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Notes to Accounts of Allied Digital Services Ltd.

Mar 31, 2015

1) Employee Benefits Gratuity Plan

(i) An amount of Rs.145.15 Lacs has been recognized towards the Employees Gratuity Fund against the liability of Rs. 145.15 Lacs as per the Actuarial Valuation for Gratuity as on 31st March 2015. The Company has its Employees Gratuity Fund managed by Birla Sun Life Insurance Company. The particulars under AS 15 (Revised) furnished below are those which are relevant and available to the company and which are as per the Acturial Valuation Report:

2) Current Assets, Loans and Advances

(i) In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated and are realisable in the ordinary course of business.

(ii) Amounts extended to wholly or partially owned subsidiaries Company has been shown under the head of investment as the same is long term in nature.

3) MAT Credit Entitlement

Considering the consistent profit over the years and also considering the future profit projections, the management believes that there are adequate and satisfying reasons with regards to the earning of future taxable income and payment of tax under normal tax within the specified period. Hence MAT credit entitlement of Rs.736.34 Lacs pertaining upto F.Y. 2014-15 (Previous year Rs.696.34 Lacs) has been recognized for the year ended 31st March 2015.

4) Current Liabilities and Provisions

In the opinion of the Board, the current liabilities are approximately at the fair value in the Balance Sheet. Balances of sundry creditors are subject to confirmation and reconciliation.

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

The company has received Notices from the MVAT Department for the disallowance of Input Credit on purchases made from certain registered dealers in Maharashtra. The company has contested the said claim of the MVAT Department but the quantum of the proposed disallowance of Input Credit has not been worked out by the company and hence cannot be quantified for provision.

The company has not deposited Rs.264.68 Lacs towards Service Tax Liability and has not filed their return of Service Tax for the year under consideration till the date of signing of this Audit Report.

5) Quantitative Information

Considering the nature of business of the company, it is not practically possible to give quantitative information in the absence of common expressible unit. Hence the value of the Inventory for the Balance Sheet purpose has been take as certified by the Management.

6) Dues to Micro, Small and Medium Enterprises

No response was received by the Company from its creditors to enable them to identify the same and hence the above information has been determined on the basis of the explanation provided by the Company to the auditors. However as per the information provided by the Company, there are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at the balance Sheet date. This has been relied upon by the auditors.

7) Taxes on Income

(i) Provision for taxation for the year has been made in accordance with the provisions of the Income Tax Act, 1961.

(iii) In terms of Accounting Standard on "Accounting for Taxes on Income" (AS 22) the Company has recognised Deferred Tax Liability amounting to Rs. 175.32 Lacs (Previous Year Rs. -542.28 Lacs) for the period ended 31st March, 2015 in the Statement of Profit and Loss. An amount of Rs. 433.50 Lacs was adjusted on account of reversal of deferred tax liability on carrying value of fixed assets whose remaining useful life is NIL.

8) Related Party Disclosures

A) Related Parties and their Relationship

(i) Subsidiaries

1. Allied Digital Services LLC (formerly known as En Pointe Global Services LLC)

2. Allied Digital INC

9) Segment Reporting

During the year under review, the Company's business consisted of two reportable business segments i.e. Enterprise Computing based Solutions and Infrastructure Management based Solutions. The details pertaining to attributable Revenues, Profits and Capital employed are given hereunder.

10) These financial statements have been prepared in the format prescribed by the Schedule III to the Companies Act, 2013. Previous year's figures have been regrouped recast / restated wherever necessary.

11) Previous year's figures have been recast / restated wherever necessary.

12) Previous year's figures are in italics.


Mar 31, 2014

1) Corporate information

Allied Digital Services Limited (referred to as "ADSL" or the "Company") is renowned as a leading Global IT Transformation Architect, having its operations pan India, USA, Australia, Europe and Middle0east Asia with an impeccable track record for designing, developing, deploying and delivering end-to-end IT infrastructure services. It provides wide range of information technology and consultancy services including Infrastructure Services, End user IT Support, IT asset life cycle, enterprise applications and integrated solutions.

The Company''s registered office is in Mumbai and has presence in pan India, and it has Subsidiary companies in USA, Singapore and Australia. (a) Rights, Preferences and restrictions related to equity shares The company has only one class of equity shares having par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share.

2) Stock Option Scheme (2010)

The Company by a Special Resolution passed at Annual General Meeting held on September 29th, 2010 approved the Employee Stock Option Scheme under section 79A of the companies act 1956 to be read along with SEBI (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999 whereby 30,00,000 options convertible into Equity Shares of Rs. 5/- each to be granted to eligible employees of the Company. This stock option scheme is titled as ''"ESOP 2010". Out of the same 4,27,500 options have been granted during the year.

Note 3 The company has received the Assessment Orders from Maharashtra Value Added Tax Department (MVAT), Investigation Branch A, Mumbai for the year 2005-06 and 2008-09 wherein a demand of Rs. 541.04 Lacs & Rs. 899.57 Lacs respectively has been raised on the company. This demand is on account of total disallowance of Input Credit availed by the Company. As the said Order is bad in law and on facts the company is filed an appeal with the Dy. Comm of Sales Tax Appeal V. The Company expects major reliefs from this demand once these appeals are decided. This liability has not been recognized in the Books of Accounts of the Company.

4) Issue of Shares other than Cash

Details of Shares allotted as fully paid up by way of bonus shares before March 31, 2014 The Company allotted 13,22,300 equity shares of Rs. 10 each as fully paid-up bonus shares by capitalisation of reserves in 1999-2000. The Company allotted 71,05,605 equity shares of Rs. 10 each as fully paid-up bonus shares by capitalisation of reserves in 2006-2007.

5) Buy- Back of Equity Shares

The Board of Directors of the Company in their meeting held on February 18, 2011 had resolved to buyback ("Buyback") its fully paid-up equity shares of the face value of Rs. 5/- each (Equity Shares) from the existing Equity Share owners of the Company, other than Promoters of the Company. This Buy back was to be made from the stock exchange in accordance with the provisions of Sections 77A, 77AA, 77B and other applicable provisions of the Companies Act, 1956 ("the Act") and Securities and Exchange Board of India (Buy Back of Securities) Regulation, 1998 ("the Regulation") and the relevant provisions of Memorandum of Association and Articles of Association of the Company. The maximum price at which this buy back was to be executed was not to exceed Rs. 140/- per Equity Share ("Maximum Buyback Price") payable in cash, and the maximum amount allocated for the Total Buy Back was Rs, 2,800 Lacs ("Offer size"). The Date of Opening of the buyback was April 25, 2011 and last Date for the Buyback was February 17, 2012. No buy back of shares was made by the Company during the year under consideration.

During the financial year 2011-2012 , the Company has bought back 5,97,075 Equity Shares for a Total Consideration of Rs. 324.87 Lacs. The Bought back shares have been duly extinguished by the Company.

6) Transfere of Capital Work in Progress to the respective Heads of Assets during the year under consideration is as per the representations made and certified by the Management.

7) Intellectual Property Right (IPR) are in process of being developed further but as represented by the Management the amount capitalised by them during the year under consideration represents the Employee Cost attributable to the development of these IPR.. As per the representation made by the Management these IPR''s in its current form can be put to use or sold to its customers. The management has informed that the active utility life of this IPR is 10 years from the date it was first put to use This is the second year of the utilisation of these IPR''s.

The company has recorded the Fixed Assets at Cost and the same shall include the additional cost paid to enable the company to acquire these assets. The value of each Fixed Assets as appearing in the Balance Sheet could not be verified by us and hence is taken as Certified by the Management.

During the year under review, it was represented that the Company is in process of developing 6 Intellectual Property Rights (IPR) the details of which are as under:

8. ADITAS :- This ia a large software product, now being extensively deployed to all our customers world wide. This is an ITSM (IT service Management) platform that orchestrates IT service management for all kinds of devices and applications within the enterprise. This platform competes with world leaders such as BMC Remedy, ServcieNow and IBM . Tivoli. It is available as on-premise as well as cloud model. This platform has mobile applications, dashboards and multiple integration points and scales to automation of business processes. This is a cornerstone of Allied now, and is the center of our offerings. It went through three phases of development in two years, and further roadmap is planned for one more year at minimum.

9. WOTS :- This is a work order tracking system. The solution provides end to end logistics management and discrete assembly of products in warehouses. This solution was developed for US customers, and now has great potential to sell for customers who are into warehousing and order fulfillment. It integrates seamlessly with SAP.

10. YOUNIFY :- Younify is developed as an intranet portal, one of the most unique kind of portal development capabilities that we have. It showcases our powerful content management and web site development capabilities. This intranet integrates all our internal HR processes and is used by all employees in India. We have extended the portal to community portals, which is one of the unique in the world, and adds great value to facility management products.

11. SFA :- This is a comprehensive sales force automation tool. Which starts from lead management to deal closure. It has mobile application too to track workforce and their day to day activities. The key feature is also that it integrates with vouvher management, and timesheet to track sales force performance and their travel costs. Commission management is under development. 5 Mobile Workforce Management :- A unique workforce management application useful for field force across the globe. This application runs on android and can run also on apple devices. The application also has central command center with GPS tracking for tracking, interaction with field force and intelligent work scheduling.

12. AWS :- Automobile warranty system is one of kind application, which tracks all interaction between the end customer, dealer and the manufacturer. Two customers in the US are already using this application. Very few vendors have such a focused application on parts warranty management. This application can be easily leveraged for other parts management industry apart from automobile warranty.

The Management has represented that these IPR''s have been developed in house for which the Company has deployed various personnel on salary basis. As these salaries have been paid to the employees exclusively working for the development of these IPR''s all these salary expenses and their related other overheads have been attributed to the development cost of these IPR''s. Hence the amount of Rs. 4,911.95 Lacs has been ascertained by the management attributable to these IPR''s. However the allocation of these expenses have not been verified by us due to the absence of the relevant records and documents with the company.

It has been represented by the Company that once these IPR''s have been developed and put to use they are likely to yield considerable revenue. As these IPR''s are in the state of development and have not contributed to the earnings of the company the same have been capitalized under the head of IPR. The useful life of these IPR''s as represented before us is that of 10 years.

Note 13 Amounts extended to wholly owned subsidiaries Company has been shown under the head investment as the same is long term in nature, though there is no issue of shares to the Company on account of these advances.

Note 14 Investments in mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

Note 15 The Company has advanced Loans to Allied Digital Inc.(USA), its wholly owned Subsidiary, on regular basis. The same being in the nature of Contribution towards Working Capital of the Subsidiary should have been classified under the head of Loans & Advances but has been classified as Investments. No Shares have been issued against this contribution.

Note 16 Company was holding 52.63% shares in M/s Digicomp Complete Solutions Limited as at the begining of the year under review. During the year under review the shres held by the Company were sold for a total Consideration of Rs. 4,200.00 Lacs. Out of the said the Company has received Rs. 2,736.76 Lacs during the year under consideration and the balance amount shall be received by them after Rs. 1,463.24 Lacs on attaining certain targets pre-decided with the acquirer of these shares.

Note 17 Whereas the Company has produced beforeus the Confirmation from Plainburgh Ltd. which amounts to Rs. 9,571.88 Lacs out of the Total Receivables of Rs. 23.321.91 Lacs, The subsidiary of the Company has however written off as Bad Debts the amount receivable from the same party as on March 31, 2014. In respect of confirmation for Sundry Debtors for the balance amount , the Company has not produced the same from any of these other parties till the signing of the Balance sheet. Due to the absence of these confirmations the need to make provisions for the doubtful debts has not been ascertained and provided for by the company. The ageing of the debtors as reported in the balance sheet could also not be verified by the Auditors and has been considered as certified by the management of the company.However, the management is of the opinion that all the Sundry Debtors, as appearing in the Balance Sheet are good and recoverable.

Note 18 In respect of confirmation for Loans and Advances as at March 31, 2014, the Company has not produced the same from the parties at the time of signing of the Balance sheet. Due to the absence of these confirmations the need to make provisions for the doubtful debts has not been ascertained and provided for by the company. The ageing of the debtors as reported in the balance sheet could also not be verified by the Auditors and has been considered as certified by the management of the company. However, the management is of the opinion that all the Loans and Advances as appearing in the Balance Sheet are good and recoverable.

19 The Company recognised Rs. 123.82 Lacs as their contribution towards Employers Contribution to provident fund and Administration Charges thereon and further deducted Rs. 110.06 Lacs from the salaries of the Employees as Employees Contribution towards this fund during the year under consideration. However, due to paucity of funds, out of the total amount payable to the Provident Fund contribution of Rs. 233.88 Lacs as stated above, the company has been able to deposit only Rs. 71.62 Lacs with the appropriate authorities till the date of this report. Hence an amount of Rs. 162.26 lacs towards the Provident Fund Contribution (Employers Contribution and Employees Contribution) is payable as on the date of this report.

The Company has also recognised Rs. 58.50 Lacs as their contribution towards Employees State Insurance Contribution (ESIC) and further deducted Rs. 21.62 Lacs from the salaries of the Employees as Employees Contribution towards this fund during the year. However, due to paucity of funds, out of the total amount payable to the ESIC contribution of Rs. 80.12 Lacs as stated above, the company has been able to deposit only Rs. 68.20 Lacs with the appropriate authorities till the date of this report. Hence an amount of Rs. 11.92 lacs towards ESIC Contribution is payable as on the date of this report.

The contributions payable to this plan by the Company are at rates specified in the rules of the scheme and the same are charged to the Profit and Loss Account of the Company.

20 The Company has deducted Rs. 26.99 Lacs for Profession Tax during the year under consideration under the various Profession Tax Act of different states.. However due to paucity of funds the company has been able to deposit only Rs. 24.44 Lacs amount with the appropriate authorities till the date of this report.

21 The contributions payable to this plan by the Company are at rates specified in the rules of the scheme and the same are charged to the Profit and Loss Account of the Company.

22 Earned Leave Encashment expenses have not been provided for during the year under consideration. The Detailed Actuarial valuation for the same has also not been made and hence the financials reported here above are as per the details provided by the Management.

(Rs. In Lacs) Contingent liabilities and commitments (to the extent not provided for) As at As at March 31, 2014 March 31, 2013

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt 2,475.56 2,463.84 (b) Guarantees 3,056.70 1,152.61

(c ) Letter of Credit 67.91 -

(d) Other money for which the company is contingently liable 5,600.17 3,616.45

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for -

(b) Uncalled liability on shares andd other investments partly paid -

(c) Other commitments (specify nature) -

5,600.17 3,616.45

Note 23 As per the Certificate issued by the banks, value of bank guarantees outstanding as on March 31,, 2014 amounts to Rs. 3,056.70 Lacs (Previous Year Rs. 1,152.61 Lacs) and the value of Letter of Credit Outstanding as on March 31,, 2014 amounts to Rs. 67.91 Lacs (Previous Year Rs. Nil Lacs).

Note 24 Claim against the Company not acknowledged as debts Rs. 94.69 Lacs (Previous Year Rs. 19.63 Lacs).

Note 25 During the year ended March 31, 2012 the Company was subject to Audit from the Service Tax Department. The said audit has been concluded and the intimation from the Service Tax Department is awaited as on the date signing of this Balance Sheet.

Note 26 There is a delay in payment of statutory dues and filing of Return of Service Tax, Provident Fund, ESIC, Profession Tax, TDS and VAT due to which an additional liability of these taxes on account of Interest on delay in payment of these taxes as well as penalty on delay in filing the returns shall accrue for the year under consideration as well as the earlier years.

Note 27 In respect of confirmation for Loans and Advances as at March 31, 2014, the Company has not produced the same from the parties at the time of signing of the Balance sheet. Due to the absence of these confirmations the need to make provisions for the doubtful debts has not been ascertained and provided for by the company. The ageing of the debtors as reported in the balance sheet could also not be verified by the Auditors and has been considered as certified by the management of the company. However, the management is of the opinion that all the Loans and Advances as appearing in the Balance Sheet are good and recoverable.

Note 28 The company has received the Assessment Orders from Maharashtra Value Added Tax Department (MVAT), Investigation Branch A, Mumbai for the year 2005-06 and 2008-09 wherein a demand of Rs. 541.04 Lacs & Rs. 899.57 Lacs respectively has been raised on the company. This demand is on account of total disallowance of Input Credit availed by the Company. As the said Order is bad in law and on facts the company is filed an appeal with the Dy. Comm of Sales Tax Appeal V. The Company expects major reliefs from this demand once these appeals are decided. This liability has not been recognized in the Books of Accounts of the Company.

1) Current Assets, Loans and Advances

(i) In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated and are realisable in the ordinary course of business.

(ii) Amounts extended to wholly or partially owned subsidiaries Company has been shown under the head of investment as the same is long term in nature.

(iii) After obtaining the approvals from the concerned parties The Debit Balances of some Trade Receivables have been written of against the Credit Balances of the Trade Payables to the extent of Rs. 7,250.00 Lacs during the year under consideration. Hence the amount of Trade Receivables of Rs. 23,321.91 Lacs as on the date of this Balance Sheet is after reducing the said amount by Rs. 7,250.00 Lacs.

2) MAT Credit Entitlement

Considering the consistent profit over the years and also considering the future profit projections, the management believes that there are adequate and satisfying reasons with regards to the earning of future taxable income and payment of tax under normal tax within the specified period. Hence MAT credit entitlement of Rs. 690.10 Lacs pertaining upto F.Y. 2013-14 (Previous year Rs. 713.77 Lacs) has been recognized for the year ended March 31, 2014.

3) Current Liabilities and provisions

In the opinion of the Board, the current liabilities are approximately at the fair value in the Balance Sheet. Balances of sundry creditors are subject to confirmation and reconciliation.

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

After obtaining the approvals from the concerned parties the Credit Balances of some Trade Payables have been written of against the Debit Balances of the Trade Receivables to the extent of Rs. 7,250.00 Lacs during the year under consideration. Hence the amount of Trade Payable of Rs. 1,535.64 Lacs as on the date of this Balance Sheet is after reducing the said amount by Rs. 7,250.00 Lacs.

4) Quantitative Information

Considering the nature of business of the company, it is not practically possible to give quantitative information in the absence of common expressible unit. Hence the value of the Inventory for the Balance Sheet purpose has been take as certified by the Management.

5) Dues to Micro, Small and Medium Enterprises

No response was received by the Company from its creditors to enable them to identify the same and hence the above information has been determined on the basis of the explanation provided by the Company to the auditors. However as per the information provided by the Company, there are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at the balance Sheet date. This has been relied upon by the auditors.

6) Taxes on Income

(i) Provision for taxation for the year has been made in accordance with the provisions of the Income Tax Act, 1961.

(ii) In terms of Accounting Standard on "Accounting for Taxes on Income" (AS 22) the Company has recognised Deferred Tax Liability amounting to Rs. 341.01 Lacs (Previous Year Rs. 884.56 Lacs) for the period ended March 31, 2014 in the Profit and Loss Account.

7) These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous year''s figures have been recast / restated wherever necessary.

8) Previous year''s figures have been recast / restated wherever necessary.

9) Previous year''s figures are in italics.


Mar 31, 2013

1) Corporate information

Allied Digital Services Limited (referred to as "ADSL" or the "Company") is renowned as a leading Global IT Transformation Architect, having its operations pan India, USA, Australia, Europe and Middle east Asia with an impeccable track record for designing, developing, deploying and delivering end-to-end IT infrastructure services. It provides wide range of information technology and consultancy services including Infrastructure Services, End user IT Support, IT asset life cycle, enterprise applications and integrated solutions.

The Company''s registered offce is in Mumbai and has presence in pan India, and it has Subsidiary companies in USA, Singapore and Australia.

2) Employee Benefts

Gratuity Plan

(i) An amount of Rs. Nil Lacs (Previous Year Rs. Nil Lacs) has been contributed towards the Employees Gratuity Fund against the current year liability of Rs. 70.78 Lacs (Previous Year Rs. 91.08 Lacs) and earlier year liabilities as per the Actuarial Valuation for Gratuity as on March 31st, 2013. The Company has its Employees Gratuity Fund managed by Birla Sun Life Insurance Company.

3) Current Assets, Loans and Advances

In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated and are realisable in the ordinary course of business.

(i) Amounts extended to wholly owned subsidiaries Company has been shown under the head investment as the same is long term in nature.

4) MAT Credit Entitlement

Considering the consistent proft over the years and also considering the future proft projections, the management believes that there are adequate and satisfying reasons with regards to the earning of future taxable income and payment of tax under normal tax within the specifed period. Hence MAT credit entitlement of Rs. 720.02 Lacs pertaining upto FY. 2011-12 (Previous yearRs. 720.02 Lacs) has been recognized during the year under consideration.

5) Current Liabilities and Provisions

In the opinion of the Board, the current liabilities are approximately at the fair value in the Balance Sheet. Balances of sundry creditors are subject to confrmation and reconciliation.

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outfow of resources and a reliable estimate can be made of the amount of the obligation.

(i) The company has not deposited Rs.5.05 Lacs towards TDS deducted u/s 194 J till the date of signing of the Audit Report.

(ii) The company has received Notices from the MVAT Department for the disallowance of Input Credit on purchases made from certain registered dealers in Maharashtra. The company has contested the said claim of the MVAT Department but out of the proposed disallowance the Company has paid Rs. 576.43 Lacs for the period from 2005-06 to 2009-10 to the MVAT Department.

6) Quantitative Information

Considering the nature of business of the company, it is not practically possible to give quantitative information in the absence of common expressible unit. Hence the value of the Inventory for the Balance Sheet purpose has been take as certifed by the Management.

7) Dues to Micro, Small and Medium Enterprises

No response was received by the Company from its creditors to enable them to identify the same and hence the above information has been determined on the basis of the explanation provided by the Company to the auditors. However as per the information provided by the Company, there are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at the balance Sheet date. This has been relied upon by the auditors.

8) Taxes on Income

(i) Provision for taxation for the year has been made in accordance with the provisions of the Income Tax Act, 1961.

(iii) In terms of Accounting Standard on "Accounting for Taxes on Income" (AS 22) the Company has recognised Deferred Tax Liability amounting to Rs. 341.01 Lacs (Previous Year Rs. 884.56 Lacs) for the period ended March 31st, 2013 in the Proft and Loss Account.

9) Related Party Disclosures

A) Related Parties and their Relationship (i) Subsidiaries

1. Allied Digital Services LLC (formerly known as En Pointe Global Services LLC)

2. Allied Digital INC

3. Allied Digital Singapore Pte Ltd

4. Allied Digital Asia Pacifc Pty Ltd

5. Digicomp Complete Solutions Ltd.

6. En Pointe Technologies India Private Limited

7. Allied-eCop Surveillance Private Limited

(ii) Associates

1. Assetlite Equipment India Private Limited

2. Abhirati Properties Private Limited

3. The Gateways

4. Allied Digital Services (UK) Limited

(ii) Key Management Personnel& their relatives (KMP)

Mr. Nitin Shah Chairman & Managing Director

Mr. Prakash Shah Executive Director - Commercial

Mr. Manoj Shah Executive Director & CIO (Resigned on 28th Aug 2012)

Mr. Bimal Raj Executive Director & CEO (Resigned on 7th Feb. 2012)

Mr. Paresh Shah Executive Director & CEO

Mrs.Tejal P. Shah Wife of Mr. Prakash Shah

Mr. Nehal N. Shah Son of Mr. Nitin Shah

Miss.Dhara N. Shah Daughter of Mr. Nitin Shah

Mrs. Rita P Shah Wife of Mr. Paresh Shah

10) Lease Income

In accordance with the Accounting Standard 19, "Leases" issued by the Institute of Chartered Accountants of India, the Company has given Assets on Operational Lease on or after April 1st, 2001. These assets have been Capitalized and consequently depreciation has also been provided on these assets. The minimum lease rent receivable as at March 31st, 2013 are as follows:

11) Segment Reporting

During the year under review, the Company''s business consisted of two reportable business segments i.e. Enterprise Computing based Solutions and Infrastructure Management based Solutions. The details pertaining to attributable Revenues, Profts and Capital employed are given hereunder.

12) These fnancial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous year''s fgures have been recast / restated wherever necessary.

13) Previous year''s fgures have been recast / restated wherever necessary.

14) Previous year''s fgures are in italics.


Mar 31, 2012

(A) Rights, Preferences and restrictions related to equity shares

The company has only one class of equity shares having par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31st, 2012, the amount of per share dividend recognized as distributions to equity shareholders is Rs. 0.25 per share (March 31st, 2011: Rs. 0.5 per share).

(b) Details of shares held by each shareholder holding more than 5% shares:

(c) Employee Stock Options Scheme

The Company by a Special Resolution passed at the Extra Ordinary General Meeting held on January 02, 2007 approved the Employee Stock Option Scheme under Section 79 A of the Companies Act, 1956 to be read along with SEBI (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999 whereby options convertible into Equity Shares had been granted to eligible employees of the Company. The Board of Directors had resolved to grant the Options to the eligible employees vide resolution dated January 22, 2007, consequently the Options were granted to eligible employees.

The Company has two Stock Options Plans which are summarized as under:

(i) Stock Option Scheme (2007) Loyalty Grant

Under this scheme, the Company had granted 63,300 Options @ Rs. 10/- each to the eligible employees.

Out of the above mentioned grant of 63,300 options,50,436 Options were exercised by the eligible employees in the Financial Year 2008-09 and balance Options were lapsed.

(ii) Stock Option Scheme (2007) Growth Grant

Under this scheme, the Company had granted 4,30,300 Options (pre-split of Company's Equity Shares) @ Rs. 95/- each to the eligible employees which were to be exercised within four years from the date of the grant.

Out of the above, during the financial year 2010-2011, 1,03,850 Options (post - split of Company's Equity Shares from the face vale of Rs. 10/- to Rs. 5/-each) were exercised by the eligible employees.

The summary of the Stock Options exercised by the eligible employees during the year under review are as under :

(iii) Stock Option Scheme (2010)

The Company by a Special Resolution passed at Annual General Meeting held on September 29th, 2010 approved the Employee Stock Option Scheme under section 79A of the companies act 1956 to be read along with SEBI (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999 whereby 30,00,000 options convertible into Equity Shares of Rs. 5/- each to be granted to eligible employees of the Company. This stock option scheme is titled as '"ESOP 2010". Out of the same 4,27,500 options have been granted during the year.

(f) Issue of Shares against Warrants

During the year under review, the Company has converted 2,00,000 (Two Lacs) (Previous Year - NIL) Warrants into 2,00,000 Equity Shares of Rs. 5/- each to Bennett, Coleman and Company Limited ("BCCL") at a premium of Rs. 272/- per share on April 01st, 2011.

(g) Issue of Shares other than Cash

Details of Shares allotted as fully paid up by way of bonus shares before March 31st, 2012

The Company allotted 13,22,300 equity shares of Rs. 10 each as fully paid-up bonus shares by capitalization of reserves in 1999-2000

The Company allotted 71,05,605 equity shares of Rs. 10 each as fully paid-up bonus shares by capitalization of reserves in 2006-2007

(h) Buy- Back of Equity Shares

The Board of Directors of the Company in their meeting held on February 18, 2011 had resolved to buyback ("Buyback") its fully paid-up equity shares of the face value of Rs. 5/- each (Equity Shares) from the existing Equity Share owners of the Company, other than Promoters of the Company. This Buy back was to be made from the stock exchange in accordance with the provisions of Sections 77A, 77AA, 77B and other applicable provisions of the Companies Act, 1956 ("the Act") and Securities and Exchange Board of India (Buy Back of Securities) Regulation, 1998 ("the Regulation") and the relevant provisions of Memorandum of Association and Articles of Association of the Company. The maximum price at which this buy back was to be executed was not to exceed Rs. 140/- per Equity Share ("Maximum Buyback Price") payable in cash, and the maximum amount allocated for the Total Buy Back was Rs. 2,800 Lakhs ("Offer size"). The Date of Opening of the buyback was April 25, 2011 and last Date for the Buyback was February 17, 2012. During the financial year, the Company has bought back 5,97,075 Equity Shares for a Total Consideration of Rs. 324.87 Lakhs. The Bought back shares have been duly extinguished by the Company.

(i) Details of Security Offered to Banks for Working Capital Facilities

Following securities have been offered to various banks with the first charge with State Bank of India and pari pasu charged with Standard Chartered Bank and Barclays Bank

(a) Mortgage of Gala no 4, Bldg No 3, Sector III,MIDC Mahape, Navi Mumbai

(b) Mortgage of Gala no 3, Bldg No 3, Sector III,MIDC Mahape, Navi Mumbai

(c ) Mortgage of Gala no 301,302,305,306.307,308, Bldg No 3, Sector III,MIDC Mahape, Navi Mumbai

(d) Mortgage of Gala no 7, Bldg No 3, Plot No MBP 2, Mahape, Navi Mumbai

(e) Hypothecation Charge on Movable assets except Vehicles

(f) Hypothecation Charge on Current Assets

(g) Fixed Deposit with State Bank of India of Rs. 87,200,104 (including accrued Interest)

(h) Personal Guarantee of directors Mr. Prakash D Shah and Mr. Nitin D Shah

(b) Details of Security Offered for Inter-Corporate Deposit

Secured against Lien of 50,00,000 Units @ 10 each of IDFC Fixed Maturity Plan -Eighteen Month Series 7- Growth.

Note:

Addition to Lease Improvements have been made as represented and Certififed by the Management.

Intellectual Property Right (IPR) are in process of being developed further but as represented by the Management the amount capitalized by them during the year under consideration represents the product which can be sold to its customers. The management has informed that the active utility life of this IPR is 10 years.

(i) Inventories are valued at lower of cost and net realizable value

(ii) The value of the Inventory as on March 31st, 2012 includes certain slow moving items which has not been provided for during the valuation of the same. The valuation of the Inventory is as certified by the management.

1) Corporate information

Allied Digital Services Limited (referred to as "ADSL" or the "Company") is renowned as a leading Global IT Transformation Architect, having its operations pan India, USA, Australia, Europe and Middle east Asia with an impeccable track record for designing, developing, deploying and delivering end-to-end IT infrastructure services. It provides wide range of information technology and consultancy services including Infrastructure Services, End user IT Support, IT asset life cycle, enterprise applications and integrated solutions.

The Company's registered office is in Mumbai and has presence in pan India, and it has Subsidiary companies in USA, Singapore and Australia.

1) Acquisitions

(i) On April 1st, 2011, the Company has entered into a final 'Share Purchase & Joint Venture Agreement' with 'e-Cop Pte Ltd., Singapore'. By virtue of this agreement, effective April 1st, 2011 'e-Cop Surveillance India Pvt. Ltd.,' has become a subsidiary of the Company.

2) Employee Benefits Gratuity Plan

(i) An amount of Rs. Nil Lacs (Previous Year Rs. 10.00 Lacs) has been contributed towards the Employees Gratuity Fund against the current year liability of Rs. 91.08 Lacs (Previous YearRs. 65.75Lacs) and earlier year liabilities as per the Actuarial Valuation for Gratuity as on March 31st, 2012. The Company has its Employees Gratuity Fund managed by Birla Sun Life Insurance Company.

(ii) The Company recognized Rs. 152.98 Lacs (Previous year: Rs. 155.54 Lacs) for provident fund contributions during the year. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme and the same are charged to the Profit and Loss Account of the Company.

3) Contingent Liabilities

(i) As per the Certificate issued by the banks, value of bank guarantees outstanding as on March 31st, 2012 amounts to Rs. 1,178. 46 Lacs (Previous YearRs. 1,520.48 Lacs) and the value of Letter of Credit Outstanding as on March 31st, 2012 amounts to Rs. 551.25 Lacs (Previous YearRs. 77.22 Lacs).

(ii) Claim against the Company not acknowledged as debts Rs. 8.93 Lacs (Previous YearRs. 8.93 Lacs).

(iii) The Income tax Authorities carried out a search operation at certain locations of the Company on February 4th, 2011. The Company extended its full co-operation to the tax authorities and various statements were recorded during the course of search. The search operation got concluded on the same business day. The Company had been asked to file the Revised Return of Income from A.Y. 2005-06 which has been complied with after revising/modifying its Income. The details of which are as under:

The additional Income Tax Liability of Rs. 57.93 Lacs as per the above table plus interest thereon has not been provided for in the Books of Accounts during the year under review.

iv) During the year under consideration the Company was subject to Audit from the Service Tax Department. The said audit has been concluded and the intimation from the Service Tax Department is awaited as on the date signing of this Balance Sheet.

(v) The Company has given guarantees for the loans taken by the subsidiary companies from Banks and Financial Institutions. The details of the Guarantee are as follows:

(v) There is a delay in payment of taxes and filing of Return of Service Tax and VAT due to which an additional liability of these taxes on account of Interest on delay in payment of these taxes as well as penalty on delay in filing the returns shall accrue. The company has not provided for these liabilities in their Balance Sheet as on March 31st, 2012.

4) Current Assets, Loans and Advances

In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated and are realizable in the ordinary course of business.

i) In respect of confirmation for Sundry Debtors and Loans and Advances as at March 31st, 2012, the Company has not received the same from the parties at the time of signing of the Balance sheet. The management is in the process of reconciling and obtaining the said confirmations as at March 31st, 2012 from the parties. Further, on completion of the reconciliation and balance confirmations as stated above, the need to make further provisions for the doubtful debts, if any, will be ascertained by the Company in due course. The ageing of the debtors as reported in the balance sheet could not be verified by the Auditors. Due to current economic market conditions as well as increased pricing pressure from customer, there is a delay in collecting the outstanding dues from the customer. However, the management is of the opinion that all the Sundry Debtors, Loans and Advances as appearing in the Balance Sheet are good and recoverable. For abundant precaution, the Company has made an additional provision for doubtful debts of Rs. 16 Lac during the year under consideration.

ii) The value of the Inventory as on March 31st, 2012 includes certain slow moving items which has not been provided for during the valuation of the same. The valuation of the Inventory is as certified by the management.

(iii) Amounts extended to wholly owned subsidiaries Company has been shown under the head investment as the same is long term in nature.

5) MAT Credit Entitlement

Considering the consistent profit over the years and also considering the future profit projections, the management believes that there are adequate and satisfying reasons with regards to the earning of future taxable income and payment of tax under normal tax within the specified period. Hence MAT credit entitlement of Rs. 280.00 Lacs (Previous yearRs. 433.77lacs) has been recognized during the year consideration.

6) Current Liabilities and Provisions

In the opinion of the Board, the current liabilities are approximately at the fair value in the Balance Sheet. Balances of sundry creditors are subject to confirmation and reconciliation.

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

7) Quantitative Information

Considering the nature of business of the company, it is not practically possible to give quantitative information in the absence of common expressible unit.

8) Dues to Micro, Small and Medium Enterprises

No response was received by the Company from its creditors to enable them to identify the same and hence the above information has been determined on the basis of the explanation provided by the Company to the auditors. However as per the information provided by the Company, there are no Micro, Small and Medium Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at the balance Sheet date. This has been relied upon by the auditors.

9) Related Party Disclosures

A) Related Parties and their Relationship

(a) Subsidiaries

(i) Allied Digital Services LLC (formerly known as En Pointe Global Services LLC)

(ii) Allied Digital INC

(iii) Allied Digital Singapore Pte Ltd

(iv) Allied Digital Asia Pacific Pty Ltd

(v) Digicomp Complete Solutions Ltd.

(vi) En Pointe Technologies India Private Limited

(vii) E-Cop Surveillance (India) Private Limited

(b) Associates

(i) Assetlite Equipment India Private Limited

(ii) Abhirati Properties Private Limited

(iii) Digicomp Electronics Testing Services (DETS) Pte. Limited

(iv) The Gateways

(c) Key Management Personnel& their relatives (KMP)

Mr. Nitin Shah Chairman & Managing Director

Mr. Prakash Shah Executive Director - Commercial

Mr. Manoj Shah Executive Director & CIO

Mr. Bimal Raj Executive Director & CEO (Resigned on Feb. 7th, 2012 )

Mr. Paresh Shah Executive Director & CEO (Appointed on Nov. 10th, 2011)

Mrs.Tejal P. Shah Wife of Mr. Prakash Shah

Mr. Nehal N. Shah Son of Mr. Nitin Shah

Miss.Dhara N. Shah Daughter of Mr. Nitin Shah

Mrs. Smitha B. Raj Wife of Mr. Bimal Raj

Mrs. Rita P Shah Wife of Mr. Paresh Shah

10) Lease Income

In accordance with the Accounting Standard 19, "Leases" issued by the Institute of Chartered Accountants of India, the Company has given Assets on Operational Lease on or after April 1st, 2001. These assets have been Capitalized and consequently depreciation has also been provided on these assets. The minimum lease rent receivable as at March 31st, 2012 are as follows:

11) These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous year's figures have been recast / restated wherever necessary.

12) Previous year's figures have been recast / restated wherever necessary.

13) Previous year's figures are in italics.

 
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