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Glodyne Technoserve Ltd.

BSE: 532672 Sector: IT
BSE 00:00 | 04 Mar Glodyne Technoserve Ltd
NSE 05:30 | 01 Jan Glodyne Technoserve Ltd
OPEN 2.84
VOLUME 20899
52-Week high 2.99
52-Week low 0.00
Mkt Cap.(Rs cr) 12
Buy Price 0.00
Buy Qty 0.00
Sell Price 2.82
Sell Qty 900.00
OPEN 2.84
CLOSE 2.76
VOLUME 20899
52-Week high 2.99
52-Week low 0.00
Mkt Cap.(Rs cr) 12
Buy Price 0.00
Buy Qty 0.00
Sell Price 2.82
Sell Qty 900.00

Glodyne Technoserve Ltd. (GLODYNE) - Director Report

Company director report


The Members of

Glodyne Technoserve Limited

Your Directors have pleasure in presenting the Fifteenth Annual Report

of your Company on the business and operations of the Company, together with theAudited Accounts for the financial year ended March 31, 2012.


(Rs. Lakhs)


March 31, 2012 March 31,2011
Total Income 161247.06 98881.83
Profit / (Loss) Before Taxes 37769.79 20025.01
Less: Provision for Income Tax (net off short/(excess) provision for earlier years) 12979.80 5100.00
Less: Provision for deferred tax/wealth Tax/fringe benefit tax 914.86 508.85
Profit / (Loss) After Taxes 25704.84 14416.16
Profit available for Appropriation 25704.84 14416.16
Less: Transfer to General Reserve - 1441.62
Less: Proposed Dividend @ 0.15 per share 67.62 1845.80
Less: Provision for Tax on Dividend 10.97 299.44
Add: Balance Brought forward from last year 28683.04 17853.74
Balance carried to Balance Sheet 54309.27 28683.04


On a Standalone basis, your Company has recorded a total income of 1,61,247.06 Lakhsfor the financial year ended March 31, 2012, an increase of 63.07% compared to last year'sfigure of Rs. 98,881.83 Lakhs. The Earnings before Interest, Tax, Depreciation andAdjustments (EBITDA) stood at Rs. 46,130.47 Lakhs as compared to last years Rs. 24,427.80Lakhs, recording a growth of 88.84%. The Company's profit after tax stood at Rs. 25,704.84Lakhs as compared to previous year's Rs. 14,416.16 Lakhs, recording a growth of 78.31%.Due to subdued performance of the US subsidiary in view of the non availability of theworking capital at US and hence delayed integration, the Consolidated results were loweras compared to the standalone for the year. The detailed analysis of the Company'sfinancial results for the year end is given in the Management Discussion and Analysis(MD&A) Report which is separately annexed as part of the Annual Report.


The Company as per its profit sharing policy, has been extending the profitparticipation to its shareholders through distribution of dividend. Your Company has beena consistent dividend paying company. Although the performance of your Company during theyear under review, had been satisfactory, considering the need to plough back profit forsustaining growth of the Company and to maintain liquidity for timely meeting of businessneeds, your Directors revised its recommendation for dividend to Rs. 0.15/- per share asagainst earlier recommended at Rs. 4.60/- per share for the year. This was also inaccordance with the approvals from the Lenders. The Board at its meeting held on December6, 2012 accordingly also approved the changes in the final accounts approved in theearlier meeting and adopted the revised financial statements, giving effect to the newdividend recommendation.

The total dividend payout is Rs. 67.62 lakhs in comparison to the previous yeardividend of Rs. 1845.80 lakhs (Previous year a dividend of Rs. 4.20/-on equity share ofRs. 6/- each), excluding the Corporate dividend tax.


A) Strategic Acquisitions / Mergers: Domestic Acquisition:

Your Company continued on its growth path through a healthy mix of organic andinorganic route. As a part of the Company's strategy of growing and strengthening itsleadership position in services business, your Company had announced the acquisition ofComat Technologies Pvt. Limited ('Comat'), a leading provider of e-governance services inIndia, which is pending for closure due to completion of the customary closing conditions.As the acquisition is pending for closure the Consolidated Results do not include thefinancials of Comat. Comat subsequent to the closure of the acquisition, may act asubsidiary of your Company or may be merged with your Company in order to derive thenecessary business and fiscal benefits, subject to necessary approvals.

Comat has been in the business of delivering essential Government and Private servicesto rural India. Comat has been a pioneer in e-governance services and ran a network ofthousands of centers in rural areas for door step delivery of Government services. Inaddition to delivery of services, Comat has worked with Government in re-engineeringprocesses and using technology to bring efficiency and cost savings to the Government.Most recently, Comat has been involved with piloting and subsequently scaling the UIDinitiative in several states.

The Comat acquisition together with our technology and service offerings, will help increating value for all constituents, it will also facilitate the Company to expand itsreach in new states and add several key partnerships and relationships with governmentsfor providing citizen centric programs.

B) Warrants issued under the preferential guidelines:

As per the approval granted by the members of the Company at the 14th Annual GeneralMeeting, the Company during the year under review, on receipt of the requisite StockExchanges Approvals had issued 15,00,000 warrants, carrying the entitlement of conversionof 1(one) equity share of Rs. 6/- each (Rupees Six only) at Rs. 400/-per warrant toGlodyne Global Private Limited, a promoter group Company. The warrants are due forconversion in April, 2013.

C) Increase in Share Capital:

(i) Allotment on exercise of stock options under Employee Stock Option Scheme:

During the year, 167,930 equity shares of the face value of Rs. 6/- each (postsubdivision) has been issued on the exercise of Stock Options under the Employee StockOption Scheme 2006 of the Company. As a result of the above, the Company's paid up capitalstood increased to Rs. 26,39,59,260 consisting of 4,39,93,210 equity shares of Rs. 6/-each.

(ii) Allotment on Conversion of warrants issued under the preferential guidelines:

On June 23, 2010, 6,00,000 warrants were issued to Glodyne Global Pvt. Limited, apromoter group Company, as per members' approval granted at 13th Annual General Meeting.The said warrants carried entitlement of conversion in to 1(one) equity share of Rs. 10/-each (Rupees Ten only). Post split, the allotted warrants were effected into 10,00,000warrants, carrying the entitlement of conversion of 1(one) equity share of Rs. 6/- each(Rupees Six only). The Promoter Warrant holder has exercised its right and converted thewarrants into equity shares at a price of Rs. 432 per share. Accordingly, during the yearunder review, 10,00,000 equity shares were allotted to Glodyne Global, thereby increasingthe paid up equity share capital from 4,39,93,210 to 4,49,93,210 shares of Rs. 6/- each(Rupees Six only) as on March 31, 2012.


Pursuant to the provisions of the Companies Act, 1956 and in accordance with theArticles of Association of the Company, Mr. Alok Sharma will be retiring by rotation atthe ensuing Annual General Meeting. Due to his other business plans and pre occupations,Mr. Sharma has not sought his re-appointment.

During the year, Mr. Bryan Sanderson, Dr. Mohan Kaul and Mr. Samar Ray who wereappointed as Additional Directors on the Board, were appointed as Directors liable toretire by rotation, as per the shareholders approval granted at the Annual General Meetingdated 15th September 2011.

Subsequent to the year end, Mr. Shantanu Rooj, Whole time director of the Company hasceased to be director of the Company.

Shareholders attention is drawn to the relevant items appearing in the Notice of theA.G.M. and the explanatory statement, seeking the approval of the members in this matter.


In accordance with the Glodyne Employees Stock Option Scheme, 2010 of the Company, atotal number of 680220 Stock Options (post subdivision no.) were granted during the yearby the Compensation Committee. No fresh grants were made under the Employee Stock OptionScheme, 2006 of the Company. The particulars required under the SEBI (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are annexed to and formpart of this report. No employee was issued Stock Option during the year equal to orexceeding 1% of the issued capital of the Company at the time of grant. The Scheme isapplicable to the eligible employees which include employees and directors of the Companyand its subsidiary companies.


Your Company has complied with the Corporate Governance norms as stipulated under theprovisions of the Listing Agreement entered into with the Stock Exchanges. A separatesection on Corporate Governance Report and a Certificate from the Company's StatutoryAuditors confirming compliance with the conditions of Corporate Governance by the Companyas stipulated in Clause 49 of the Listing Agreement are annexed to and forming part ofthis report.




As required under Section 217(1) (e) of the Companies Act, 1956 and the rules madethereunder, the necessary details are given hereunder:

Conservation of Energy

As your Company's business comprises of Technology IMS, which is service driven, theoperations are not energy intensive. Hence there are no particulars required to befurnished in respect of conservation of energy. However, as a responsible corporatecitizen, the Company carries out various energy conservation measures, including use ofequipments for minimizing power consumption.

Export Market Development

The Company has export market in terms of its services and the primary market overseashas been the US. The Company has been making further efforts to offshore the activitiescarried out in the US by its subsidiaries, which includes internal outsourcing and clientservicing. The Company focuses on offshore servicing of US clients, thereby increasingexport share.

Research & Development Activities

There is a constant endeavour at your Company to upgrade its products / servicesofferings. For such purposes, the Company invests and carries out the research anddevelopment activities. To enhance the capabilities of service delivery, Company has inhouse developed mobile application for its on field support services. It has resulted inefficiency improvements and cost savings. The Company also carried out virtualization ofthe Data Centers at US, which resulted in better performance of the data centers andefficiency.

Foreign Exchange Earnings and Outgo / Technology Absorption

During the year under review, the Company has earned Rs. 2,377.76 Lakhs in foreigncurrency (Previous year Rs. 15,223.08 Lakhs) and has spent Rs. 193.58 Lakhs (Previous yearRs. 37.28 Lakhs). Details of the same are available vide note nos. B - 28 and 29 of theNotes forming part of the Audited Accounts, attached herewith.

The Company has not imported any foreign technology and hence the requisite particularsin this regard are Nil.

Explanation in respect of Auditors comments in the Audit Report.

The Board gives the following explanations on the comments of Auditors reported in theAnnexure to Auditors Report:

1) Refer point (ix) (a) of the Annexure to the Auditors' Report to the members - Thereare certain delays in the payment of certain statutory dues. However, the Company has beengenerally regular in depositing the same and the post the year end the process of paymentof the same was already initiated. The management opines that in future, your Company willbe able to meet its obligation in time.

2) Refer point 4 of the Auditors' Report to the members on Consolidated FinancialStatements - Even though there is no mandatory requirement of conducting audit of thesaid subsidiary as per the US laws, the US GAAP and Indian GAAP Audit of the Decision OneCorporation have been carried out by the US Auditors. However, the pending certainprevious year confirmations, the report in respect of the year under review was pendingfor release by them on the date of adoption of the accounts.


The disclosure about the details of the employees drawing remuneration in excess of thelimits specified under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975, during the year under review forms part of theDirectors' Report. However, having regard to the provisions of Section 219 (i) (b) (iv) ofthe Companies Act, 1956, the Annual Report excluding the aforesaid information is beingsent to all the shareholders of the Company and others entitled thereto. Any shareholderinterested in obtaining a copy of the same may write to the Company Secretary at theRegistered Office of the Company. The statement is also available for inspection at theregistered office during working hours upto the date of the forthcoming Annual GeneralMeeting (AGM).


Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, theDirectors hereby confirm:

(i) that in the preparation of the accounts for the inancial year ended March 31, 2012,the applicable accounting standards have been followed along with proper explanationrelating to material departures;

(ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theinancial year under review and of the proit for the year under review;

(iii) that the Directors have taken proper and suficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) that the Directors have prepared the accounts for the inancial year ended March31, 2012 on a going concern basis.


As on March 31, 2012, your Company's subsidiaries included Glodyne Peoplepower Limited,Smaarftech Technologies Private Limited, Glodyne Technoserve Inc., DecisionOne CorporationUSA and its 2 US subsidiaries, Glodyne Technoserve East Inc., Front Office Technologies,Inc., Compulink USA Inc., Compulink Software Pte. Ltd., Compulink Europe Ltd.

Ministry of Corporate Affairs has granted general exemption under Section 212(8) of theCompanies Act, 1956 exempting companies from attaching copies of the Balance Sheet, Profitand Loss Account, Reports of the Board of Directors and Auditors of Subsidiaries asspecified under Section 212(1) of the Companies Act, 1956 subject to publication ofcertain summarised financial information of the subsidiaries in the Annual Report. Also,as required, the Company has attached to this report, Consolidated Audited Accounts of theCompany and all its subsidiaries. Accordingly these documents related to subsidiaries arenot attached to the Balance Sheet and the summarised financial information related tosubsidiaries is included in the Annual Report. The annual accounts of the subsidiariesalong with the related information will be made available to the Members seeking suchinformation at any point of time. The annual accounts of the subsidiaries are alsoavailable for inspection during business hours at the Registered Ofice of the Company forinspection by any interested shareholder.


The Company has not accepted any deposits falling within the purview of Section 58A ofthe Company's Act, 1956 during the year under review, and as such, no principal orinterest amount was outstanding on the date of the Balance sheet.


As permitted by the Ministry of Corporate Affairs (MCA) in its circular "GreenInitiative in Corporate Governance" issued towards encouraging paperless compliances,the Company intends to disseminate the Annual Report and related communications for FY-2011-2012 in electronic mode.

Going forward also the Company's communications / documents (including Notice ofGeneral Meetings, Audited Financial Statements, Directors' Report, Auditors' Report andall other documents including Postal Ballot documents) as may be allowed from time totime, by MCA will be send in electronic mode to the registered e-mail addresses of theMembers as provided / updated by you and made available to the Company by theDepositories, which will be deemed to be your registered e-mail address for serving thenecessary communications / documents.

Your directors also requests you to register your e-mail address with your DP for thepurpose of serving of documents by the Company in electronic mode, if your e-mail addressis not registered with your Depository Participant (DP).

Glodyne Care Foundation

The Company through its social trust titled "Glodyne Care Foundation"

supports it's social initiatives. The foundation is setup with the object of impartingeducation, helping the down trodden, etc. The Foundation embodies corporate systems andprocesses driven organization operating on a not for proit basis, with the overall aim tocreate and support meaningful and innovative activities that will address some of India'smost pressing development challenges.


The Present Statutory Auditors of the Company M/s. N M Kapadia and Co, CharteredAccountants, Mumbai, hold their office until the conclusion of the ensuing Annual GeneralMeeting. The present auditors have confirmed their willingness and eligibility underSection 224(1B) of the Companies Act, 1956 for their reappointment for the financial yearending 2012-13 at a remuneration to be decided by the Board of Directors or Committeethereof.

Your Directors recommend their re-appointment at the ensuing Annual General Meeting foryour approval.


The Company's present human capital comprises organic resources and additions madethrough the overseas acquisitions. The Company has a strong outsourced model for variousprojects which creates local employment. The Company carries out various initiatives forthe talent management within the organization and to this intent, various employee centricprograms such -Excellence workshops, etc have been designed and are carried out to promotehealthy competition, motivate the workforce, and aligning them to the organization'sobjectives. Your Company is an equal opportunities Employer.


The Company has been certified with by International Organization for Standardization(ISO) with ISO 27001, the highest certification standard on information security. TheCompany is also an ISO 9001:2000 certified and CMMi level 3 compliant Company. The Processmethodologies are followed to ensure quality deliverables to clients.


During the year under review, your Company was awarded with the following Awards:

• 'Best Under a Billion' 2011 award for the year by Forbes Asia

• 'Outstanding Entrepreneurship Award' awarded to Mr. Annand Sarnaaik at the TheAsia Pacific Entrepreneurship Awards 2011

• 'E-Shakti' project of Glodyne was adjudged as the winner at 'EDGE' awards atINTEROP 2011 .

• 'E-Shakti' was declared as the best 'ICT initiative in the Country' at the PCQuest 2011 Awards

• Glodyne was chosen as the best "Best Government to Citizen Initiative"Company at the 'E-World Awards 2011'

• Glodyne's Education Managed Services was announced as the winner at "WorldEducation Award 2011"

• Glodyne received 'Asia's Best Employer Brand Award 2011' under the categories ofBest Employer Brand - Talent Management and in the Continuous Innovation at HR Strategy

• Ranked as one of the top performing mid sized companies by Inc India

• Winner at the 'Deloitte Technology Fast 500 AsiaPac Program' 2011 and 'DeloitteTechnology Fast 50 India Program' 2011


The Board of Directors put on record their sincere thanks to the clients, vendors,bankers, media, analysts for their continued support and cooperation.

Your Directors place on record their appreciation for the business associates andshareholders. Your Directors also thank all the Government and regulatory authoritiesconnected with the Company's business for their support during the year.

Your Directors also appreciate and value the contribution of each member of Glodynefamily including the contribution of the employees at all levels in the growth of theorganization.

For and on Behalf of the Board


Annand Sarnaaik

Chairman & Managing Director

Place: Mumbai

Date: 6th December, 2012

Annexure to the Directors' Report

Information to be disclosed under the Securities and Exchange Board of India (EmployeeStock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (during the F.Y.ended March 31, 2012):

A. Summary of Status of ESOPs Granted

The position of the existing schemes is summarized as under -

Sr. No. Particulars ESOP 2006 ESOP 2010
1 Details of the Meeting Authorized by Shareholders of the Company on 29th September 2006 Authorized by Shareholders of the Company on 24th December 2010
2 The Pricing Formula "Market price" as defined by SEBI "Market price" as defined by SEBI
3 Options Granted* 2,959,773 18,61,200
4 Options Vested and Exercisable* 382,807 45,108
5 Options Exercised* 15,70,450 0
6 Options Cancelled* 587,276 382,601
7 Options Lapsed* 0 1353
8 Total Number of Options in force * 802,047 14,77,246
9 Variation in terms of ESOP Not Applicable Not Applicable
10 Total number of shares arising as a result of exercise of options 15,70,450 0
11 Money realized by exercise of options during the year (Rs. In Lakhs) 730.54 0

*The options have been adjusted for split - Face value of Rs. 10 split to face value ofRs. 6 as on February 10,2011 and a bonus of 1:1 share as on August 20,2009

B. Employee-wise details of options granted during the financial

year 2011-12 to:

(i) Senior managerial personnel no. 10
(ii) Employees who were granted, during any one year, options amounting to 5% or more of the options granted during the year 4
(iii) Identified employees who were granted option, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant. Nil

C. Weighted average Fair Value of Options granted during the year whose

(a) Exercise price equals market price 134.06
(b) Exercise price is greater than market price NA
(c) Exercise price is less than market price 230.50

Weighted average Exercise price of options granted during the year whose

(a) Exercise price equals market price 280.10
(b) Exercise price is greater than market price NA
(c) Exercise price is less than market price 6.00


Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed. The stock-based compensation cost calculated as per the intrinsic value method for the financial year 2011-12 is Rs. 21.19 Lakhs. If the stock-based compensation cost was calculated as per the fair value method, the total cost to be recognised in the financial statements for the year 2011-12 would be Rs. 841.41 Lakhs. The profits would have been lower by Rs. 841.41 lakhs and basic and diluted earnings per share would have been lower by Rs. 1.86 & Rs. 1.76 respectively.

E. Method and Assumptions used to estimate the fair value of options granted during theyear:

The fair value has been calculated using the Black Scholes Option Pricing model.

The Assumptions used in the model are as follows:

Variables 30-Aug-11 6-Mar-12
1. Risk Free Interest Rate 8.30% 8.29%
2. Expected Life (years) 3.50 3.50
3. Expected Volatility 61.14% 58.03%
4. Dividend Yield 1.03% 1.03%
5. Price of the underlying share in market at the time of the option grant. (Rs.) 280.10 243.60