Conservation of Energy
The Operations of your Company are not energy-intensive. Adequate measures have however
been taken to reduce energy consumption by using energy efficient computer terminals and
by the purchase of energy efficient equipment incorporating the latest technology. As
energy forms a very small part of the total cost, the impact on cost is negligible.
B. Technology Absorption
Your Company is constantly making efforts towards adoption, innovation and absorption
of the latest technology. The Company continues to carry out Research and Development
activities to enhance its capability and customer service. Your Company hopes that this
thrust will bring in new and better products and upgrade the existing products.
Your Company will continue to invest in and adopt the best processes and methodologies
suited to its line of business and long term business strategy. The company will continue
to leverage on new technologies and also on the expertise available.
C. Foreign Exchange Earnings and Outgo:
The details of Foreign Exchange Earnings and Outgo are given below:
|
Year ended 31.12.2011 |
Year ended 31.12.2010 |
| a) Foreign Exchange Earnings |
Nil |
Nil |
| b) Foreign Exchange Outgo |
Nil |
Nil |
D. Details under section 217(2A) of the Companies Act, 1956 for the year ended 31st
December, 2011
There was no Director or Key Managerial personnel drawing remuneration that would make
them eligible for being mentioned under section 217(2A) of the Companies Act, 1956.
|
For and on behalf of the Board of Directors |
| Place: Chennai |
Capt. D.S. Srinivasan |
A.D. Sudhindra |
| Dated: August 18, 2012 |
Managing Director |
Director |
| Registered Office: |
|
|
| New No. 20/Old No. 6, First Floor |
|
|
| Sengunthar Street |
|
|
| Shenoy Nagar |
|
|
| Chennai - 600 030 |
|
|
| Tamil Nadu, India |
|
|
Statement in Pursuance of Section 212(3) of the Companies Act, 1956
| Sl. No. |
Name of the Subsidiary Company |
Dhanus Global Medicare Ltd. |
Dhanus Technologies Inc., USA |
| 1. |
Financial Year of the Subsidiary Company |
30.06.2011 |
31.12.2011 |
| 2. |
Holding Companys interest in the Companys Accounts |
Rs. 2,81,34,500/-(28,13,450 Equity Shares of Rs.10/-each) 100% |
Rs.9,54,73,560/-(22,64,90,000 shares of US$ 0.01 each)100% |
| 3. |
Net Aggregate amount of the Losses not dealt with in the Holding Companys Accounts a)
For the subsidiarys financial year ended as stated above b) For the previous financial
year of the Subsidiary company. |
NIL |
NIL |
| 4. |
Net Aggregate amount of the Losses dealt with in the Holding Companys Accounts. |
|
|
|
a) For the subsidiarys financial year ended as stated above |
NIL |
NIL |
|
b) For the previous financial year of the Subsidiary company. |
|
|
| Capt. D.S. Srinivasan |
A.D. Sudhindra |
R. Ramnath |
| Managing Director |
Director |
President (Corporate Affairs), CFO & Company Secretary |
| Place: Chennai |
|
|
| Date: August 18, 2012 |
|
|
Statement in Pursuance of Section 212(5) of the Companies Act, 1956
Statement of material changes which has occurred in respect of the following in the
case of the subsidiary between the end of the financial year and that of the holding
company in respect thereof.
| Sl. No. |
Particulars |
Dhanus Global Medicare Ltd. |
Dhanus Technologies Inc. |
| a. |
Fixed Assets of the Subsidiary |
Nil |
Nil |
| b. |
Investments in subsidiary |
Nil |
Nil |
| c. |
Money lent by the subsidiary |
Nil |
Nil |
| d. |
Money borrowed by the subsidiary for any purpose other than that of meeting current
liabilities |
Nil |
Nil |
For consolidation of the accounts of Dhanus Technologies Limited, the foreign
subsidiary transactions are translate converted into Indian Rupees at Rs. 53.065 per US$
i.e., the exchange rate as on 31st December 2011.
| Capt. D.S. Srinivasan |
A.D. Sudhindra |
R. Ramnath |
| Managing Director |
Director |
CFO & Company Secretary |
| Place: Chennai |
|
|
| Date: August 18, 2012 |
|
|
+91-9892691696
