Dynacons Systems & Solutions Ltd.
|BSE: 532365||Sector: IT|
|NSE: DSSL||ISIN Code: INE417B01040|
|BSE 00:00 | 22 May||16.15||
|NSE 00:00 | 22 May||16.25||
|Mkt Cap.(Rs cr)||15|
|Mkt Cap.(Rs cr)||14.81|
Dynacons Systems & Solutions Ltd. (DSSL) - Director Report
Company director report
Your Directors are pleased to present the Twenty fourth Annual Report on the businessand operations of the Company for the year ended March 31 2019
1. Financial Highlights
(Rs. in Lakhs)
We've had an exceptional year thanks to our clients and our employees. As we look backat fiscal 2019 this strategic direction has yielded strong results. Our clients haveincreased their trust in us. Our Standalone revenues of Rs. 30489.77 Lakhs as comparedwith Rs. 21152.84 Lakhs during the previous year reflected a growth of 44% over theprevious year. The profit before tax stood at Rs. 631.12 Lakhs as compared to Rs. 283.78Lakhs in the previous year. The Company has made a provision of tax totaling to Rs. 212.51Lakhs and the profit after tax stood at Rs. 418.61 Lakhs for the current year an increaseof 121.40% over the previous year.
On a consolidated basis the revenue from operations for FY19 at Rs. 31190.82 Lakhswas higher by 45% over the previous year (Rs. 21460.50 Lakhs in FY18). The profit beforetax stood at Rs. 739.00 Lakhs as compared to Rs. 305.41 Lakhs in the previous year. TheCompany has made a provision of tax totaling to Rs. 221.93 Lakhs and the profit after taxstood at Rs. 517.07 Lakhs for the current year an increase of 146.74% over the previousyear. This was largely an outcome of greater demand for our services and solutions duringthe year driven by expanding participation in our customers' growth and transformationinitiatives.
Over the past year we have been working relentlessly to rebuild a people organizationto operate with the speed and agility of a startup. We are seeking to be agile in ourresponses to a rapidly changing external environment and with it to increase the velocityof ideas and innovations we generate and execute. Our vision is to build aglobally-respected organization delivering the best-of-breed business solutionsleveraging technology delivered by the best-in-class people. We are guided by our valuesystem which motivates our attitudes and actions.
Dynacons has historically grown much faster than the market. One reason for the outperformance is market share gains on account of superior capabilities and higher customersatisfaction. The second reason has been greater participation in our customers' growthand transformation initiatives which represent the expanding part of their technologyspending. Industry after industry are realizing the power of digital technologies andtheir businesses are increasingly embedded in technology.
Today enterprises are advancing on their digital transformation journey to adapt torapidly changing markets business needs and consumer preferences. As businesses look tonew areas and new economics new and intelligent systems are required to be built withnext-generation technologies and with exponentially superior cost-benefit performance. Thecomplexity of legacy landscapes exploding data evolving business models in the largeenterprise and the resultant need for quick-paced frequent changes make it hard forcurrent systems and humans alone to wrestle with the transformation. The fast pace oftechnology change and the need for technology professionals who are highly skilled in bothtraditional and digital technology areas are driving businesses to rely on third partiesto realize their business transformation.
Technology is transforming businesses around the world in a profound and fundamentalway. The continued reduction in the unit cost of IT infrastructure the explosion ofnetwork bandwidth advanced software technologies and technology-enabled services arefueling the rapid digitization of business processes and information. The digitalrevolution is cascading across industries redefining customer expectations enablingdisruptive market o erings and automating core processes. Traditional business models arebeing disrupted with digital and software-based business models. Incumbent companies towin amid this disruption need to reinvent their business from the core to activate stronge ciency and productivity levers reimagine the end consumer experience and create impactat scale. In FY 2019 the global market for services is estimated to have grown to $1.4trillion. IT Services is estimated to have grown by 3.2% YoY driven by strong growth inIT engagements particularly cloud adoption.
At times like this it is more important than ever to stay close to the customer.Dynacons' customer centric philosophy allowed it to work closely with customers and beagile in responding to their needs and reacting to events on the ground. These deeprelationships the broad and diversified global footprint spanning all major markets andindustries makes your Company's business well positioned to weather any storms ahead.
Review of operations:
Dynacons has built a strong customer base variety of talent and a competent servicedelivery infrastructure. The Company undertakes all activities related to ITinfrastructure including infrastructure design and consulting services turnkey systemsintegration of large network and data centre infrastructures including supply ofassociated equipment and software; on-site and remote facilities management of multi-location infrastructure of domestic clients. We have a global presence deep domainexpertise in multiple industry verticals and a complete portfolio of o erings - groupedunder system integration and managed service o erings targeting multiple stakeholders. TheCompany leverages all these and its deep contextual knowledge of its customers' businessesto craft unique high quality high impact solutions designed to deliver di erentiatedbusiness outcomes. These solutions are delivered using the latest technologies.
While traditional systems integration services remain critical with the shiftingapplications landscape clients are now seeking partners that can also help them takeadvantage of emerging technologies and simplify their IT operations while simultaneouslyreducing costs and investing in business growth. Using end-to-end IT capabilities - fromsystems integration to managed services - we deliver value-driven solutions designed tohelp organizations maximize their return on investment enhance business productivity andreduce the total cost of technology ownership. The Company has built a strong customerbase variety of talent and a competent service delivery infrastructure. Our deep domainexpertise in the industries we serve is central to our ability to understand ourcustomers' challenges and design e ective solutions to address them. We hire professionalswith in-depth industry experience and continually invest in industry training for our staand build out industry-specific services and solutions. This approach is key to our highlevels of on-time delivery and customer satisfaction.
We expanded our approach to engaging with clients via a larger team of client-facingindividuals and a stronger team that drives strategic partnerships. This resulted in asignificant increase in our ability to engage with clients. We have strengthened ouraccess to clients by doubling down and hiring new sales talent. We have also uplifted ourseasoned sales force to keep them relevant in the context of large establishedrelationships that constantly demand more. We have created specific programs to go aftertheme-based industry-specific proactive large deals. With fresh new ideas refreshedsales processes data-driven sales intelligence and socially enabled go-to-marketstrategies our sales teams are now ready to take to new expanding sales frontiers. Thecore business portfolio has performed very well with all key segments posting steadygrowth led by Banking & Financial Services and global customers. Hence the attempt toincrease market share fructified into concrete results. Dynacons' customer-centricitydeep domain expertise agility in building new capabilities and focus on constantinnovation and execution excellence have resulted in enduring customer relationships.
We have organized our sales and marketing departments into teams that focus on specificgeographies and industries enabling us to customize our service o erings to our clients'needs better. The domain knowledge customer-specific contextual knowledge and executiverelationships that each business unit built up over the last decade have been critical toour success. Dynacons partners with all the major technology providers to launch andjointly market industry-specific solutions that leverage our domain knowledge and theirtechnology.
Our primary focus is to provide a comprehensive portfolio of services and products aspart of our strategy to help customers maximize innovation drive business e ciency andperformance and achieve success in the technology world. Clients are looking beyondcustom services designed as a reactive strategy to business problems and seekingproactive solutions that can build on readily available platforms with best practices andcustom expertise. Your Company uses its delivery capability and full services portfolio todeliver high quality high impact solutions leveraging the latest technologies tocustomers across multiple regions and industry verticals. We help organizations realizethe true benefits of their technology investments by aligning IT service o erings withbusiness goals and strategies.
Customer-centricity is at the core of Dynacons' strategy. The philosophy has been toexpand and deepen customer engagements by continually looking for new areas in thecustomer's business where we can add value proactively invest in building newercapabilities and launch new o erings to participate in those opportunities. This strategyhas resulted in a continual expansion of customer relationships in terms of the servicesconsumed revenue and share of wallet. The willingness to invest in the relationship thecommitment to deliver impactful outcomes and the track record of execution excellence haveresulted in high satisfaction levels and long enduring customer relationships.
We are focusing on building our connect in the US Europe and Asia Pacific therebygaining increased direct engagement with our clients in these geographies. Our strategicpartnerships with many Global Large System Integrators are the steps to build a foundationfor expanding future relationships. This has led to increased business from Globalcustomers in India.
Enterprises must make their Data Centers digital ready with software-definedinfrastructure and hybrid cloud powered by intelligent automation & catalog- basedconsumption model with the ability to scale up and down. We help in making the Datacenters ready for Digital Transformation and supports the entire life cycle from DCtransformation to modern data centers by enabling latest technology & solutions likeSoftware Defined Infrastructure Hybrid Cloud architecture and Hyper ConvergedInfrastructure. The major services we provide include data center infrastructuresecurity network and convergence end-user computing services and mobility.
The Company also has cloud services o erings that utilize virtualization technologiesacross delivery solutions for private cloud enterprise multi-tenant cloud and publiccloud models. We provide services that harness and modernize legacy systems to bedigital-ready with agility and speed without sacrificing the knowledge those systemscontain.
Moving ahead with Software-defined Networks (SDN) and Network Function Virtualization(NFV) the Company is now working on the Software Defined Wide Area Network (SD WAN)technology to build solutions for its customers. SD-WAN simplifies the management andoperation of a WAN by decoupling (separating) the networking hardware from its controlmechanism. This concept is similar to how software- defined networking implementsvirtualization technology to improve data center management and operation. We help themdeploy secure fast and programmable networks which can scale and transform per changingbusiness needs. These include life cycle management services that span strategy designimplementation and managed services across data and collaboration networks and coverstrategy definition audit services risk assessment and mitigation planning policydefinition and implementation unified communication services software-defined networksand network services brokerage.
Our Workplace Solutions cover the entire lifecycle including sourcing and logisticsintegration user profiling and enablement service desk and global field supportremote/branch site optimization hybrid messaging enterprise mobile enablement managedprint services virtualization and desktop as a service and operating system migration.These services emphasize personalization collaboration and mobility for a heterogeneousand data-driven employee experience that keeps employees satisfied connected and engagedglobally. The Company has won several contracts with large BFSI and Global enterprises fortheir workplaces services.
During the year the Company has won the prestigious contract worth Rs. 58 Crore ofHospital Management Information System (HMIS) from the Municipal Corporation of GreaterMumbai (MCGM). The objective of this project is to implement HMIS at MCGM's network whichcomprises of 3 Major Hospitals 1 Dental Hospital 18 Peripheral Hospitals 5 SpecialtyHospitals 28 Maternity Homes 161 Dispensaries and 183 Health Posts. The total capacityis approximately 13000 beds which amount to 28% of the total bed capacity in Mumbai.Approximately 54000 outpatients are treated every day at MCGM health facilities. Underthis initiative citizens (patients) record will be maintained with unique id &available across the Network Hospitals. The HMIS-infra contract covers the setup of the ITInfrastructure Network Connectivity Enterprise Management System PACS softwareRadiology systems and software. It also includes services and support for a period of 5years.
The Company's focus on Storage solutions has yielded good results. The most notable winis the order for an Enterprise Storage Solution worth INR 10 Crores from National PaymentsCorporation of India. The Contract is for a period of 5 years. The solution will enhancethe IT infrastructure for NPCI with a Fast flexible system that will meet the demands ofbusiness growth at their two data centers separately located in India at Chennai &Hyderabad. The solution is an enterprise class storage for the most demanding workloadswith submillisecond latencies and scalability. The architecture hardware accelerationincluding inline deduplication compression data packing thin technologies and othercompaction technologies that can reduce acquisition and operational costs.
Enterprises are looking at their Infrastructure Management Service (IMS) providers tocreate their digital foundation that would accelerate digital transformation and be thecore of digital operations for years. This demands a flexible architecture of hybrid cloudled deployments and AI / ML for IT Operations. On the end user computing side IMSproviders need to be creative and adaptive to support digital workplace that goes beyondmanaging devices to users to experience.
Dynacons' IMS o erings caters to enterprises spread across a broad spectrum ofindustries. We are building capabilities in Automation and AI which will help us improveour service delivery - a strength our client's value and leverage to make them more ecient. Dynacons o ers Infrastructure Management Services (IMS) managing themission-critical IT environments for some of the largest and most forward-lookingorganizations Dynacons' Enterprise Services o erings include a wide spectrum of EnterpriseIT and O ce Automation Services including Infrastructure Managed Services BreakfixServices Managed Print Services Cloud Computing Systems Integration Services andApplications Development and Maintenance. The Company provides end-to-end technology andtechnology related services to corporations across industry verticals.
Customers are increasingly utilizing IT infrastructure services to sharpen their focuson core business operations reallocate overhead costs to growth investments enablebusinesses to respond more quickly to changing demands decrease time to market ensurethat the IT infrastructure can scale as the business evolves and access skill sets outsidethe organization. Your Company has continued to showcase its leadership in terms ofservice capabilities and scale of operations over a wide spectrum of industries. Severalinitiatives have been taken to build a strong and sustainable delivery organisationthrough automation remote service management process improvements manpoweroptimization and infrastructure optimizations. We have an established nationwide supportnetwork to provide multi location multi-platform support for organisations. Our reach hasexpanded to over 250 cities and towns across India. Our ability to align our teams to thecustomers' business goals together with our extensive domain and technology expertisehas helped us to remain relevant to our customers.
It is now very evident that we live in an era of continuous and rapid disruption. Whatis truly incredible is the lightning speed at which technology and markets are movingtoday dismantling established business models and giving birth to entire new industries.They are digitizing their core increasing operational capability reimagining customerengagement and augmenting process execution with new digital technologies as before theword adoption and take it as continuation from the above paragraph Adoption of digitaltechnologies such as cloud mobile loT analytics machine learning AI and automationhas reached the inflexion point and is triggering large re-architecture programs.Enterprises are reimagining multiple aspects of their business model investing intechnology-led product or service innovation customer analytics and insights and coretransformation programs. This has led to increased opportunities as enterprises arescaling up their technology spend on this account.
Technological innovations are reshaping the world we live in. Exponential advancesacross technologies like cloud computing artificial intelligence (AI) machine learningrobotics IoT augmented and virtual reality would continue to transform every aspect ofhuman life. We strongly believe enterprises will continue to invest in these technologiesto transform every aspect of their businesses.
Our work across industries value chains and geographies gives us keen insights intothe pattern of changes impacting the fundamental wiring across a diverse set ofbusinesses and we believe with this understanding we can help our clients pick up theright signals and work out what's next. Our strategic objective is to build a sustainableorganization that remains relevant to the agenda of our clients while creating growthopportunities for our employees and generating profitable growth for our investors. Theobjective is to boost the top line embrace new technology-enabled business models createnew revenue streams address new customer segments or deepen existing customerrelationships.
Awards Certifications and Recognitions
In Fiscal 2019 we won multiple awards and recognitions.
The Company has won the Hyperconverged Infrastructure Award presented by Nutanix India.Hyper- converged infrastructure (HCI) is a software-defined IT infrastructure thatvirtualizes all of the elements of conventional "hardware-defined" systems.Hyper-convergence is a software-centric architecture that tightly integrates computestorage and virtualization resources in a single system. Hyperconverged Infrastructure(HCI) simplifies Datacenter Operations. The award is a testimony to the technologyexpertise demonstrated by our team. Your Company also won the Enterprise Business awardfrom HPE Aruba. The award was presented by the HPE team at a function in Goa. The awardwas presented for the excellence demonstrated in Enterprise solutions.
During the year the Company was successfully appraised at Capability Maturity ModelIntegration (CMMI)- SVC V1.3 Maturity Level 3. CMMI is a process improvement andassessment framework which comprises of a collection of best practices designed to promoteimproved performance in any organization and is considered a global standard for e ciency.A successful CMMI ML3 appraisal means that the organization is performing at a definedlevel where processes are well characterized and understood. This appraisal facilitatescontinued customer satisfaction delivery of quality services and use of best practices.
This assessment is a testimony to our commitment to exceed our customers' expectationsby continuously delivering the highest quality services and solutions and improving ourprocesses whenever possible. This assessment benefits Dynacons with mature andstandardized processes higher predictability and consistency better turn-around timesand increased profitability. It also is a testament to the quality of our people andprocesses that ensure the highest levels of quality and repeatability. This puts Dynaconsin elite club of few Companies having the CMMI certification.
Over the years we have invested in building di erentiated capabilities such asSpecific industry domain and technology expertise and end-to-end service o eringcapabilities in systems integration and infrastructure management. Our Service DeliveryModel divides projects into components that can be executed simultaneously at client sitesand at our o ces in India. Our processes are based on the IT Infrastructure Library(ITIL) service management framework with a focus on continuous service improvement andcustomer satisfaction. Our rich portfolio of service o erings span across theinfrastructure lifecycle of Plan- Build-Run-Monitor and includes infra consulting datacenter end user computing enterprise networking enterprise security IT infrastructureoperation management and transformation services.
We have taken several steps to build a sophisticated service delivery model and qualitycontrol processes standards and frameworks. Our Sales and client engagement teams haveensured deep enduring and expansive relationships with our customers around the world.All of our services and operations are fully aligned with the world's most respectedstandards and frameworks. Your Company has developed and refined its Service DeliveryModel to ensure a consistent and controlled service process.
Dynacons is continually investing in improving our customer-centric executioncapabilities by focusing on delivery excellence deepening domain expertise and o ering afull services capability delivered through an agile distributed delivery model. Thephilosophy has been to expand and deepen customer engagements by continually looking fornew areas in the customer's operational value chain where Company can add value and toproactively invest in building newer capabilities to participate in those opportunities.Over time every customer engagement results in the build-up of deep contextual knowledgeof the customer's business which is leveraged to build innovative transformativesolutions.
Your Company has a well-defined and scalable organizational structure based on productterritory and process knowledge experienced and stable management team strongrelationships with banks and investors. This helps Dynacons achieve its business goals.Dynacons has a team of specialists with experience in leveraging technology to helpimprove e ciency. The Company provides dynamic technology solutions and has the capabilityto address the increased complexity cost and risk associated with these technologyplatforms.
We have been leveraging this contextual knowledge products and solutions andpartnerships and alliances with leading technology providers to craft unique solutionsthat transform our customers' businesses and give them a competitive edge in the market.This has increased demand for the entire gamut of services solutions products andplatforms o ered by us resulting in a stronger order book more robust revenue growth andimproved market share.
The Company continues to sustain its commitment to the highest levels of qualitysuperior service management robust information security practices and business continuitymanagement. In FY 2019 the Company was successfully appraised at Capability MaturityModel Integration (CMMI)-SVC V1.3 Maturity Level 3. We continue to strive and maintainsustainable growth through the philosophy of business excellence. Recognizing thatworkforce competency is a powerful growth engine competency mapping and development wascompleted for the workforce with appropriate interventions through a learning anddevelopment plan. A strong emphasis is based on quality in every aspect of the Company'sactivities. In line with this philosophy we have designed our quality management programand have defined several key parameters for measurement of quality levels to ensureimprovement in the quality of the deliverables.
Your Company continues to strive towards process improvement for ensuring high qualitydelivery and high levels of customer satisfaction. Customer satisfaction and excellence inquality are key elements for succeeding in the competitive global market. Your Company hasan enduring focus on operational and delivery excellence and towards sustainable growth onthe path of business Excellence. Sustained commitment to highest levels of qualitybest-in-class service management robust information security practices and maturebusiness continuity processes helped the Company attain significant milestones during theyear.
Enterprises are increasingly embracing business models that are defined by technologystructurally driving up technology intensity across industries. This as well as thegreater leverage of technology for competitive di erentiation significantly increases themarket opportunity for us. We are building business model resilience with increased clientrelevance a recipe that will help us shape the times to come. We have laid a solidfoundation for a growing business that has increased client relevance and a strongoperating discipline. We also have a greater sense of stability and an aligned and drivenmanagement team eager to serve our clients in a world where technology is becoming moreand more critical.
We are participating very well in this expanding opportunity getting embedded deeperin our customers' business ecosystems and becoming an industry staple. This is resultingin better visibility predictability and business sustainability all of which createever more value for our stakeholders in the longer term. The key focus is to stay abreastwith technology change continually investing in building capabilities on newertechnologies and creatively harnessing the power of those technologies in bespoke waysfor our customers. The opportunities ahead are huge. By staying true to its mission andits values and by continually investing in building newer capabilities your Company ispositioned well to become the partner of choice to enterprises in their growth andtransformation journeys.
Since every business is becoming software defined and technology led business modelsare emerging in every vertical the technology investment is more than ever businessoutcome aligned and would be sustained through economic cycles. Government and the BFSIsectors are expected to be huge buyers and these are the focus sectors for your Companyalso. The Government initiative on Smart Cities has led to the creation of manyopportunities for your company to participate in. We continued our e orts this year onharnessing the power of artificial intelligence (AI) and automation IoT platforms androbotics. These technologies will redefine the IT landscape and the business models ofenterprises in the times to come. Your Company is also working on Robotic processautomation in the services that it o ers. This will create a lot of value for customersand drive revenues.
Competition is the main threat to most tech outfits considering the relentless productcycles the typically rapid move towards commoditization in the sector and also changes intechnology and markets changes in government policy or regulations/legislation etc. alsobrings challenges and treats to the smooth functioning of the Company. In the IT industrythe ability to execute projects build and maintain client partnerships and to achieveforecasted operating and financial results are significantly influenced by theorganization's success in hiring training and retaining highly skilled IT professionals.
The competition from large international and Indian IT companies is increasing in thedomestic market space. The Company's objectives and expectations may be forward lookingwithin the meaning of applicable laws and regulations. The Company is exposed to varietyof risks such as credit risk economy risk interest rate risk liquidity risk and cashmanagement risk among others. The Company has Enterprise Risk Management Framework whichinvolves risk identification risk assessment and risk mitigation planning for theCompany. Technology investments by corporates have shown strong correlations with GDPgrowth. Uncertainties in economic outlook in these markets can impact technology spendand thereby constrain the Company's growth potential.
Your Company has developed competencies in various technologies platforms andoperating environments and o ers a wide range of technology options to clients to choosefrom for their business needs. The Company strategy is not dependent on any singletechnology or platform. We operate in an ever evolving and dynamic technology environment.Therefore it becomes important for the Company to continuously review and upgrade itstechnology resources and processes to mitigate technology obsolescence. Rapidly evolvingtechnologies are changing technology consumption patterns creating new classes of buyerswithin the enterprise giving rise to entirely new business models and therefore new kindsof competitors. This is resulting in increased demands on the Company's agility to keeppace with the changing customer expectations.
One of the key areas of focus is talent availability and readiness of our leadership tolead and execute the organizational strategy. The focus is on deploying a robust trainingstrategy to cater to the development needs of employees across leadership levels. Thisincludes professional functional technical and leadership development learningsolutions. The presence and demonstration of required competencies and skills acrosslevels continues to play a key role in defining the success trajectory of theorganization. It's the right and able people who bring the business strategy to life areality that your Company has taken note of.
Internal Financial control systems and their adequacy
Your Company has a well-defined delegation of power with authority limits for approvingrevenue as well as expenditure and processing payments. There is an e ective internalcontrol and risk mitigation system which is constantly assessed and strengthened withnew/revised standards operating procedures. The Company's internal control system iscommensurate with its size scale and complexities of its operations.
The Company's well defined organizational structure defined authority matrix andinternal financial controls ensure e ciency of operations protection of resources andcompliance with the applicable laws and regulations. Moreover the Company continuouslyupgrades its systems and undertakes review of policies. The Company has made the employeesresponsible for establishing expectations and seeking feedback at every role that isassigned. The employees have been enabled to influence their network of peers to co-owngoals. This has helped enable cross functional collaboration and interlock. The Companyhas in material respect an adequate internal financial control over financial reportingand such controls are operating e ectively. Understanding employee engagement and views onthe employment experience periodically in our view is not reflective of the needs of theworkforce today.
Dynacons Systems & Solutions Limited has an audit committee the details of whichhave been provided in the corporate governance report. The Audit Committee of the Board ofDirectors actively reviews the adequacy and e ectiveness of the internal control systemsand suggest improvements to strengthen the same. The Company has the robust ManagementInformation System which is an integral part of the control mechanism. It has continuedits e orts to align all its processes and controls with best practices in the group andindustry.
The internal financial control is supplemented by extensive internal audits regularreviews by management and standard policies and guidelines to ensure reliability offinancial and all other records to prepare financial statements and other data.
With a view to plough back the profits of the Company and keeping in mind the expansionof business activities the Board of Directors consider it prudent and recommend notdeclaring any dividend for the year ended March 312019.
The Company has not transferred any amount to reserves.
The Provisions of Sec.125 (2) of the Companies Act 2013 do not apply as there was nodividend declared and paid last year.
6. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
The Company had o ered issued 2795000 warrants convertible into Equity shares of Rs.20 each including a premium of Rs. 10 each to promoters/promoter group and others on apreferential basis on 31st March 2017 of which 2265000 warrants were converted intoequity shares on 29.09.2018 and trading approval for the same was received from NationalStock Exchange of India Limited and BSE Limited on 28th March2019.
7. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future
There are no significant and material orders passed by the Regulators or courtsor tribunals impacting the going concern status and company's operations in future.However the Company had received a show cause in the matter of Dynacons TechnologiesLimited issued by SEBI dated 15th March 2017 for non
compliance of the provisions of Regulations 30(1) and 30(2) read with Regulation 30(3)of SEBI (Substantial Acquisition of shares and Takeovers) Regulations 2011 for the yearended on March 312013 and March 312014.The Company had made an adequate reply to SEBIand settlement order for the same was received on February 012019 and the matter standsclosed.
There was no change in the nature of business of the Company.
The Company has a subsidiary Dynacons Systems & Solutions Pte. Ltd. as on March312019. There are no associate companies or joint venture companies within the meaning ofSection 2(6) of the Companies Act 2013 (Act). There has been no materialchange in the nature of the business of the subsidiary.
Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company as Annexure -V
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiaries are available on thewebsite of the Company.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees commission andreimbursement of expenses if any incurred by them for the purpose of attending meetingsof the Company.
Mr. Parag Dalal Whole Time Director retires by rotation and being eligible has oered himself for reappointment. The Board recommends the resolutions for your approval forthe above appointment.
The Board of Directors re-appointed Mr. Shirish Anjaria as Chairman cum ManagingDirector Mr. Parag Dalal as Whole-time director and Mr. Dharmesh Anjaria as Whole-timedirector and Chief financial O cer for a further period of Three years with e ect fromFebruary 01 2019 subject to approval of members at the ensuing 24th AGM.
All the above appointments/re-appointments by the Board of Directors are based on therecommendation of the Nomination and Remuneration Committee. The resolutions foraforementioned appointment/re- appointments and for payment of remuneration to ManagingDirector Whole time- Director together with requisite disclosures are set out in theNotice of the ensuing 24th AGM. The Board recommends all the resolutions for yourapproval.
Pursuant to the provisions of Section 203 of the Act there has been no change in thekey managerial personnel during the year.
Details/Disclosures of ratio of remuneration to each Director to median employee'sremuneration as required pursuant to Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and details of remuneration paid to Employees vide Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given as Annexure-IV
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. MSP & Co. Chartered Accountants (ICAI Firm Registration No. 107565W) had beenappointed as the statutory auditors of the Company for a term of five consecutive yearsat the AGM held in the year 2017. The Companies (Amendment) Act 2017 has waived therequirement for ratification of the appointment of auditor by the shareholders at everyAnnual General Meeting with e ect from May 07 2018. Hence the approval of the members isnot being sought for the re-appointment of the Auditors in line with the resolution passedfor their appointment at the 22nd AGM held on September 29 2017.
Auditors have confirmed that they are not disqualified to act as Auditors and areeligible to hold o ce as Auditors of your Company. They have also confirmed that they holda valid peer review certificate as prescribed under Listing Regulations.
The Auditors' Report does not contain any qualification. Notes to Accounts and Auditorsremarks in their report are self-explanatory and do not call for any further comments.
Pursuant to Schedule V to the Listing Regulations and as required under Regulation 27of Securities & Exchange Board of India (Listing Obligations & DisclosureRequirements) Regulations 2015 with the Stock Exchanges the report on ManagementDiscussion and Analysis Corporate Governance as well as the Statutory Auditors'Certificate regarding compliance of conditions of Corporate Governance forms part of theAnnual Report and the Certificate duly signed by the Chairman cum Managing Director andChief Financial O cer on the Financial Statements of the Company for the year ended March312019 forms a part of Annual Report.
Your Company has always practiced sound corporate governance and takes necessaryactions at appropriate time for meeting stakeholders' expectations while continuing tocomply with the mandatory provisions of corporate governance.
The Directors and members of Senior Management have a rmed compliance with the Code ofConduct for Directors and Senior Management of the Company. The copies of Code of Conductas applicable to the Executive Directors (including Senior Management of the Company) andNon-Executive Directors are uploaded on the website of the Company -
The Company has practice of conducting familiarization program of the Independentdirectors as detailed in the Corporate Governance Report which forms part of the AnnualReport.
The Directors Mr. Shirish M. Anjaria & Mr. Dharmesh S. Anjaria having father andson relationship are related to each other within the meaning of the termrelative as per Section 2(77) of the Act and as per SEBI(Listing Obligationsand Disclosure Requirements) Regulations 2015. Other than these none of the Directorsare related.
The information as required under Section 197 of the Act and rules made there-under isnot applicable as none of the employees are in receipt of remuneration which exceeds thelimits specified under the said rules read with Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
The following documents have been placed on the website in compliance with the Act:
Financial statements of the Company and consolidated financial statements alongwith relevant documents as per third proviso to Section 136(1).
Details of Vigil mechanism for directors and employees to report genuineconcerns as per proviso to Section 177(10).
The terms and conditions of appointment of independent directors as per ScheduleIV to the act.
Code of Conduct
Nomination and Remuneration Policy
We continue to work hard to make work simple and remove undue process overhead infavor of trust employee autonomy and a focus on collaboration. This in addition topositively impacting productivity is facilitating improved employee experience byenabling individuals to do purposeful work supported by systems that let them outsourcemore of the routine to technology. We are also empowering teams to make data-leddecisions act on these decisions e ectively leveraging user-friendly processes. The aimis to create an agile and energetic workplace.
We strive to enhance the employee experience and equip our workforce with tools andplatforms to help accelerate their professional growth in the organization. Ours is aCompany that has always attracted passionate individuals who want to contribute and arewilling and ready to work together. We want to improve our workplace quality for them sotheir collective motivation can make us more e ective through these times of acceleratingchange. We are making conscious e orts to create an environment which is more amenable andfriendly to our employees. We are committed to create a culture that considers theirspecial needs and an environment that allows them to grow and thrive as professionals andwhile not hampering their work life balance.
The focus is to create the workplace of tomorrow that promotes a collaborativetransparent and participative organization culture encourages innovation and rewardsindividual contribution. The focus of human resources management at Dynacons is to ensurethat we enable each and every employee to navigate the next not just for clients butalso for themselves.
Pursuant to Section 204 of the Companies Act 2013 the Company had appointed Ms.Shruti Shah Practicing Company Secretary as its Secretarial Auditor to conduct theSecretarial Audit of the Company for the F.Y 2018-19. The Company has provided all theassistance and facilities to the Secretarial Auditor for conducting their audit. Report ofSecretarial Auditors for the F.Y. 2018-19 in Form MR-3 is annexed to this report asAnnexure-II.
The Auditors' Report to the members on the Accounts of the Company for the financialyear ended 31st March 2019 does not contain any qualifications reservations or adverseremarks. The Secretarial Audit Report however contains the following observation fromSecretarial Auditor.
The Company had received a show cause in the matter of Dynacons Technologies Limitedissued by SEBI dated 15th March 2017 for non-compliance of the provisions of Regulations30(1) and 30(2) read with Regulation 30(3) of SEBI (Substantial Acquisition of shares andTakeovers) Regulations 2011 for the year ended on March 31 2013 and March 31 2014.TheCompany had made an adequate reply to SEBI and settlement order for the same was receivedon February 01 2019 and the matter stands closed.
Board's Response - The Board informed that the Company had made an adequate reply toSEBI and settlement order for the same was received on February 01 2019 and the matterstands closed.
The paid up Equity Share Capital of the Company as on 31st March 2018 was Rs.69080800 divided into
6908080 Equity shares of Rs. 10 each which has increased to Rs. 91730800 dividedinto 9173080 Equity shares of Rs. 10 each as on 31st March 2019 since the Company hadconverted 2265000 Warrants convertible into Equity shares of Rs. 20 each including apremium of Rs. 10 each on 29th September 2018.
a. Buyback of Securities: The Company has not bought back any of the securities duringthe year under review.
b. Sweat Equity: The Company has not issued any sweat equity shares during the yearunder review.
c. Employee Stock Option Plan: The Company has not provided any stock options to theemployees.
d. Warrants convertible into Equity shares: The Company had issued 2795000 warrantsconvertible into equity shares on 31.03.2017 of which 2265000 warrants were convertedinto Equity shares on 29th September 2018 and trading approval for the same had beenreceived from National Stock Exchange of India Limited and BSE Limited on 28th March2019.
Your Directors have pleasure to inform that Acuite had carried out a credit ratingassessment of the Company both for short term and long term bank facilities in compliancewith norms implemented by Reserve Bank of India for all banking facilities which enablesthe Company to access banking services at low costs. Acuite Ratings has assigned AcuiteBBB- rating to your Company for working capital facilities for a total amount of Rs. 35.00Crores. Acuite has also assigned Acuite BBB-; Stable/A3 rating for the Long-term/shortterm bank facilities of the Company up to Rs. 20 Crores.
Your Company has not accepted any fixed deposits and as such no amount of principalor interest was outstanding as on the date of the Balance Sheet.
Pursuant to the provisions of clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 the Directors confirm that to the best of their knowledge andbelief:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with no material departures;
(b) They have 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 a airs of the Company at the end of the financial year and of theprofit/loss of the Company for that period;
(c) They have taken proper and su cient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(d) They have prepared the annual accounts on a going concern basis; and
(e) They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating e ectively
(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating e ectively.
Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) the Companies (Accounts) Rules 2014 forming part of Directors' Report for the yearended 31st March 2019 is as under :
Conservation of Energy: The Company's operations involve low energy consumption.However e orts to conserve and optimize the use of energy through improved operationalmethods and other means will continue.
Technology Absorption: The Technology available and utilized is continuously beingupgraded to improve overall performance and productivity.
Research & Development: Your Company believes that research & development is acontinuous process for sustained corporate excellence. Our research & developmentactivities help us in product and service improvement e ective time management and arefocused to provide unique benefits to our customers. Such methods do not involve anyspecific cost burden to the Company.
Foreign Exchange Earnings : Rs.1451.03 Lakhs (previous year 661.96 Lakhs)
Foreign Exchange Outgo : Rs. 1923.52 Lakhs (previous year 59.41 Lakhs)
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration Committee.The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.
During the year Twelve Board Meetings were held. The details of the Board and variousCommittee meetings are given in the Corporate Governance Report.
The Board has received the declaration from all the Independent Directors as per theSection 149(7) of the Companies Act 2013 and the Board is satisfied that all theIndependent Directors meet the criterion of independence as mentioned in Section 149(6) ofthe Companies Act 2013.
The Company's policy on directors' remuneration and appointment and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of this report.
The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis which is a part of this report.
The Audit Committee comprises of three directors namely Mr. Jitesh Jain Mr. VirenShah and Mr. Dilip Palicha.
Your Company has established a mechanism called 'Vigil Mechanism' for directors andemployees to report the unethical behavior actual or suspected fraud or violation of theCompany's code of conduct or ethics policy and provides safeguards against victimizationof employees who avail the mechanism. The Vigil Mechanism Policy has been uploaded on thewebsite of the Company at www.dynacons.com.
Risk Management Policy identifies communicate and manage material risks across theorganization. The policy also ensures that responsibilities have been appropriatelydelegated for risk management. Key Risk and mitigation measures are provided in theManagement Discussion and Analysis annexed to the Annual Report.
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within the purview of Section 135(1) of the Companies Act 2013 andhence it is not required to formulate policy on corporate social responsibility.
As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return inMGT-9 as a part of this Annual Report annexed as Annexure-I. The same is also available onthe website of the company at the web link: http://dynacons.com/investors/
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. The details of material contracts or arrangements or transactions at arm's lengthbasis or otherwise have been disclosed in Form AOC-2 as Annexure III.
Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board is uploaded on the Company's website at the web
Your Company has adopted a policy for prevention of Sexual Harassment of Women atworkplace. An Internal Complaints Committee has been constituted in line with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 ('thesaid Act'). During the year Company has not received any complaint of harassment.
Your Directors thank the Company's Investors Clients Vendors Bankers Business andvarious governmental as well as regulatory agencies for their continued support andconfidence in the management.
Your Directors wish to place on record their deep sense of appreciation of thededicated and sincere services rendered by employees at all levels during the year.You^offiBaflW'feSftnisis&entiSrtwthwas mafepfi^ible by their hard work solidaritycooperation and support.