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Directors Report of Allsec Technologies Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting to you the 15th Annual Report of the company covering the financial year ended 31st March 2014.

FINANCIAL HIGHLIGHTS (Rs. In Million) YEAR ENDED YEAR ENDED Y-O-Y % PARTICULARS Mar 31 2014 Mar 31 2013 in Dec

SNECRoVMEeFRQM 1067.4 1074.8 (1%)

total costs 958.2 1036.2 (8%)

OPERATING MARGIN 109.2 38.6 183%

OTHER INCOME 27.6 35.1 (21%)

EBIDTA 136.8 73.7 86%

EBIDTA (%) 13% 7% 86%

DEPRECIATION 74.8 101.4 (26%)

FINANCE CHARGES 7.7 5.6 38%

PBT / (loss) before tax 54.3 33.3 _

PBT / (loss) After tax 54.3 33.3 _

CASH PROFIT 129.1 68.1 90%

Dividend

The Board of Directors of your Company does not recommend any dividend for the Financial Year 2013- 14 in view of the accumulated losses and to conserve cash for future growth of your company.

Business Outlook

Your Company has turned around this year and has made a good overall performance due to sustained marketing efforts, focusing on right pricing of contracts, non renewal of unprofitable contracts and also sustained cost cutting efforts. The Standalone total Income is at the same levels at Rs. 1067.4 Million (Previous year: Rs. 1074.8 Million).

There is an increase in Exports revenue by 5.8% in local currency terms. Though there is a drop of revenues in US Dollar terms, the exchange rate was favorable throughout the year. Economy in US and UK is now showing definite signs of improvement and we believe there will be a significant growth in our top line in the next few years. With additional focus on business development in US, your company believes that growth in business from the US and UK will be to our acceptable levels and profitability will improve substantially.

Domestic business saw a decline of 14% compared to last year and it is mainly due to your Company''s conscious decision not to renew contracts with 2 major

clients whose pricing was not profitable. Despite that we have added quite a few clients in the Domestic market during the year to offset this and the Pricing with these new Clients were negotiated at normal levels. This has resulted in the improved profitability of your company as can be seen from the results.

HR BPO is a vertical which is growing organically for us and this will continue in the coming years too. The plan is to expand HR BPO to new geographies mainly in the Phillipines and the US. We are also making efforts to actively market the new SAAS based application. The new markets in Phillipines as well as in the US will be the key growth area for the future in HR BPO and marketing efforts will be increased to market in the new destinations in the coming year. We believe HR BPO business will see a significant growth in the next 2 years.

Profit before Interest, Depreciation and Tax (EBIDTA) has almost doubled to INR 136.8 Million from previous year of INR 73.7 Million due to efforts taken by your company as stated in the previous paragraphs. Your company has reported Net Profit after tax for the current year and it is at INR 54.3 Million as compared to Net loss after tax of INR 33.3 Million for the previous year. Detailed analysis of the Standalone results forms part of the Management Discussion and Analysis (MDNA) report provided separately as part of the Annual Report.

The Auditors have made qualified opinion in Para 1 and Para 2 under "basis of qualified opinion" in the Audit Report for the year 2013-14. We have given our detailed explanation to this qualified opinion in Note 19 (a) & (b) of the Notes forming part of the Accounts. In view of this, we have not made any provision in the books of Accounts. The same may be considered as our explanation to the qualified opinion of the Auditors.

Performance of Retreat Capital Management Inc, was disappointing in 2013 and the head start we had in 2012 was not consolidated by Rereat management team. The consulting business was not growing and was facing significant challenges as organizations seek to cut more costs. The nature of business has changed with the business requiring more innovative solutions including offshore mix to deliver cost savings. The management team at Retreat has been changed in early 2014 and the new emphasis is to focus on more stable process driven transactions based business, compared to the consulting business done earlier. We have taken a few steps to cut costs as well as resize work force and sales force and we are confident that the coming quarters will bring growth to the Retreat business. The focus is on process driven transaction related businesses which will bring stability to the revenues and create an opportunity to grow organically.

The company is continuing to pursue growth through the Organic route in both the overseas and domestic

markets and see very good traction for growth in both US and Domestic Markets. The company has delivery centers in India and Manila for the international segment and has Domestic delivery centers in major cities in India and has the capability to offer delivery in multiple Indian languages.

Quality & information Security

the vision of Quality and Information security at Allsec is to institutionalize excellence in quality of service and security of data of Clients, customers and organization by developing and deploying simple, efficient and effective processes using the latest Quality models in accordance with ISo 9001:2008 interlined with data security controls prescribed by International standards such as ISo 27001:2005. As part of its continuous improvement program, ISo 9001:2008 (Quality Management System), ISo 27001:2005 (Information Security Management), pCI DSS compliance certifications are renewed at Chennai location of your company. To take this forward, Manila location of your company is certified for ISo 27001:2005 for the first time and pCI DSS & HIpAA, Certifications were renewed. Further existing ISAE 3402 which is graduated version of SAS 70 type II certification for HR Bpo business is renewed to ensure consistency with business and market needs in HR outsourcing. Several client audits took place on information security and data privacy and results indicated that the company accomplished required compliance with their contractual and standards requirements.

Disclosure as per Securities and Exchange Board of india (employees stock option scheme and employee stock Purchase scheme) Guidelines, 2011

The details are given in Annexure -A to Directors Report Responsibility statement

Your Directors confirm the following:

i. That in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. That the directors had 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 and of the profit or loss of the company for that period;

iii. That the directors had 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;

iv. That the directors had prepared the annual accounts on a going concern basis.

subsidiaries

The company has four subsidiaries as at year end namely Allsectech Inc, USA, Allsectech Manila Inc., philippines, Retreat Capital Management Inc, uSA and Centigral Inc, USA.

A Statement containing brief financial particulars of the subsidiary companies for the year ended March 31, 2014 is included in the Annual Report. The Consolidated Financial Statements of the Company and its Subsidiaries prepared in accordance with Accounting Standard AS-21 form part of the Annual Report and Accounts.

The Annual Accounts of the said subsidiaries and the related detailed information will be made available to the investors of the Company/Subsidiaries, seeking such information at any point of time. The copies of Annual Accounts of the Subsidiary Companies will also be kept for inspection by any investor at the Corporate office of the Company.

Deposits:

Your company has not accepted any deposit from the public during the period under review and did not have any outstanding deposits.

conservation of energy, technology absorption, for- eign exchange earnings and outgo

Your Company being in the Information Technology Enabled Services (ITES) business, the provisions relating to conservation of energy and technology absorptions are not applicable. The details of the earnings and expenditure in foreign currency are given below:

Particulars INR (Millions)

Earnings in Foreign Currency 536.8

Expenditure in Foreign Currency 67.5

Remittance of Dividend in Foreign Currency -

Directors

Mr. R. Jagadish, Director retire at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.

Dr. Krishnakumar Srinivasan, a Director who was appointed as an Additional Director and who holds office as such upto the date of Fifteenth Annual General Meeting of the Company and in respect of whom Notice under section 160 of the Act has been received from members signifying their intention to propose Dr. Krishnakumar Srinivasan as a candidate for the office of Director and accordingly a resolution will be placed before the members at the forthcoming Annual General Meeting.

Mr. S. Premkumar, a Director who was appointed as an Additional Director and who holds office as such upto the date of Fifteenth Annual General Meeting of the Company and in respect of whom Notice under section 160 of the Act, has been received from members signifying their intention to propose Mr. S. premkumar as a candidate for the office of Director and accordingly a resolution will be placed before the members at the forthcoming Annual General Meeting.

Mr. T. Anantha narayanan is an Independent Director of the Company and have held the position as such for more than 5 (five) years.

the Securities and Exchange Board of India (SEBI) has amended Clause 49 of the Listing Agreement inter alia stipulating the conditions for the appointment of independent Director by a listed company. It is proposed to appoint Mr. T Anantha narayanan as an Independent Director under Section 149 of the Act and Clause 49 of the Listing Agreement to hold office for further 5 (Five) consecutive years for a term with effect from 14th August, 2014.

Mr. T. Anantha narayanan is not disqualified from being appointed as Director in terms of Section 164 of the Act and have given his consent to act as Director.

Dr. Bala V Balachandran has informed that he would like to resign from the position of Chairman & Director with effect from August 14, 2014. the Board wishes to place on record its appreciation for the wonderful guidance provided by Dr. Bala V Balachandran during his tenure as Chairman of the Company. Mr. Aravinthan Wijay, Director resigned from the Board on 23rd May 2014.

Corporate Governance

A Report on Compliance of Corporate Governance under Clause 49 of the listing agreement & Certificate from Auditors confirming compliance of conditions of Corporate Governance is included in this Annual Report.

investor Services

Your company will constantly endeavor to give the best possible services to the investors. towards this end, the following are some of the initiatives taken by the Company:

the investor Information section of the Website of the Company (www.allsectech.com), furnishes important financial details and other data of frequent reference by the investors. the Company also has a Shareholders/ Investors Relation Committee to address shareholders grievances if any and resolve them as & when they are highlighted.

the Company has provided an exclusive email id: investorcontact@allsectech.com for the investors to facilitate the redressal of the queries and complaints of the investors.

the Company has appointed M/s Karvy Computershare pvt ltd as Registrars & Share transfer Agents for attending to issues relating to physical shares and routine services requests.

Shareholders can also address any unresolved issues or information requests by postal mail to -the Company Secretary, Allsec technologies Ltd, 46B, Velachery Main Road, Velachery, Chennai 600042.

Shareholders are requested to update their email addresses with their respective depository participants so that the Company can provide better services at all times.

Auditors

M/s. S.R. Batliboi & Associates, Chartered Accountants were re-appointed as Auditors of the company at the annual general meeting held on 12th August, 2013. M/s. S.R. Batliboi & Associates retire at this Annual General meeting and being eligible offers themselves for re-election.

Employees

Information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of employees) Rules 1975, as amended regarding the employees, is given in the Annexure to the Directors'' Report. However, as per the provisions of Section 219 of the Companies Act, 1956, the Report and Accounts are being sent to all the members of the Company, excluding the aforesaid information. the said information would be filed with the Registrar of Companies and also would be available for inspection by the members at the Corporate office of the Company. Any member interested in obtaining such particulars may also write to the Company Secretary, Allsec technologies Limited, 46B, Velachery Main Road, Velachery, Chennai 600042.

Acknowledgement

Your Directors wish to place on record their appreciation for the excellent support and co-operation given by customers, shareholders, service providers and Government Agencies.

Your Directors also record their appreciation and gratitude to Financial Institutions and Bankers for their continued support and timely assistance in meeting the Company''s resource requirements. Your Directors acknowledge the dedicated services rendered by all the employees of the company.

For and on behalf of the Board of Directors

A. saravanan R. Jagadish Director Director

place : Chennai Date : May 23, 2014


Mar 31, 2013

The Directors have pleasure in presenting to you the 14th Annual Report of the company covering the financial year ended 31st March 2013.

FINANCIAL RESULTS:

The performance of the Company for the financial year 2012-13 is summarized below:

(Rs. in Million)

Particulars consolidated sTANDALoNE FY FY FY FY 2012- 2011- 2012- 2011- 13 12 13 12

Income from Services 3200.7 1831.4 1074.8 1247.1

Other Income 41.6 54.3 35.1 50.5

Total Income 3242.3 1885.7 1109.9 1297.6

Profit/(Loss) before Interest, Depreciation & Tax (EBIDTA) 405.7 44.3 73.7 (32.8)

Depreciation & Amortisation 147.7 141.4 101.4 107.9

Profit /(Loss) before interest & tax 258.0 (97.1) (27.7) (140.7)

Interest & Finance charges 51.7 7.8 5.6 6.3

Profit /(Loss) before taxation 206.3 (104.9) (33.3) (147.0)

Profit /(Loss) after taxation 88.4 (147.2) (33.3) (147.0)

Profit /(Loss) after taxation and Minority Interest 19.5 (169.8) - -

Profit / (Loss) brought forward (525.5) (355.7) (339.6) (192.6)

Surplus/(Deficit) carried forward to Balance Sheet (506.0) (525.5) (372.9) (339.6)

Dividend

Due to the loss incurred during the year, the Board of Directors of your Company does not recommend any dividend for the Financial Year 2012-13.

Business outlook

The Consolidated total Income grew from Rs. 1885.7 Million to Rs. 3242.3 Million, a growth of 72% over the previous financial year. EBIDTA has increased by 9 times from Rs. 44.3 Million to Rs. 405.7 Million which is the highest for the Company. Net Profit after Taxation is at Rs. 19.5 Million, while it was a loss of Rs. 169.8 Million for the previous year. The contribution to increased profitability is from Retreat Capital Management Inc, the subsidiary which we acquired in 2010.

The Standalone total Income has decreased from Rs.1297.6 Million to Rs. 1109.9 Million over the previous financial year. The Company was in the process of re-pricing all the Domestic Contracts so that all contracts are profitable. Due to this, we did not renew contracts with 2 major Clients whose pricing was not acceptable to us. This has resulted in lower revenues from domestic clients by 32% for the year. However your Company''s focus on profitability has yielded better EBITDA this year.

There is an increase in Exports revenue by 24% in local currency terms. The new businesses which we got have gone to backfill lost business during last year and this has resulted in a revenue growth from USA, which has always been our dominant market. Even though economy in US and UK is not showing definite signs of improvement, we believe we will see significant growth in the next few years. With additional focus on business development in uS, your company believes that growth in business from the uS and uK will be good and profitability will improve substantially.

Net loss After Tax reduced considerably from Rs. 147 Million to Rs 33 Million, a decline of 77% over previous financial year. During the year, we had written off old receivables amounting to Rs. 42.6 Million and we have also spent money on closing of delivery centers consequent to closure of two contracts with Domestic clients. Considering this, your Company has actually made Operating Profit for the year. Detailed analysis of the Standalone results forms part of the Management Discussion and Analysis (MDNA) report provided separately as part of the Annual Report.

The Auditors have made qualified opinion in Para 1 and Para 2 under "basis of qualified opinion" in the Audit Report for the year 2012-13. We have given our detailed explanation to this qualified opinion in Note 20(a) & (b) of the Notes forming part of the Accounts. In view of this, we have not made any provision in the books of Accounts. The same may be considered as our explanation to the qualified opinion of the Auditors.

Acquisition of Retreat Capital Management Inc last year seems a right step taken by your Company and the results of Retreat are very encouraging as can be seen from the consolidated results. The growth potential looks good and in the coming years, the contribution to Profit from Retreat business will be substantial.

The company is continuing to pursue growth through the Organic route and sees very good traction for growth in both US and Domestic Markets. The company has delivery centers in uSA, India and Manila for the international segment and has Domestic delivery centers in major cities in India and has the potential to offer delivery capabilities in multiple Indian languages.

Quality & information Security

The vision of Quality and Information security at Allsec is to institutionalize excellence in quality of service and security of data of Clients, Customers and organizations by developing and deploying simple, efficient and effective processes using the latest Quality models in accordance with ISo 9001:2008 interlined with data security controls prescribed by International standards such as ISo 27001:2005. As part of its continuous improvement program, ISo 9001:2008 (Quality Management System), ISo 27001:2005 (Information Security Management), pci DSS compliance certifications are renewed at Chennai location of your company. To take this to the next paradigm, Manila is certified for ISo 27001:2005 and pCI DSS & HipAA. Further, existing ISAE 3402 which is a graduated version of SAS 70 Type II certification for HR Bpo is renewed to ensure consistency with business and market needs in HR outsourcing. Several client audits took place on information security and data privacy and results indicated that the company accomplished required compliance with their contractual and standards'' requirements.

Disclosure as per Securities and Exchange Board of india (Employees Stock option Scheme and Employee Stock Purchase Scheme) guidelines, 2011

The details are given in Annexure - A to Directors Report.

Responsibility Statement

Your Directors confirm the following:

i. That in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. That the directors had 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 and of the profit or loss of the company for that period;

iii. That the directors had 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;

iv. That the directors had prepared the annual accounts on a going concern basis.

Subsidiaries

The Company has four subsidiaries as at year end namely Allsectech Inc, USA, Allsectech Manila Inc., philippines, Retreat Capital Management Inc, USA and Centigral Inc, USA.

A Statement containing brief financial particulars of the subsidiary companies for the year ended March 31, 2013 is included in the Annual Report. The Consolidated Financial Statements of the Company and its Subsidiaries prepared in accordance with Accounting Standard AS-21 form part of the Annual Report and Accounts.

The Annual Accounts of the said subsidiaries and the related detailed information will be made available to the investors of the Company/Subsidiaries, seeking such information at any point of time. The copies of Annual Accounts of the Subsidiary Companies will also be kept for inspection by any investor at the Corporate office of the Company.

Deposits:

Your company has not accepted any deposit from the public during the period under review and did not have any outstanding deposits. conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company being in the Information Technology Enabled Services (ITeS), the provisions relating to conservation of energy and technology absorptions are not applicable. The details of the earnings and expenditure in foreign currency are given below:

Particulars INR (millions)

Earnings in Foreign Currency 507.5

Expenditure in Foreign Currency 69.0

Remittance of Dividend in Nil Foreign Currency

Directors

Mr. T. Anantha Narayanan and Mr. A Saravanan, Directors retire at the ensuing Annual General Meeting and being eligible offer themselves for re- appointment.

Mr. Aravinthan Wijay, a Director who was appointed as an Additional Director and who holds office as such upto the date of Fourteenth Annual General Meeting of the Company and in respect of whom Notice under section 257 of Companies Act, 1956 has been received from members signifying their intention to propose Mr. Aravinthan Wijay as a candidate for the office of Director and accordingly a resolution will be placed before the members at the forthcoming Annual General Meeting.

Mr. A. Sankarakrishnan, a Director on the Board of the Company, expired on 9th April, 2013. The Board condoles the death of Mr. A. Sankarakrishnan and records its appreciation of the valuable services rendered by him.

Corporate governance

A Report on Management Discussion & Analysis of performance and Compliance of Corporate Governance under Clause 49 of the listing agreement & Certificate from Auditors confirming compliance of conditions of Corporate Governance is included in this Annual Report.

Investor Services

Your company will constantly endeavor to give the best possible services to the investors. Towards this end, the following are some of the initiatives taken by the Company:

The investor Information section of the Website of the Company (www.allsectech.com), furnishes important financial details and other data of frequent reference by the investors. The Company also has a Shareholders/ Investors Relation Committee to address shareholders grievances if any and resolve them as & when they are highlighted.

The Company has provided an exclusive email id: investorcontact@allsectech.com for the investors to facilitate the redressal of the queries and complaints of the investors.

The Company has appointed M/s. Karvy Computershare pvt Ltd as Registrars & Share Transfer Agents for attending to issues relating to physical shares and routine services requests.

Shareholders can also address any unresolved issues or information requests by postal mail to -The Company Secretary, Allsec Technologies Ltd, 46B, Velachery Main Road, Velachery, Chennai 600042.

Shareholders are requested to update their email addresses with their respective depository participants so that the Company can provide better services at all times.

Auditors

M/s. S.R.Batliboi & Associates LLp, (previously known as M/s. S.R.Batliboi & Associates) Chartered Accountants were re-appointed as Auditors of the company at the annual general meeting held on 2nd August, 2012. M/s. S.R.Batliboi & Associates LLp retire at this Annual General meeting and being eligible offers themselves for re-election.

Employees

Information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules 1975, as amended regarding the employees, is given in the Annexure to the Directors'' Report. However, as per the provisions of Section 219 of the Companies Act, 1956, the Report and Accounts are being sent to all the members of the Company, excluding the aforesaid information. The said information would be filed with the Registrar of Companies and also would be available for inspection by the members at the Corporate office of the Company. Any member interested in obtaining such particulars may also write to the Company Secretary, Allsec Technologies Limited, 46B, Velachery Main Road, Velachery, Chennai 600042.

Acknowledgement

Your Directors wish to place on record their appreciation for the excellent support and co-operation given by customers, shareholders, service providers and Government Agencies.

Your Directors also record their appreciation and gratitude to Financial Institution and Bankers for their continued support and timely assistance in meeting the Company''s resource requirements. Your Directors acknowledge the dedicated services rendered by all the employees of the company.

For and on behalf of the Board of Directors

A. Saravanan R. Jagadish

Director Director

Chennai

May 8, 2013


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting to you the 12th Annual Report of the company covering the financial year ended 31st March 2011.

FINANCIAL HIGHLIGHTS (Rs. in Million)

Year Year Particulars Ended Ended March 31, March 31, 2011 2010

Income from Services 1,415.45 1,220.80

Other Income 35.76 107.07

Total Income 1,451.21 1,327.87

Profit/(Loss) before Interest,

Depreciation & Tax (EBITDA) 68.64 37.03

Depreciation & Amortisation 103.38 101.42

Profit/(Loss) before interest & tax (34.74) (64.40)

Interest & Finance charges 4.71 3.74

Profit /(Loss) before taxation (39.45) (68.14)

Profit /(Loss) after taxation (39.45) (68.14)

Profit / (Loss) brought forward (153.22) (85.08)

Surplus/(Deficit) carried forward to Balance Sheet (192.67) (153.22)

Dividend

Due to the loss incurred during the year, the Board of Directors does not recommend any dividend for the Financial Year 2010-11.

Business Outlook

The company made further inroads in the domestic market during the year and added significant volumes increasing the Domestic revenue by over 30%. However the Company increased its international revenues by 4% only due to the following reasons:

Market Conditions in USA has not improved and any new businesses which we got have only gone to backfill reductions from clients we lost during the year and this has resulted in a stagnant revenue growth in USA which has always been our dominant market.

Strengthening of Rupee against the Dollar during the second half of the year resulting in lower rupee realization.

With the economy showing definite signs of improvement in USA, we believe we will see significant growth in the next few years. With a view to take full advantage of this, your company has set up an onshore facility in USA with a 100 seater capacity. The Company believes this Delivery centre will be a strategic advantage and will enhance its Marketing efforts in USA.

With the growth in the domestic business and resultant favourable cost structures due to the spread of fixed costs over a larger base, we have improved our performance compared to last year and hope to see significant profitability increases in the coming years. Compared to FY 2009-10, the company has reduced its net losses from INR 68 Mn to INR 39 Mn and it is even better if seen in the context of lower other income which was available during the last year.

The company is continuing to pursue growth through the Organic route in both the markets and see very good traction for growth in both US and Domestic Markets. The company has delivery centres in USA, India and Manila for the international segment and has Domestic delivery centres in major cities in India and has the capability to offer delivery capabilities in multiple Indian languages.

Also inorganic growth is an opportunity for us to expand into new domains and markets which will help the company to achieve better results. During the year, the Company has acquired a US Company in the mortgage space. The mortgage space is definitely a very sought after vertical for the Company and we believe the timing is right for entry into the Mortgage servicing industry.

New Center in US

During the year, Allsectech Inc, USA, the wholly owned subsidiary of the company has opened a new centre at Bedford, Texas, USA. The Capacity of this center is 100 seats. This center has become operational since December 2010.

Acquisition of Retreat Capital Inc, USA

Retreat Capital Management Inc.,USA a Company incorporated in the State of California, is a default management solution company that offers outsourcing services designed to assist lenders, mortgage servicers and other institutions. The company has acquired 66% of the share capital from the promoter for cash. We feel that it is a good platform to explore vast opportunity in the mortgage domain, where the company does not have any presence.

Quality & Information Security

The vision of Quality and information security at Allsec is to institutionalize excellence in quality of service and security of customer data by developing and deploying simple, efficient and effective processes using the latest Quality models interlined with data security controls prescribed by international standards such as ISO 27001:2005. As part of its continuous improvement program, the Company is certified for ISO 27001 (Information Security Management), and

ISO 9001:2008 . In addition to such overall process and security systems certifications, the Company has also achieved SAS 70 Type II certification for HR BPO services to realize higher levels of maturity and be consistent with business and market needs in HR outsourcing.

During the current year, the Company has successfully completed certification for PCI - DSS Level I at our Chennai and Manila locations. Further, Manila location has been certified for HIPPA compliance.

Disclosure as per Securities and Exchange Board of India (Employees Stock option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

The details are given in Annexure - A to Directors Report.

Responsibility Statement

Your Directors confirm the following:

i) That in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) That the directors had 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 and of the profit or loss of the company for that period;

iii) That the directors had 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;

iv) That the directors had prepared the annual accounts on a going concern basis.

Subsidiaries

The company has three subsidiaries as at year end namely Allsectech Inc, USA, Allsectech Manila Inc., Philippines and Retreat Capital Management Inc, USA.

A Statement containing brief financial particulars of the subsidiary companies for the year ended March 31, 2011 is included in the Annual Report. The Consolidated Financial Statements of the Company and its Subsidiaries prepared in accordance with Accounting Standard AS-21 form part of the Annual Report and Accounts.

The Annual Accounts of the said subsidiaries and the related detailed information will be made available to the investors of the Company/Subsidiaries, seeking such information at any point of time. The copies of Annual Accounts of the Subsidiary Companies will also be kept for inspection by any investor at the Corporate Office of the Company.

Deposits:

Your company has not accepted any deposit from the public during the period under review and did not have any outstanding deposits.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company being in the Information Technology Enabled Services (ITES), the provisions relating to conservation of energy and technology absorptions are not applicable. The details of the earnings and expenditure in foreign currency are given below:

Particulars INR (Thousands)

Earnings in Foreign Currency 684,811

Expenditure in Foreign Currency 78,769

Remittance of Dividend in Foreign Currency NIL

Directors

Mr.A.Saravanan and Dr.Bala V Balachandran, Directors retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Corporate Governance

A Report on Management Discussion & Analysis of Performance and Compliance of Corporate Governance under clause 49 of the listing agreement & Certificate from Auditors confirming compliance of conditions of Corporate Governance is included in this Annual Report.

Investor Services

Your company will constantly endeavor to give the best possible services to the investors. Towards this end, the following are some of the initiatives taken by the Company:

The investor Information section of the Website of the Company (www.allsectech.com), furnishes important financial details and other data of frequent reference by the investors. The Company also has a Shareholders/ Investors Relation Committee to address shareholders grievances if any and resolve them as & when they are highlighted.

The Company has provided an exclusive email id: investorcontact@allsectech.com for the investors to facilitate the redressal of the queries and complaints of the investors.

The Company has appointed M/s Karvy Computershare Pvt Ltd as Registrars & Share Transfer Agents for attending to issues relating to Physical shares and routine services requests.

Shareholders can also address any unresolved issues or information requests by postal mail to -The Company Secretary, Allsec Technologies Ltd, 46B, Velachery Main Road, Velachery, Chennai 600042.

Auditors

M/s. S.R.Batliboi & Associates, Chartered Accountants were re-appointed as Auditors of the company at the annual general meeting held on 4th August, 2010. M/s. S.R.Batliboi & Associates retire at this Annual General meeting and being eligible offers themselves for re-election.

Employees

Information as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, as amended regarding the employees is given in the Annexure. to the Directors' Report. However, as per the provisions of Section 219 of the Companies Act, 1956, the Report and Accounts are being sent to all the members of the Company, excluding the aforesaid information. The said information would be filed with the Registrar of Companies and also would be available for inspection by the members at the Corporate Office of the Company. Any member interested in obtaining such particulars may also write to the Company Secretary, Allsec Technologies Limited, 46B, Velachery Main Road, Velachery, Chennai 600042.

Acknowledgement

Your Directors wish to place on record their appreciation for the excellent support and co-operation given by customers, shareholders, service providers and Government Agencies.

Your Directors also record their appreciation and gratitude to Financial Institution and Bankers for their continued support and timely assistance in meeting the Company's resource requirements. Your Directors acknowledge the dedicated services rendered by all the employees of the company.

For and on behalf of the Board of Directors

A. Saravanan R.Jagadish

Director Director

Place : Chennai Date : May 16, 2011

 
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