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Directors Report of Allied Digital Services Ltd.

Mar 31, 2015

The Directors are pleased to present herewith the 21st Annual Report on the business and operations of your Company and Audited Accounts for the Financial Year ended March 31, 2015 together with the Audited Statement of Accounts and Auditor's Report thereon.

The State of the Company's Affairs:

1. KEY FINANCIAL HIGHLIGHTS :

(INR in Lakhs)

Particulars 2014-15 2013-14

Total Operational Income 12,549.52 14,938.06

Other Income 1,075.61 3,250.95

Total Income 13,625.13 18,189.01

Less: Operating Expenditure 9,395.47 13,492.09

Profit before Interest, Depreciation, 4,229.66 4,696.92 Amortization Tax & Exceptional Item

Less: Depreciation 2,394.88 2,325.24

Less: Interest 1,618.87 1,437.98

Profit before Tax and Exceptional Item 215.91 933.69

Exceptional Item _ -

Profit before Tax 215.91 933.69

Less: Provision for Taxation 40.00 194.80

Less: Deferred Tax Liability 174.10 (542.28)

Net Profit for the year 41.81 1,281.17

Add: Balance brought forward from the Previous 28,707.51 27,426.34 Year

Less: Adjustment for Depreciation 1,734.01 --

Amount Available for Appropriation 27,015.31 28,707.51

Less: Transfer to General Reserve _ _

Proposed Dividend Including Dividend Tax _ _

Short provision of Tax of earlier years (Net) _ _

Add: Excess provision of Tax of earlier years _ _

Balance carried to Balance Sheet 27,015.31 28,707.51

During the year under review your Company has reported a total income of INR 13,625.13 lakhs out of which non- operating income amounts to INR 530.42 lakhs. Revenue from Operating Income decreased by INR 2,388.54 lakhs i.e. by 15.99% as compared to the previous year.

2. RECENT DEVELOPMENTS:

During the Financial Year 2014-2015, your Company has made the following Developments:

- Completed the prestigious Pune City Surveillance (safe city) project, first of its kind and size in India;

- Won the large global deal in retail industry and expanded globally to 20 other cities;

- Looking forward for better opportunities for trading in Africa and Middle East;

- Robust business growth in the United States of America;

- New initiatives in Digital business such as IOT, Analytics & Security.

3. OUTLOOK:

During Financial Year 2015-2016, the company aims to deepen its engagements with existing clients, draw repeat business, and emerge as the ''First Choice'' and the preferred partner for its marquee global customers.

The Company sees its eco-system of critical partnerships and alliances with reputed global companies as an important asset and will continue to explore opportunities to further expand it.

The Company's differentiated business model with strong capabilities in its chosen verticals, programme management track-record, investments in intellectual property, and a reinforced leadership team are great advantages in the prevailing macro-environment that remains volatile.

4. DIVIDEND:

In recognition of the fact that the economy is recovering and in view of the Company's performance the Directors do not recommend any Dividend for the Financial Year 2014-2015.

5. CONSOLIDATED FINANCIAL STATEMENT:

Your Directors are pleased to attach the Consolidated Financial Statements pursuant to Section 129 and all other applicable provisions of the Companies Act, 2013 and as per the requirement of Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards (AS) - 21 and all other applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.

6. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

Sr. No Name of Company Subsidiary / Joint Date of becoming of ventures/ Associate Subsidiary / Joint ventures/ Company Associate Company.

1. Allied Digital Services, L LC; Subsidiary 02nd July 2008

2. Allied Digital INC; Subsidiary 31st October,2007

3. Allied Digital Singapore Pte Ltd Subsidiary 12th October,2010

4. Allied Digital Asia Pacific PTY Subsidiary 16th September,2010 LTD (Australia)

5. En Pointe Technologies India Subsidiary 29th December,2006 Private Limited

6. Allied-eCop Surveillance Private Subsidiary 6th August,2007 Limited

Details of the Company who ceased to be its Subsidiary/ Joint ventures/Associate C companies:

Sr. No Name of Company Subsidiary / Joint Date of cession of Subsidiary ventures/ Associate / Joint ventures/ Associate Company Company.

Not Applicable

Pursuant to the provisions of Section 129 of the Companies Act, 2013 ("the Act"), the Company is required to attach to its Annual Report, the Balance Sheet, Profit and Loss Account, Directors' Report and the Report of the Auditors' (collectively referred to as "the accounts and reports'), of its subsidiaries for the year ended March 31st, 2015.

As required under the Listing Agreement with the stock exchange(s) a consolidated financial statement of the Company and all its subsidiaries have been prepared and attached hereto.

The Ministry of Corporate Affairs has granted a general exemption to the companies from attaching financials of the subsidiaries, subject to the laid down conditions. The Board of Directors has also given their consent for not attaching the accounts and reports of its subsidiary to the Annual Report. Therefore, the Company shall not be attaching the audited accounts of the subsidiaries to the annual accounts of the Company for the current year. The annual accounts of the subsidiary companies and related detailed information will be made available to any member of the Company or subsidiary company upon request and are also available for inspection by any member of the Company, during the business hours, at the registered office of the Company and that of the subsidiary company concerned.

7. TRANSFER TO RESERVES:

The Company has not proposed to transfer any amount to the General Reserve out of amount available for appropriations.

8. MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR:

No material changes and commitments have occurred after the close of the year till the date of this Report, which affects the financial position of the Company.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO [SECTION 134 (3) (m) OF THE COMPANIES ACT, 2013:

Particulars required to be furnished by the Companies as per Rule 8 of Companies (Accounts) Rules, 2014, are as follows:

A. RULE 8 SUB-RULE 3 (A) PERTAINING TO CONSERVATION OF ENERGY

Although operations of the Company are not energy intensive, steps are always been taken to conserve energy in all possible areas.

B. SUB-RULE 3 (B) PERTAINING TO TECHNOLOGY ABSORPTION The sub rule is not applicable to the company.

C. RULE 8 SUB-RULE 3 (C) PERTAINING TO FOREIGN EXCHANGE EARNINGS AND OUTGO-

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows:

(INR in Lakhs)

Particulars 2014-15 2013-14

Earnings 1,343.17 2,748.95

Outflow (including Capital imports) 738.14 151.52

Net Foreign Exchange Earnings (NFE) 605.03 2,597.43

NFE / Earnings (%) 45 94

10. MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange in India, is presented in a separate section forming a part of this Annual Report.

11. ANNUAL RETURN:

The extract of Annual Return pursuant to Section 92 of the Companies Act, 2013 read with The Companies (Management and Administration) Rules, 2014 in the prescribed Form MGT-9 is annexed as "ANNEXURE 1" to this report as on 31st March, 2015.

12. FIXED DEPOSITS:

During the year under review your Company has not accepted any fixed deposits from the public however, there are certain outstanding fixed deposits accepted in earlier years from the public, as on the Balance Sheet date falling within the ambit of Section 73(1) of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

The details relating to deposits, covered under Chapter V of the Act:

(INR in Lakhs)

Sr. No 2014-15 2013-14

Deposits accepted during the year -- --

Deposits unpaid or unclaimed at the 108.33 -- end of the year

Default in repayment of deposits or 10.66 -- payment of interest:

Further, in case of default in repayment of deposits or payment of interest:

(INR in Lakhs)

Number of cases At the beginning of Maximum during At the end of the the year the year year

Total amount 118.99 118.99 118.99 involved

Details of Deposits not in compliance with the Companies (Acceptance of Deposits) Rules, 2014:

There are no deposits which are not in compliance with the requirement of the aforementioned rules as on 31st March, 2015.

13. BOARD MEETING S:

The Board of Directors (herein after called as "the Board") met for Four times during the Year under review:

Sr. Date of Venue and time of the Directors present No. Meetings meeting

1 30.05.2014 Venue: Premises 1) Mr. Nitin Shah

No.13A, 13th Floor, 2) Mr. Prakash Shah

Earnest House, Back 3) Dr.Shrikant Parikh

Bay Reclamation, 4) Mr. Paresh Shah

NCPA Road, Block III, 5) Dr. Roop Kishan Dave

Nariman Point, Mumbai

– 400021.

Time: 11 A.M.

2 14.08.2014 Venue: Premises 1) Mr. Nitin Shah

No.13A, 13th Floor, 2) Mr. Prakash Shah

Earnest House, Back 3) Dr.Shrikant Parikh

Bay Reclamation, 4) Mr. Paresh Shah

NCPA Road, Block III, 5) Dr. Roop Kishan Dave

Nariman Point, Mumbai 6) Prof. Venugopal Iyengar – 400021

Time: 4:30 P.M

3 14.11.2014 Venue: Premises 1) Mr. Nitin Shah

No.13A, 13th Floor, 2) Mr. Prakash Shah

Earnest House, Back 3) Prof. Venugopal Iyengar

Bay Reclamation, 4) Dr. Roop Kishan Dave

NCPA Road, Block III,

Nariman Point, Mumbai

– 400021

Time: 3:00 P.M.

4 12.02.2015 Venue: 1) Mr. Prakash Shah

Premises No.13A, 13th 2) Dr. Shrikant Parikh

Floor, Earnest House, 3) Mr. Paresh Shah

Back Bay Reclamation, 4) Prof. Venugopal Iyengar

NCPA Road, Block III, 5) Ms. Shubhada Jahagirdar Nariman Point, Mumbai

– 400021

Time: 5:00 P.M.

Sr. Date of meetings Directors to whom No. Leave of absence was granted

1 30.05.2014 Prof. Venugopal Iyengar.

2 14.08.2014 None

3 14.11.2014 1) Dr.Shrikant Parikh

2) Mr. Paresh Shah

4 12.02.2015 1) Mr. Nitin Shah

2) Dr. Roop Kishan Dave

14. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Cha nges in Directors and Key managerial personnel are as follows :

Sr. No Name of the Director/Key managerial Particulars Date of Appointment and personal resignation

NOT APPLICABLE

15.. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS UNDER SECTION 149 (6) OF THE COMPANIES ACT, 2013:

As per the provisions of Section 149(4) of the Companies Act, 2013 every listed public company shall have at least one-third of the total number of directors as independent directors.

In view of the above your Company has duly complied with the provision by appointing following Independent Directors:

Sr. Name of the Independent Director Date of appointment/ Date of passing of No. Reappointment resolution (if any)

1. Ms. Shubhada Jahagirdar 01/10/2014 25.09.2014

2. Prof. Venugopal Ramaswami Iyengar 28/04/2009 25.09.2014

3. Dr. Shrikant Navnitlal Parikh 23/05/2006 25.09.2014

4. Dr. Roopkishan Sohanlal Dave 05/10/2009 25.09.2014

All the above Independent Directors meets the criteria of 'independence' prescribed under section 149(6) and have submitted declaration to the effect that they meet with the criteria of 'independence' as required under section 149(7) of the Companies Act, 2013.

15. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

A new concept of 'Familiarisation programme for Independent Directors' has been introduced by Clause 49.

As per Clause 49(II) (B) (7) of the Equity Listing Agreement:

"The Company shall familiarise the independent directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes."

The Company is in the process of developing familiarisation programmes for its independent directors including their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters. The same shall be updated on website of the Company in due course.

16. COMMITTEES OF BOARD:

I. Nomination and Remuneration Committee:

The Remuneration Committee of the Board has been constituted in the year 2007, which inter-alia recommends to the Board the compensation terms of Executive Directors, managerial personnel's and the senior most level of management immediately below the Executive Directors. The Remuneration Committee deals with all elements of remuneration package of all the Executive Directors i.e. salary, benefits, bonuses, stock options, pension etc.

including details of fixed component and performance linked incentives, along with the performance criteria. The remuneration of Executive Directors is decided by the Board of Directors and the Remuneration Committee as per the remuneration policy of the Company within the overall ceiling limits approved by shareholders.

a) Composition of the Committee:

The Composition of the Committee is as under :

Chairman : Dr. Shrikant Parikh- Non- Executive and Independent Director

Members : 1. Prof. Venugopal Iyengar - Non-Executive and Independent Director

2. Dr. Roopkishan Dave - Non-Executive and Independent Director

b) Terms of reference of the Committee, inter alia, includes the following:

To approve the Remuneration Plan of the Company;

To review and grant increments to Executive / Managing Director;

Such other matters as the Board may from time to time request the Remuneration Committee to examine and recommend / approve.

c) Attendance at the Remuneration Committee Meetings :

During the Financial Year 2014 –15, No meeting of the Remuneration Committee was held.

d) Disclosure of Remuneration paid :

At present Non – executive and Independent Directors are not paid any remuneration except sitting fees for attending Board and Committee Meetings. Details of remuneration paid to Directors during the accounting year ended March 31st, 2015 are as under:

Name of Directors Salary Sitting fee Total Stock Option (Amt. in Rs) (Amt. in Rs) (Amt. in Rs) granted

Mr. Nitin Shah 50,00,004 - 50,00,004 -

Mr. Prakash Shah 30,00,000 - 30,00,000 -

Mr. Paresh Shah 13,51,864 - 13,51,864 -

Dr. Shrikant Parikh - 80,000 80,000 -

Dr. Roopkishan Dave - 40,000 40,000 -

Prof. Venugopal Iyengar - 80,000 80,000 -

Nomination and Remuneration Policy

The Company's Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees is annexed as "ANNEXURE 2" to the Directors' Report.

Further, the Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual directors. The Company's Nomination and Remuneration Policy is directed towards rewarding performance based on review of achievements periodically. The Nomination and Remuneration Policy is in consonance with the existing industry practice.

II. Audit Committee:

The management is responsible for the Company's internal controls and the financial reporting process while the statutory auditors are responsible for performing independent audits of the Company's financial statements in accordance with generally accepted auditing practices and for issuing reports based on such audits. The Board of Directors has entrusted the Audit Committee with the responsibility to supervise these processes and thus ensure accurate and timely disclosures that maintain the transparency, integrity and quality of financial control and reporting.

In accordance with the provisions of Section 177 of the Companies Act, 2013 your Company has constituted an "Audit Committee" comprising of minimum three directors consisting of two non- executive Independent directors and one executive director with the Chairman being Independent director. The Audit Committee acts in accordance with the Terms of Reference specified by the Board in writing.

a) The Composition of the Committee is as under:

Chairman : Dr. Shrikant Parikh- Non-Executive & Independent Director

Members : 1. Prof.Venugopal Iyengar- Non-Executive & Independent Director

2. Mr. Prakash Shah- Executive Director The Board of Directors constituted the Audit Committee in the year 2007. The Audit Committee for the accounting year comprises of following two non-executive and independent directors and one executive director who have financial / legal / accounting acumen to specifically look into the internal controls and audit procedures.

In addition to the members of the Audit Committee, these meetings are attended by the Head of Finance & Accounts and other respective functional heads, internal auditors and statutory auditors of the Company, whenever necessary and those executives of the Company who can provide inputs to the Committee. The quarterly / half-yearly and annual audited financials of the Company are reviewed by the audit committee before consideration and approval by the Board of Directors. The Committee also reviews the internal control systems, IT systems and conduct of the internal audit.

b) Meetings :

Four (4) Audit Committee Meetings were held during the Financial Year 2014-15. The date on which the said meetings were held are, May 30th, 2014, August 14th, 2014, November 14th, 2014 and February 12th, 2015.

c) Mr. Ravindra Joshi, Company Secretary, acts as Secretary of the Committee.

d) Terms of reference of the Committee, inter alia, includes the following: The Terms of reference of the Audit Committee are broadly stated as under:

1. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;

2. Review and monitor the auditor's independence and performance, and effectiveness of audit process;

3. Examination of the financial statement and the auditors' report thereon;

4. Approval or any subsequent modification of transactions of the company with related parties;

5. Scrutiny of inter-corporate loans and investments;

6. Valuation of undertakings or assets of the company, wherever it is necessary;

7. Evaluation of internal financial controls and risk management systems;

8. Monitoring the end use of funds raised through public offers and related matters.

A summary statement of transactions with related parties was placed periodically before the Audit Committee during the year. Suitable disclosures have been made in the financial statements. The Minutes of the Meetings of the Committee are circulated through email to all Directors and are confirmed at the subsequent Meeting.

III. INVESTORS /SHAREHOLDER'S GREIVANCE COMMITTEE:

a) Composition:

Chairman: Prof. Venugopal Iyengar-Non-Executive & Independent Director

Member: 1) Mr. Prakash Shah-Executive Director

2) Dr. Shrikant Parikh-Non-Executive & Independent Director The Board of Directors constituted a Shareholders Grievance Committee in the Financial Year 2007. The Shareholders' Grievance Committee for the Accounting Year comprises of following two Non-Executive and Independent Directors and one Executive Director

b) Meeting of the Shareholders' grievance Committee Meetings: Four (4) Shareholders' Grievance Committee Meetings were held during the Financial Year 2014-15. The dates on which the said Meetings were held are May 30th, 2014, August 14th, 2014, November 14th, 2014 and February 12th, 2015.

C) Compliance Officer:

Mr. Ravindra Joshi, Company Secretary, has been designated as the Compliance Officer for complying with requirements of Securities Laws and Listing Agreements with Stock Exchange.

d) Investors' / Shareholders' Grievance Redressal:

The number of complaints received and resolved to the satisfaction of investors during the year under review and their break- up are as under:

Nature of Complaints Opening Received Resolved Pending

Non Receipt of Annual Report 0 1 1 0

Non receipt of dividend 0 0 0 0

Total 0 1 1 0

During the Accounting Year ended March 31st, 2015, one complaint was received from shareholders, and the same has been resolved as on date.

All valid Share Transfers received during the accounting year ended March 31st, 2015 have been acted upon. There were no share transfers pending for more than 30 days for the half-year ended September 30th, 2014, and for more than 15 days for the half-year ended March 31st, 2015.

The Shareholders' Grievance Committee continued to function effectively and held Four (4) meetings during the year under review. It continued to attend the matters related to Share Transfers and redressal of Shareholders' complaints. The complaints and grievances of shareholders received were duly attended by the Committee and as of now no complaints are pending.

e) Terms of reference of the Committee, inter alia, includes the following :

- Transfer /Transmission of shares;

- Redressal of the Complaints of the share holders;

- Issue of duplicate share certificates;

- Review of shares dematerialized and all other related matters;

- Monitors expeditious redressal of investors' grievances;

- Non receipt of Annual Report and declared dividend;

- Non receipt of Notices, Share Certificates, Annual reports, Dividends;

- All other matters related to shares.

III. COMPENSATION COMMITTEE:

The Compensation Committee was formed inter alia to formulate detailed terms and conditions of Employee Stock Option Scheme.

a) Constitution and Composition of Committee : Chairman : Mr. Nitin Shah- Chairman & Managing Director

Members: 1) Dr. Shrikant Parikh -Non-Executive & Independent Director

2) Prof. Venugopal Iyengar- Non-Executive & Independent Director

b) Meeting of the Compensation Committee:

During the Financial Year 2014 - 2015, No Compensation Committee Meeting was held.

c) Terms of reference of the Committee, inter alia, includes the following:

To decide the terms and conditions of the Employee Stock Option Scheme (ESOP);

The quantum of any option to be granted under an employee stock option scheme per employee and in aggregate; The conditions under which option vested in employees may lapse in case of termination of employment for misconduct; The exercise period within which the employee should exercise the option and that option would lapse on failure to exercise the option within the exercise period;

The specified time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee;

The right of the employee to exercise all the options vested in him at one time or at various points of time within the exercise period;

The procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of corporate actions such as rights, issues, bonus issues, merger, sale of divisions and other; The grant, vest and exercise of option in case of employees who are on long leave.

IV. MANAGEMENT COMMITTEE :

a) Constitution and Composition of Committee:

The Board constituted Management Committee on April 28th, 2009 comprising of Mr. Nitin Shah, Chairman and Managing

Director as Chairman, Mr. Prakash D. Shah and Mr. Paresh Shah as Members of the Committee.

b) Meeting of the Management Committee:

Management Committee Meetings were held Four times during the Financial Year 2014-2015. The dates on which the said Meetings were held are May 30th, 2014, August 14th, 2014, November 14th, 2014 and February 12th, 2015.

c) Terms of reference of the Committee, inter alia, includes the following:

To borrow monies not exceeding specified sum or such other amount as may be authorized by the Shareholders at the General Meeting, together with the monies already borrowed by the Company, (apart from temporary loans obtained from the Company's Bankers in the ordinary course of business) from Financial Institutions / Banks and others from time to time;

To authorize employees of the Company for purchase whether on hire purchase or otherwise or sale of vehicle;

To open Bank Accounts and to authorize Directors / Authorized Signatories to operate the Bank Accounts;

To withdraw / change the authority to operate any of the Company's Bank Account;

To appoint attorney for and on behalf of the Company for specific power or for general purposes;

To authorize Company Executives to represent the Company and sign and execute all the documents and papers related to the Central Government, State Government, Local Authority or any other authority in relation to the business of the Company;

To take premises on leave and license / lease to be used as office / store / godown of the company or for the purpose of residence of employees or for any other purpose;

To decide on opening Branches / Godowns at different places in the country or abroad subject to such permission as may be required from different authorities;

To authorize Company Executives for obtaining Telephone / Electricity connections or other permissions in the name of the Company;

To decide on filing recovery suits against distributors / dealers / customers and to authorize company's executives to prosecute the same;

To launch criminal proceedings against those misusing the company's rights under the Design, Patents, Trademarks and Copyright Laws;

To authorize company's executives to defend civil suits filed by third parties against the company;

Other general day-to-day affairs of the Company

V. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE :

In accordance with Section 135 of the Companies Act, 2013 your Company has constituted a Corporate Social Responsibility Committee consisting of 3 Directors out of which 2 directors are independent Directors.

The Composition of this Committee is as under.

Chairman: Ms. Shubhada Jagirdar

Members: Mr. Prakash Shah

Dr. Shrikant Parikh

Corporate Social Responsibility (CSR) Initiatives:

As part of its initiatives under "Corporate Social Responsibility (CSR), the Corporate Social Responsibility Committee (CSR Committee) has been formed in accordance with Schedule VII of the Companies Act, 2013. However, formulation of the Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by your Company is under process and shall be recommended to the Board for their approval in due course.

23. LISTING FEES :

The Equity Shares of your Company are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). Your Company has paid the applicable listing fees to the above Stock Exchanges for the financial year 2014 - 2015. Your Company's shares are also traded in dematerialized segment for all investors compulsorily and your Company had entered into agreements with the Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL) for custodial services.

24. THE VIGIL MECHANISM :

Your Company believes in promoting a fair, transparent, ethical and professional work environment.

The Board of Directors of the Company has established a Whistle Blower Policy & Vigil Mechanism in accordance with the provisions of the Companies Act, 2013 and the Listing Agreement for reporting the genuine concerns or grievances or concerns of actual or suspected, fraud or violation of the Company's code of conduct. The said Mechanism is established for directors and employees to report their concerns. The policy provides the procedure and other details required to be known for the purpose of reporting such grievances or concerns. The same shall be uploaded on the website of the Company in due course.

25. QUALIFICATION GIVEN BY THE AUDITORS:

(a) QUALIFICATION GIVEN BY THE STATUTORY AUDITORS:

There are no qualificatory remarks made by the Statutory Auditors of the Company in their report.

(b) QUALIFICATION GIVEN BY THE SECRETARIAL AUDITOR:

The Secretarial Auditor is appended as "ANNEXURE 3" in their report.

26. CONTRACT OR ARRANGEMENT WITH RELATED PARTIES

Pursuant to Section 188 read with Rule 15 of The Companies (Meetings of the Board and its Powers) Rules, 2014, a Company shall enter into any contract or arrangement with a related party with respect to the following only with consent of Board of Directors at a meeting of the Board:

a. sale, purchase or supply of any goods or materials;

b. selling or otherwise disposing of, or buying, property of any kind;

c. leasing of property of any kind;

d. availing or rendering of any services;

e. appointment of any agent for purchase or sale of goods, materials, services or property;

f. such related party's appointment to any office or place of profit in the company, its subsidiary company or associate company; and

g. underwriting the subscription of any securities or derivatives thereof, of the company.

Further, these transactions as mentioned above, with the related parties shall be entered only with the prior approval of the company by a special resolution if the same exceeds the limits prescribed under the aforementioned Rules.

A detailed disclosure of these transactions with the Related Parties is annexed with this Report in Form AOC-2 in "ANNEXURE-4" of the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013, is duly entered in the register.

27. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non- Independent Directors were carried out by the Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

Having regard to the industry, size and nature of business your company is engaged in, the evaluation methodology adopted is, in the opinion of the Board, sufficient, appropriate and is found to be serving the purpose.

28. LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY:

As provided in Section 186 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Powers) Rules, 2014 every Company shall :

1. Give any loan to any person or other body corporate;

2. Give any guarantee or provide security in connection with a loan to any other body corporate or person;

3. Acquire by way of subscription, purchase or otherwise, the securities of any other body corporate.

Exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more only with prior approval by means of a special resolution passed at a general meeting.

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to Financial Statement and also detailed in "ANNEXURE 5".

29. STATUTORY AUDITOR:

M/s. Shah & Taparia, Statutory Auditors of your Company, bearing (Registration number: 033594) retires at the ensuing Annual General Meeting and are eligible for re-appointment. The Auditors have given their consent in writing and have furnished a certificate to the effect that their re-appointment, if made, would be in accordance with the provisions of Section 139(1) and that they meet with the criteria prescribed under section 141 of the Companies Act, 2013. Yours Directors recommend their re-appointment in the ensuing Annual General Meeting.

30. INTERNAL AUDITOR:

Pursuant to the provisions of Section 138 and 179(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Directors of the Company hereby appoint M/s. Satya Prakash Natani & Co. (Firm Registration No. 115438W), Mumbai as Internal Auditors of the Company for the financial year 2015-2016 on such remuneration as may be decided by the Board in consultation with the Internal Auditor.

31. SECRETARIAL AUDITOR

Pursuant to the provisions of the Section 179(3) and 204 of the Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014 and as a measure of good corporate governance practice, the Board of Directors of the Company hereby appoint M/s. Pramod S. Shah & Associates (Membership No. 334), Practicing Company Secretaries as a Secretarial Auditors of the Company for the Financial Year 2015-2016 on such remuneration as may be decided by the Board in consultation with the Secretarial Auditor.

32. ESOP 2010:

At present the Company has an Option plan for its employees, "ESOP 2010". "ESOP 2010", was approved by the members at their meeting held on September 29th, 2010. The Company had granted total 502,500 options under "ESOP 2010" to the eligible employees in tranches out of total 3,000,000 grants allocated under the effective ESOP scheme. During the financial year ended March 31st, 2015, No options were granted to employee of the Company or its Subsidiary. Each option entitles the holder thereof to apply for and be allotted Equity Shares of the Company upon payment of the exercise price during the exercise period.

The details of present ESOP are given in the table:- PARICULARS ESOP 2010 GRANT Total Options granted by the plan (no.) 502,500 Pricing formula on date of grant Fair Market Value Options granted during the year (no.) Nil Weighted average price per Option granted (Rs) N.A Variation in terms of Options N.A Options exercised during the year (no.) Nil Money raised on exercise of Options (Lakhs) Nil Options forfeited and lapsed during the year (no.) Nil Total number of Options in force at the end of the year. (no.) 487,500 Grant to senior management Nil Employees receiving 5% or more of the total number of Options granted during N.A the year Employees granted Options equal to or exceeding 1% of the issued capital Nil

Diluted EPS in accordance with [AS-20] N.A

33. DISCLOSURE OF REMUNERATION PAID TO DIRECTOR AND KEY MANAGERIAL PERSONNEL AND EMPLOYEES:

a. None of the employees of the Company is drawing remuneration in excess of the limits prescribed under Rule (5)(2), Chapter XIII as provided under Section 197 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

b. The further details with regard to payment of remuneration to Director and Key Managerial Personnel is provided in Form No. MGT 9- extract of annual return appended as "ANNEXURE 1."

34. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to sub-section (5) of Section 134 of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained /received from the operating management, your Directors make the following statement and confirm that-

a) In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis;

e) The directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and;

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

35. PARTICIPATION IN THE GREEN INITIATIVE:

Your Company continues to wholeheartedly participate in the Green Initiative undertaken by the Ministry of Corporate Affairs (MCA) for correspondences by Corporate to its Members through electronic mode. All the Members are requested to join the said program by sending their preferred e-mail addresses to the Registrar and Share Transfer Agent.

36. CORPORATE GOVERNANCE CERTIFICATE:

Our Company acknowledges its responsibilities to its Stakeholders and believes that Corporate Governance helps to achieve commitment and goals to enhance stakeholder's value by focusing towards all stakeholders. Your Company maintains highest level of transparency, accountability and good management practices through the adoption and monitoring of corporate strategies, goals and procedures to comply with its legal and ethical responsibilities. Your Company is committed to meeting the aspirations of all its stakeholders.

our Company has taken appropriate steps and measures to comply with all the applicable mandatory provisions of Clause 49 of the Listing Agreement entered with the Stock Exchanges. The Company's governance practices are described separately in the Corporate Governance section of this Annual Report. We have obtained certification from a Statutory Auditor on our compliance with Clause 49 of the Listing Agreement with Indian Stock Exchanges, described in the separate section forming a part of this Annual Report.

37. AWARDS AND RECOGNITION:

During the year Company has received various awards & recognitions. The awards are listed below:

- Pune city surveillance project was awarded best smart city surveillance project in the country by ELETS Technomedia in New Delhi and Bhopal

- Winner of Channel world Premier 100 awards,2015 for being agile and adopting rapidly to the changing technology and business landscape.

- Mr. Nitin shah was awarded Entrepreneur of the year services-security 2015 by Franchise India.

38. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Your Company has always believed in providing a safe and harassment free workplace for every individual through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

During the year ended 31 March, 2015, no complaints have been received pertaining to sexual harassment.

ACKNOWLEDGEMENT :

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from all our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels.

We thank the Government of India, the Ministry of Communication and Information Technology, the State Government, various government agencies and the Government of United States of America where we have operations, for their immense support, and look forward to their continued support in the future.

For and on behalf of the Board

Sd/- Sd/-

Nitin D. Shah Prakash D. Shah

Chairman & Managing Director Executive Director- Commercial

DIN: 00189903 DIN: 00189842

Place : Mumbai Date : 29th May, 2015


Mar 31, 2014

Dear Members,

The Directors present herewith the Annual Report together with the Audited Statement of Accounts and Auditors'' Report thereon for the Financial Year ended March 31st, 2014:

RESULTS OF OPERATIONS:

(Rs. In Lakhs)

PARTICULARS 2013-14 2012-13

Total Operational Income 14,938.06 23,625.54

Other Income 3,250.95 544.34

Total Income 18,189.01 24,169.88

Less: Operating Expenditure 13,492.09 20,781.91

Profit before Interest, Depreciation, Amortization Tax & Exceptional Item 4,696.92 3,387.97

Less: Depreciation 2,325.24 2,132.41

Less: Interest 1,437.98 1,355.92

Profit before Tax and Exceptional Item 933.69 (100.35)

Exceptional Item - 576.44

Profit before Tax 933.69 (676.79)

Less: Provision for Taxation 194.80 -

Less: Deferred Tax Liability (542.28) 341.01

Net Profit for the year 1,281.18 (1,017.80)

Add: Balance brought forward from the Previous Year 27,426.36 28,444.16

Amount Available for Appropriation 28,707.53 27,426.36

Less: Transfer to General Reserve - -

Proposed Dividend Including Dividend Tax - -

Short provision of Tax of earlier years (Net) - -

Add: Excess provision of Tax of earlier years - -

Balance carried to Balance Sheet 28,707.53 27426.34

BUSINESS OPERATIONS:

Your Company is an IT Infrastructure Management and Technical Support Services Outsourcing Company, with an impeccable track record for designing, developing, deploying and delivering end-to-end IT Infrastructure services with an objective to provide end to end IT Solutions, outcomes of which have always resulted into a positive change in the organization. Your Company is an experienced entity having sufficient knowledge of the local market which assists them in organizing manpower for diverse tasks and contractual works. It has over more than two decades of experience in enterprise IT Infrastructure, Management and Implementation and consulting on complex IT Solutions for different Business Verticals.

Your Company''s inherent capabilities built on the philosophy of ''3S'' (Smart People, Smart Processes, Smart Technology); provides the strong foundation for a best-in-class Integrated Service Delivery Framework which consistently augments our overall value creation proposition to our clients; both effectively and efficiently.

Your Company provide credible, high class and customer oriented services and solutions to its clients, actively participate to fulfill the needs and preferences of the customers, their requirements in a dedicated manner. We seek long term partnership with clients while addressing their IT requirements. Our customer centric approach has resulted in high levels of client satisfaction and retention. Moreover we encourage a warm and cordial environment in our organization which will add to the skilled workforce and also improve the work culture.

The global economic environment remains subdued, although key economies such as the US are showing stability and some improvement, with a yet unresolved crisis in the Euro zone and signs of slower growth in many emerging economies. In such business conditions the Company''s gross income for the Financial Year ended March 31st, 2014 decreased by 25% to Rs. 181.89 Crore from Rs. 241.70 Crore in the previous year. The operating profit (PBDIT) of the Company increased to Rs. 46.97 Crore during the year, from Rs. 33.88 Crore in the previous year. Interest & Depreciation was at Rs. 37.63 Crore as against Rs. 34.88 Crore in the previous year. The provision for taxation during the year was Rs. (3.47) Crore which includes deferred tax Asset for the year. The net Profit for the year was Rs. 12.81 Crore. Like several other major technology companies, Allied Digital has also been hurt by the recent economic turmoil, margin pressure, increase in competition, spending curbed on IT cost by the customer. The Company''s Net worth as on March 31st, 2014, stood at Rs. 690.02 Crore, as against Rs. 677.21 Crore last year.

OUTLOOK:

During Financial Year 2015, the company aims to deepen its engagements with existing clients, draw repeat business, and emerge as the "First Choice" and the preferred partner for its marquee global customers.

The Company sees its eco-system of critical partnerships and alliances with reputed global companies as an important asset and will continue to explore opportunities to further expand it.

The Company''s differentiated business model with strong capabilities in its chosen verticals, programme management track-record, investments in intellectual property, and a reinforced leadership team are great advantages in the prevailing macro-environment that remains volatile.

APPROPRIATIONS:

a. DIVIDEND:

In recognition of the fact that the economy is recovering and in view of the Company''s performance the Directors do not recommend any Dividend for the Financial Year 2013-2014.

b. LIQUIDITY:

Your Company maintains sufficient cash to meet its strategic objectives. As on March 31st 2014, your Company has liquid assets including investment in mutual funds of Rs. 19.20 Crore as against Rs. 15.74 Crore at the previous year end. These funds are lying in current bank account, fixed deposits with banks and in mutual funds.

BOARD OF DIRECTORS

RE-APPOINTMENT/ APPOINTMENT:

In accordance with the Articles of Association of the Company and provisions of the Companies Act, 2013, at least two-third of our Directors shall be subject to retirement by rotation. One- third of these retiring Directors must retire from office at each Annual General Meeting of the Shareholders. Mr. Paresh Shah will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommend his re-appointment.

Pursuant to provision of Section 149, 152 read along with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of the Listing Agreement, Ms. Shubhada Jahagirdar who has consented to act as Independent Director and in respect of whom the Company has received a notice in writing under Section 160 of the Act from a member proposing her candidature for the office of Independent Director, be and is hereby appointed as an Independent Director of the Company to hold office for 5 (five) consecutive years effective from October 01st, 2014, not liable to retire by rotation.

Pursuant to the provisions of the Companies Act, 2013, the Company has decided the term of Independent Directors as below:

Pursuant to provision of Section 149, 152 read along with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Prof. Venugopal Ramaswami Iyengar (DIN 02591297), Dr. Shrikant Navnitlal Parikh (DIN 01735830), and Dr. Roopkishan Sohanlal Dave (DIN 2800417), who was appointed as a Director liable to retire by rotation and in respect of whom the Company has received a notice in writing under section 160 of the Companies Act, 2013 from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for 5(five) consecutive years for the term upto March 31st, 2019, not liable to retire by rotation.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub section (6) of Section 149 of the Companies Act, 2013 and under clause 49 of the Listing Agreement with the Stock Exchanges.

As stipulated under clause 49 (IV)(G) of the Listing Agreement entered into with the stock exchanges, the following informations are provided in the Report in explainatory statement to Notice forming part of the Annual Report:

A brief resumes of the Directors proposed to be appointed / reappointed;

Nature of their expertise in specific functional areas is as stated above;

The names of companies in which they hold directorships and membership/ chairmanship of Committees of the Board;

Shareholding of Non-Executive Directors as stated in clause 49(IV)(E)(V) of the Listing Agreement.

DIVIDEND:

Your Directors have not recommended any Dividend for the Financial Year 2013-2014.

COST AUDIT:

The Company is not required to undertake the cost audit as required under Section 148 of the Companies Act, 2013.

CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the Accounting Standard (AS) - 21 on Consolidated Financial Statements, the Audited Consolidated Financial Statement is provided in the Annual Report.

COMMITTEES OF THE BOARD:

The details of the Committees of the Board including their composition are provided in the Corporate Governance Section of this Annual Report.

* Nomination and Remuneration Committee - Companies Act 2013.

Pursuant to the provisions of Section 178 of Companies Act, 2013, the Board of Directors of the Company has consented the change in nomenclature of existing Remuneration Committee to ''Nomination and Remuneration Committee'' as provided under Companies Act, 2013 and has also approved the revised terms of reference of the Nomination and Remuneration Committee as per the provisions of the Companies Act, 2013 (effective from 01/04/2014).

As per the said terms of reference approved by the Board the Nomination and Remuneration Committee shall formulate the criteria for determining the qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration for the Director, KMP and other employees. The Company''s policy on Directors appointment and remuneration and other specifications as mentioned above will be disclosed in the Boards'' Report as provided under Section 134 (3) (e) once the same is formulated by the Committee.

SUBSIDIARIES:

Your Company has Seven subsidiaries:-

1. Allied Digital Services, LLC;

2. Allied Digital INC;

3. Allied Digital Singapore Pte. Ltd;

4. Allied Digital Asia Pacific PTY LTD;

5. *Digicomp Complete Solutions Limited;

6. En Pointe Technologies India Private Limited ;

7. Allied-eCop Surveillance Private Limited.

* Your Company has divested it''s entire 52.6% holding in it''s subsidiary, Digicomp Complete Solutions Limited as per Share Purchase and Shareholders agreement on August 14th, 2013.

Pursuant to the provisions of Section 212 of the Companies Act, 1956 ("the Act"), the Company is required to attach to its Annual Report, the Balance Sheet, Profit and Loss Account, Directors'' Report and the Report of the Auditors'' (collectively referred to as "the accounts and reports''), of its subsidiaries for the year ended March 31st, 2014.

As required under the Listing Agreement with the stock exchange(s) a consolidated financial statement of the Company and all its subsidiaries have been prepared and attached hereto.

The Ministry of Corporate Affairs has granted a general exemption to the companies from attaching financials of the subsidiaries, subject to the laid down conditions. The Board of Directors has also given their consent for not attaching the accounts and reports of its subsidiary to the Annual Report under the provisions of Section 212 of the Companies Act, 1956. Therefore, the Company shall not be attaching the audited accounts of the subsidiaries to the annual accounts of the Company for the current year. The annual accounts of the subsidiary companies and related detailed information will be made available to any member of the Company or subsidiary company upon request and are also available for inspection by any member of the Company, during the business hours, at the registered office of the Company and that of the subsidiary company concerned.

The statement containing the list of subsidiaries along with brief financial details of the subsidiaries is given on page numbers 122 of the Annual Report.

UTILISATION OF FUNDS RAISED THROUGH QIP AND ISSUE OF SHARE WARRANTS:

The Company has raised funds through the issue of shares to the Qualified Institutional Buyers pursuant to Qualified Institutional Placement and Issue of Share Warrants to Bennett Coleman and Company Limited. Out of the above issues proceeds as on March 31st 2014, the company is having balance of Rs. 5.01 cores pending for deployment.

HUMAN RESOURCES:

Your Company recognizes the importance of people in its growth and has been progressing with the unflinching commitment of the dedicated team of employees. The Company''s recruitment practices ensure that suitable candidates with merit are recruited and provided with right opportunities to grow within the Organization. The Company has developed an HR strategy comprising need base training. Employees are encouraged to attend seminars, lectures and training. Key performance indicators by department heads were subject to regular management review meetings.

Developing a learning culture has always been and will continue to be our uppermost priority. Our efforts in the coming years will be to enable our employees to continually grow and build a competitive edge by translating the learning into positive actions. Several trainings were conducted during the year under review. We believe that together we can and will make the Company achieve its corporate mission.

QUALITY & CERTIFICATION:

We continue our excellence in journey with a critical focus on quality and processes and significant investment in quality processes. Pursuant to our ISO 9001 certification, since last 15 years, we continued further certifications for our other activities. Your Company''s Remote Management Services (RMS) center at Navi Mumbai has got ISO 27001: 2005 Certification in a year 2007 and has gone through one successful renewal and five successful surveillance audit. It is planned to get this certified against ISO 27001:2013 in Aug 2014. By this certification, we have protected IT infrastructure by means of right infrastructure and process deployment so that the customers are in safe hands. We have further completed certifications of this RMS by ISO 20000- 1:2005 which is certification of excellence in IT Service Management and has gone through one successful renewal and two successful surveillance audits and recently we have up-scaled this certification to ISO 20000- 1:2011. The IT services that we thus provide from this RMS are certified to be one of the best in the world meeting requirements of that standard. We have further initiated movements towards green IT and offer green data center consultancy to our prospects. In this initiative we intend to voluntarily reduce energy consumption of hardware and offer consultancy to our prospects to reduce consumption of that data center thus improving carbon footprint and one more step towards precious energy conservation. We have registered for getting our software activities certified under CMMI certification level 3 which is expected to be completed in a year''s time.

SUSTAINABILITY INITIATIVES:

As part of sustainability journey, Allied Digital''s various businesses have adopted sustainability approach encompassing initiatives covering natural & energy resource conservation, water efficiency, waste reduction and product innovation. This is strengthened through commitment of top management, robust processes and policy formulation.

The company actively works towards development of underprivileged communities especially around our area of operations. Mother & child health, primary education and skill building are the key thrust areas for community welfare.

INVESTMENTS:

The investments of the Company as on March 31st, 2014 were to the tune of Rs. 152.46 Crore as compared to the last year''s investment of Rs. 151.93 Crore.

The Book value of the quoted investments for the year under review was Rs. 5.01 Crore (previous year Rs. 5.17 Crore) and its realizable value as at March 31st, 2014 for this investment was same as book value.

FIXED DEPOSITS:

In terms of the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit Rules), 1975, the Company has accepted fixed deposits during the year. As on date no Principal or Interest amount is outstanding.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The information on Conservation of Energy required under Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company. Although operations of the Company are not energy intensive, steps are being taken to conserve energy in all possible areas.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Annexure to the Directors'' Report and the same are nil as no employees of the Company come under the purview of the aforesaid provisions. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 and Companies (Particulars of Employees) Rules, 1975, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of your Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of Section 217(2AA) of the Companies Act, 1956, that:

In the preparation of the Annual Accounts for the year ended March 31st, 2014, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any;

The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended March 31st, 2014;

The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

The Directors have prepared the Annual Accounts for the year ended March 31st, 2014, on a going concern basis.

STATUTORY AUDITORS:

At the Annual General Meeting, members will be requested to appoint M/s. Shah & Taparia, Chartered Accountant, Mumbai (Firm Registration No. 109463W) as Auditors of the company in place of retiring auditors M/s. K.M. Kapadia & Associates, Chartered Accountant, Mumbai (Firm Registration No. 104777W), to hold office for a period of five years i.e. from conclusion of Twentieth Annual General Meeting until conclusion of Twenty - Fifth Annual General Meeting of the Company subject to ratification in every Annual General Meeting and to fix their remuneration.

M/s. Shah & Taparia, Chartered Accountants, have given their consent for appointment. The Company has also received a certificate of eligibility from them under Section 139(1) of the Companies Act, 2013 and notice from a shareholder moving resolution of their appointment.

SECRETARIAL AUDITOR:

Pursuant to the provisions of the Section 179(3) and 204 of the Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014 and as a measure of good corporate governance practice, the Board of Directors of the Company hereby appoint M/s. Pramod S. Shah & Associates (Membership No. 334), Practicing Company Secretaries as a Secretarial Auditors of the Company for the Financial Year 2014-2015 on such remuneration as may be decided by the Board in consultation with the Secretarial Auditor.

ESOP 2010:

At present the Company has an Option plan for its employees, "ESOP 2010". "ESOP 2010", was approved by the members at their meeting held on September 29th, 2010. The Company had granted total 502,500 options under "ESOP 2010" to the eligible employees in tranches out of total 3,000,000 grants allocated under the effective ESOP scheme. During the financial year ended March 31st, 2014, No options were granted to employee of the Company or it''s Subsidiary. Each option entitles the holder thereof to apply for and be allotted Equity Shares of the Company upon payment of the exercise price during the exercise period.

The details of present ESOP are given in the table:-

PARICULARS ESOP 2010 GRANT

Total Options granted by the plan (no.) 502,500

Pricing formula on date of grant Fair Market Value

Options granted during the year (no.) Nil

Weighted average price per Option granted (Rs.) N.A.

Variation in terms of Options NA

Options exercised during the year (no.) Nil

Money raised on exercise of Options (Lakhs) Nil

Options forfeited and lapsed during the year (no.) Nil

Total number of Options in force at the end of the year. (no.) 487500

Grant to senior management Nil

Employees receiving 5% or more of the total number of Options granted during the year N.A.

Employees granted Options equal to or exceeding 1% of the issued capital Nil

Diluted EPS in accordance with [AS-20] N.A.

CORPORATE GOVERNANCE:

Your Company has taken appropriate steps and measures to comply with all the applicable mandatory provisions of Clause 49 of the Listing Agreement entered with the Stock Exchanges. The Company''s governance practices are described separately in the Corporate Governance section from pages 33 of this Annual Report. We have obtained certification from a Practicing Chartered Accountant on our compliance with Clause 49 of the Listing Agreement with Indian Stock Exchanges, described in the separate section forming a part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange in India, is presented in a separate section forming a part of this Annual Report.

THE COMPANIES ACT, 2013:

The Companies Act, 2013 (the Act) came into force as on April 1st, 2014 (in the manner, to the extent notified by the Ministry of Corporate Affairs). The Act has replaced the Companies Act, 1956 and has brought a new set of compliances for companies. The new Legislation will facilitate greater transparency, more disclosures and enhanced corporate governance. The Company is taking necessary steps for implementation of the provisions of the Act.

AWARDS AND RECOGNITION:

During the year Company has received various awards & recognitions. The awards are listed below:

* Certificate of Excellence from India Inc Innovative 100, for smart innovation -ADiTaaS platform

* "Best VAR 2013'' - Western India

* Winner of the Channel World Premier 100 Awards, 2014

ACKNOWLEDGMENT:

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels.

We thank the Government of India, the Ministry of Communication and Information Technology, the State Government, various government agencies and the Government of United States of America where we have operations, for their immense support, and look forward to their continued support in future.

For and on behalf of the Board of Directors

sd/- sd/- Nitin D. Shah Prakash D. Shah Chairman & Managing Director Executive Director- Commercial

Place: Mumbai Date: August 14th, 2014


Mar 31, 2012

To The Members of ALLIED DIGITAL SERVICES LIMITED

The Directors present herewith the Annual Report together with the Audited Statement of Accounts and Auditors' Report thereon for the Financial Year ended March 31st, 2012:

RESULTS OF OPERATIONS

(Rs. in Lacs)

"PARTICULARS 2011-12 2010-11

Total Operational Income 40602.05 52190.79

Other Income 1569.57 695.32

Total Income 42171.62 52886.11

Less: Operating Expenditure 37420.70 43917.84

Profit before Interest, Depreciation, Amortization Tax & Exceptional Item 4750.92 8968.27

Less: Depreciation 1636.69 1176.14

Less: Interest 1639.90 783.05

Profit before Tax and Exceptional Item 1474.33 7009.08

Less: Provision for Taxation including FBT 0.0 888.19

Less: Deferred Tax Liability 884.56 511.31

Net Profit for the year 589.77 5609.58

Add: Balance brought forward from the Previous Year 27986.78 23308.47

Amount Available for Appropriation 28576.55 28918.05

Less: Proposed Dividend Including Dividend Tax 134.20 271.60

Less: Short provision of Tax of earlier years (Net) 0.00 659.67

Add: Excess provision of Tax of earlier years 1.75 0.00

Balance carried to Balance Sheet 28444.10 27986.78

BUSINESS OPERATIONS

Your Company is an IT Infrastructure Management and Technical Support Services Outsourcing Company, with an impeccable track record for designing, developing, deploying and delivering end-to-end IT Infrastructure services with an objective to provide end to end IT Solutions, outcomes of which have always resulted into a positive change in the organization. Your Company is an experienced entity having sufficient knowledge of the local market which assists them in organizing manpower for diverse tasks and contractual works. It has over more than two decades of experience in enterprise IT Infrastructure, Management and Implementation and consulting on complex IT Solutions for different Business Verticals.

Your Company inherent capabilities built on the philosophy of '3S' (Smart People, Smart Processes, Smart Technology); provides the strong foundation for a best-in-class Integrated Service Delivery Framework which consistently augments our overall value creation proposition to our clients; both effectively and efficiently.

Your Company provide credible, high class and customer oriented services and solutions to its clients, actively participate to fulfill the needs and preferences of the customers, their requirements in a dedicated manner. We seek long-term partnership with clients while addressing their IT requirements. Our customer - centric approach has resulted in high levels of client satisfaction and retention. Moreover we encourage a warm and cordial environment in our organization which will add to the skilled workforce and also improve the work culture.

The global economic environment remains subdued, although key economies such as the US are showing stability and some improvement, with a yet unresolved crisis in the Euro zone and signs of slower growth in many emerging economies. In such business conditions the Company's gross income for the financial year ended March 31st, 2012 decreased by 20 per cent to Rs. 421.72 Crore, from Rs. 528.86 Crore in the previous year. The operating profit (PBDIT) of the Company decreased to Rs. 47.51 Crore during the year, from Rs. 89.68 Crore in the previous year. Interest & Depreciation was at Rs. 32.77 Crore as against Rs. 19.59 Crore in the previous year. The provision for taxation during the year was Rs. 8.85 Crore

which includes deferred tax liability for the year. The net profit for the year decreased by 89 per cent to Rs. 5.90 Crore from Rs. 56.10 Crore in the previous year. Like several other major technology companies, Allied Digital has also been hurt by the recent economic turmoil, margin pressure, increase in competition, spending curbed on IT cost by the customer. The Company's Net worth as on March 31st, 2012, stood at Rs. 687.39 Crore, as against Rs. 686.06 Crore last year.

OUTLOOK

During financial year 2013, the company aims to deepen its engagements with existing clients, draw repeat business, and emerge as the ''First Choice'' and the preferred partner for its marquee global customers.

During financial year 2012, the Company entered into high potential, business transformation deals with new customers that will also enable it to further expand and strengthen its footprint in Europe and the USA. Going forward, the Company will attempt to build upon these achievements.

The Company sees its eco-system of critical partnerships and alliances with reputed global companies as an important asset and will continue to explore opportunities to further expand it.

The Company's differentiated business model with strong capabilities in its chosen verticals, programmed management track-record, investments in intellectual property, and a reinforced leadership team are great advantages in the prevailing macro-environment that remains volatile.

APPROPRIATIONS: a. DIVIDEND:

In recognition of the fact that the economy is recovering and in view of the Company's profitable performance the Directors recommend a Dividend of Rs. 0.25 per Equity Share of Rs. 5/- each i.e. 5 % of the face value of each Equity Share (last Year Rs. 0.50 on the paid up value of equity share of Rs. 5/- each) of the Company for the financial year 2011-2012.

b. LIQUIDITY:

Your Company maintains sufficient cash to meet its strategic objectives. As on March 31st, 2012, your Company has liquid assets including investment in mutual funds of Rs. 34.56 Crore as against Rs. 80.19 Crore at the previous year end. These funds are lying in current bank account, fixed deposits with banks and in mutual funds.

DIRECTORS: RE-APPOINTMENT/ APPOINTMENT

In accordance with the Articles of Association of the Company and provisions of the Companies Act, 1956 at least two- third of our Directors shall be subject to retirement by rotation. One- third of these retiring Directors must retire from office at each Annual General Meeting of the Shareholders. The retiring Directors are eligible for re-election.

As stipulated under clause 49 of the Listing Agreement entered into with the stock exchanges, brief resumes of the Directors proposed to be appointed / reappointed, nature of their expertise in specific functional areas is as stated above and the names of companies in which they hold directorships and membership / chairmanship of Board Committees are provided in the Report on Corporate Governance forming part of the Annual Report.

The Board recommends to the members the resolutions for appointment and re - appointment of the Directors mentioned above.

DIVIDEND:

Your Directors have recommended a Dividend of Rs. 0.25 per Equity Share of Rs. 5/- each i.e. 5 % of the face value of each Equity Share of the Company for the financial year 2011-2012.

COST AUDIT:

The Company is not required to undertake the cost audit as required under Section 233 B of the Companies Act, 1956. COMMITTEES OF THE BOARD:

The details of the Committees of the Board including their composition are provided in the Corporate Governance Section of this Annual Report.

SUBSIDIARIES

Your Company has seven subsidiaries.

1. Allied Digital Services, LLC. (USA)

2. Allied Digital INC (USA);

3. Allied Digital Singapore Pte. Ltd;

4. Allied Digital Asia Pacific PTY LTD (Australia);

5. Digicomp Complete Solutions Limited;

6. En Pointe Technologies India Private Limited ;

7. E-cop Surveillance India Private Limited.

Pursuant to Section 212 of the Companies Act, 1956 ("the Act"), the Company is required to attach to its Annual Report, the Balance Sheet, Profit and Loss Account, Directors' Report and the Report of the Auditors (collectively refereed to as "the accounts and reports'), of its subsidiaries for the year ended March 31st, 2012.

As required under the Listing Agreement with the stock exchange(s) a consolidated financial statement of the Company and all its subsidiaries has been prepared and attached hereto.

The Ministry of Corporate Affairs has granted a general exemption to the companies from attaching financials of the subsidiaries, subject to the laid down conditions. The Board of Directors has also given their consent for not attaching the accounts and reports of its subsidiary to the Annual Report under the provisions of section 212 of the Companies Act, 1956. Therefore, the Company shall not be attaching the audited accounts of the subsidiaries to the annual accounts of the Company for the current year. The annual accounts of the subsidiary companies and related detailed information will be made available to any member of the Company or subsidiary company upon request and are also available for inspection by any member of the Company, during the business hours, at the registered office of the Company and that of the subsidiary company concerned.

The statement containing the list of subsidiaries along with brief financial details of the subsidiaries is given on page numbers 89 of the Annual Report.

UTILISATION OF FUNDS RAISED THROUGH QIP AND ISSUE OF SHARE WARRANTS:

The Company has raised funds through the issue of shares to the Qualified Institutional Buyers pursuant to Qualified Institutional Placement and Issue of Share Warrants to Bennett Coleman and Company Limited. Out of the above issues proceeds as on March 31st 2012, the Company is having balance of Rs. 13.17 cores pending for deployment.

HUMAN RESOURCES:

Your Company recognizes the importance of people in its growth and has been progressing with the unflinching commitment of the dedicated team of employees. The Company's recruitment practices ensure that suitable candidates with merit are recruited and provided with right opportunities to grow within the Organization. The Company has developed an HR strategy comprising need base training. Employees are encouraged to attend seminars, lectures and training. Key performance indicators by department heads were subject to regular management review meetings.

Developing a learning culture has always been and will continue to be our uppermost priority. Our efforts in the coming years will be to enable our employees to continually grow and build a competitive edge by translating the learning's into positive actions. Several trainings were conducted during the year under the year under review. We believe that together we can and will make the Company achieve its corporate mission.

QUALITY & CERTIFICATION:

We continue our excellence in journey with a critical focus on quality and processes and significant investment in quality processes. Pursuant to our ISO 9001 certification, since last 13 years, we continued further certifications for our other activities. Your Company's Remote Management Services (RMS) center at Navi Mumbai has got ISO 27001: 2005 Certification in a year 2007 and has gone through three successful surveillance audits, a recertification audit thereafter. By this certification, we have protected our IT infrastructure by means of right infrastructure and process deployment so the customers are in safe hands. We have further completed certifications of this RMS by ISO 20000-1:2005 which is certification of excellence in IT Service Management and has gone through two successful surveillance audit and recently we have upscale this certification to ISO 20000-1:2011. The IT services that we thus provide from this RMS are certified to be one of the best in the world meeting requirements of that standard. We have further initiated movements towards green IT and offer green data center consultancy to our prospects. In this initiative we intend to voluntarily reduce energy

consumption of hardware and offer consultancy to our prospects to reduce consumption of that data center thus improving carbon footprint and one more step towards precious energy conservation. We have registered for getting our software activities certified under CMMI certification level 3 which is expected to be completed in a year's time.

SUSTAINABILITY INITIATIVES:

As part of sustainability journey, Allied's various businesses have adopted sustainability approach encompassing initiatives covering natural & energy resource conservation, water efficiency, waste reduction and product innovation. This is strengthened through commitment of top management, robust processes and policy formulation.

The company actively works towards development of underprivileged communities especially around our area of operations. Mother & child health, primary education and skill building are the key thrust areas for community welfare.

INVESTMENTS

The investments of the Company as on March 31st, 2012 were to the tune of Rs. 152.46 Crore as compared to the last year's investment of Rs. 171.94 Crore.

The Book value of the quoted investments for the year under review was Rs. 13.17 Crore (previous year Rs. 42.71 Crore) and its realizable value as at March 31st, 2012 for this investment was same as book value.

FIXED DEPOSITS

In terms of the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit Rules), 1975, the Company has not accepted any fixed deposits during the year and as such, no amount of Principal or Interest was outstanding as of the Balance Sheet date.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The information on Conservation of Energy required under Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company. Although operations of the Company are not energy intensive, steps are being taken to conserve energy in all possible areas.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Annexure to the Directors' Report and the same is nil as none of the employees of the Company come under the purview of the aforesaid provisions. However, having regard to the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956 and Companies (Particulars of Employees) Rules, 1975, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of your Company.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs In Lakhs)

PARICULARS 2012 2011

Earnings 598.53 3717.79

Outflow (including Capital imports) 691.23 359.64

Net Foreign Exchange Earnings (NFE) (92.70) 3358.15

NFE / Earnings (%) (15) 90

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of Section 217(2AA) of the Companies Act, 1956, that:

a) In the preparation of the Annual Accounts for the year ended March 31st, 2012, the applicable accounting standards have been followed Along with proper explanation relating to material departures, if any.

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended March 31st, 2012 and of the profit of the Company for that year.

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the Annual Accounts for the year ended March 31st, 2012, on a going concern basis. STATUTORY AUDITOR

M/s. K. M. Kapadia & Associates, Chartered Accountants, Mumbai, Statutory Auditor of your Company hold office till the conclusion of the forthcoming Annual General Meeting of the Company. He has signified his willingness to accept office, if re-appointed. The Company has also received his eligibility under Section 224 (1B) of the Companies Act, 1956.

INTERNAL AUDITORS:

Your Company has appointed HNT & Co. as Internal Auditors for conducting the Internal Audit.

CORPORATE GOVERNANCE

Your Company has taken appropriate steps and measures to comply with all the applicable mandatory provisions of Clause 49 of the Listing Agreement entered with the Stock Exchanges and Section 292A of the Companies Act 1956. The Company's governance practices are described separately in the Corporate Governance section from pages 11 to 26 of this Annual Report. We have obtained certification from a Practicing Chartered Accountant on our compliance with Clause 49 of the Listing Agreement with Indian Stock Exchanges, described in the separate section forming a part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange in India, is presented in a separate section forming a part of this Annual Report.

AWARDS AND RECOGNITION

During the year Company has received various awards & recognitions. The awards are listed below:

1. Channel World Premier 100

2. 'BEST MANAGED SERVICES PROVIDER' by CRN Excellence Award - 2011

3. ITPV Best Business Leader - 2011 (Solution Provider Category)

4. ITPV Partner leadership award -BEST SOLUTION PROVIDER - 2011 (SECURITY)

5. Asia Pacific Entrepreneurship Awards 2011

6. Top Solution Provider (Silver)

7. Solution Champ - Managed Security Services ACKNOWLEDGMENT

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels.

We thank the Government of India, the Ministry of Communication and Information Technology, the State Government, various government agencies and the Government of United States of America where we have operations, for their immense support, and look forward to their continued support in the future.

CAUTIONARY STATEMENT:

Statements forming part of the Management Discussion and Analysis covered in this report may be forward- looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. The Company takes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.

For and on behalf of the Board of Directors

sd/- sd/-

Nitin D. Shah Prakash D. Shah Chairman and Managing Director Director - Commercial

Mumbai

August 28th, 2012

 
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