Directors Report of Allsec Technologies Ltd.
Mar 31, 2023
The Board takes pleasure in presenting you the twenty fourth Annual Report of your Company for the Financial Year ended March 31,2023.
Key Parameters of the financial performance (Standalone and Consolidated) of the Company are as follows:
|
(Rs. In Lakhs) |
||||||
|
PARTICULARS |
STANDALONE |
CONSOLIDATED |
||||
|
YEAR ENDED |
YEAR ENDED |
|||||
|
March 31, 2023 |
March 31, 2022 |
F/(A)* (in %) |
March 31, 2023 |
March 31, 2022 |
F/(A)* (in %) |
|
|
Revenue from Operations |
27,907 |
22,121 |
26% |
39,045 |
31,720 |
23% |
|
Total Costs |
22,963 |
17,982 |
(28%) |
30,202 |
23,697 |
(27%) |
|
EBIDTA |
4,944 |
4,140 |
19% |
8,843 |
8,023 |
10% |
|
EBIDTA (%) |
18% |
19% |
23% |
25% |
||
|
Other Income |
(3,415) |
(9,788) |
(65%) |
(803) |
(645) |
25% |
|
Depreciation and amortization expense |
2,264 |
1,805 |
(25%) |
2,825 |
2,345 |
(20%) |
|
Finance costs |
310 |
181 |
(71%) |
367 |
208 |
(76%) |
|
Profit before exceptional items and tax |
5,785 |
11,942 |
(52%) |
6,454 |
6,115 |
6% |
|
Exceptional items |
- |
- |
- |
- |
- |
- |
|
Profit before tax |
5,785 |
11,942 |
(52%) |
6,454 |
6,115 |
6% |
|
Profit after tax |
4,632 |
9,753 |
(53%) |
4,886 |
3,564 |
37% |
|
*F / (A) stands for Favourable / Adverse |
||||||
The Company operates two business segments viz Human Resources Operations (HRO) that caters to Payroll and other HR services we provide to our clients and the Digital Business Services (DBS) business which provides voice and non-voice services to domestic and international clients. The DBS business is delivered out of India and Manila, with capability to deliver from America as well. The HRO business is largely delivered out of India and Manila.
The DBS International business has had a great year with good sales wins in the North American market and we believe that this trend will continue in the coming years as well. We have identified Healthcare as a key vertical to focus on with a key client win gaining early traction in volumes. The DBS international business has also seen expansion in some of its services like Background verification and Insurance.
The HRO business has seen growth coming from both new customer wins and organic increase in our existing customer payroll count. We crossed the significant milestone of processing more than 1.2 million monthly
employee records during the current year which is a testament to our strong and scalable technology infrastructure. This has clearly established us as the No. 1 player in the Managed services business in India.
Allsec manages some of the complex payroll and tax scenarios for both global and domestic organisations across industries. Our labour law and payroll compliance practice complements our payroll business & helps us provide an end-to-end solution for our customers.
A quick glance on the financial highlights - At Standalone level, Profit before Tax and Exceptional Item (PBTE) stood at '' 5,785 lakhs as compared to '' 11,942 lakhs in the previous year. Your Company has reported Net profit after tax for the current year at '' 4,632 lakhs as against '' 9,753 lakhs for the previous year.
Consolidated Revenues for the year stands at '' 39,045 lakhs as compared to '' 31,720 lakhs in the previous year. Consolidated Profit before Tax and Exceptional Item increased to '' 6,454 lakhs from '' 6,115 lakhs in the previous year. Net profit after tax stood at '' 4,886 lakhs from '' 3,564 lakhs in previous year. Detailed analysis of the results forms part of the Management Discussion and
Analysis (MD&A) report provided separately as part of the Annual Report.
The Company has delivery centers in India at Chennai, Bengaluru & Noida locations. On the international front Allsec has centers in Manila (Philippines) and Dallas (United States of America).
There is no change in the nature of the Companyâs business.
The Company has not transferred any amount to the general reserves during the year under review.
4. Transfer of Unclaimed Dividend to Investor Education and Protection Fund
There is no unclaimed dividend that are outstanding for more than 7 years and therefore no amounts are required to be transferred to Investor Education and Protection Fund under Section 125(2) of the Act.
Your Company declared an interim dividend of '' 20/- per equity share on October 28, 2022. The Board does not recommend any final dividend for the year.
6. Dividend Distribution Policy
Pursuant to Regulation 43A of the Listing Regulations, the Board of Directors of the Company has formulated a Dividend Distribution Policy. The dividend, if any, to be declared in the future will be paid as per this policy depending on a number of parameters, including but not limited to the Companyâs profits, capital requirements, overall financial condition, contractual restrictions and other factors considered relevant by the Board. The Dividend Distribution Policy adopted by the Company is available on the Companyâs website which can be accessed using the link https://www.allsectech.com/ investor-information/
The paid up Equity Capital of the Company as on March 31, 2023 stood at ''15,23,83,260/-. During the period under review, there is no change in Share Capital of the Company.
The Company has two subsidiaries as at year end namely Allsectech Inc., USA, and Allsectech Manila Inc., Philippines.
The Consolidated Financial Statements of the Company and its subsidiaries are prepared in accordance with Indian Accounting Standards and forms an integral part of this Annual Report.
The Annual Accounts of the said subsidiaries and the related detailed information will be made available to the investors of the Company seeking such information at
any point of time. In terms of Section 134 of the Act and Rule 8(1) of the Companies (Accounts) Rules, 2014, the financial position and performance of the subsidiaries are given as an annexure to the Consolidated Financial Statements.
The Company monitors performance of subsidiary companies (list of subsidiary companies has been provided in the financial statements), inter-alia, by the following means:
a) Allsectech Inc, US is a material subsidiary of the Company and hence an Independent Director from your Company was appointed in Allsectech Inc as per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
b) The Audit Committee reviews the financial statements and minutes of the subsidiary companies on a quarterly basis.
c) The separate audited accounts of the subsidiary companies are placed on the website of the Company at https://www.allsectech.com/investor-information/.
d) Your Company has formulated a Policy on Material Subsidiary as required under SEBI (LODR) Regulations, 2015 and the policy is hosted on the website of the Company under the web link https:// www.allsectech.com/investor-information/.
9. Significant developments / updates for the Financial Year â23
Withdrawal of the Scheme of Arrangement between the Company and Quess Corp Limited:
During the financial year 2022-23, the Board of Directors of Quess Corp Limited and Allsec Technologies Limited, at their meeting held on 22 June 2022, after considering the recommendation and report of the Audit Committee and the Committee of Independent Directors, had approved the Scheme of Amalgamation of Allsec Technologies Limited (âTransferor Companyâ or âthe Companyâ) with Quess Corp Limited (âTransferee Companyâ) and their respective Shareholders and Creditors (hereinafter referred to as the âSchemeâ), subject to necessary approvals of Honâble NCLT and relevant Regulatory authorities.
On December 23, 2022, the Board of both Companies considered and approved the proposal of withdrawal of the Scheme under Clause 21.2 of the Scheme considering the changed market scenarios and informed to the Stock Exchanges.
10. Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013
Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the financial statements forming an integral part of the Annual Report.
11. Management Discussion & Analysis:
In terms of Regulation 34 of SEBI (LODR) Regulations, 2015, the Management Discussion and Analysis Report for the year under review is presented in a separate section, forming an integral part of the Report.
The Board of Directors of your Company consists of three (3) Non-Executive Non-Independent Directors and three (3) Non-Executive Independent Directors. All the Directors of your Company have rich background of highly productive leadership and management. The details of the members of the Board is given in the Corporate Governance section of the Annual Report.
a. Director retiring by rotation
In accordance with the provisions of Section 152 of the Act read with rules made thereunder and the Articles of Association of the Company, Mr. Guruprasad Srinivasan (DIN:07596207), is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. A resolution seeking shareholdersâ approval for his reappointment forms part of the Notice.
b. Key Managerial Personnel
List of the Key Managerial Personnel served during the period under review is mentioned below :
1. Mr. Ashish Johri - Chief Executive Officer (resigned wef February 15, 2023)
2. Mr. Naozer Dalal - Chief Executive Officer (appointed wef February 16, 2023)
3. Mr. Raghunath P - Chief Financial Officer (resigned wef January 3, 2023)
4. Mr. Gaurav Mehra - Chief Financial Officer (appointed wef January 4, 2023)
5. Ms. Sripiriyadarshini - Company Secretary
c. Changes in Directors & Key Managerial Personnel
The Board, on the recommendation of the Nomination & Remuneration Committee approved the appointment of Mr. Kamal Pal Hoda (DIN: 09808793), as an Additional Director in the capacity of Non-Executive Non-Independent Director of the Company with effect from January 6, 2023. Approval of shareholders was accorded on March 8, 2023 through Postal Ballot.
The Board, approved the appointment of
Mr. Naozer Dalal, as the Chief Executive Officer of the Company with effect from February 16, 2023, on the recommendation of the NRC.
The Board, approved the appointment of
Mr. Gaurav Mehra, as the Chief Financial Officer of
the Company with effect from January 4, 2023, on the recommendation of the NRC.
Mr. N. Ravi Vishwanath resigned from his directorship with effect from January 6, 2023.
Mr. Raghunath P resigned from the position of Chief Financial Officer and Mr. Ashish Johri resigned from the position of Chief Executive Officer with effect from the close of business hours of January 3, 2023 and February 15, 2023 respectively.
13. Independent Directors and Board Evaluation
a. Declaration of Independence
The Independent Directors of the Company have declared that they meet the criteria of independence in terms of Section 149(6) of the Companies Act, 2013, Regulation 25 of the SEBI (LODR) Regulations, 2015.
During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, if any, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committees of the Company.
None of the Directors of the Company is disqualified for being appointed as Directors as specified in Section 164(2) of the Act and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
b. Annual Board Evaluation
Pursuant to Section 134(3) of the Companies Act,
2013 & Rule 8 of the Companies (Accounts) Rules,
2014 and the Listing Regulations, a structured questionnaire was prepared considering the various aspects of Board functioning and composition of Board committees and used to evaluate the performance of the Board. The NRC reviewed the performance of individual Directors based on the formulated criteria for performance evaluation and the Independent Directors considered / evaluated the performance of the Non-Independent Directors in a separate meeting of Independent Directors.
The Board members subsequently evaluated performance of the Board, the Committees and Independent Directors as per the criteria and questionnaire developed for the purpose and the Board of Directors expressed their satisfaction with the evaluation process.
c. Familiarisation Programme
Your Company follows an orientation and familiarization programme through various reports / codes / internal policies for the Independent Directors with a view to update them on the
Companyâs policies and procedures on a regular basis. Periodic presentations are made at the Board Meetings on business and performance, long term strategy initiatives and risks involved. The details about the familiarization programme have been posted on the website of the Company under the web link https://www.allsectech.com/investor-information/
14. Directorsâ Responsibility Statement
The Board of Directors acknowledges the responsibility of ensuring compliance with the provisions of Section 134(3)(c) of the Companies Act, 2013. To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements:
Your Directors confirm the following that:
a. In preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b. 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;
c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f. Proper systems were in place so as to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively.
15. Business Responsibility and Sustainability Report:
As stipulated under Regulation 34 of the Listing Regulations, the Business Responsibility and Sustainability Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of the Annual Report as âAnnexure - Aâ.
a. Statutory Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Reg. No.:008072S), the Statutory Auditors of
the Company were appointed at the 20th Annual General Meeting held on September 30, 2019 for a period of 5 years. The Company has received necessary certificates under Sections 139 and 141 of the Companies Act, 2013, to the effect that they satisfy the conditions under the Companies Act, 2013 and the rules made thereunder for the above appointment. As required under the SEBI (LODR) Regulations 2015, the Statutory Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
During the year under review, the Auditors have not reported to the Audit Committee any instances of fraud committed against the Company by its officers or employees under Section 143(12) of the Act and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.
b. Internal Auditors
The Board, on the recommendation of the Audit Committee, in its meeting held on May 14, 2022 had approved the appointment of M/s. Ernst & Young as the Internal Auditors of the Company for FY23 to conduct the audit on basis of a detailed internal audit plan which is reviewed each year in consultation with the Internal Audit Team and the Audit Committee. Internal Auditors give presentations and provide a report to the Audit Committee on a quarterly basis. The Board, on the recommendation of the Audit Committee, has re-appointed M/s. Ernst & Young as the Internal Auditors for the FY24.
c. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Mohan Kumar & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is given as an Annexure - B and forms part of this Report.
Pursuant to Regulation 24A of the Listing Regulations, a Secretarial Compliance Report for the financial year ended March 31,2023 is annexed as âAnnexure - Câ .
The Secretarial Auditor in his report has pointed out that under Rule 20 of Companies (Management and Administration) Rules, 2014 relating to the cutoff date for determining the eligibility to vote by electronic means for the Annual General Meeting held on 19th September, 2022 to be earlier than seven (7) days. The Board of your Company herewith clarifies that the cut-off date for the AGM held on 19th September, 2022 was determined considering
the working days. The Board hereby clarifies and confirms that for future events, seven (7) calendar days shall be considered instead of working days for determining the cut-off date.
d. Cost Audit
Maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Act, is not required by the Company and accordingly, such accounts and records are not made and maintained.
Risk Management is an integral part of the business process. Pursuant to Section 134(3)(n) of the Companies Act, 2013, the Company has developed and implemented a Risk Management Policy. The policy has been approved by the Risk Management Committee of the Company on October 28, 2021. The Policy envisages identification of risk and procedures for assessment and minimization of risk.
18. Internal Financial Control and Adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. The Internal Audit is performed by an external agency and the main scope of the Audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. Additionally the Company engages an external agency to review the internal controls on financial reporting. There are no observations from the said review.
19. Related Party Transactions
The Company has formulated a Policy on Related Party Transactions as approved by the Board and the same is uploaded on the Companyâs website https://www. allsectech.com/investor-information/
All the related party transactions that were entered into by the Company during the Financial Year 2022-23, were on an armâs length basis and were in the ordinary course of business. All repetitive related party transactions placed before the Audit Committee are within the omnibus approval limits obtained in accordance with the requirements of the SEBI (LODR) Regulations, 2015. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company otherwise than
disclosed in the Corporate Governance Report, forming part of this report. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in âAnnexure - Dâ in Form AOC-2 and the same forms part of this report.
20. Nomination & Remuneration Committee and Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Companyâs policy lays down the policy for appointment and remuneration including criteria for determining qualifications, positive attributes, and independence are provided in the Corporate Governance Report forming integral part of this Report. The policy on remuneration can be accessed at web link - https://www.allsectech.com/investor-information/
21. Disclosure as per Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 2011
There are no Employee Stock Option Plans that is currently in vogue.
The information relating to employees to be given under Section 197(12) of the Companies Act, 2013 is given as Annexure - E.
Your Company endeavours to adopt the best prevalent Corporate Governance practices. A detailed report on Corporate Governance, pursuant to the requirements of Regulation 34 of the Listing Regulations, forms an integral part of the Annual Report. A certificate from Mr. A. Mohan Kumar, Practicing Company Secretary, Chennai, confirming compliance to conditions of Corporate Governance, as stipulated under the Listing Regulations, is annexed to the Corporate Governance Report. A statement containing additional information as required under Part II of Schedule V of the Companies Act, 2013 is provided in the Report on Corporate Governance, which forms part of this Annual Report.
24. Vigil Mechanism / Whistle Blower Policy
In accordance with the requirements of the Companies Act, 2013; your Company has established a Vigil Mechanism / Whistle Blower Policy for Directors and Employees to report genuine concerns. The said Policy meets the requirement of the Vigil Mechanism framework under the Companies Act, 2013 and the members can view the details of the policy on https://www.allsectech. com/investor-information/. No member has been denied access to Vigil Mechanism and no complaints have been received during the year.
25. Conservation of energy, technology absorption, foreign exchange earnings and outgo
Since your Company is 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 |
''in Lakhs |
|
Earnings in Foreign Currency |
12,104.30 |
|
Expenditure in Foreign Currency |
415.57 |
26. Corporate Social Responsibility
The Board of Directors of your Company has constituted the CSR Committee to help the Company to frame, monitor and execute the CSR activities.
As per Sec. 135 of the Companies Act 2013, the Board of every Company referred to in sub-section (1), shall ensure that the Company spends, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years.
As per computations made under Section 198 of the Companies Act, 2013, the Company must contribute '' 51 lakhs as CSR Contribution. During the financial year 2022-23, the CSR Committee of the Company had a meeting on July 27, 2022 which approved the contributions made and proposed to the tune of '' 51 Lakhs towards healthcare and education, which falls under the categories prescribed in Schedule VII of the Companies Act 2013 under (i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water (ii) promoting education, including special education and employment enhancing vocational skills specially among children, women, elderly and the differently abled and livelihood enhancement project.
The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules 2014 is annexed in Annexure - F and forms an integral part of the Report. The policy has been uploaded on the Companyâs website at https://www.allsectech. com/investor-information/
Pursuant to the provisions of Section 118 of the Act, the Company has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India (âICSIâ) and notified by the Ministry of Corporate Affairs (âMCAâ).
Your Company has not accepted any deposits from the public during the period under review and did not have any outstanding deposits.
29. Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company operations in future
There were no significant and material orders passed by the Regulators, Courts or Tribunals that would impact the going concern status of the Companyâs operation in the future.
30. Board Meetings held during the year
During the year, eight (8) meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report that forms part of this Annual Report.
In terms of Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return in the prescribed format is available at https://www.allsectech.com/investor-information/
32. I nformation required under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013:
In order to comply with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a policy on prevention, prohibition and redressal of complaints related to sexual harassment of women at the workplace. All women employees either permanent, temporary or contractual are covered under the above policy. The said policy has been uploaded on the internal portal of the Company for information of all employees. An Internal Complaint Committee (ICC) has been set up in compliance with the said Act. During the year, the Committee has not received any complaints.
33. Material changes and commitments affecting the financial position of the Company which have occurred between March 31,2023 and May 8, 2023 (date of the Report)
There are no material changes and commitments affecting the financial position of the Company which has happened between March 31,2023 and May 8, 2023.
34. Names of Companies which have ceased / become Subsidiaries / Joint Ventures / Associates
No changes during the year.
35. Quality & Information Security
The Company has a robust Quality Management, Information Security Management system and Data Privacy framework in place to identify the potential risks, areas of improvement and further to have smooth business operations.
ISO 9001:2015, Quality Management System certification for Chennai facility and ISO 27001:2013, Information Security Management System certification for all Allsecâs facilities in Chennai, Bengaluru, Noida and Manila cities globally were renewed in Febâ 23 and these are valid till Febâ 24.
The PCI DSS compliance certifications for DBS business are renewed in May 22 for Chennai and Manila facilities and in Jan 23 for Bengaluru and Noida facilities respectively. These are valid for 1 year period from the date of renewal.
Existing SSAE 18 / ISAE 3402, SOC1, Type II which is a graduated version of SAS 70 Type II audit reporting for HRO payroll business has been performed in Q1 for one client as per their exclusive controls requirements as requested by them and also in Q2 for some clients. Overall, we perform this audit thrice in a year for different time periods of a financial year for complete payroll business to cater to different clientsâ requirements as a standard practice. This increased frequency makes the system more robust.
To fulfil the requirements for one new US Healthcare business program launched in Manila facility this year, we got our Manila facility HIPAA certified in Oct 22. Further, we got existing HIPAA certification for Chennai facility renewed in Jan 23. HIPAA certification is mandatory if we are providing service delivery for any client that deals with US citizens / residents health information and it is an Act of US.
General Data Protection Regulation (GDPR) is a regulation in EU law on data protection & privacy for all individuals within the European Union (EU). It also addresses the requirements to be fulfilled for export of personal data from EU to outside the EU. This act is applicable to all entities which can be located anywhere in the world and have to mandatorily deploy the GDPR framework and controls if they collect or process personally identifiable information (PII) of EU citizens or those residing in EU. We established GDPR framework 4 years ago. We continued strengthening the controls and our system in line with this regulation and its periodic enhancements for the business lines where it is applicable.
Further we continued our efforts in strengthening the systems deployed to fulfil the compliance requirements of Philippines Data Privacy Act and California Consumer Privacy Act (CCPA) for the client programs where these acts are applicable.
36. Environment, Health & Safety
The Company is conscious of the importance of environmentally clean and safe operations. The Companyâs policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.
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 as per Regulation 46 of SEBI (LODR) Regulations, 2015. The Company also has a Stakeholdersâ Relationship Committee to address shareholdersâ grievances if any and resolve them as & when they are reported. The Company has provided an exclusive email id: [email protected] for the investors to facilitate the redressal of the queries and complaints of the investors.
The Company has appointed M/s. KFin Technologies Limited 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 - Company Secretary, Allsec Technologies Ltd, 46C, 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.
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 place on record their appreciation and gratitude to Financial Institutions, Auditors and Bankers for their continued support and timely assistance in meeting the Companyâs resource requirements. Your Directors acknowledge the dedicated services rendered by all the employees of the Company.
Mar 31, 2018
The Directors take pleasure in presenting to you the 19th Annual Report of the Company covering the financial year ended March 31, 2018.
FINANCIAL HIGHLIGHTS
Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards (IndAS) notified under the Companies (Indian Accounting Standards) Rules 2015 with effect from April 1, 2017. The performance of the Company for the financial year 2017-18 is summarized below:
(INR In Lakhs)
|
STANDALONE |
CONSOLIDATED |
|||||
|
YEAR ENDED |
YEAR ENDED |
|||||
|
31-Mar-18 |
31-Mar-17 |
F/(A)* |
31-Mar-18 |
31-Mar-17 |
F/(A)* |
|
|
INCOME FROM SERVICES |
12,878 |
11,621 |
11% |
32,496 |
31,812 |
1% |
|
TOTAL COSTS |
10,568 |
9,701 |
(9%) |
26,393 |
25,540 |
(3%) |
|
OPERATING MARGIN |
2,310 |
1,920 |
20% |
6,103 |
6,272 |
(3%) |
|
OTHER INCOME |
518 |
305 |
70% |
677 |
589 |
15% |
|
DEPRECIATION |
328 |
336 |
2% |
450 |
554 |
19% |
|
INTEREST EXP /(INCOME) |
22 |
(148) |
(115%) |
(29) |
(21) |
37% |
|
PROFIT / (LOSS) BEFORE TAX |
2,478 |
2,037 |
22% |
6,359 |
6,328 |
0% |
|
PROFIT / (LOSS) AFTER TAX |
2,899 |
2,254 |
29% |
5,953 |
6,172 |
(3%) |
* F/(A) means Favorable / (Adverse)
Business Outlook
Allsec Technologies Limited has two core business units. One is Human Resources Outsourcing (HRO) business that offers the following services as part of its service offering: Managed payroll services, Human Resources Management Services (HRMS) & Employee Statutory services. The Second business unit offers Customer Life Cycle Management (CLM) to customers across the globe. This service is offered across verticals like Retail, BFSI (Banking Financial Services & Insurance), E-Commerce, F&A (Finance & Accounting), Manufacturing & Home Appliance Companies in both the domestic market as well as in the International market.
The HRO business unit has continued to grow steadily this year making inroads into the Asian, Middle-East and African markets. There has been increased focus in offering the services in multiple formats like managed services, SAAS based services, and as a stand-alone product. As of this year, Allsecâs Payroll services are utilized by customers across 35 countries in the world. Additionally, the service is also offered as a bundled offering with other significant modules like Time & attendance, Absence management, Reimbursement & expense management and Performance Management systems. The division has also entered into strategic tie-ups with global leaders for Payroll Compliance support in new geographies and in Time keeping for offering payroll services on a common platform.
On the technology front the Company has adopted new cutting edge technologies like Robotic Process Automation (RPA), Machine Learning, Big data & Chatbots. The portfolio of services continues to be augmented and value additions are offered to existing clients and to prospects. These technology enabled services will power the Company to break new grounds globally, allow organic growth and facilitate new customer acquisitions.
The CLM-Domestic business has improved in volumes and in margins as compared to the previous year. This is a result of our strategy of identifying processes that have better margins and also by strengthening relationships with existing clients by way of client farming and relationship nurturing. During this year incremental volumes have been added in most of the existing businesses through volume increase and process additions.
The CLM-International business has remained stable over the last year. The Company has focused on nonvoice opportunities and has added a few new verticals like âEnergy sectorâ and âhealthcareâ. Additionally, the Company is investing in emerging technologies to improve margins and to pass on cost savings to customers.
Overall financial performance of your Company has improved substantially during this year. Profit before Tax (PBT) has increased from INR 2,037 lakhs last year to INR 2,478 Lakhs (22%). Your Company has reported Net profit after tax for the current year at INR 2,899 Lakhs as compared to Net profit after tax of INR 2,254 lakhs for the previous year. Detailed analysis of the Standalone results forms part of the Management Discussion and Analysis (MD&A) report provided separately as part of the Annual Report.
Consolidated Revenues for the year stands at INR 32,496 lakhs as compared to INR 31,812 lakhs in the previous year. Consolidated Profit before Tax (PBT) stood at INR 6,359 lakhs compared to INR 6,328 lakhs in the previous year. Net profit after tax stood at INR 5,953 lakhs as compared to INR 6,172 lakhs in the previous year.
The Company has delivery centers in India at Chennai, Bangalore & NCR locations. In the international front, Allsec has centers in Manila (Philippines) and Dallas (United States of America).
Dividend
The Board of Directors of your Company recommend a dividend of INR 5/- per share of the face value of INR 10/- each for the financial year ended March 31, 2018. The dividend shall be payable subject to approval by the members in the ensuing Annual General Meeting.
Deposits
Your Company has not accepted any deposit from the public during the period under review and did not have any outstanding deposits.
Directors
Mr. Manish Gaur (DIN : 00340911) & Mr.Kapil Modi, (DIN : 07055408) Nominee Directors of First Carlyle Ventures Mauritius on the Board of the Company resigned during the year with effect from February 15, 2018. The Board wishes to place on record its sincere appreciation for the valuable services rendered by them.
Mr. A. Saravanan, Director retires at the ensuing Annual General Meeting and being eligible offers himself for reappointment.
Key Managerial Personnel
The Key Managerial Personnel of the Company is provided below:
1. Mr. R. Jagadish - Chief Executive Officer
2. Mr. P. Raghunath - Chief Financial Officer
3. Mr. Gagan Preet Singh - Company Secretary
Mr. A. Mohan Kumar resigned during the year and Mr. Gagan Preet Singh has joined the Company as DGM-Legal and Company Secretary with effect from November 9, 2017.
Employees
The information relating to Employees to be given under Section 197(12) of the Companies Act, 2013 is given in Annexure G.
Corporate Governance
Your Company is fully compliant with the requirements under SEBI (LODR) Regulations, 2015. The report on Corporate Governance is given in Annexure A.
Certificate from Statutory Auditors confirming the compliance of conditions of Corporate Governance is included in Annexure B. CEO / CFO compliance certification is attached in Annexure I.
In terms of Regulation 34 of SEBI (LODR) Regulations, 2015, the Management Discussion and Analysis report is given in Annexure - C.
Subsidiary Companies
The Company has three subsidiaries as at year end namely Allsec Tech Inc., USA, Allsectech Manila Inc., Philippines and Retreat Capital Management Inc., USA.
The Consolidated Financial statements of the Company and its subsidiaries are prepared in accordance with Indian Accounting Standards and forms part of this Annual Report and accounts.
The Annual Accounts of the said subsidiaries and its related detailed information will be made available to the investors of the Company seeking such information at any point of time. The copies of the Annual accounts of the subsidiaries will also be available for inspection by any investor at the corporate office of the Company. Performance and financial position of subsidiaries included in consolidated financial statements of the Company is provided in Annexure-E.
The Company monitors performance of subsidiary companies (list of subsidiary companies has been provided in the financial statements), inter-alia, by the following means:
a) The Company does not have any material unlisted Indian subsidiary, and hence, is not required to nominate an Independent Director of the Company on the Board of any subsidiary.
b) The Audit Committee reviews the financial statements, in particular, the investments made by the subsidiary companies on a quarterly basis.
c) Your Company has formulated a Policy on Material Subsidiary as required under SEBI (LODR) Regulations, 2015 and the policy is hosted on the website of the Company under the web link http:// www.allsectech.com/Allsec/investor-information. aspx
Compliance under Companies Act, 2013
Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, your Company has complied with all the compliance requirements that are applicable to the Company and the detail of such compliances under Companies Act, 2013 are provided below:
Extract of Annual Return
An Extract of the Annual Return as of March 31, 2018, pursuant to the sub section (3) of Section 92 of the Companies Act, 2013 and forming part of the report is placed in the Companyâs website under the Investorâs tab https://www.allsectech.com/investor-information.
Board Meetings held during the year
During the year, 5 meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached as Annexure-A to this Report.
Directorsâ Responsibility Statement
The Board of Directors acknowledges the responsibility of ensuring compliance with the provisions of Section 134(3)(c) of the 2013 Act. To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements:
Your Directors confirm the following that:
(i) In preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures wherever applicable;
(ii) 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) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors had prepared the annual accounts on a going concern basis.
(v) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
(vi) Proper systems were in place so as to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively.
Independent Directors and Board Evaluation
The Independent Directors of the Company have declared that they meet the criteria of Independence in terms of Section 149(6) of the Companies Act, 2013.
Independent Directors, considered / evaluated the performance of the Non-Independent Directors at a meeting without anyone from the Non-Independent Directors and Management present.
The Board members subsequently evaluated performance of the Board, the Committees and Independent Directors as per the criteria and questionnaire developed for the purpose as mandated by Section 134(3) of the Companies Act, 2013 & Rule (8) of the Companies (Accounts) Rules, 2014.
Familiarisation Programme
Your Company follows an orientation and familiarization program through various reports / codes / internal policies for all the Directors with a view to update them on the Companyâs policies and procedures on a regular basis. Periodic presentations are made at the Board Meetings on business and performance, long term strategy initiatives and risks involved. The details about the familiarization program have been posted on the website of the Company under the web link http://www. allsectech.com/Allsec/investor-information.aspx.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Companyâs policy on appointment and remuneration including criteria for determining qualifications, positive attributes, and independence are provided in the Corporate Governance Report forming part as an Annexure-A to this Report.
Related Party Transactions
The Company has formulated a policy on Related Party Transactions as approved by the Board and the same is uploaded on the Companyâs website http://www. allsectech.com/Allsec/investor-information.aspx
All the Related Party Transactions that were entered into by the Company during the financial year 2017-18, were on an armâs length basis and were in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee and are within the limits obtained by a prior approval in accordance with the requirements of the SEBI (LODR) Regulation, 2015. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company otherwise than disclosed in the Corporate Governance Report, forming part of this report.
Details of the transaction are provided in Form AOC-2 which is attached as Annexure - F to this Report.
Vigil Mechanism / Whistle Blower Policy
In accordance with the requirements of the Companies Act 2013, your Company has established a Vigil Mechanism / Whistle Blower Policy for Directors and Employees to report genuine concerns. The said Policy meets the requirement of the Vigil Mechanism framework under the 2013 Act, and the members can view the details of the policy on http://www.allsectech.com/Allsec/investor-information.aspx. No member has been denied access to Vigil Mechanism and no complaints have been received during the year.
Corporate Social Responsibility
The Board of Directors of your Company has constituted the CSR Committee to help the Company to frame, monitor and execute the CSR activities.
As per Sec. 135 of the Companies Act 2013, the Board of every Company referred to in sub-section (1), shall ensure that the Company spends, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years.
As per computations made under Section 198 of the Companies Act, 2013, the Company must contribute approximately INR 23 lakhs as CSR Contribution. During the financial year 2017-18, the Company has formulated a CSR policy and the CSR committee had a meeting on January 24, 2018 which approved the proposal to contribute INR 6 lakhs towards education which falls under the categories prescribed in Schedule VII of the Companies Act 2013 under clause (ii) - promoting education, including special education and employment enhancing vocational skills specially among children, women, elderly and the differently abled and livelihood enhancement project.
Allsecâs CSR initiatives are based on the focus areas approved by the Board and thereby benefitting the community. The Company is in the process of identifying specific long term projects to make CSR contributions. Although during the current year, the Companyâs spend on CSR activities has been less than the limits prescribed under the Companies Act, 2013, the Company shall endeavour to spend the complete amount on CSR activities in accordance with the Companies Act requirements in the coming year.
Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013
Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the financial statements.
Internal Financial Control and Adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.
Auditors
M/s. Walker Chandiok & Co., LLP the Statutory Auditors of the Company were appointed at the previous Annual General meeting held on 11th August 2016 for a period of 5 years The Company has received necessary certificates under Sections 139 and 141 of the 2013 Act, to the effect that they satisfy the conditions under the 2013 Act and the rules made thereunder for the above appointment. As required under the SEBI (LODR) Regulations 2015, the Statutory Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
Comments on Auditorsâ report
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in Practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.
Material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2018 and May 24, 2018 (date of the Report)
There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31, 2018) and the date of the Report (May 24, 2018).
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. P. Sriram, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is given as an Annexure- E and forms part of this Report.
Names of Companies which have ceased / become Subsidiaries / Joint Ventures / Associates
During the year there is no change in the status of any subsidiary.
Quality & Information Security
The vision of Quality and Information security at Allsec is to institutionalize excellence in quality of services 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 (Quality Management System) (QMS) interlined with data security controls prescribed by International standards such as ISO 27001:2013 (Information Security Management System). ISO 9001 certification at Chennai has been upgraded to latest version i.e. ISO 9001:2015 from ISO 9001:2008 which enhances strength of our QMS to a new level. ISO 27001:2013 certification renewal at Chennai and Manila facilities is completed. This year, our Bangalore facility is included in ISO 27001:2013 scope and this facility is also certified for ISO 27001:2013. PCI DSS compliance certifications at Chennai and Manila locations and ISO 27001:2013 certification at Irving facility are renewed during the year. Our Irving facility in the US is newly certified for PCI DSS this year. Further, existing SSAE 16 / ISAE 3402 which is a graduated version of SAS 70 Type
II certification for the HRO business has been renewed and upgraded to SSAE 18 / ISAE 3402.
Disclosure as per Securities and Exchange Board of India (Employees Stock option Scheme and Employee Stock Purchase Scheme) Guidelines, 2011
The options granted under the scheme have lapsed.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
Since your Company is in the Information Technology Enabled Services (ITES) Sector, 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 in Lakhs |
|
Earnings in Foreign Currency |
4,040 |
|
Expenditure in Foreign Currency |
199 |
|
Dividend received in foreign currency |
54 |
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 as per the Regulation 46 of SEBI (LODR) Regulations, 2015. The Company also has a Stakeholders Relationship Committee to address shareholders grievances, if any, and resolve them as & when they are reported. The Company has provided an exclusive email id: [email protected] 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 - Company Secretary, Allsec Technologies Ltd., 46B, Velachery Main Road, 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.
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 Companyâs 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
Chennai A. Saravanan R. Jagadish
May 24, 2018 Director Director
DIN : 00033683 DIN : 00033589
Mar 31, 2017
The Directors take pleasure in presenting to you the 18th Annual Report of the company covering the financial year ended 31st March 2017.
FINANCIAL HIGHLIGHTS (Rs. In Lakhs)
|
STANDALONE |
CONSOLIDATED |
|||||
|
YEAR ENDED |
YEAR ENDED |
|||||
|
31-Mar-17 |
31-Mar-16 |
F/(A) |
31-Mar-17 |
31-Mar-16 |
F/(A) |
|
|
INCOME FROM SERVICES |
11,621 |
10,836 |
7% |
32,280 |
23,338 |
38% |
|
TOTAL COSTS |
9,698 |
9,563 |
(1%) |
26,046 |
19,949 |
(31%) |
|
OPERATING MARGIN |
1,923 |
1,273 |
51% |
6,234 |
3,389 |
84% |
|
OTHER INCOME |
417 |
252 |
65% |
565 |
803 |
(30%) |
|
EBIDTA |
2,340 |
1,525 |
53% |
6,799 |
4,192 |
62% |
|
EBIDTA (%) |
20% |
14% |
21% |
18% |
||
|
DEPRECIATION |
336 |
503 |
33% |
554 |
755 |
27% |
|
INTEREST EXP / (INCOME) |
(183) |
(223) |
(18%) |
(56) |
(16) |
25% |
|
PROFIT/(LOSS) BEFORE TAX |
2,187 |
1,245 |
76% |
6,301 |
3,453 |
82% |
|
PROFIT/(LOSS) AFTER TAX |
2,404 |
948 |
154% |
6,145 |
3,094 |
99% |
|
CASH PROFIT |
2,523 |
1,451 |
74% |
6,482 |
3,849 |
68% |
Business Outlook
HR Operations division continues the strong momentum from previous years and is poised to grow well in the coming years as well. During the year, the HRO division has moved from a predominantly payroll outsourcing services to a division providing wider range of services in the HR Operations space. This has helped in deepening relationships with existing clients as well as in addition of newer clients. Further the division has expanded its geographical coverage by providing services to customers in more than 8 countries. We believe HRO business will continue to be a significant revenue generator for your Company in the next few years.
Domestic Support Business has remained at similar levels as previous year. Your Company has during the year focused on improving profitability with existing clients and have also been very selective in customer acquisition to ensure that the operations are profitable. The plan is to keep looking for strategic contracts where we can negotiate better rates and improve margins.
Exports revenue has shown modest growth during the year. The division continues to have challenges on account of the global environment. However we are actively pursuing targets both by increasing the sales force as well as increase marketing efforts by doing more targeted marketing.
Overall financial performance of your Company has improved substantially during this year. Profit before Interest, Depreciation and Tax (EBIDTA) has increased from INR 1,525 lakhs last year to INR 2,340 Lakhs (53%). Your company has reported Net profit after tax for the current year at INR 2,404 lakhs as compared to Net profit after tax of INR 948 lakhs 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.
Consolidated results of your Company have shown growth due to improved performance of all the entities during the year. Consolidated Revenues has increased to INR 32,280 lakhs from INR 23,338 lakhs in the previous year. Consolidated Profit before Interest, Depreciation and Tax (EBIDTA) increased to INR 6,799 lakhs from INR 4,192 in the previous year. Net profit after tax has increased to INR 6,145 lakhs from INR 3,094 lakhs in the previous year.
The company is continuing to pursue growth through the Organic route and see very good traction for growth in all the entities. The company has delivery centers in India, Philippines and in US for the international segment and has Domestic delivery centers in three major cities in India.
Dividend
The Board of Directors of your Company does not recommend any dividend for the Financial Year 201617 in view of the accumulated losses.
Deposits
Your company has not accepted any deposit from the public during the period under review and did not have any outstanding deposits.
Directors
Mr. Krishnakumar Srinivasan, a Director on the Board of the Company has resigned on 11th February 2017. The Board wishes to place on record its sincere appreciation for the valuable services rendered by him.
Mr.A.Saravanan, Director retires at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
Key Managerial personnel
The Key Managerial Personnel of Allsec Technologies Limited is mentioned below:
1) Mr. R. Jagadish - Chief Executive Director
2) Mr. A. Mohan Kumar - Company Secretary
3) Mr. P.Raghunath - Chief Financial Officer
Mr. P.Raghunath has joined as Vice President Finance of the Company effective 17th October, 2016. He is a Chartered Accountant and a Cost Accountant having more than 18 years of Professional experience.
Employees
The Information relating to Employees to be given under Section 197(12) of the Companies Act, 2013 is given as Annexure-H.
Corporate Governance
Your Company is fully compliant with the requirements under SEBI (LODR) Regulations 2015. The report on Corporate Governance is given in Annexure-A.
Certificate from Auditors confirming the compliance of conditions of Corporate Governance is included in Annexure-B. CEO/CFO certification is attached in Annexure-I.
In terms of regulation 34 of Securities and Exchange Board of India (Listing obligations and disclosure requirements) regulations 2015, the Management Discussion and Analysis report is given in Annexure-C.
Subsidiary Companies
The Company has three subsidiaries as at year end namely Allsectech Inc USA, Allsectech Manila Inc. Philippines and Retreat Capital Management Inc USA.
The Consolidated Financial statements of the company and its subsidiaries prepared in accordance with Accounting Standards AS 21 forms part of this 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 seeking such information at any point of time. The copies of the Annual accounts of the subsidiaries will also be kept for inspection by any investor at the corporate office of the Company. Performance and financial position of subsidiaries included in consolidated financial statements of the company is provided in Annexure-F.
The Company monitors performance of subsidiary companies (list of subsidiary companies has been provided in the financial statements), inter-alia, by the following means:
a) The Company does not have any material unlisted Indian subsidiary, and hence, is not required to nominate an Independent Director of the Company on the Board of any subsidiary.
b) The Audit Committee reviews the financial statements of the subsidiaries on a quarterly basis.
c) Your Company has formulated a Policy on Material Subsidiary as required under Regulation SEBI (LODR) and the policy is hosted on the website of the Company under the web link https://www.allsectech. com/investor-information.
Compliance under Companies Act, 2013
Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, your Company complied with the compliance requirements and the details of compliances under Companies Act, 2013 are enumerated below:
Extract of Annual Return
An Extract of the Annual Return as of 31st March 2017, pursuant to the sub section (3) of Section 92 of the Companies Act 2013 and forming part of the report is attached in Annexure-D.
Board Meetings held during the year
During the year, 5 meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached as Annexure-A to this Report.
Directorsâ responsibility Statement
The Board of Directors acknowledges the responsibility of ensuring compliance with the provisions of Section 134(3)(c) of the Companies Act, 2013. To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements:
Your Directors confirm the following that:
i) In preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii) 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) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
iv) The Directors had prepared the annual accounts on a going concern basis.
v) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
vi) Proper systems were in place so as to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively.
Independent Directors and Board Evaluation
The Independent Directors of the Company have declared that they meet the criteria of Independence in terms of Section 149(6) of the Companies Act, 2013.
Independent Directors considered/evaluated the performance of the non-independent Directors at a meeting without anyone from the non-independent Directors and Management.
The Board members subsequently evaluated performance of the Board, the Committees and Independent Directors as per the criteria and questionnaire developed for the purpose as mandated by section 134(3) of the Companies Act 2013 & Rule (8) of the companies Accounts Rules 2014.
Familiarization Programme
Your company follows an orientation and familiarization programme through various reports/codes/internal policies for all the Directors with a view to update them on the companyâs policies and procedures on a regular basis. Periodic presentations are made at the Board Meetings on business and performance, long term strategy initiatives and risks involved. The detail about the familiarization programme have been posted in the website of the Company under the web link https:// www.allsectech.com/investor-information.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Companyâs policy on appointment and remuneration including criteria for determining qualifications, positive attributes, and independence are provided in the Corporate Governance Report forming part as an Annexure-A to this Report.
Related Party Transactions
The Company has formulated a policy on Related Party Transactions as approved by the Board and the same is uploaded on the Companyâs website https://www. allsectech.com/investor-information.
All the Related Party Transactions that were entered into by the Company during the financial year 2016-17, were on an armâs length basis and were in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee and are within the limits obtained by a prior approval in accordance with the requirements of the SEBI (LODR) Regulation 2015. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company otherwise than disclosed in the Corporate Governance Report, forming part of this report.
Details of the transaction are provided in Form AOC-2 which is attached as Annexure-G to this Report.
Vigil Mechanism / Whistle Blower Policy
In accordance with the requirements of the Companies Act 2013, your Company has established a Vigil Mechanism/ Whistle Blower Policy for Directors and Employees to report genuine concerns. The said Policy meets the requirement of the Vigil Mechanism framework under the Companies Act, 2013 and the members can view the details of the policy on https://www.allsectech. com/investor-information. No member has been denied access to Vigil Mechanism and no complaints have been received during the year.
Corporate Social Responsibility
The Board of Directors of your Company has constituted the CSR Committee to help the Company to frame, monitor and execute the CSR activities.
As per Sec. 135 of the Companies Act 2013, the Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years.
As per Computations made under Section 198 of the Companies Act, 2013, the Company must contribute a minimum of Rs 13 lakhs as CSR Contribution. During the financial year 2016-17, the Company has spent an amount of Rs.5 lacs towards CSR.
Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013
Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the financial statements.
Internal Financial Control and Adequacy:
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.
Auditors
M/s. Walker Chandiok & Co LLP the Statutory Auditors of the Company were appointed at the previous Annual General meeting held on 11th August 2016 for a period of 5 years. The appointment of statutory Auditors is required to be ratified every year in the Annual General Meeting. The company has received necessary certificates under Sections 139 and 141 of the 2013 Act, to the effect that they satisfy the conditions under the Companies Act, 2013 and the rules made there under for the above appointment. As required under the SEBI (LODR) Regulations 2015, the Statutory Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Directors recommend their re-appointment.
Comments on Auditorsâ report
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in Practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.
Material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2017 and May 15, 2017 (date of the Report)
There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31, 2017) and the date of the Report (May 15, 2017).
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. P. Sriram, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is given as an Annexure-E and forms part of this Report.
Names of Companies which have ceased/ become Subsidiaries/ Joint Ventures / Associates
During the year there is no change in the status of any subsidiary.
Quality & Information Security
The vision of Quality and Information security at Allsec is to institutionalize excellence in quality of services 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 (Quality Management System) interlined with data security controls prescribed by International standards such as ISO 27001:2013 (Information security Management System). ISO 9001 and ISO 27001 certifications have been renewed at Chennai location and ISO 27001:2013 has been renewed for the Manila location. PCI DSS compliance certifications are renewed at Chennai and Manila locations during the year. We have also got our ISO 27001:2013 renewed at the Dallas Location. Further, existing ISAE 3402 which is a graduated version of SAS 70 Type II certification for the HRO business has been renewed. We established a process for âTechnical Writing & documentationâ to create user guides and documentation for key proprietary applications and processes for HR BPO this year. We continued publishing Organization wide weekly education bulletins on various topics in Quality Management Systems (QMS) and Information Security Management Systems (ISMS) during this year also to enhance awareness and skill level of employees.
We have begun transitioning of existing Quality Management system policies, procedures and practices in accordance with ISO 9001:2015, a new and upgraded version of ISO:9001:2008 and will complete transition including certification by Jan 2018.
Disclosure as per Securities and Exchange Board of India (Employees Stock option Scheme and Employee Stock Purchase Scheme) Guidelines, 2011
The options granted under the scheme have lapsed.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
Since your Company is 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 in Lakhs |
|
Earnings in Foreign Currency |
3,897 |
|
Expenditure in Foreign Currency |
246 |
|
Interest received |
76 |
|
Dividend received |
37 |
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 Stakeholders/ Relationship Committee to address Stakeholders grievances if any and resolve them as & when they are reported. The Company has provided an exclusive email id: [email protected] 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 - Company Secretary, Allsec Technologies Ltd, 46B, Velachery Main Road, 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.
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 Companyâs 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
Chennai A. Saravanan R. Jagadish
15th May 2017 Director Director
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:
[email protected] 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:
[email protected] 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, 2012
The Directors have pleasure in presenting to you the 13th Annual Report
of the company covering the financial year ended 31st March 2012.
FINANCIAL HIGHLIGHTS (Rs. in Million)
Year Year
Particulars Ended Ended
March 31, March 31,
2012 2011
Income from Services 1,247.1 1,415.4
Other Income 50.5 35.8
Total Income 1,297.6 1,451.2
Profit/(Loss) before Interest,
Depreciation & Tax (EBITDA) (32.8) 68.6
Depreciation & Amortisation 107.9 103.3
Profit/(Loss) before
interest & tax (140.7) (34.7)
Interest & Finance charges 6.3 4.7
Profit/(Loss) before taxation (147.0) (39.4)
Profit/(Loss) after taxation (147.0) (39.4)
Profit/(Loss) brought forward (192.6) (153.2)
Surplus/(Deficit) carried (339.6) (192.6)
forward to Balance Sheet
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
2011-12.
Business Outlook
The company was able to clock higher revenues in the domestic market
during the year, growing by over 15%. However the Company is in the
process of reprising of all the Domestic Contracts, so that all
contracts are profitable. Your company's focus on profitability will
yield better results in the coming years.
During this year, there is a reduction of exports revenue by 40%,
though this was compensated by a huge increase in Domestic business.
Drop in exports revenue is mainly due to market conditions in USA not
improving during the year. The new businesses which we got have only
gone to backfill lost business during last year and this has resulted
in a reduced 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 is achievable in the
years to come.
Due to a sharp reduction in exports revenue during the year, which is
our main strength, the results for the year have been below par as can
be seen above. In the last quarter of 2010-11, your company lost one of
the top clients from USA which has affected our performance very badly.
During the year, your Company has added a few clients and also
increased volumes with existing clients. Your company is also in talks
with existing clients to explore new opportunities and we are very
confident to get back to the old days of higher exports and
profitability. Your company is currently exploring opportunity in
specific verticals like Mortgage and Health Care Industries in the US
Market.
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. Your company has also
added few clients in the mortgage non voice space and with Retreat's
domain knowledge, business growth in this vertical can be achieved in
coming years.
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 centers in USA, India and
Manila for the international segment and has Domestic delivery centers
in major cities in India. It has the capability to offer delivery in
multiple Indian languages.
Manila centre was acquired in 2009 and has a seat capacity of around
600. This is a strategic centre for our business as many of US Clients
prefer Manila as a Delivery Centre. Due to overall market conditions in
USA, our business is affected which has resulted in loss situation in
Manila centre also. With increased possibility of billing from existing
and new clients in the current and future years, we feel the loss
situation in Manila centre will be reversed. In the view of Management,
the investment made in our Manila Centre (wholly owned subsidiary) of
Rs.102 Million and the advances recoverable given to them amounting to
Rs.122.50 Million do not require any adjustments in the stand alone
financials as of now. The Auditors have made an observation vide para 4
in their Report regarding this and this may be treated as our
explanation.
The Company has not made provisions towards certain Receivables
aggregating to Rs.61.3 Million in respect of two foreign customers,
where amounts are substantially overdue. On the basis of available
information and regular confirmation of balances from customers showing
their intent to pay the same, the Company is confident of recovering
the entire amount and therefore not made any provision in the books of
accounts. The Auditors have however made an observation vide para 5 in
their Report regarding this and this may be treated as our explanation.
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, your Company is
recertified for ISO 9001:2008 (Quality Management System) and ISO
27001:2005 (Information Security Management). To take this to next
paradigm, your company is recertified for PCI DSS and accomplished
compliance with HIPAA for service delivery locations in India.
During the current year, in addition to the existing PCI DSS and HIPAA
compliance at Manila, your company has achieved PCI DSS certification
for service delivery location at Dallas in US. Further, existing SAS 70
Type II certification for HR BPO services is graduated to ISAE 3402
certification in line with the new International auditing standard to
realize higher levels of maturity and be consistent with business and
market needs in HR outsourcing.
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 AnnexureÃA 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 31st March, 2012 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 408.1
Expenditure in Foreign Currency 60.1
Remittance of Dividend in
Foreign Currency NIL
Directors
Mr. R. Jagadish and Mr. A. Sankarakrishnan, Directors retire at the
ensuing Annual General Meeting and being eligible offer themselves for
re-appointment.
Mr. Manish Gaur representing M/s. First Carlyle Ventures Mauritius, was
appointed as additional director on 13th October, 2011. The Notice
under Section 257 of the Companies Act, 1956 has been received from a
member signifying the intention to propose Mr. Manish Gaur as a
candidate for the office of Director and accordingly a resolution will
be placed before the members at the forthcoming Annual General Meeting.
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:
[email protected] 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
Limited, 46B, Velachery Main Road, Velachery, Chennai - 600 042.
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 4th
August, 2011. 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 14, 2012
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:
[email protected] 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
Mar 31, 2010
The Directors have pleasure in presenting to you the 11th Annual Report
of the company for the financial year ended 31st March 2010.
FINANCIAL HIGHLIGHTS (Rs in Million)
Year Year
Particulars Ended Ended
March 31, March 31,
2010 2009
Income from Services 1,220.80 964.92
Other Income 107.07 133.54
Total Income 1,327.87 1,098.46
Profit/(Loss) before interest,
depreciation & Tax (EBITDA) 37.03 18.06
Depreciation & Amortisation 101.42 84.48
ProfitV(Loss) before interest & tax (64.39) (66.42)
Interest & Finance charges 3.75 3.81
Profit/(Loss) before taxation (68.14) (70.23)
Profit/(Loss) after taxation (68.14) (72.28)
Profit/(Loss) brought
forward (85.08) (12.80)
Surplus/(Deficit) carried
forward to Balance Sheet (153.22) (85.08)
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
2009-10.
Business Outlook
The company made significant inroads in the domestic market and added
significant volumes, increasing the overall revenue by over 26%,
inspite of a decrease in the international revenues by 8%, by more than
doubling the domestic revenue. The company continued to make losses
though due to the following reasons:
à Continued slowing economy in USA which has affected us and any
significant new businesses have only gone to backfill reductions from
existing clients which has resulted in a stagnant revenue growth in USA
which has always been our dominant market.
à Strengthening of Rupee against the Dollar during the second half of
the year resulting in lower rupee realization as compared to previous
year.
Increased spending on New Centers which were started during the year to
cater to increased domestic
business and also higher startup costs for these new processes. We
strongly believe these new processes will yield better results in the
years to come.
With the economy showing definite signs of improvement in USA, we
believe we will see significant growth in the next few years. With the
growth in the domestic business and resultant favourable cost
structures due to the spread of fixed costs over a larger base, we hope
to see significant profitability increases in the years to come.
However compared to FY 2008-09, the company has reduced its net losses
marginally and it is much better considering that we recognized the one
time realized foreign exchange gains on return of overseas subsidiary
additional capital of Rs 42.8 Mn in 2008-09. This was primarily due to
higher levels of Domestic business which has helped the Company spread
costs over a larger volume and through concerted efforts in reducing
the costs.
The company is pursuing growth through the Organic route in both the
markets and see very good opportunities for growth with the market
conditions improving. Also inorganic growth is an opportunity for us to
expand into new domains and markets and we are actively looking to
seize attractive opportunities. We strongly believe that a combination
of Organic and Inorganic growth will help the company to achieve better
results.
The company has delivery centers in India and Philippines for the
international segment and has delivery centers in major cities in India
and has the capability to offer redundant delivery capability in
multiple Indian languages. With over 10 years track record of delivery
to International customer base and the quality of its offering, we
believe the company is on track to achieve growth and profitability.
New Centers
The company during the year added more capacity for its domestic market
offering by adding capacity in Bengaluru, Chennai and Pune. The company
also upgraded and expanded the facilities in Delhi, Mumbai and
Hyderabad. This has resulted in an overall addition of 1500 seats and
upgradation of 1200 seats. The company now operates over 5000 seats pan
India and 600 seats in Manila, Philippines.
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, your
Company is certified for ISO 27001 (Information Security Management)
and ISO 9001:2008 during the year. Also in addition to such overall
process and security systems certifications, your Company has also
achieved SAS 70 Type II certification for your HR BPO services to
realize higher levels of maturity and be consistent with business and
market needs in HR outsourcing.
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 two wholly owned subsidiaries as at year end namely
Allsectech Inc, USA, and Allsectech Manila Inc., Philippines.
Your Company has been granted exemption for the year ended March 31,
2010 by the Ministry of Corporate Affairs from attaching to its Balance
Sheet, the Annual Report and accounts of its subsidiaries and
therefore the accounts of Allsectech Inc, USA and Allsectech Manila
Inc, Philippines are not attached. As per the terms of the exemption, a
Statement containing brief financial particulars of the subsidiary
companies for the year ended March 31, 2010 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 Million
Earnings in Foreign Currency 726.88
Expenditure in Foreign Currency 81.66
Remittance of Dividend in
Foreign Currency NIL
Directors
Mr. A. Sankarakrishnan and Mr.T Anantha Narayanan, 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 for frequent reference of 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:
[email protected] 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 (Firm Registration No.: 101049W),
Chartered Accountants were re-appointed as Auditors of the company at
the Annual General Meeting held on 31st July 2009. M/s. S.R.Batliboi &
Associates (Firm Registration No.: 101049W), 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.
Your Company has formulated an Employee Stock Option scheme ("ESOS
2010"), which will help to attract, retain and motivate the employees.
The consent of the shareholders is sought for the issue of 600,000
options to the employees at the market price. The salient features of
the scheme are mentioned in the notice and explanatory statement
attached to this Annual report.
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 Companys 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 : 28th May 2010
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