Allied Digital Services Ltd Directors Report.

Dear Members,

The Directors are pleased to present the Twenty Sixth Annual Report on the business and operations along with the Audited Standalone and Consolidated Financial Statements for the year ended March 31, 2020.

1. FINANCIAL PERFORMANCE:

The Standalone and Consolidated financial statements for the financial year ended March 31, 2020, forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.

Key highlights of financial performance of your Company for the financial year 2019-20:

(Rs. In Lakhs)

Particulars STANDALONE CONSOLIDATED
2019-20 2018-19 2019-20 2018-19
Total Operating Income 9,419 7,523 33,014 23,973
Other Income 558 412 558 412
Total Income 9,978 7,935 33,572 24,384
Less: Operating Expenditure 7,159 4,866 28,248 20,118
Profit before Interest, Depreciation, Amortization, Tax & Exceptional Item 2,819 3,069 5,324 4,266
Less: Depreciation 1,370 1,385 2,221 2,162
Less: Finance cost 619 921 699 1,003
Profit before Tax and Exceptional Item 830 762 2,404 1,102
Exceptional Item - 351 - 351
Profit before Tax 830 1,113 2,404 1,453
Less: Provision for Taxation - - 441 65
Less: Deferred Tax Liability 41 150 41 150
Net Profit after tax 788 963 1,922 1,238
Other Comprehensive Income (25) (35) 50 (35)
Shares of Profit/(Loss) of Associates & Joint Ventures - - 2 -
Total Comprehensive Income (after tax) 764 928 1,975 1,203
Attributable to Owners of the Company 2,281 1,196
Attributable to Non-Controlling Interest - - 306 (7)
Paid-up equity share capital (Face Value of 5/-) 2,510 2,510 2,510 2,510
Reserves excluding Revaluation Reserves as per Balance Sheet of previous Accounting Year 44,618 43,797 43,128 41,171
Earning per Share
Basic 1.57 1.92 3.83 2.46
Diluted 1.57 1.92 3.83 2.46

2. RESULT OF OPERATING PERFORMANCE, ONGOING PROJECTS & STATE OF AFFAIRS:

Your Company is focusing on growth and achieving profitability along with a renewed commitment to customer services. Positive modifications are expected in the near future boosting companys revenue. Your Company is also focusing extensively on expanding the business and improvements in operations through various strategic projects for operational excellence.

There was no change in the nature of business of the Company, during the year under review.

a) Standalone Financial Statements:

During the year under review, there was 26% increase in the total income of the company, and there was actual increase of 9% in the Profit before exceptional items and taxes for the year.

b) Consolidated Financial Statements:

During the year under review, the overall consolidated income grew by 38% and the profit after tax level of 19.22 Crs. was higher by almost 55% as against the previous year amount of 12.37 Crs. mainly due to increased sales volume and considerable reduction in the finance costs.

c) Ongoing Projects & State of Affairs:

The Ongoing Projects & State of Affairs of the Company is presented as part of Management Discussion and Analysis Report which forms part of the Annual Report.

Further information regarding the potential impact of COVID-19 and various steps taken by your Company are provided as part of the Management Discussion and Analysis Report (MDAR).

d) Revision of Financial Statement:

There was no revision of the financial statements pertaining to previous financial year during the year under review.

e) Disclosure of Internal Financial Controls:

The Board of your Company has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

f) Investor Education and Protection Fund:

In terms of the provisions of Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, 81,481.75 of unpaid/ unclaimed dividends was unpaid/unclaimed is yet to be transferred to the Investor Education and Protection Fund. The Company is in the process of doing the needful.

3. REPORT ON HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES. ASSOCIATES AND JOINT VENTURE COMPANIES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY:

a. The Company has Seven (7) Foreign Subsidiaries, two (2) Indian Subsidiaries and three (3) Associate Companies. The Company did not have any joint venture company.

Following are the details of Subsidiary and Associate Companies:

Sr. No. Name of Company Subsidiary / Joint ventures/ Associate Company Date of becoming of Subsidiary/Joint Ventures/ Associate Company.
1. Allied Digital Services, LLC (USA) Subsidiary July 02, 2008
2. Allied Digital INC (USA) Subsidiary October 31, 2007
3. Allied Digital Singapore Pte Limited Subsidiary October 12, 2010
4. Allied Digital Asia Pacific Pty Limited (Australia) Subsidiary September 16, 2010
5. Allied Digital Services (UK) Ltd. Subsidiary December 04, 2013
6. Allied Digital Services Oy. Subsidiary June 08, 2018
7. Allied Digital Services (Ireland) Limited Subsidiary November 04, 2019
8. En Pointe Technologies India Private Limited Subsidiary December 29, 2006
9. Allied-eCop Surveillance Private Limited Subsidiary August 06, 2007
10. Assetlite Equipment India Private Limited Associate September 26, 2009
11. Soft Shell System (I) Private Limited Associate August 07, 2015
12. Allied CNT Solutions Private Limited Associate July 06, 2004

There is no material change in the nature of the business of Subsidiaries or Associate Companies.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 (‘the Act), the statement containing the salient features of the financial statement of Subsidiaries and Associates Companies in the prescribed Form AOC-1 is appended as "Annexure I" to the Boards Report.

b. Material Subsidiaries:

Allied Digital Services LLC, USA is a Material Subsidiary whose income in the immediately preceding accounting year exceeds twenty percent of the consolidated income of the Company and its Subsidiaries.

The Policy for determining Material Subsidiaries as approved may be accessed on the Companys website at the link:

https://www.allieddigital.net/in/downloads/Inv_Policies/Policy_on_Determination_of_Material_Subsidiaries.pdf

During the year under review, the Board of Directors reviewed the affairs of the subsidiaries from time to time and there has been no material change in the nature of the business of subsidiaries.

4. RECENT DEVELOPMENTS:

Your Company is adopting new technologies as it foresees massive growth in IT Solutions and Services in the domain of loT (Internet of Things), Smart Cities and next generation Automation solutions leveraging machine learning and Artificial Intelligence ("Al").

The Company has developed advanced solutions for Covid-19 pandemic, such as bringing intelligent alerts of crowd gathering during the pandemic, automated centralized public announcements in streets, Drone based surveillance. During the year, your company has continued to sharpen IoT and computer vision-based technology skillsets, to enhance smart city solutions and innovative thermal scanning solutions.

5. DIVIDEND:

Your Board is pleased to recommend for your consideration, a dividend of 0.50 (Fifty Paise only) per Equity Shares of 5/- for the financial year 2019-20. The aforesaid dividend will involve a total payout of 251.03 Lakhs and is subject to the approval of Members at the ensuing General Meeting of your Company. The proposed dividend payout is in accordance with the Companys Dividend Policy.

6. TRANSFER TO RESERVES:

Your Company has not recommended transfer of any amount out of the profit to reserves during the year under review. Hence, the entire amount of profit for the year under review has been carried forward to the Profit and Loss surplus account.

7. DEPOSITS:

Your Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies (Acceptance of Deposits) Rules, 2014 from public during the year under review. However, as on the Balance Sheet date i.e. March 31, 2020, there were unclaimed fixed deposits amounting to 5.91 lakhs lying with the Company.

The details relating to deposits, covered as per the Chapter V of the Companies Act, 2013, are as under:

(Rs. In Lakhs)

1 Particulars
Deposits accepted during the year --- ---
Deposits unclaimed at the end of the year 5.91 15.57
Default in repayment of deposits or payment of interest thereon --- ---

Your Company has not defaulted in repayment of deposits or payment of interest.

8. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

Except as disclosed elsewhere in the report, there were no material changes and commitments, occurred during the period between the end of the financial year to which the financial statements relate and date of said report, which could affect the financial position of the Company.

9. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

In line with the requirements of the Companies Act, 2013 and amendment to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations), your Company has formulated a Policy on Related Party Transactions which is also available on the Companys website at:

https://www.allieddigital.net/in/downloads/Inv_Policies/Related_Party_Transaction_Policy.pdf .

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

All Related Party Transactions are placed before the Audit Committee and the Board, on quarterly basis for review and approvals. Prior omnibus approval is obtained for Related Party Transactions for transactions which are of foreseeable and of a repetitive nature.

All Related Party Transactions entered during the financial year under review were in Ordinary Course of the Business and at Arms Length basis. None of the transactions entered into with the related parties, whether singly or taken together with the transaction entered into with the related party during the year, was materially significant related party transaction except those disclosed in the financial statements.

There were no transactions/contracts/arrangements with related party(ies), which are required to be reported in Form AOC-2.

Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed the reports on related party transactions with the Stock Exchanges.

10. PARTICULARS OF LOANS, ADVANCES, GUARANTEES OR INVESTMENTS:

Pursuant to the provisions of Section 186 of Companies Act, 2013 and Schedule V of the Listing Regulations, the disclosure on particulars of Loans, Advances, and Guarantees given and investments made are provided as part of the Financial Statements.

11. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) CHANGE IN BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

The Board of your Company is duly constituted in accordance with the requirements of the Companies Act, 2013 read with the Listing Regulations.

Dr. Shrikant Parikh, Ms. Shubhada Jahagirdar, Prof. Venugopal Iyengar, Independent Directors of the Company were reappointed on April 01, 2020 as Independent Directors of the Company for second term for continuous period of five years to hold office up to March 31, 2024.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Nehal Nitin Shah, (DIN: 02766841) Director, being longest in the office, shall retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment.

Prof. Venugopal Iyengar (DIN: 02591297), Independent Director of the Company ceased to be Director of the Company due to his sudden demise on April 29, 2020. The Board appreciate his valuable contribution to the Company during his tenure and express deep sympathy, sorrow and condolence to his family.

Mr. Milind Madhav Kamat (DIN: 01772084) was appointed as an Additional Director (Independent Director) with effect from June 11, 2020 for a period of five years subject to the approval of shareholders in the ensuing Annual General Meeting on the terms and conditions as recommended by the Nomination & Remuneration Committee and approved by the Board of the Company in their meeting held on June 11, 2020.

In accordance with the provisions of the Companies Act, 2013 none of the Independent Directors are liable to retire by rotation.

b) DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS:

Definition of ‘Independence of Directors is derived from Regulation 16 of the Listing Regulations and Section 149(6) of the Companies Act, 2013. The Company has received necessary declarations under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the Listing Regulations, from the Independent Directors stating that they meet the prescribed criteria for Independence. All Independent Directors have affirmed compliance to the code of conduct for independent directors as prescribed in Schedule IV to the Companies Act, 2013.

12. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:

a. BOARD MEETINGS:

Five meetings of the Board were held during the year under review. The Meetings were held on May 29, 2019, August 13, 2019, October 31, 2019, November 13, 2019 and February 4, 2020. Brief details of the said Meetings are provided in the Corporate Governance Report, which is a part of this Annual Report.

b. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a. in the 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 as at March 31, 2020 and of the profit 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

c. COMMITTEES OF BOARD:

The Board has constituted the following Committee(s) as mandated under the provisions of the Companies Act, 2013 and Listing Regulations. There are currently five (5) Committees of the Board namely:

- Audit Committee;

- Nomination and Remuneration Committee;

- Stakeholders Relationship Committee;

- Corporate Social Responsibility Committee; and

- Management Committee.

Details of Committees along with their charter, composition and attendance of Directors at Meetings of the Committees are provided in the Corporate Governance report.

I. AUDIT COMMITTEE:

The Audit Committee has been constituted by the Board, in accordance with the provisions of Section 177 of the Companies Act, 2013 read with Regulation 18 of Listing Regulations. During the year under review, the Board had accepted all the recommendations of the Audit Committee.

The composition and other details of the Audit Committee is presented in the Corporate Governance Report.

II. NOMINATION AND REMUNERATION COMMITTEE:

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of Listing Regulations, the Board has constituted the Nomination and Remuneration Committee, which inter-alia recommends to the Board the criteria for appointment of Director(s) along with the compensation, terms of Executive Directors and senior managerial personnels.

The Board has approved the Nomination and Remuneration Policy for Directors, Key managerial personnel and all other employees of the Company. The said policy is hosted on the website of the Company. The Web link of the same is as follows:

https://www.allieddigital.net/in/downloads/Inv_Policies/Nomination_Remuneration_policy.pdf .

The composition and other details of the Nomination and Remuneration Committee is presented as part of Corporate Governance Report which forms part of the Annual Report.

III. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee is duly constituted in accordance with the provisions Section 178 of the Companies Act, 2013 read with Regulation 20 of Listing Regulations. The primary objective Stakeholders Relationship Committee of the Company is to consider and resolve the grievances of security holders/members of the Company.

The composition and other details of the Stakeholders Relationship Committee is presented as part of Corporate Governance Report which forms part of the Annual Report.

IV. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE ("CSR COMMITTEE"):

The CSR Committee is duly constituted as per provisions of Section 135 of the Companies Act, 2013, consisting of three (3) Directors of which two (2) Directors are Non - Executive Independent Directors and one (1) Executive Director and the Chairperson is an Independent Director. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by your Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The detailed report on CSR activities is attached as "Annexure II" to this report.

The key philosophy of the Companys CSR initiative is to promote development through social and economic transformation. The CSR Policy of the Company can be accessed on the Companys website in the link provided herein below:

https://www.allieddigital.net/in/downloads/Inv_Policies/CSR%20Policy.pdf

V. MANAGEMENT COMMITTEE:

The Management Committee was constituted by the Board on April 28, 2009. The Committee is entrusted with the operational and administrative power. The Committee comprises of three (3) members i.e. Mr. Nitin Shah, Chairman and Managing Director, Mr. Prakash Shah, Whole-time Director and Mr. Paresh Shah, Chief Executive Officer of the Company.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are as follows:

A. CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy:

Your Company has always considered energy and natural resource conservation as a focus area. Though the operations of the Company are not energy intensive, it strongly believes that it is the need of the hour to do best efforts to conserve energy and natural resources like water.

Your Company continues to take sustainable steps voluntarily to contribute towards better environment.

Selected few steps/impact are listed below:

- Use of natural Lightning and natural ventilation;

- Use of energy efficient electric equipment such as use of LED bulbs;

- Conservation of water, ensuring no leakages in taps;

- Encourage use of environment-friendly reusable water bottles;

- Car-pooling during meetings and encourage use of public transport;

- Discouraging use of non-disposable plastic bags, plates etc.;

- Switching off work stations and laptops;

- Controlling the air-conditioning equipment optimally in the premises;

- Educating employees

- and workers for energy conservation.

(ii) Steps taken by the Company for utilizing alternate sources of energy:

Your Company is using electricity as main source of its energy requirement and does not have any alternate source of energy.

(iii) Capital investment on energy conservation equipments:

During the year under review, there was no such investment in energy saving equipment apart from promoting replacement of CFL to LED bulbs where applicable.

B. TECHNOLOGY ABSORPTION

i. The efforts made towards technology absorption:

Your Company has innovation as part of its motto. It is always thrive to be a pioneer for adoption new technologies, which either be useful for generating new business for its customers or for its self-use. It evaluates the best available technology for improving its performance and quality of its service operations.

ii. The benefits derived like product improvement, cost reduction, product development or import substitution:

Your Company has adopted new technology to strengthen its infrastructure in the US, which is leveraged by many customers that has helped giving top quality uninterrupted services. It has adopted new technologies to apply to solve challenges faced by customers.

iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

Your Company has not imported technology during the three preceding years under review.

iv. Expenditure incurred on Research and Development:

Your Company has been continuously working on innovative projects, which are either part of- New features of their ADiTaaS product;

- Doing proof-of-concepts on new technologies;

- Investing in new technology training/learning.

14. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of the Foreign Exchange earned in terms of Actual Inflows and the Foreign Outflow during the year in terms of Actual Outflows are as follows:

(Rs. In Lakhs)

1 Particulars 2019-20 2018-19 1
Earnings 3,595 4,342
Outflow (including Capital imports) 229 114
Net Foreign Exchange Earnings (NFE) 3,366 4,228
NFE/ Earnings (%) 94 97

15. MANAGEMENT DISCUSSION AND ANALYSIS:

In terms of Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report, capturing the Companys performance, industry trends and other material changes with respect to the Company and its Subsidiaries, wherever applicable, are presented in a separate section forming a part of this Annual Report.

16. CORPORATE GOVERNANCE:

Your Company believes in adopting best practices of Corporate Governance. Corporate Governance principles, which form the core values of the Company. These guiding principles are also articulated through the Companys code of business conduct, Corporate Governance Guidelines, as per Schedule V of Listing Regulations, the Auditors certificate on Corporate Governance is annexed to the Boards Report. The requisite certificate from the Practicing Company Secretary, confirming compliance of the conditions of Corporate Governance is attached to the Report on Corporate Governance.

17. EXTRACT OF ANNUAL RETURN:

Pursuant to section 92(3) and section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on March 31, 2020 is in Form MGT-9 which is annexed as "Annexure III" to this report.

Further, the Company has also placed a copy of the Annual Return of the Financial Year 2018-2019, filed with the Ministry of Corporate Affairs on the website i.e. www.alieddigital.net

18. ANNUAL EVALUATION:

The evaluation framework for assessing the performance of Directors of the Company comprises of contributions at the meetings, strategic perspective or inputs regarding the growth and performance of the Company, among others.

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Directors have carried out the Annual Performance Evaluation of the Board, Independent Directors, Non-Executive Directors, Executive Directors, Committees and the Chairman of the Board.

The Nomination and Remuneration Committee considered and discussed the inputs received from the Directors and the outcome of such evaluation process was satisfactory, which reflected the overall engagement of the Board and its Committees with the Company.

Further, the Independent Directors at their meeting held on February 04, 2020, reviewed the performance of the Board, Chairman of the Board, Executive and Non- Executive Directors.

19. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

In compliance with the requirements of Listing Regulations, your Company has placed a Familiarization Programme for Independent Directors to familiarize them with the working of the Company, their roles, rights and responsibilities vis-a-vis the Company, the industry in which the Company operates, business model etc. on the website of the Company. The link for accessing the said program is:

https://www.allieddigital.net/in/downloads/Inv_Policies/Familiarisation_Programme_Independent_Directors.pdf .

20. THE VIGIL MECHANISM:

Your Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including Directors of the Company to report genuine concerns and to ensure strict compliance with ethical and legal standards across the Company. The provisions of this Policy are in line with the provisions of the Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014.

The employees of your Company have the right to report their concern or grievance to the Chairman of the Audit Committee. Your Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Whistle Blower Policy is hosted on the website of the Company at:

https://www.allieddigital.net/in/downloads/Inv_Policies/Whistle_blower_and_vigil_mechanism.pdf .

21. AUDITORS AND REPORTS:

The matters related to Auditors and their Reports are as under:

a. Statutory Auditors

At the Twenty Fifth Annual General Meeting held on September 10, 2019, M/s. Shah & Taparia, Chartered Accountant, Mumbai (Firm Registration No. 109463W) was appointed as Statutory Auditors of the Company for second term of five years i.e. conclusion of Twenty Fifth Annual General Meeting until conclusion of Thirtieth Annual General Meeting of the Company.

The Auditors Report to the Shareholders for the Financial Year ended on March 31, 2020 does not contain any qualification or observation. The notes to accounts referred to in Auditors Report are self-explanatory, and therefore, do not call for any further explanation or comments from the Board.

b. Secretarial Auditors

The Board had appointed M/s. Rathi & Associates, Company Secretaries as Secretarial Auditors for the financial year 201920. Secretarial Audit Report issued by them in Form MR-3 for the financial year 2019-20 forms part of this report and marked as "Annexure IV".

The comments on the specific observations made in the above Secretarial Audit Report (which is subject to verification of financial statements for the year ended March 31, 2020 and documents filed under the provisions of FEMA in respect of the Overseas Direct Investment) are as under: -

- The Company had allotted 2186667 Equity Shares to Mr. Nitin Dhanji Shah and 1832134 Equity Shares to Mr. Prakash Dhanji Shah, Promoters of the Company in Dematerialized Form. Hence, the said shares are shown in the DEMAT form in the shareholding pattern of the Company. Further, the corporate action procedure for credit of the said shares was completed during Financial Year 2019-20 and trading approvals were received in February 2020.

- The Company will ensure timely payment of the Annual Listing Fees to Stock Exchanges.

- The entire pre-preferential shareholding of Mr. Nitin Dhanji Shah and Mr. Prakash Dhanji Shah are presently locked-in as required under the law.

c. Internal Auditor

Pursuant to the provisions of Section 138 and Section 179 (3) of the Companies Act, 2013, M/s. Satya Prakash Natani & Co. (Firm Registration No. 115438W), Mumbai is appointed as the Internal Auditors of the Company for the Financial Year2020-21.

The Audit Committee has accepted all the recommendation of the Internal Auditors.

d. COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

22. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has laid down Internal Financial Controls to be followed by the Company. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, prevention and detection of frauds and error, reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

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

Information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as "Annexure V"to this report.

Further details with regards to payment of remuneration to Directors and Key Managerial Personnel are provided in Form No. MGT - 9, Extract of Annual Return appended as "Annexure III".

24. PARTICIPATION IN THE GREEN INITIATIVE:

In commitment to keep in line with the Green Initiative undertaken by the Ministry of Corporate Affairs (MCA) and Securities and Exchange Board of India (SEBI), electronic copies of the Annual Report 2019-20 along with the Notice of Annual General Meeting were sent to all the members whose email addresses are registered with the Company / Depository Participant(s)/Registrar and Share Transfer Agent.

Also, all the Members are requested to join the said program by sending their preferred e-mail addresses to the Registrar and Share Transfer Agent.

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

Your Company has always believed in providing a safe and harassment free workplace for every individual working in its premises through various policies and practices. Your Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment. Accordingly, your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

During the year ended March 31, 2020, no complaints have been received pertaining to sexual harassment of women at workplace.

26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

During the year under review, no significant and material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

27. RISK MANAGEMENT:

Your Companys robust risk management framework identifies and evaluates all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory, reputational and other risks. Your Company recognizes that these risks need to be managed and mitigated to protect its shareholders and other stakeholders, to achieve its business objectives and enable sustainable growth. The risk framework is aimed at effectively mitigating the Companys various business and operational risks, through strategic actions. Risk management is integral part of our critical business activities, functions and processes. The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risks and future action plans.

Your Company believes that the overall risk exposure of present and future risks remains within its risk capacity.

28. FRAUD REPORTING:

During the year under review, there were no material or serious instances of fraud falling within the purview of Section 143 (12) of the Companies Act, 2013 and rules made thereunder, by officers or employees reported by the Statutory Auditors of the Company during the course of the audit conducted. 29. GENERAL:

The Directors states that, no disclosure or reporting is required in respect of the following items as there are no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

3. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

30. ACKNOWLEDGEMENT:

The Board wishes to place on record its sincere appreciation of the contributions made by the employees of your Company and its subsidiaries during the year under review. The Directors of your Company thank its customers, clients, vendors and other business associates for their continued support in the Companys growth.

The Directors also express their deep sense of gratitude to the Government Authorities, Banks, Financial Institutions and other Stakeholders for their support and look forward to their continued assistance in future.

For and on behalf of the Board of Directors of Allied Digital Services Limited
Nitin Shah Prakash Shah
Place: Mumbai Chairman & Managing Director Whole-time Director
Date: July 30, 2020 DIN:00189903 DIN: 00189842