The Members of
ALLIED DIGITAL SERVICES LIMITED
Your Directors present herewith the Annual Report together with the Audited Statement of Accounts and Auditors Report thereon for the Financial Year ended March 31st, 2014:
RESULTS OF OPERATIONS:
(Rs. In Lakhs)
|Total Operational Income||14,938.06||
|Less: Operating Expenditure||13,492.09||
|Profit before Interest, Depreciation, Amortization Tax & Exceptional Item||4,696.92||
|Profit before Tax and Exceptional Item||933.69||
|Profit before Tax||933.69||
|Less: Provision for Taxation||194.80||
|Less: Deferred Tax Liability||(542.28)||
|Net Profit for the year||1,281.18||
|Add: Balance brought forward from the Previous Year||27,426.36||
|Amount Available for Appropriation||28,707.53||
|Less: Transfer to General Reserve||-||
|Proposed Dividend Including Dividend Tax||-||
|Short provision of Tax of earlier years (Net)||-||
|Add: Excess provision of Tax of earlier years||-||
|Balance carried to Balance Sheet||28,707.53||
Your Company is an IT Infrastructure Management and Technical Support Services Outsourcing Company, with an impeccable track record for designing, developing, deploying and delivering end-to-end IT Infrastructure services with an objective to provide end to end IT Solutions, outcomes of which have always resulted into a positive change in the organization. Your Company is an experienced entity having sufficient knowledge of the local market which assists them in organizing manpower for diverse tasks and contractual works. It has over more than two decades of experience in enterprise IT Infrastructure, Management and Implementation and consulting on complex IT Solutions for different Business Verticals.
Your Companys inherent capabilities built on the philosophy of 3S (Smart People, Smart Processes, Smart Technology); provides the strong foundation for a best-in-class Integrated Service Delivery Framework which consistently augments our overall value creation proposition to our clients; both effectively and efficiently.
Your Company provide credible, high class and customer oriented services and solutions to its clients, actively participate to fulfill the needs and preferences of the customers, their requirements in a dedicated manner. We seek long term partnership with clients while addressing their IT requirements. Our customer centric approach has resulted in high levels of client satisfaction and retention. Moreover we encourage a warm and cordial environment in our organization which will add to the skilled workforce and also improve the work culture.
The global economic environment remains subdued, although key economies such as the US are showing stability and some improvement, with a yet unresolved crisis in the Euro zone and signs of slower growth in many emerging economies. In such business conditions the Companys gross income for the Financial Year ended March 31st, 2014 decreased by 25% to Rs. 181.89 Crore from Rs. 241.70 Crore in the previous year. The operating profit (PBDIT) of the Company increased to Rs. 46.97 Crore during the year, from Rs. 33.88 Crore in the previous year. Interest & Depreciation was at Rs. 37.63 Crore as against Rs. 34.88 Crore in the previous year. The provision for taxation during the year was Rs. (3.47) Crore which includes deferred tax Asset for the year. The net Profit for the year was Rs. 12.81 Crore. Like several other major technology companies, Allied Digital has also been hurt by the recent economic turmoil, margin pressure, increase in competition, spending curbed on IT cost by the customer. The Companys Net worth as on March 31st, 2014, stood at Rs. 690.02 Crore, as against Rs. 677.21 Crore last year.
During Financial Year 2015, the company aims to deepen its engagements with existing clients, draw repeat business, and emerge as the First Choice and the preferred partner for its marquee global customers.
The Company sees its eco-system of critical partnerships and alliances with reputed global companies as an important asset and will continue to explore opportunities to further expand it.
The Companys differentiated business model with strong capabilities in its chosen verticals, programme management track-record, investments in intellectual property, and a reinforced leadership team are great advantages in the prevailing macro-environment that remains volatile.
In recognition of the fact that the economy is recovering and in view of the Companys performance the Directors do not recommend any Dividend for the Financial Year 2013-2014.
Your Company maintains sufficient cash to meet its strategic objectives. As on March 31st 2014, your Company has liquid assets including investment in mutual funds of Rs. 19.20 Crore as against Rs. 15.74 Crore at the previous year end. These funds are lying in current bank account, fixed deposits with banks and in mutual funds.
BOARD OF DIRECTORS
In accordance with the Articles of Association of the Company and provisions of the Companies Act, 2013, at least two-third of our Directors shall be subject to retirement by rotation. One- third of these retiring Directors must retire from office at each Annual General Meeting of the Shareholders. Mr. Paresh Shah will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommend his reappointment.
Pursuant to provision of Section 149, 152 read along with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of the Listing Agreement,
Ms. Shubhada Jahagirdar who has consented to act as Independent Director and in respect of whom the Company has received a notice in writing under Section 160 of the Act from a member proposing her candidature for the office ofindependent Director, be and is hereby appointed as an Independent Director of the Company to hold office for 5 (five) consecutive years effective from October 01st, 2014, not liable to retire by rotation.
Pursuant to the provisions of the Companies Act, 2013, the Company has decided the term ofindependent Directors as below:
Pursuant to provision of Section 149, 152 read along with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Prof. Venugopal Ramaswami Iyengar (DIN 02591297), Dr. Shrikant Navnitlal Parikh (DIN 01735830), and Dr. Roopkishan Sohanlal Dave (DIN 2800417), who was appointed as a Director liable to retire by rotation and in respect of whom the Company has received a notice in writing under section 160 of the Companies Act, 2013 from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for 5(five) consecutive years for the term upto March 31st, 2019, not liable to retire by rotation.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria ofindependence as prescribed both under sub section (6) of Section 149 of the Companies Act, 2013 and under clause 49 of the Listing Agreement with the Stock Exchanges.
As stipulated under clause 49 (IV)(G) of the Listing Agreement entered into with the stock exchanges, the following informations are provided in the Report in explainatory statement to Notice forming part of the Annual Report:
A brief resumes of the Directors proposed to be appointed / reappointed;
Nature of their expertise in specific functional areas is as stated above;
The names of companies in which they hold directorships and membership/ chairmanship of Committees of the Board;
Shareholding of Non-Executive Directors as stated in clause 49(IV)(E)(V) of the Listing Agreement.
Your Directors have not recommended any Dividend for the Financial Year 2013-2014.
The Company is not required to undertake the cost audit as required under Section 148 of the Companies Act, 2013.
CONSOLIDATED FINANCIAL STATEMENT:
In accordance with the Accounting Standard (AS) 21 on Consolidated Financial Statements, the Audited Consolidated Financial Statement is provided in the Annual Report.
COMMITTEES OF THE BOARD:
The details of the Committees of the Board including their composition are provided in the Corporate Governance Section of this Annual Report.
Nomination and Remuneration Committee Companies Act 2013.
Pursuant to the provisions of Section 178 of Companies Act, 2013, the Board of Directors of the Company has consented the change in nomenclature of existing Remuneration Committee to Nomination and Remuneration Committee as provided under Companies Act, 2013 and has also approved the revised terms of reference of the Nomination and Remuneration Committee as per the provisions of the Companies Act, 2013 (effective from 01/04/2014).
As per the said terms of reference approved by the Board the Nomination and Remuneration Committee shall formulate the criteria for determining the qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration for the Director, KMP and other employees. The Companys policy on Directors appointment and remuneration and other specifications as mentioned above will be disclosed in the Boards Report as provided under Section 134 (3) (e) once the same is formulated by the Committee.
Your Company has Seven subsidiaries:-
1. Allied Digital Services, LLC;
2. Allied Digital INC;
3. Allied Digital Singapore Pte. Ltd;
4. Allied Digital Asia Pacific PTY LTD;
5. *Digicomp Complete Solutions Limited;
6. En Pointe Technologies India Private Limited ;
7. Allied-eCop Surveillance Private Limited.
* Your Company has divested its entire 52.6% holding in its subsidiary, Digicomp Complete Solutions Limited as per Share Purchase and Shareholders agreement on August 14th, 2013.
Pursuant to the provisions of Section 212 of the Companies Act, 1956 ("the Act"), the Company is required to attach to its Annual Report, the Balance Sheet, Profit and Loss Account, Directors Report and the Report of the Auditors (collectively referred to as "the accounts and reports), ofits subsidiaries for the year ended March 31st, 2014.
As required under the Listing Agreement with the stock exchange(s) a consolidated financial statement of the Company and all its subsidiaries have been prepared and attached hereto.
The Ministry of Corporate Affairs has granted a general exemption to the companies from attaching financials of the subsidiaries, subject to the laid down conditions. The Board of Directors has also given their consent for not attaching the accounts and reports ofits subsidiary to the Annual Report under the provisions of Section 212 of the Companies Act, 1956. Therefore, the Company shall not be attaching the audited accounts of the subsidiaries to the annual accounts of the Company for the current year. The annual accounts of the subsidiary companies and related detailed information will be made available to any member of the Company or subsidiary company upon request and are also available for inspection by any member of the Company, during the business hours, at the registered office of the Company and that of the subsidiary company concerned.
The statement containing the list of subsidiaries along with brief financial details of the subsidiaries is given on page numbers 122 of the Annual Report.
UTILISATION OF FUNDS RAISED THROUGH QIP AND ISSUE OF SHARE WARRANTS:
The Company has raised funds through the issue of shares to the Qualified Institutional Buyers pursuant to Qualified Institutional Placement and Issue of Share Warrants to Bennett Coleman and Company Limited. Out of the above issues proceeds as on March 31st 2014, the company is having balance of Rs. 5.01 cores pending for deployment.
Your Company recognizes the importance of people in its growth and has been progressing with the unflinching commitment of the dedicated team of employees. The Companys recruitment practices ensure that suitable candidates with merit are recruited and provided with right opportunities to grow within the Organization. The Company has developed an HR strategy comprising need base training. Employees are encouraged to attend seminars, lectures and training. Key performance indicators by department heads were subject to regular management review meetings.
Developing a learning culture has always been and will continue to be our uppermost priority. Our efforts in the coming years will be to enable our employees to continually grow and build a competitive edge by translating the learning into positive actions. Several trainings were conducted during the year under review. We believe that together we can and will make the Company achieve its corporate mission.
QUALITY & CERTIFICATION:
We continue our excellence in journey with a critical focus on quality and processes and significant investment in quality processes. Pursuant to our ISO 9001 certification, since last 15 years, we continued further certifications for our other activities. Your Companys Remote Management Services (RMS) center at Navi Mumbai has got ISO 27001: 2005 Certification in a year 2007 and has gone through one successful renewal and five successful surveillance audit. It is planned to get this certified against ISO 27001:2013 in Aug 2014. By this certification, we have protected IT infrastructure by means of right infrastructure and process deployment so that the customers are in safe hands. We have further completed certifications of this RMS by ISO 20000-1:2005 which is certification of excellence in IT Service Management and has gone through one successful renewal and two successful surveillance audits and recently we have up-scaled this certification to ISO 20000-1:2011. The IT services that we thus provide from this RMS are certified to be one of the best in the world meeting requirements of that standard. We have further initiated movements towards green IT and offer green data center consultancy to our prospects. In this initiative we intend to voluntarily reduce energy consumption of hardware and offer consultancy to our prospects to reduce consumption of that data center thus improving carbon footprint and one more step towards precious energy conservation. We have registered for getting our software activities certified under CMMI certification level 3 which is expected to be completed in a years time.
As part of sustainability journey, Allied Digitals various businesses have adopted sustainability approach encompassing initiatives covering natural & energy resource conservation, water efficiency, waste reduction and product innovation. This is strengthened through commitment of top management, robust processes and policy formulation.
The company actively works towards development of underprivileged communities especially around our area of operations. Mother & child health, primary education and skill building are the key thrust areas for community welfare.
The investments of the Company as on March 31st, 2014 were to the tune of Rs. 152.46 Crore as compared to the last years investment of Rs. 151.93 Crore. The Book value of the quoted investments for the year under review was Rs. 5.01 Crore (previous year Rs. 5.17 Crore) and its realizable value as at March 31st, 2014 for this investment was same as book value.
In terms of the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit Rules), 1975, the Company has accepted fixed deposits during the year. As on date no Principal or Interest amount is outstanding.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
The information on Conservation of Energy required under Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company. Although operations of the Company are not energy intensive, steps are being taken to conserve energy in all possible areas.
PARTICULARS OF EMPLOYEES:
In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Annexure to the Directors Report and the same are nil as no employees of the Company come under the purview of the aforesaid provisions. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 and Companies (Particulars of Employees) Rules, 1975, the Annual Report is being sent to all Members of the Company excluding the aforesaid information. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of your Company.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
|(Rs. In Lakhs)|
|Outflow (including Capital imports)||151.52||1,268.70|
|Net Foreign Exchange Earnings (NFE)||2,597.43||603.01|
|NFE / Earnings (%)||94||32|
DIRECTORS RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of Section 217(2AA) of the Companies Act, 1956, that:
In the preparation of the Annual Accounts for the year ended March 31st, 2014, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any;
The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended March 31st, 2014;
The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
The Directors have prepared the Annual Accounts for the year ended March 31st, 2014, on a going concern basis.
At the Annual General Meeting, members will be requested to appoint M/s. Shah & Taparia, Chartered Accountant, Mumbai (Firm Registration No. 109463W) as Auditors of the company in place of retiring auditors M/s. K.M. Kapadia & Associates, Chartered Accountant, Mumbai (Firm Registration No. 104777W), to hold office for a period of five years i.e. from conclusion of Twentieth Annual General Meeting until conclusion of Twenty - Fifth Annual General Meeting of the Company subject to ratification in every Annual General Meeting and to fix their remuneration.
M/s. Shah & Taparia, Chartered Accountants, have given their consent for appointment. The Company has also received a certificate of eligibility from them under Section 139(1) of the Companies Act, 2013 and notice from a shareholder moving resolution of their appointment.
Pursuant to the provisions of the Section 179(3) and 204 of the Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014 and as a measure of good corporate governance practice, the Board of Directors of the Company hereby appoint M/s. Pramod S. Shah & Associates (Membership No. 334), Practicing Company Secretaries as a Secretarial Auditors of the Company for the Financial Year 2014-2015 on such remuneration as may be decided by the Board in consultation with the Secretarial Auditor.
At present the Company has an Option plan for its employees, "ESOP 2010". "ESOP 2010", was approved by the members at their meeting held on September 29th, 2010. The Company had granted total 502,500 options under "ESOP 2010" to the eligible employees in tranches out of total 3,000,000 grants allocated under the effective ESOP scheme. During the financial year ended March 31st, 2014, No options were granted to employee of the Company or its Subsidiary. Each option entitles the holder thereof to apply for and be allotted Equity Shares of the Company upon payment of the exercise price during the exercise period.
The details of present ESOP are given in the table:-
|PARICULARS||ESOP 2010 GRANT|
|Total Options granted by the plan (no.)||502,500|
|Pricing formula on date of grant||Fair Market Value|
|Options granted during the year (no.)||Nil|
|Weighted average price per Option granted (Rs.)||N.A.|
|Variation in terms of Options||NA|
|Options exercised during the year (no.)||Nil|
|Money raised on exercise of Options (Lakhs)||Nil|
|Options forfeited and lapsed during the year (no.)||Nil|
|Total number of Options in force at the end of the year. (no.)||487500|
|Grant to senior management||Nil|
|Employees receiving 5% or more of the total number of Options granted during the year||N.A.|
|Employees granted Options equal to or exceeding 1% of the issued capital||Nil|
|Diluted EPS in accordance with [AS-20]||N.A.|
Your Company has taken appropriate steps and measures to comply with all the applicable mandatory provisions of Clause 49 of the Listing Agreement entered with the Stock Exchanges. The Companys governance practices are described separately in the Corporate Governance section from pages 33 of this Annual Report. We have obtained certification from a Practicing Chartered Accountant on our compliance with Clause 49 of the Listing Agreement with Indian Stock Exchanges, described in the separate section forming a part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange in India, is presented in a separate section forming a part of this Annual Report.
THE COMPANIES ACT, 2013:
The Companies Act, 2013 (the Act) came into force as on April 1st, 2014 (in the manner, to the extent notified by the Ministry of Corporate Affairs). The Act has replaced the Companies Act, 1956 and has brought a new set of compliances for companies. The new Legislation will facilitate greater transparency, more disclosures and enhanced corporate governance. The Company is taking necessary steps for implementation of the provisions of the Act.
AWARDS AND RECOGNITION:
During the year Company has received various awards & recognitions. The awards are listed below:
Certificate of Excellence from India Inc Innovative 100, for smart innovation ADiTaaS platform
"Best VAR 2013 Western India
Winner of the Channel World Premier 100 Awards, 2014
We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels.
We thank the Government ofindia, the Ministry of Communication and Information Technology, the State Government, various government agencies and the Government of United States of America where we have operations, for their immense support, and look forward to their continued support in future.
|For and on behalf of the Board of Directors|
|Nitin D. Shah||Prakash D. Shah|
|Chairman & Managing Director||Executive Director- Commercial|
|Date: August 14th, 2014|
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Nitin D Shah , Chairman & Managing Director
Prakash D Shah , Executive Director(Commercial)
Paresh Shah , Executive Director & CEO
Venugopal Iyengar , Director
Company Head Office / Quarters:
Premises No 13A 13th Floor,
Earnest House NCPA Rd BlockIII,
Phone : Maharashtra- / Maharashtra-
Fax : Maharashtra- / Maharashtra-
E-mail : firstname.lastname@example.org
Web : http://www.alliedindia.com