Religare Technova Global Solutions Ltd merged Directors Report

RELIGARE TECHNOVA GLOBAL SOLUTIONS LIMITED (FORMERLY ASIAN CERC INFORMATION TECHNOLOGY LIMITED) ANNUAL REPORT 2008-2009 DIRECTORS REPORT Dear Members, Religare Technova Global Solutions Limited Your Directors have immense pleasure in presenting this 15th Annual Report along with Audited Accounts for the financial year ended March 31, 2009. FINANCIAL RESULTS The brief highlights of Standalone and Consolidated financial results of the Company for the financial years 2008-09 and 2007-08 are as under: (Rupees in Lacs) PARTICULARS STANDALONE CONSOLIDATED 2008-09 2007-08 2008-09 2007-08 Total Income 2835.41 2685.26 8383.43 4591.24 Total Expenditure 3884.57 2132.94 10731.17 4066.21 Profit / (Loss) before Tax (1049.16) 552.32 (2347.74) 525.03 Net Profit / (Loss) after Tax (1024.68) 392.07 (2351.96) 217.57 Share of Minority Interest - - (163.63) 61.83 Net Profit for the period (1024.68) 392.07 (2188.33) 155.74 Balance Brought Forward 530.01 301.97 293.68 301.97 Balance taken over on Merger - (164.03) - (164.03) Balance Carried Forward to Balance sheet (494.67) 530.01 (1894.65) 293.68 OPERATIONS The year under review witnessed a huge recession affecting all the countries including India. All the sectors including IT have reported decrease in Top Line as well as Bottom Line. The financial market on which the companys performance is largely dependent has witnessed a meltdown to the extent of 35% (Source BSE Sensex). However, in spite of aforesaid turmoil, your Company has reported a growth of 150.15 Lacs in gross turnover on standalone basis. The Consolidated Income of the Company is at Rs. 8383.43 Lacs, which recorded an increase of 83% as compared to the previous year. However at the same time the Company has recorded a Consolidated Loss after Tax of Rs. 2188.33 Lacs. Due to the diversification in business activities of the Company, there was requirement on account of infrastructure and manpower. This resulted in increase in expenditure relating to rent and ancillary charges and personnel expenses. The Company has also incurred heavy expenditure on account of Interest and Finance Charges on Inter Corporate Deposits on a consolidated basis. DIVIDEND Keeping in view the Companys growth plans, the Board of Directors decided not to recommend any dividend for the year ended March 31, 2009. RESTRUCTURING OF THE COMPANY Religare Technova Limited (RTL), the Holding Company of your Company, has initiated a process of restructuring the group business operations in the IT vertical in order to give independent and increased focus by segregating the product business and service business currently being run by it through its various subsidiaries. The products business under the RTL umbrella being catered mainly through your Company and its step down subsidiaries including global operations is a totally different line of business activity which requires different business approach and strategy, particularly with regard to its respective growth strategy viewed on a global basis. Moreover the valuation of the products and services business is also different owing to difference in Industry scenario and other market conditions. In view of the above, RTL has proposed a composite scheme of arrangement to achieve the above mentioned objectives, which, inter-alia, provides for amalgamation of your Company with RTL to be the products company and demerger of the services business of RTL into a separate listed company. ACQUISITIONS (1) OliveRays Innovations Private Limited Pursuant to Share Purchase Agreement dated December 31, 2008 executed amongst the Company, OliveRays Innovations Private Limited (OliveRays) and its Shareholders, your Company acquired 100% controlling equity stake of OliveRays. OliveRays cater to the needs of the broking, Investment Banking and Fund Management segment by providing software for client relationships, internal workflow and documentation. This acquisition has integrated the product offering of the Company and one shop/stop solution for all operations of stock broking can be offered to the clients of the Company in both domestic as well as international market. (2) Religare Technova Global Solutions Pty Limited Pursuant to Share Sale Agreement dated June 4, 2009 executed amongst Regius Overseas Holding Co. Ltd., wholly owned subsidiary of your Company (Regius), Wolli Holdings Pte Ltd.; Tracetext Pty. Ltd. and the Shareholders of Religare Technova Global Solutions Pty Limited (RTGS) (formerly known as Capital Market Solutions Pty. Ltd.), Regius has acquired balance 24% of the issued capital of RTGS and consequently RTGS has become a wholly owned subsidiary of Regius [a 100% step down subsidiary of your company]. SUBSIDIARIES Pursuant to the application made by the Company under Section 212(8) of the Companies Act, 1956 (the Act), the Central Government vide letter dated 6th July 2009 exempted the Company from attaching the copy of Balance Sheet and the Profit and Loss Account of the Subsidiary Companies and other document required to be attached under Section 212(1) of the Act to the Annual Report of the Company. However, the Annual Accounts of the subsidiary companies are open for inspection by any member/ investor and the Company will make available these documents/ details upon request by any member or investor of the Company or its subsidiaries Companies who may be interested in obtaining the same. Further, pursuant to Accounting Standard - 21, issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the company includes financial information of its subsidiaries. CHANGES IN CAPITAL STRUCTURE During the financial year ended March 31, 2009, the Paid-up Share Capital of the Company was increased from Rs. 6,14,38,000/- to Rs. 11,18,25,000/- consequent to the following: 1. Pursuant to Scheme of Amalgamation of Regius Infotech Private Limited (Transferor Company) with the Company, the Company allotted 1,00,00,000 Equity Shares of Rs. 5/- each; and 2. Consequent to the vesting and exercise of Options granted under the Employees Stock Option Plan - 2006 (ESOP), the Committee has allotted 77,400 Equity Shares of Rs 5/- each during the period under review. The Equity Shares issued under ESOP of the Company shall rank pari-passu in all respects including dividend with existing equity shares of the Company. DIRECTORS Mr. Kanwaljit Singh, Director, Mr. Sudhanshu Varma, Whole-time Director and Mr. Manoj A Shah, Director of the Company have resigned from the Board of Directors w.e.f. July 30, 2008, December 31, 2008 and June 25, 2009 respectively. The Directors place on record their appreciation for the valuable services and guidance provided by them during their tenure as Directors of the Company. In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Vikram Sahgal and Mr. Maninder Singh Grewal retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment as Directors. Brief Resume of the Directors proposed to be appointed / re-appointed, nature of their expertise in specific functional areas and name of companies in which they hold Directorships and Memberships / Chairmanships of the Board Committees and number of shares held in the Company, as stipulated under Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange Limited (BSE) , are provided in the Report on Corporate Governance forming part of the Annual Report. NAME CHANGE During the year under review, the name of your Company has been changed from Asian CERC Information Technology Limited to Religare Technova Global Solutions Limited w.e.f. November 12, 2008, pursuant to the resolution of the members passed through postal ballot process on November 05, 2008. Consequent upon the name change, the scrip id of the Company on trading platform of Bombay Stock Exchange has been changed from ASIANCE to RELIGLOBE. SHIFTING OF REGISTERED OFFICE During the year under review, the registered office of the Company has been shifted from 908A, Devika Tower, 6, Nehru Place, New Delhi - 110019 to 255, First Floor, Okhla Industrial Estate, Phase - III, New Delhi - 110020 with effect from November 25, 2008. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that: (i) in the preparation of the Annual Accounts for the financial year ended March 31, 2009, the applicable accounting standards have been followed and there were no material departures from the same; (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 March 31, 2009, and of the loss of the Company for the said period; (iii) the Directors have taken proper and sufficient 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; and (iv) the Directors have prepared the annual accounts on a going concern basis. AUDITORS M/s Price Waterhouse, Chartered Accountants, retires as Statutory Auditors of the Company at the conclusion of the ensuing Annual General Meeting of the Company and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if re-appointed. AUDITORS REPORT Auditors have made a qualification in the Auditors Report that provision has not been made in respect of possible loss, if any, arising on account of diminution in value of the investments of Rs. 137,396,857 and non recoverability, if any, of advances and interest recoverable of Rs. 449,032,804 from Regius Overseas Holding Co. Ltd., wholly owned subsidiary of the Company. In respect of the above qualification, the Board of Directors has given an undertaking to the Auditors that Religare Technova Limited, the Holding Company of your Company, has confirmed that they along with their promoter group will continue to provide adequate financial support to your Company and its subsidiaries, by subscribing additional capital, if required, to honour its obligations as and when required in near future. Other than the above qualification, the report of the Auditors read together with the Notes on Accounts are self explanatory and therefore in the opinion of the Board, do not call for any further explanation. EMPLOYEES STOCK OPTION PLAN With a view to retain, motivate and reward the employees and to enable them to participate in your Companys future growth and financial success, Employees Stock Option Plan - 2006 (ESOP) was approved by the Members in the Extra-Ordinary General Meeting of the Company held on March 3, 2006. The brief details of the Plan are as follows: ESOP Outstanding Remarks Options as at March 31, 2009 ESOP 2006 10,200** The special resolution passed by the Shareholders of the Company on March 3, 2006 approved the grant of options under the ESOP 2006. Under the plan 4,00,000 Options were authorised wherein the Company had granted 154000 options in August 2006. Due to disassociation of employees of the Company, 5000 Options were cancelled during April 2007 to March 2008 and 1800 options were cancelled during April 2008 to March 2009. Particulars Details Fiscal 2008 Fiscal 2009 No. of Options as at beginning of Fiscal 154000 89400 Options granted NIL NIL Exercise price of options Rs.5 Rs. 5 Total options vested (includes options exercised) 59600 87600 Options exercised 59600 77400 Total number of Equity Shares arising as a result of full exercise of options already granted 59600 87600 Options forfeited/ lapsed/ cancelled 5000 1800 Variations in terms of options NIL NIL Money realised by exercise of options 298000 387000 Options outstanding (in force) 89400 10200** Person wise details of options granted to i) Directors and key managerial employees: Name of employees Options Options Options Granted Exercised Outstanding as at March 31, 2009 1. Sudhanshu Varma 80000 80000 Nil 2. Madhur Uniyal 10000 10000 Nil 3. Hari Nair 10000 4000 6000 4. Pravin Gaonkar 10000 10000 Nil 5. Shailesh Chitre 10000 10000 Nil 6. Sameer Paddalwar 10000 10000 Nil ii) Any other employee who received a grant in any NIL one year of options amounting to 5% or more of the options granted during the year Identified employees who are granted options, NIL during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Fully diluted EPS# pursuant Standalone fully diluted EPS Rs. -5.93 to issue of shares on Consolidated fully diluted EPS Rs. -12.67 exercise of options in accordance with the relevant accounting standard Vesting schedule (A) 40% on expiry of 12 months from Grant Date. (B) 60% on expiry of 24 months from Grant Date. Difference, if any, between If the compensation cost employee compensation cost on account of stock calculated using the intrinsic options granted was value of stock options and computed using fair employee compensation cost market value method, the calculated on the basis of compensation cost fair value of stock options for the financial year 2008-2009 would have been higher by Rs.49,834 Impact on the profits of the As per Consolidated Financials Company and on the earnings If the compensation cost on per share (EPS)arising due account of stock options to difference in the granted was computed using accounting treatment and for fair market value method, the calculation of the employee profit would be higher by compensation cost (i.e. Rs.49,834 difference of the fair value of stock options over the As per Standalone Financials intrinsic value of the If the compensation cost on stock options) account of stock options granted was computed using fair market value method, the profit would be higher by Rs.49,834 The impact on the EPS for the financial year 2008-2009 would be NIL Particulars Details Fiscal 2008 Fiscal 2009 Weighted average exercise Exercise Price - Rs. 5 price and weighted average Fair value - Rs. 47.42 fair value of options whose exercise price either equals or exceeds or is less than market price of the stock Method and significant As per details below assumptions used to estimate the fair value of options granted during the year Method used ESOP-2006 Black Scholes Option Pricing Method Risk free interest rate 7.40 % Expected Life 5.80 years Expected Volatility 85.46% Expected Dividends 1.81% Price of underlying shares in market at the time Rs. 55.40 of Option grant #The Company has followed the intrinsic value method for calculating employee compensation as per the ESOP Guidelines. The Intrinsic value per equity share of the Company was Rs. 50.55 where as the exercise price is Rs. 5/- per share. ** Since surrendered by the concerned employees. Hence no options are outstanding as on date. LISTING WITH STOCK EXCHANGE The Equity Shares of the Company continue to remain listed on the Bombay Stock Exchange Limited (BSE). The Company has paid the requisite Annual Listing Fee to BSE for the financial year 2009-10. CORPORATE GOVERNANCE Report on Corporate Governance along with Certificate from Ms. Rachna Batra, Practising Company Secretary, confirming compliance of conditions of Corporate Governance as stipulated under the Clause 49 of the Listing Agreement forms part of the Annual Report. FIXED DEPOSITS During the financial year ended March 31, 2009, the Company has accepted Fixed Deposits aggregated Rs. 249.25 Lacs in terms of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975. During the period, the Company has repaid deposit amounting Rs.167.25 Lacs and the deposits outstanding as at March 31, 2009 are Rs. 395.75 Lacs. 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, statement of particulars of the employees are required to be set out in the Annexure to the Directors Report. However, in terms of provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid statement is being sent to all the Members of the Company and other entitled thereto. Any member interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION In view of the nature of activities which are being carried on by the Company, the particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 regarding Conservation of Energy and Technology Absorption are not applicable to the Company. However, significant measures are taken to reduce energy consumption by using energy-efficient computers and by purchasing energy efficient equipment. We constantly evaluate new technologies and invest to make our infrastructure more energy efficient. Research and development of new services, designs, processes and methodologies continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous innovation. FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has incurred Rs. 61.62 Lacs (Previous Year: Rs. 139.39 Lacs) in Foreign Exchange and earned Rs. 1060.29 Lacs (Previous Year: Rs. 364.09 Lacs) in Foreign Exchange during the year under review on a standalone basis. ACKNOWLEDGEMENT Your Directors would like to express their sincere appreciation for the co- operation and assistance received from the Bankers, Regulatory Bodies, Investors, Suppliers, Distributors and other Business Constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff during the year and look forward to their continued support in the years to come. By Order Of The Board For Religare Technova Global Solutions Limited Sd/- Sd/- Place : New Delhi Sanjay V. Padode Maninder Singh Grewal Date : July 27, 2009 Managing Director Director MANAGEMENT DISCUSSION AND ANALYSIS FORWARD-LOOKING STATEMENTS: This report contains forward-looking statements which may be identified by their use of words like plans, expects, will, anticipates, believes, projects, estimates or other words of similar meaning. All Statements that address expectations or projections about the future, including, but not limited to, statements about the companys strategy for growth, product development, market position, expenditure and financial results are forward looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee these assumptions and expectations are accurate or will be realised. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The Companys assumes no responsibility to publiclyamend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. ECONOMY AND INDUSTRY OVERVIEW Year 2008-09, was a transformational year for the Indian Information Technology sector, as it began to re-engineer itself to face the challenges presented by a macro- economic environment which witnessed substantial volatility in commodity prices, inflation and decline in GDP rates, cross- currency movement, finally culminating in the economic downturn. In an increasingly globalised world, significant complexity and uncertainty is getting attached to this unprecedented economic crisis. The Indian economy has also been impacted by the recessionary trends, with a slowdown in GDP growth to seven per cent. The focus and exponential growth in the domestic market has partially offset this fall and insulated the country, resulting in net overall momentum. In year 2008-09, Indian Economic growth decelerated to 6.7 percent. The global financial meltdown and consequent economic recession in developed economies have clearly been major factor in Indias economic slowdown. Given the origin and dimensionof the crisis in the advanced countries, which some have called the worst since the Great Depression, every developing country has suffered to a varying degree. No country, including India remained immune to the global economic shock. The Indian economy has also been impacted by the recessionary trends, with a slowdown in GDP growth to seven percent. The focus and the exponential growth in the domestic market has partially offset this fall and insulated the country, resulting in net overall momentum. The IT Services segment aggregated export revenues of USD 26.9 billion, accounting for 57 per cent of total exports. Indian IT service providers have evolved from application development and maintenance companies, to full service players providing testing services, infrastructure services, consulting and system integration. Within these segments, it was IT outsourcing that exhibited strong growth, in line with global trends. Remote infrastructure management, expected to deliver almost 30 per cent net savings to customers, continued its robust performance, with an above average growth of 25 per cent expected in FY2009. Additionally, the engineering, R&D and software products segment is also expected to grow by 14.4 per cent in the current fiscal, to touch USD 7.3 billion, which highlights the strong impetus and renewed focus on improving IP driven service capabilities in India. Domestic IT services are expected to grow by 20 per cent in FY2009, driven by increased acceptance of IT as a growth enabler and a competitive tool for Indian corporations looking to compete in an increasingly globalised environment. Increased IT adoption in not only the large/mid-sized companies, but also the 35 million strong small and medium business (SMB) segment is expected to drive growth in the future. A. Industry Structure and Developments Changing economic and business conditions, rapid technological innovation, proliferation of the internet and globalization are creating an increasingly competitive market environment that is driving corporations to transform the manner in which they operate. Customers are increasingly demanding improved services with accelerated delivery times and at lower prices. To address these needs adequately, companies are focusing on their core competencies and are using technology to help improve productivity, develop new products, conduct research and development activities, reduce business risk and manage operations more effectively. There is an increasing need for highly skilled technology professionals in the markets in which we operate. At the same time, corporations are reluctant to expand their internal IT departments and increase costs. The role of technology has evolved from supporting companies to transforming them. The ability to develop, implement and maintain advanced technology platforms and solutions to address business and customer needs has become a competitive advantage and a priority for companies worldwide. The need for more dynamic technology solutions and the increased complexity, cost and risk associated with these technology platforms has created a growing need for specialists with experience in leveraging technology to help drive business strategy. B. Opportunities and Threats Strong fundamentals, a robust enabling environment and enhanced value delivery capability are the hallmarks of the Indian IT Industry. Strong fundamentals: Indias fundamental advantages-abundant talent and cost-are sustainable over the long term. With a young demographic profile, where over 3.5 million graduates and postgraduates are added annually to the talent base, no other country offers a similar mix and scale of human resources. While some gaps in talent suitability exist, they are being addressed through strong provider-level initiatives and industryled programmes. India enjoys a cost advantage of around 60-70 per cent as compared to source markets. Additional productivity improvements and the development of tier 2/3 cities as future delivery centres, is expected to enhance Indias cost competitiveness. Timely government policies and increased public-private participation have played a key role in developing an enabling business environment for the Indian IT industry. The Governments focus on education has helped create the large talent base from where the industry draws its workforce. Establishment of Software Technology Parks of India (STPI) stands out as a seminal policy action, specifically targeted towards encouraging, promoting and boosting the export of software and services from India. Public and private enterprises have contributed by building the required capacities of key business infrastructure, helping this sector enjoy world-class facilities and services. The private sector is now, in partnership with the Government, also beginning to play an increasing role in the overall infrastructure development in the country. In a globally integrated economy, outsourcing is leading to overall benefits for the source economies, providing significant monetary and employment benefits. The silver lining of the economic downturn is the opportunity for the industry to enhance its overall efficiency. Companies are increasingly looking inwards and focusing on process benchmarking, enhanced utilisation of infrastructure and talent, increasing productivity and greater customer engagement. Coupled with wage moderation and lower attrition, these measures will help industry sustain its margins and invest in future growth. While your Company is best equipped to capitalize on the available opportunities, it has well understood that the prospects expect the partner to prove themselves in a relationship, building trust and being a trusted advisor rather than a vendor selling them products and services. Your Company already positioned globally through its subsidiaries in various parts of the country to tap the potentials in this space, which is indicative of the enormous growth potentially available to the Company. In the present economic scenario, poses a global threat to the Industries but your company is totally committed and confident upon it strengths and is looking forward to overcome this economic meltdown soon. Though the global competitors emerges as a threat to our business, yet your Company is confident of handling the situations by enhancing their products and providing more prompt and competitive services. Fluctuation in foreign exchange also poses a threat but the company is positive in mitigating this risk by adopting suitable hedging strategies. C. Segment-wise or product-wise performance Segment Reporting i) Primary Segment - Business Segments: The groups primary business segments are identified as those relating to Trading Solutions (including customization, installation and support services) and Information Services Division (subscription/data content feed). Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organization structure as well as the differential risks and returns of these segments. Segment revenue, results and capital employed figures include the respective amounts identifiable to each of the segments and also amounts allocated on a reasonable basis. Other unallocable expenditure includes expenses incurred on common services provided to the segments which are not directly identifiable to the individual segments as well asexpenses incurred at a corporate level which relate to the group as a whole. (Consolidated Figures in Lacs) Particulars 2009 2008 SEGMENT REVENUE (a) Information Services Division 369.90 89.20 (b) Trading Solution 7433.81 3947.68 Net Sales / Income From Operations 7803.71 4336.88 Segment Results Profit (+)/Loss(-) Before Tax and Interest From Each Segment (A) Information Services Division 48.59 48.43 (B) Trading Solution 1036.63 1436.97 Total 1085.22 1485.40 Less: (A) Interest 812.15 86.97 (B) Other Un-allocable Expenditure 3038.69 773.40 Add: Interest Income 417.87 287.91 Total Profit/ Loss Before Tax -2347.74 525.03 Segment Information ii) Secondary Segment - Geographical Segments (Consolidated Figures in Rupees) Particulars 2009 2008 SEGMENT REVENUE: Within India 142,301,779 195,387,658 Within Australia 356,224,924 163,575,493 Others 281,844,272 74,725,237 TOTAL 780,370,975 433,688,388 Segment Assets: Within India 1,018,271,998 1,146,107,211 Within Australia 161,418,118 300,296,406 Others 94,801,585 246,243,810 Total 1,274,491,701 1,692,647,427 Cost incurred for acquiring segment assets: Within India 66,178,715 28,767,090 Within Australia 7,615,091 5,566,004 Others 690,644 75,940 Total 74,484,451 34,409,034 Notes: a. Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisation structure as well as the differential risks and returns of these segments. b. The segment wise revenue and results relate to the respective amounts directly identifiable to each of the segments. D. Outlook Key global sourcing drivers will continue to be cost, access to talent, business improvements, increasing speed-to-market and access to emerging markets. The future outlook for all these drivers is positive, leading to increased momentum for global sourcing. The focus on cost reduction is expected to increase, keeping in mind the current recessionary environment. Environmental considerations such as climate change, global warming, social responsibilities, and compliance issues are all adding up to increase pressure on margins, which can be offset by increasing global sourcing to keep tabs on spiraling costs. Access to talent is likely to become more decisive as workforce demographics indicate a shortfall in the long term, in all major developed countries such as USA, UK, France, Germany, Japan and some developing countries as well. While the 2009 outlook for global technology related spending is affected by the recessionary environment, a rebound is expected from 2010 onwards. Worldwide adoption of outsourcing is also expected to rise significantly in the coming years. The size of the opportunity in hand can be gauged from the fact that India currently accounts for just over 4 per cent of worldwide technology related spend. Additionally, growth in global sourcing is estimated to be almost four times that of technology related spend. India, with its fundamental advantages can capture a large share of the opportunities available. However, in order to achieve this goal, the key stakeholders need to work in tandem. Companies need to focus on increasing their levels of customer intimacy, as well as developing the brand value of their organisations through product and service differentiation. The supportive policy environment created by the Government of India has played a key role in the rapid development of this sector. The Governments efforts on increasing the quality of talent from India needs to be stepped up by laying special emphasis on the talent needs of knowledge intensive industries, technology and innovation. The focus should be on improving the quality of graduate and post graduate out-turn, enhancing capacity across the country, policy de-regulation and nurturing clusters of research institutes. With enhanced competition from other low cost countries and the current recessive scenario, support is needed from the Government to extend the tax incentives under the Software Technology Parks Scheme (STPI). This would enable small and medium companies to reinvest their profits back into the business and invest for future growth. It would also make India competitive vis-a-vis other destinations that are offering tax incentives and subsidies on training and infrastructure costs. Removal of procedural obstacles- service tax refunds, taxation of software products and clarity around transfer pricing norms that are applicable to foreign companies is needed. Efforts to enhance talent availability and quality need concerted action from all the stakeholders-the government, academia and the industry. The role of academia in fact is critical. Specific initiatives like Faculty Development Programmes, upgrading the curriculum, setting up research labs, launching internship programmes and industry-academia collaboration can help to bridge the employable talent gap. Efforts towards enhancing information and data security; participation in public private initiatives in technology led development; proactively working with academia to address quality of education and building an integrated delivery model in leading cities. Expansion of new markets will require different strategies and focus from the industry players. In the developed regions, the industry will need to take a broader leadership role and drive global sourcing to the next level of customers. E. Risks and Concerns The company continues to be plagued by risks associated with currency fluctuation, market sentiments and more competition from global players. The dependency of the company on human capital remains high and we see this as a significant risk for the business. The company has instituted robust processes for managing its resources and is fairly confident of mitigating the above mentioned risks. F. Internal Control Systems The Company is equipped with adequate internal control systems for its business processes, which determine the efficiency of its operations, strengthens financial reporting and ensures compliance with applicable laws and regulations. The internal control systems are supplemented by extensive audits conducted by internal auditors. Moreover, regular internal audit and checks ensure that responsibilities are executed effectively across the organization. The Audit Committee of the Board of Director reviews the adequacy and effectiveness of the internal control systems and also suggest improvements for strengthening the same. The company has diligently worked on the QMS initiative during the year and is now a ISO 9001:2000 certified Company. During the year under review, Company has received CMMi level 3 certification which indicates highest level of Standards in delivery and execution, applicable in software product industry. G. Financial Overview of the Company (based on stand alone financials) Your company has been acknowledged as a domain expert in the capital market space and the growth of this segment inthe country has boosted the revenues and the profitability of your company. The globalization of the capital market segment has also forced the management of the company to invest into technologies and solutions that can enable it to become global player in this space in the future. On Standalone basis though the total turnover of the Company has increased from Rs. 2685.26 Lacs for Financial Year 2007-08 to Rs. 2835.41 Lacs in Financial Year 2008-09, however the Company has recorded a net loss of Rs. 1049.16 Lacs during the year under review as compared to Profit after Tax of Rs. 552.32 Lacs in Financial Year 2007-08. The change in Revenue and Profits is also visualized in following chart: OPERATIONAL OVERVIEW OF THE COMPANY: The Company again focused on improving its processes to enhance its scale of operations efficiently. The Company continued to enhance its Offshore Development Center (ODC) for its associate company Capital Market Solutions Pty. Ltd. The ODC now not only develops software, but can also provide design services. The Company successfully completed the empanelment of its new age dealing terminal in the MCX commodity exchange, thus delivering the only Dealing Terminal in India providing access to NSE Equity, NSE Derivative, NSE Currency Derivative, BSE Equity, MCX and NCDEX. The company also enhanced its product portfolio by adding additional products such as Acquire, Anysign, Chronicle, DigiSend, EnAct, Engage, Orchid, Mutex, InSense, Scholar and Dedupe .The company has also successfully integrated the DMA Platform in Religare Securities for a hedge fund over the internationally standard FIX Protocol. The Company also became one of the few vendors who have completed the electronic trading integration with Ho Chi Minh Stock Exchange successfully. We partnered with Bombay Stock Exchange and successfully implemented the Electronic Clearing and Borrowing system (E-bid). The Company continued its customer acquisition spree. Some of the big names that were added to the list of customers are: ENAM Securities, Matalia Stock Broking, Yahoo, State Bank of India, RBS (Royal Bank of Scotland), Sharekhan, Nomura Securities (Malaysia) and Bank of China International (Hong Kong). Besides this the business from existing customers continued to grow which clearly demonstrated the faith that such customers have reposed on your company. This is highlighted by the renewal of substantial contracts by Commonwealth Securities (Australia) and Cannacord Adams (UK). The information business also had a difficult year but by enhancing our offerings on the Portal development front and customising our packaged information delivery, we basically protected this business in a very difficult business environment. Religare Technova Global Solutions Pty. Ltd. (RTGSPL) (formerly known as Capital Market Solutions Pty. Ltd.) continued to invest in enhancing its products to position the RTGSPL group for future growth. This investment includes, but is not limited to, developing Custody and Margin functionality primarily for the Singapore market, localizing NOVA for institutional customers India and electronic trading functionality for Vietnam. H. Human Resources Employees are our most important assets. At Religare Technova, we value our employees as our Greatest Assets. The Company, therefore, strives for continuous learning and development for each and every employee to align the same with the business objective. The company has initiated various HR Strategies to attract, motivate, develop and retain staff in order to make it a productive workplace. Employee Training and Development, Employee Selection and Recruitment, Employee Engagement and Rewards, Performance Appraisal and Communication are the critical issues which HR targets to accomplish.