Dion Global Solutions Limited
The Board of Directors of Dion Global Solutions Limited ("the Company")are pleased to present the 23rd Annual Report on the business and operations ofthe Company along with the Audited Standalone and Consolidated Financial Statements forthe financial year. ended March 31 2018
The highlights of the Standalone and Consolidated financial results of the Company forthe Financial Years 2017-18 and 2016-17 are reflected in the table
(Rs. in crore)
|Particulars || |
| ||FY ||FY ||FY ||FY |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Operating Revenue ||24.06 ||28.59 ||230.64 ||236.14 |
|Operating Expenses ||38.89 ||33.97 ||230.76 ||221.48 |
|Operating Profit ||(14.83) ||(5.38) ||(0.12) ||14.66 |
|Non-Operating Income ||21.51 ||22.77 ||23.60 ||22.85 |
|Non-Operating Expenses ||16.78 ||6.56 ||20.93 ||5.13 |
|EBIDTA ||(10.10) ||10.84 ||2.55 ||32.38 |
|Depreciation & Amortization ||1.28 ||1.21 ||25.71 ||18.88 |
|Finance Cost ||33.99 ||27.27 ||53.01 ||44.51 |
|Net Profit / (Loss) Before Tax ||(45.37) ||(17.64) ||(76.18) ||(31.01) |
|Tax ||- ||- ||0.01 ||0.02 |
|Exceptional Items ||465.63 ||0.30 ||419.44 ||12.45 |
|Net Profit / (Loss) After Tax ||(511.00) ||(17.94) ||(495.63) ||(43.48) |
|Other Comprehensive Income / (Loss) ||0.24 ||(0.61) ||12.54 ||(19.57) |
|Total Comprehensive Income / (Loss) ||(510.75) ||(18.55) ||(483.08) ||(63.05) |
Note: As per the notification issued by the Ministry of Corporate Affairs ("MCA")the Company has adopted Indian Accounting Standards ("Ind AS") witheffect from April 1 2017 and accordingly: (a) the financial statements for the year havebeen prepared in accordance with Ind AS; and (b) the comparative numbers for the previousyear have been restated to be in conformance with the requirements of Ind AS.
The Consolidated Operating Revenue of the Company declined marginally in FY 2017-18 toRs.230.64 Cr. The decline in revenue in FY2017-18 is primarily on account of longer salescycles due to the overall increased due diligence by the existing well as the new clients.
Consolidated EBIDTA although lower than the previous year has remained in positiveterritory for the second year in a row reflecting the effectiveness of the measures takenover the past two years to improve efficiencies and strengthen the business. There hasbeen an all-round effort to optimize costs and specific gains have been noted in areassuch as employee cost rent and travel expenses.
However some of the cost savings were offset by a sharp increase in Non-OperatingExpenses in the nature of exchange fluctuation which suppressed EBIDTA. An increaseinDepreciation & Amortization due to the higher capitalization in internally developedsoftware and in Finance Cost due to an increase primarily due to penal interest by thebanks has resulted in an increase in the Consolidated (pre-exceptional) Net Loss BeforeTax from Rs.31.01 Cr. in the earlier year to Rs.76.18 Cr. during the year under review. Anexceptional charge of Rs.419.44 Cr. was taken on the Profit & Loss Statementrepresenting provision for impairment made against goodwill on consolidation and allowancefor expected credit loss on inter-corporate loan extended to a related party (includingaccrued interest) to the entire extent of the amount assessed in the manner prescribedunder Ind AS which became applicable to the Company from
FY 2017-18 and consequently the Net Loss for the year stood at Rs.495.63 Cr.
The Company's Auditor has in its report on the financial statements expressed aqualified opinion based on a view that an uncertainty exists which casts a doubt on theCompany's ability to continue as a going concern. The Company's management believes thatthe Company is a going concern and its business is inherently viable as its core businessbeing restored to profitability as a result of the restructuring exercise robust demandfor the Company's products success in conserving the Company's diverse global customerbase and a strong pipeline of business. Furthermore the management is in the process ofevaluating financial restructuring options infusion of new capital and selectivedivestment of assets to improve its financial position. The management is confident thatas these efforts yield results the Company will be well-positioned to build on thestrengths of the core business and deliver superior outcomes.
There has been no change in the nature of business of the Company during the year underreview.
DIVIDEND AND TRANSFER TO RESERVES
Keeping in view the losses for the year under review the Board of Directors of theCompany has not recommended any dividend for the financial year ended March 31 2018.Accordingly there has been no transfer to general reserves.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR 2017-18 AND THE DATE OF THE REPORT
The following are the material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year 2017-18and the date of this Report: I. Insolvency proceedings for Dion Global Solutions Gmbh- An application for opening preliminary insolvency proceeding under self-administrationhad been filed by Dion Global Solutions GmbH (Dion Germany) a wholly ownedstep-down subsidiary of the Company in Frankfurt Germany. On June 20 2018 the localcourt of Frankfurt am Main Germany has approved preliminary self-administration asapplied for by Dion Germany.
Subsequently the insolvency proceedings for Dion Germany have been opened on August31 2018 and effective September 01 2018 the operating business of Dion Germany has beenacquired by the new investor (Valantic) in Germany including the employees and serviceoffering to the customers partners and suppliers.
Your Company's Management is working closely with the new investor during thetransition period and ensure that any organisational operational product and technologyrelated interdependencies are being carefully reviewed and resolved. In the interim DionGermany will be winding down its business under the court appointed directors. II. Saleof certain assets in Australia - Dion Global Solutions Pty. Ltd. (DGSPL) awholly owned step-down subsidiary of the Company and its subsidiaries in Australia inrespect of the said subsidiaries have entered into an Asset Sale and Purchase Agreementwith FinClear Pty. Ltd. The proposed transaction is subject to the satisfaction of theconditions precedent which is expected to be completed in November.
III. Disinvestment of shareholding held in Chase Cooper Holdings Limited (CCHL)
DGSPL has entered into Share Purchase Agreement with CCHL on September 24 2018 w.r.tentire 44% shareholding held by DGSPL in CCHL. Subsequent to the above CCHL and itssubsidiaries ceased to be subsidiaries of the Company with effect from September 24 2018pursuant to the transfer of aforesaid shareholding from DGSPL to CCHL.
IV. Filing of an application by Axis Bank Limited in Debt Recovery Tribunal - AnOriginal Application has been filed by Axis Bank Ltd. ("Bank") againstthe Promoters PromoterGroup Entity and the Company in Hon'ble Debt Recovery Tribunal IIat New Delhi for recovery of Rs. 171.56 Cr. in relation to the credit facilitiessanctioned to the Company by the Bank which is inter-alia secured by unconditional andirrevocable joint and several personal guarantees from Promoters Corporate Guarantee ofRHC Holding Pvt. Ltd. and certain other securities provided by the promoter group entitiesto the Bank. As the facilities have already been properly accounted for and included inthe financial statements so there will be no other foreseen / expected financialimplications on the Company. The said application is currently pending.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the financial year under reviewdetailing economic scenario and outlook as stipulated under Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") is presented in a separate section and forms part of this Report.
AWARDS AND RECOGNITIONS
Our wealth management solutions are widely acclaimed across the UK and were nominatedand recognised with a number of key industry awards. We have received the following awardsand recognitions-
- Won the Best Innovative Solutions' Award at the Systems in The City 2017 byGoodacre UK.
- Dion's Global Head of Pre-Sales won the Best Product to help improve Manager'for her significant and grow the clients' business.
- Won Best Investment Management Solution' award for a key module of recentlylaunched Wealth Intelligence (WIN) platform.
- Four individual accolades were given to our wealth management team who werenominated by the clients for whom they worked.
During the year under review there has been no change in the Share Capital of theCompany.
An extract of Annual Return in Form No. MGT 9 as required to be prepared in Section92(3) of the Companies Act 2013 ("Act") is being uploaded on the websiteof the Company and can be accessed through the link http://investors.dionglobal.com/AGM-Notices.aspx
DETAILS OF SUBSIDIARIES / JOINT VENTURES / ASSOCIATES COMPANIES
During the year under review the following companies have been dissolved /deregistered and accordingly ceased to be subsidiaries of the Company:
1. Dion Latam S.A.;
2. Dion Panama S.A.; and
3. Dion Global Solutions (Development) Pty. Ltd.
Further the Company has no joint ventures / associate companies during the year underreview.
The Board of Directors has formulated a Policy for determining Material Subsidiarieswhich has been uploaded on the Company's website and can be accessed through the link http://investors.dionglobal.com/Policies-Codes.aspx.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES
In terms of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts)Rules 2014 (as amended) a separate statement containing the salient features of thefinancial statement of Company's subsidiaries associates and joint ventures companies inForm AOC 1 is attached to the Consolidated Financial Statements of the Company. Thesaid statement contains a report on the performance and financial position of each of thesubsidiaries associate and joint ventures companies included in the ConsolidatedFinancial Statement and hence is not repeated here for the sake of brevity.
The Company will provide a copy of separate audited or unaudited financialstatementsas the case may be as prepared in respect of each of its subsidiaries to any shareholderof the Company who asks for it and the said financial statements will also be kept openfor inspection during normal business hours at the registered office of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Regulation 34 of the Listing Regulations and Section 129 of the ActConsolidated Financial Statements of the Company and its subsidiaries duly audited by theStatutory Auditors of the Company are provided in this Annual Report.
The Consolidated Financial Statements have been prepared in according with applicableAccounting Standards issued by the Institute of Chartered Accountants of India andreferred to in Sections 129 & 133 of the Act.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments given under Section 186 of the Actand outstanding during the year under review have been disclosed in the notes forming partof the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions entered into with Related Parties during the financial year underreview were in the ordinary course of business and on an arm's length basis. The detailsof the transactions with related parties are provided in the notes to accompanyingstandalone financial statements.
All Related Party transactions are placed before the Audit Committee for approval asrequired under Regulation 23 of the Listing Regulations. Prior omnibus approval of theAudit Committee is obtained for the transactions which are of a foreseen and repetitivenature. A statement giving details of all related party transactions entered into pursuantto the omnibus approval so granted is placed before the Audit Committee for their reviewon a quarterly basis.
The policy on Related Party Transactions as approved by the Board has been uploadedon the Company's website and can be accessed through the link: http://investors.dionglobal.com/Policies-Codes.aspx.
None of the Directors has any pecuniary relationship or transaction vis-a-vis theCompany except to the extent of sitting fees paid to them.
Disclosures as required under Section 134(3)(h) of the Act read with Rule 8(2) of theCompanies (Accounts) Rules 2014 are provided in Form AOC-2 annexed herewith as Annexure A and forms part of this Report.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has in place adequate internal financial controls with reference to thefinancial statements and were operating effectively. The controls are adequate to providereasonable assurance regarding timely preparation of reliable financial statements thesafeguarding of assets prevention & detection of fraud and errors the accuracy andcompleteness of accounting records and ensuring compliance of corporate policies. TheCompany has appointed M/s KPMG as the Internal Auditor of the Company as approved by theAudit Committee for the year under review. KPMG also assist the Company and its keysubsidiaries in testing and reporting of Internal Financial Controls through an integratedsystem of internal audit. To maintain its objectivity and independence the InternalAuditor reports directly to the Audit Committee.
The Internal Auditor evaluates the efficacy and adequacy of internal financial controlsin the Company its compliance with operating systems accounting procedures policies andregulatory requirements at all the locations of the Company and its key subsidiaries.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the internal controls.
RISK MANAGEMENT POLICY
The Company has developed and implemented a Risk Management Policy to mitigate thevarious risks that can impact the ability to achieve its strategic objectives.
The Company adopts a systematic approach to mitigate risks associated withaccomplishment of objectives operations revenues and regulations. The Company believesthat this would ensure mitigating steps proactively and help to achieve stated objectives.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Dr. Gaurav Laroia Non-Executive Independent Director andMr. Ravi Umesh Mehrotra Non-Executive Non-Independent Director have resigned from theoffice of Directors of the Company with effect from April 12 2017 and Mr. Ralph JamesHorne Non-Executive Non-Independent Director had resigned from the office of Director ofthe Company with effect from March 29 2018. The Board of Directors placed on record itsappreciation for the valuable services and guidance provided by them during their tenureas Directors of the Company.
The Members of the Company at their 22nd Annual General Meeting ("AGM")held on September 26 2017 approved the appointment of Mr. Vivek Satish Agarwal as aNon-Executive Non-Independent Nominee Director with effect from the date of hisappointment as an Additional Director. Further the Members of the Company at the said AGMhas also approved the appointment of Mr. Balinder Singh Dhillon as a Director of theCompany whose period of office shall be liable to determination by retirement of Directorsby rotation.
Subsequent to the financial year ended March 31 2018 the following are the changes inthe Directors of the Company:
|S. No. ||Name ||Category ||Date of Appointment ||Date of Resignation |
|1. ||Mr. Balinder Singh Dhillon ||Non-Executive Non -Independent Director ||- ||April 19 2018 |
|2. ||Mr. Vivek Satish Agarwal ||Non-Executive Non -Independent Nominee Director ||- ||May 16 2018 |
|3. ||Mr. Daljit Singh ||Non-Executive Non-Independent Director ||- ||May 28 2018 |
|4. ||Dr. Vandana Nadig Nair ||Non-Executive Independent Director ||- ||June 21 2018 |
|5. ||Ms. Kiran Sharma ||Non-Executive Independent Director ||August 14 2018 ||- |
|6. ||Ms. Jayashree Swaminathan ||Non-Executive Independent Director ||August 31 2018 ||- |
|7. ||Mr. Sanjeev Chandna ||Non-Executive Independent Director ||September 12 2018 ||- |
|8. ||Mr. Amit Sethi ||Non-Executive Independent Director ||- ||September 12 2018 |
|9. ||Mr. Rashi Dhir ||Non-Executive Independent Director ||- ||September 12 2018 |
The Board of Directors placed on record its appreciation for the valuable services andguidance provided by the Directors who have resigned during their tenure as Directors ofthe Company. Further Mr. Maninder Singh Grewal has been re-designated as IndependentDirector of the Company with effect from
July 19 2018 and will hold the office of Independent Director for a term of 5 (five)years from the aforesaid date. However the said appointment to the office is subject tothe approval of Shareholders of the Company in the General Meeting In terms of Section 161of the Act Ms. Kiran Sharma Ms. Jayashree Swaminathan and Mr. Sanjeev Chandna would holdoffice upto the date of the ensuing AGM of the Company. The Company has received noticesin writing from a Member proposing Ms. Kiran Sharma Ms. Jayashree Swaminathan and Mr.Sanjeev Chandna for appointment as Directors of the Company. The Nomination andRemuneration Committee and the Board of Directors recommends their appointment. Briefresume of the Directors seeking appointment along with other details as stipulated underRegulation 36 of the Listing Regulations are provided in the Notice for convening the AGMof the Company.
All Independent Directors have submitted declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of theListing Regulations.
BOARD / COMMITTEE COMPOSITION AND MEETINGS
The Board of Directors of the Company met 4 (Four) times during the financial year2017-18. The details of composition of Board and Committees and their meetings held duringthe year under review are provided in the Report on Corporate Governance which forms partof this Report. The intervening gap between two meetings of the Board was within theperiod prescribed under the Act and Regulation 17 of the Listing Regulations.
Pursuant to the provisions of the Act and the Listing Regulations the Board and therespective committees are required to carry out performance evaluation of the Board as abody the Directors individually Chairman as well as that of its Committees. Thefollowing process of evaluation as approved by the Nomination & RemunerationCommittee ("NRC") and the Board of Directors was followed:
|S. No. ||Process ||Remarks Criteria for Evaluation (including Independent Directors) |
|1. ||Individual Self- Assessment ||Self - evaluation This includes Members forms were shared Selection and Induction and completed by Process knowledge the Directors and skills diligence submitted to the Process participation Coordinator. leadership skills and personnel attributes. |
|2. ||One to One discussion ||Process Coordinator This includes Board as recommended by focus (Strategic NRC was authorized inputs) Board Meeting to interact with each Management Board member to Board Effectiveness assess performance Management invite direct feedback Engagement and and seek inputs to addressing of follow up identify opportunities for requests. improvement. |
|3. ||Evaluation by the Board NRC and Independent Directors ||A compilation of This includes the individual self- demonstration of assessments and one integrity commitment to one discussion attendance at the were placed issued by M/s VAP & Associates at the meetings contribution meeting of the NRC and participation Board of Directors and professionalism Independent Director's contribution while held on February 14 developing Annual 2018 for them to review Operating Plans collectively and include demonstration of roles as additional feedback and responsibilities to the formal process review of high risk completed in the issues & grievance meetings. redressal mechanism succession planning working of Board Committees etc. |
|4. ||Final recording and reporting ||Based on the above NA a final report on Board Evaluation 2017-18 was collated presented and tabled at a meeting of the Board of Directors held on May 24 2018. The report also noted opportunities for improvement. |
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration including criteria for determining qualifications positive attributesindependence of a Director etc. Details of the Remuneration Policy and changes if anyare provided in the Report on Corporate Governance which forms part of this
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and based on the representation as providedto the Board by the management your Directors make the following statements in term ofSection 134(5) of the Act:
(a) in the preparation of annual accounts for the financial year ended March 31 2018the applicable accounting standards have been followed along with proper explanationrelating to material departures wherever applicable;
(b) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the loss ofthe Company for that period;
(c) they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts for the financialyear ended March 31 2018 have been preparedon a going concern' basis on the basis of management view as placed before the AuditCommittee and the Board;
(e) they had laid down internal financialcontrols to be followed by the Company andsuch internal financial controls are adequate and were operating effectively; and
(f) they had devised proper systems to ensure proper compliance with provisions of allapplicable laws and that such systems were adequate and operating effectively.
REPORT ON CORPORATE GOVERNANCE
The Company continues to be committed to uphold the standards of Corporate Governanceand adhere to the requirements set out by the Listing Regulations.
A detailed Report on Corporate Governance along with Company the Certificate
Secretaries confirming the compliance with the conditions of Corporate Governance asstipulated in the Listing Regulations for the financial year ended March 31 2018 is setout in this Annual Report and forms an integral part of this Report.
AUDITORS Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and the Rules framed thereunderM/s S.S. Kothari Mehta & Co. Chartered Accountants (Firm Registration No. 000756N)were appointed as Statutory Auditors of the Company from the conclusion of the 21stAnnual General Meeting (AGM) of the Company held on September 23 2016 until theconclusion of the AGM of the Company to be held in the year 2021 (subject to ratificationof their appointment by the Members at every AGM) at such remuneration as may be mutuallyagreed between the Board of Directors and the Auditors.
Pursuant to the provisions of Companies (Amendment) Act 2017 read with MCAnotification dated May 7 2018 the appointment of Statutory Auditors is not required tobe ratified at every AGM. Therefore no resolution shall be taken into for theratification of appointment of a Statutory Auditor at the forthcoming 23rd AGMof the Company.
The Statutory Auditors have in their report to the Board of Directors on theStandalone and Consolidated Financial Statements of the Company made the followingqualification:
Basis of Qualified Opinion
As per the accompanying note no. 48(h) of the Standalone Financial Statements whereinit has been explained by the management that the financial statements have been preparedon going concern basis.
The Company has substantial negative net worth and accumulated losses of past years;The Company has made a default in the repayment of Principal and Interest against all thefacilities sanctioned by Banks; There is no committed agreement for the infusion of fundsby any investors; Due to payment defaults made by the Regius Overseas Holding Co. Ltd.("ROHCL") wholly owned subsidiary of the Company lending banks of ROHCL haveinvoked the SBLCs issued by Axis Bank and Yes Bank. Being the guarantor now the loanamount is payable by the company to the banks. As explained to us in respect of SBLCinvocations due to the aforesaid defaults and lack of clarity the company is seekingclarification from RBI whether file the form ODI under automatic or approval route;
Axis Bank Limited ("ABL") vide its letter dated August 29 2017 had recalledall the credit facilities given to the Company and ABL had also adjusted a part of thefacility against realization of invoked shares of Religare Enterprises Limited and FortisHealthcare Limited which are kept by the promoter or promoter group as securities.;
Yes Bank Limited have informed the company that all the facilities provided by the YesBank have been reclassified as non-performing assets (NPA) etc. ;
Considering the non-ascertainable consequential impact of these factors events orconditions on financial statements from Statutory indicate that a material uncertaintyexists and may cast the to continue as a significant going concern and therefore thecompany is unable to realise its assets and discharge its liabilities in the normal courseof business at the amounts stated in the financial statement.
Management response on the Statutory Auditors' Qualified Opinion on Company'sStandalone and Consolidated Financial Statements:
The material uncertainty due to reported negative net worth is primarily due to theimpairment and provision accounted for on a prudent & conservative basis while theCompany's product margins are positive.
The rationale for management to continue to believe that the annual accounts areprepared on a going concern basis is a healthy profitable core business a continuingproduct demand through contract renewals a diverse global customer base which remainslargely intact existing contracts contributing license maintenance and support &professional services revenues coupled with existing pipeline across existing and newcustomers.
In addition to the above the Company is in the process of evaluating financialrestructuring options including debt structuring and capital infusion and selectdivestments of assets each of which will enable the Company to sustain its businessoperations.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 Mr. Mohit Maheshwari Company Secretaryin Whole-time Practice has conducted the Secretarial Audit of the Company for thefinancial year 2017-18. The Secretarial Audit Report of the Company for the financial yearended March 31 2018 is annexed herewith as Annexure B to this Report.
The Secretarial Auditor in its report has made the following qualification: During theperiod under review to the best of my knowledge and belief and according to theinformation and explanations given to me the Company has complied with the provisions ofthe Acts Rules Regulations and Agreements mentioned above to the extent applicable. Howeverduring the period under review due to the payment defaults made by the Regius
Overseas Holding Co. Ltd. (ROHCL) wholly owned subsidiary of the Company lending bankof ROHCL has invoked the SBLC issued by Yes Bank Limited. Being the guarantor now theloan amount is payable by the Company to the bank. The Company has not reported ofinvocation of SBLC to RBI upto the date of this report. I have been informed by theCompany that the Company is seeking clarification from RBI whether to file the form ODIfor invocation of SBLC under automatic route or approval route.
Management response on aforesaid qualification given by Secretarial Auditor in itsreport are as follows:
In terms of ODI Master Directions the investments / financial commitments are subjectto certain conditions which inter-alia includes that the Indian Party should not be onthe Reserve Bank of India ('RBI') Exporters' caution list / list of defaulters to thebanking system circulated by the RBI / Credit Information Bureau (India) Limited(CIBIL)/or any other credit information company as approved by the Reserve Bank or underinvestigation by an investigation / enforcement agency or regulatory body. On account ofinvocation of SBLC as referred in the qualification the Company was required to fileForm ODI Part I with all requisite annexures (including certificate to the RBI to reportthe said invocation. Having regard to the defaults with the banks and the subsequentdiscussions with Authorized Dealer (AD) Bank of the Company the management isof the view that the Company can't ascertain whether it is in the list of defaulters as ithas no access of the list of defaulters to the banking system circulated by RBI or CIBILor any other approved credit information company. However the Auditors are of thedifferent view that the aforesaid defaults may be considered of not fulfilling theabovementioned requirement / condition specified under ODI Master Directions and priorapproval of the RBI would be required for reporting the SBLC invocation. To seekclarification on the above the Company had approached RBI but there has been no responsetill date from RBI on the matter. Accordingly the management now on a conservative basishas filed an application with RBI for requisite approval and the said approval is stillawaited.
During the year under review the Company has neither invited nor accepted any depositsfrom public pursuant to the provisions of Section 73 of the Act read with Companies(Acceptance of Deposit) Rules 2014 and therefore no amount of principal or interest wasoutstanding in respect of deposits from the Public as of the date of Balance Sheet.
LISTING WITH STOCK EXCHANGE
The Equity Shares of the Company continue to be listed on BSE Limited ("BSE").The Annual Listing Fee for the financial year 2018-19 has been paid to the BSE.
EMPLOYEE STOCK OPTION SCHEME
The Nomination and Remuneration Committee (NRC) of the Board of Directors of theCompany inter-alia administers and monitors the Dion Global Employee Stock Option Scheme2013 ("ESOP 2013") of the Company in accordance with the Securities andExchange Board of India (Share Based Employee Benefits) Regulations 2014 ("SEBIGuidelines").
As per Regulation 14 of the SEBI Guidelines disclosure of the ESOP Scheme of theCompany has been uploaded on the website of the Company which can be accessed through thelink http://investors.dionglobal.com/ESOP-Disclosures.aspx and forms part of thisReport.
During the year under review the Board of Directors of the Company on therecommendations of NRC had cancelled the Dion Global Employee Stock Option Scheme 2011.Further there was no material change in the ESOP 2013 of the Company and the ESOP 2013 isin compliance with the SEBI Guidelines. The certificate from Statutory Auditors of theCompany confirming that the ESOP 2013 has been implemented in accordance with the SEBIGuidelines would be placed at the forthcoming Annual General Meeting of the Company forinspection by the Members.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Even though operations of the Company are not energy intensive as an on-going processthe management has been highly conscious of the importance to conserve energy andenvironment at all operational levels and efforts are made in this direction on acontinuous basis. The Company continued to take the steps for power savings througheffective operational controls and close monitoring of utilization.
With respect to technology absorption the use of cloud based services hassignificantly reduced the telecommunication costs. Further the dependency on servers andin-house data centers has also been reduced by effectively implementing the cloud leadingto improved productivity and reduced spending on infrastructure & IT.
However in view of the nature of activities which are being carried on by the Companythe particulars as prescribed under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 regarding Conservation of Energy and TechnologyAbsorption are not applicable to the Company and hence not been provided.
The Company has continued to maintain focus on and avail of export opportunities basedon economic considerations. The Company has earned Rs 9.88 Crores (Previous Year: Rs.20.14 Crores) in Foreign Exchange and incurred expenditure of Rs 0.54 Crores (PreviousYear: Rs. 1.05 Crores) in Foreign Exchange during the year under review on a standalonebasis.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Statement of Particulars of Employees as required under Section 197 of the Act readwith Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 (Rules) as amended from time to time forms part of this Report.However pursuant to Section 136 of the Act this Report and Financial Statements arebeing sent to the Members and others entitled thereto excluding the aforesaid informationand the said particulars are available for inspection by the Members at the RegisteredOffice of the Company during normal business hours on working days of the Company upto thedate of the ensuing Annual General Meeting. The Members desirous of obtaining suchparticulars may write to the Company Secretary at the Registered Office / Corporate Officeof the Company in this regard.
Disclosures of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Section 197(12) of the Act readwith Rule 5(1) of the Rules are annexed herewith as Annexure - C and forms part ofthis Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has in place a mechanism in form of Whistle Blower Policy (Policy)for Directors and employees of the Company to report their genuine concerns and to dealwith instance of unethical practices fraud and mismanagement or gross misconduct by theemployees of the Company if any that can lead to financial loss or reputational risk tothe organization. The details of the Policy are provided in the Report on CorporateGovernance and the said Policy has also been uploaded on the website of the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company is committed to provide a healthy environment to all employees and thusdoes not tolerate any discrimination and/or harassment in any form. The Company has inplace an Anti-Harassment and Grievance Redressal Policy in line with the requirements ofThe Sexual Harassment of Women at the Work Place (Prevention Prohibition and Redressal)Act 2013 and the rules made thereunder. An Internal Compliance Committee is in place asper the requirements of the said Act to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthe said Policy. No case has been reported during the year under review.
The year of 2017-18 continued to be a year of re-organization and restructuring foryour Company. All these changes required to be managed with a lot of sensitivity and care.HR with support of the management team were able to successfully implement the changes andmore importantly maintain a level of stability with the retained team.
During a fairly tumultuous 2017-18 HR continued to pro-actively work on severalinitiatives to overcome the challenges faced by the organization to retain the existingemployees as well as attract good talent from the market. These initiatives includeregular management discussions acknowledge employees' accomplishments offer roleenhancements with larger accountabilities maintain transparency and keep them updatedwith the future plans and prospects. This helped us in building their confidence and trustin the Company. HR continued to pro-actively work on several initiatives towardsstrengthening of the human resources management aspects relating to employee productivityand cost employee retention talent management employee engagement and various otherengaging activities.
We have continued to nurture a culture of diverse thinking leading to an array ofideas and initiatives that resulted in sustained workforce engagement. We continue tofocus on investing strategically in creating new growth opportunities for the future whilecontinuing to drive our core to full potential ensuring excellence and building on ouragile and high-performance culture.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the significantand year under review there are no material orders passed by theRegulators / Courts / Tribunals which would impact the going concern status of the Companyand its operations in future.
Your Directors place on record their gratitude to the Bankers Regulatory BodiesStakeholders and other business associates for the assistance and co-operations they haveextended to the Company during the year and look forward to their continued support infuture.
Your Directors also greatly appreciate the commitment and dedication of all employeesat all levels towards the growth of the Company.
| ||For and on behalf of the Board |
| ||For Dion Global Solutions Limited |
| ||Sd/- |
|Place : Noida ||Maninder Singh Grewal |
|Date : November 15 2018 ||Chairman |