Allsec Technologies Ltd Management Discussions

Industry trends affecting our business:

Reinventing Efficiency: Evolving Strategies in BPM and HR Outsourcing

In 2024, amidst global geopolitical tensions, Indias technology industry confronts cautious investment and delayed decision making, yet it remains resilient, poised for growth in both export and domestic sectors. As the industry expands its workforce and identifies opportunities across

Europe,APAC,Manufacturing,Retail,andHealthcare, Business Process Management (BPM) and Human Resources Outsourcing (HRO) industries stand at a pivotal juncture. The convergence of technological advancements, global economic shifts and competitive pressures presents a landscape ripe with opportunities and challenges. Both global and

India specific outlooks underscore the imperative for radical transformation and growth, demanding strategic agility and forward-thinking approaches.

Driving Efficiency and Value:

The Evolution of BPM in 2024

Navigating through todays complex macroeconomic environment, characterized by challenges such as cybersecurity risks and talent shortages, emphasizes the critical need for enhanced data utilization, improved performance and innovative partnerships within the BPM sector. Addressing crucial areas like data underutilization, governance and slow technology adoption positions BPM service providers to lead the way in driving efficiency and excellence amidst evolving realities.

The demand for outcome-driven partnership models heralds a transformative phase for BPM, where the transition from effort-based workflows to outcome centric approaches reshapes the industry landscape. This shift isnt merely a preference but a necessity, given that nearly half of enterprises now perceive their relationships with service providers as strategic rather than transactional. The latest insights from the NASSCOM report underscore a clear shift in mindset towards valuing outcomes and data over traditional resource centric models. Organizations increasingly rely on BPM partners to unlock new value streams and deliver data driven solutions tailored to their evolving needs.

Tech Export Trends: Insights into IT Services, BPM,

ER&D and Software Products

Against a backdrop of heightened global geopolitical tension prompting a more cautious investment stance and delayed decision-making, Indias technology industry revenue (including hardware) is forecasted to reach $254 billion in 2024, marking a 3.8% year-on-year growth and an increase of over $9 billion from the previous year. Exports are anticipated to surpass the $200 billion milestone with a 3.3% year-on-year growth, while the domestic technology sector is expected to exceed $54 billion, growing at 5.9% year-on-year. Despite challenging market conditions, the industry remains a net employer, adding 60,000 employees and expanding the total employee base to 5.43 million, representing a 1.1% year-on-year growth. Europe, APAC, Manufacturing, Retail and

Healthcare are identified as key growth markets for the industry.

Tech Industry Segment Trends (Exports):

? IT services anticipate 2% ayear-on-year growth in 2024, fuelled by escalating demand for infrastructure management, networking services in distributed setups, cloud-based software testing, and consulting services.? ?Business Process Management (BPM) is cultivating specialized capabilities in data monetization, leveraging cloud-based AI and analytics, poised to grow by 2.7% in 2024.

? ?Engineering Research & Development (ER&D) emerges as the fastest growing segment at 7.4%, driven by heightened ER&D intensity across sectors with a focus on digital engineering spurred by digital imperatives and the resurgence of AI.

? ?Software products are projected to grow by 1.8% year-on-year, as customer enterprises persist in investing in communication and collaboration tools, cybersecurity, and content management solutions.

2024 HR Outsourcing Trends: Strategic Insights for Future Planning

In accordance with a recent study by Forbes, HR outsourcing trends in 2024 reflect a dynamic landscape marked by significant shifts and emerging priorities. Key metrics indicate a noteworthy focus on streamlining HR processes, enhancing employee experiences and adapting to evolving workforce dynamics. According to the study, 46% of HR leaders identify outsourcing as their top priority, underscoring the growing reliance on external expertise to navigate complex HR challenges.

HR OUTSOURCING - MARKET INSIGHTS IN 2024

Metrics	Insights
Leadership Development	Cultivating effective leadership enhances employee productivity, loyalty and overall job satisfaction.
Employee Burnout	HR leaders are increasingly focused on mitigating change fatigue, recognizing its impact on workforce morale and productivity.
Employee Experience	Efforts include de ning clear career paths, communicating bene ts, and providing opportunities for growth, aiming to boost employee satisfaction and retention.
Compelling Career Paths	De ned career trajectories, skill development, and transparent job descriptions are essential to retaining talent and fostering employee engagement.
Recruitment Priorities	Talent acquisition remains crucial for organizational success, with HR departments focused on identifying and lling skill gaps to drive growth and innovation.
Recruitment Challenges	Overcoming recruitment challenges, exacerbated by increasing competition for skilled professionals, involves leveraging AI and outsourcing to streamline processes and attract top candidates.
Remote Work Preferences	Remote work preferences re ect evolving workplace dynamics, emphasizing the importance of virtual recruitment, onboarding, and culture-building initiatives.
Employee Retention	Effective onboarding and clear career development opportunitiesare critical in retaining talent (particularly in the rst 90 days) and reducing turnover costs.
HR Technology Adoption	Enables efficient recruitment, onboarding and performance tracking, contributing to organizational productivity and competitiveness.
Employee Engagement	Enhancing employee engagement correlates with increased productivity and organizational success.
Diversity in the Workplace	Efforts to promote diversity and inclusion contribute to improved employee morale, innovation, and overall business performance.
Employee Learning and Development	Customized learning programs and manager support play pivotal roles in employee skill development and retention.
Future of Work Strategy	Strategies that address remote work, contingent workforce management and office space optimization are critical for organizational resilience and growth.

The above table provides a concise overview of key metrics and trends in HR outsourcing and services, offering insights into the evolving landscape of human resources management, as per a study published in Forbes Advisor, 2024.^#

The Forbes article titled ‘HR Outsourcing - Market Insights in 2024 highlights a surge in demand for specialized HR services, with 36% of HR professionals expressing a need for tailored solutions to address specific organizational needs. This trend is reinforced by the finding 77% of organizations believe that outsourcing HR tasks can lead to cost savingsandoperationalefficiencies.

Additionally, the study emphasizes the increasing adoption of technology driven HR solutions, with 80% of businesses leveraging HR software to streamline recruitment, onboarding and performance management processes. As organizations continue to adapt to remote work environments and embrace flexible work arrangements, HR outsourcing emerges as a strategic imperative for driving organizational agility and enhancing workforce productivity in 2024.

As businesses navigate the intricate landscapes of Business Process Management (BPM) and Human Resources Outsourcing (HRO), the convergence of technological advancements, evolving economic paradigms and shifting consumer expectations presents both challenges and opportunities. The insights gleaned from the exploration of BPM and HRO trends in 2024 underscore the critical importance of strategic agility, forward-thinking approaches and proactive adaptation to emerging realities. As we venture into the future, the ability to harness the power of BPM and HRO will be instrumental in driving organizational resilience, agility and competitiveness in an ever-evolving business landscape.

Company Overview:

Allsec is a global company with extensive expertise in delivering business process solutions across various industry verticals. The company was incorporated in 1998 as a limited company under the erstwhile Companies Act, 1956, and is listed that on the National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE).

The company owns two wholly-owned subsidiaries: Allsectech Inc., USA, and Allsectech Manila Inc., Philippines.

Allsec operates two segments globally: Employee Experience Management (EXM), which covers HRMS, payroll services, time and attendance management, and Customer Experience Management (CXM), encompassing lead generation, customer retention and relationship management, including both voice and non-voice processes. EXM and CXM services are delivered from India and the subsidiary in the Philippines.

The company is highly customer-centric, flexible and transparent in its service provision. Allsec focusses on enhancing its clients business experience by assuming process responsibility, enhancing cost efficiencies, and adding value through continuous process improvements and quality assurances.

The financial year2023-24 was a year of growth for

Allsec with stellar financial performance.

Key Financial Ratios (on Standalone Financials):

Particulars	FY24	FY23	Remarks
Debtors Turnover Ratio	7.1	6.4
Interest Coverage Ratio	29.3	19.7
Current Ratio	2.9	2.8	Note 1
Debt Equity Ratio	0.1	0.2	Note 2
EBITDA Margin (%)	20.6%	17.7%
Net Profit Margin (%)	21.1%	16.6%	Note 3
Inventory Turnover Ratio	NA	NA	NA for Servicing Industry
Return on Net worth (%)	35.3%	27.2%	Note 3

Note 1: Marginal increase due to increase in business volume. DSO remains flat at 55 days YoY

Note 2: Debt equity ratio improvement is on account of repayment of lease liabilities & higher growth in margins during the year. Note 3: Increase in margin ratio for standalone financialsis on account of higher dividend ( 1,041 lakhs) from Manila & increased margin linked to business growth.

OPPORTUNITIES Core Competency

Allsec has a 24 years legacy of servicing customers in both the CXM and EXM space. This has helped the Company to build a deep domain knowledge, putting in place processes for continuous training and ensuring robust customer service. Our customers stand testimony to our track record of providing outstanding service. The Company takes pride in quality delivery pinned on an agile and customer centric approach.

Allsec manages some of the complex payroll and tax scenarios for both global and domestic organisations across industries. Our payroll and HRMS solutions are flexible to meet the requirements of wide range of Companies. During FY24, the Companys volumes of payslip per month increased to the level of 1.32 Mn.

Our CXM business continues to provide value added services to our customers with features like BOT monitoring command centre, omni-channel support, multiple languages support etc. We are a leading provider of outsourced solutions in customer engagement, sales & retention for businesses across BFSI, Retail, Healthcare etc. Our customer retention rates have been exceptionally high standing testimony to our strong delivery capabilities.

During the year, the CXM business has forayed into patient care support in Health care, delivering it from its Manila centre.

Client Acquisition

The Company has continued to invest in building capabilities for new sales. This has resulted in strong customer acquisition during the year and a significant pipeline.

In CXM, our focus continues to be in the North

American market. During the year, our sales efforts have resulted in addition of Rs. 98 Cr in ACV during the year, up by 3.3X YoY.

The EXM business continues to expand both in domestic and international geographies. Allsec serves payroll services for 42 Countries across the globe. Our sales team is in place across major cities in India and we have sales presence in Manila as well. We won 56 new Logos with ACV of Rs. 27 Cr during FY24.

Quality

The Company has robust Quality Management, Information Security Management system and Data Privacy frameworks in place to identify the potential risks, areas of improvement and to ensure smooth business operations.

ISO 9001:2015, Quality Management System certification for Chennai facility and ISO

27001:2013, Information Security Management

System certification for Allsecs facilities in Chennai,

Bengaluru, Noida and Manila are renewed in Feb 24 and are valid till Feb 25.

The PCI DSS compliance certifications for CXM business are renewed in June 23 for Chennai and Manila facilities and in Feb 24 for Bengaluru and Noida facilities respectively. These are valid for one 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 across the quarters for the payroll business to cater to different clients requirements as a standard practice. This increased frequency makes the system more robust.

To fulfill the requirements for one US Healthcare business program in Manila facility, we renewed existing HIPAA certification in Oct 23. We also got one new facility in Manila HIPAA certified in Oct

23. Further, we got existing HIPAA certification for Chennai facility renewed in Feb 24. HIPAA certification is mandatory for 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 European Union (EU) citizens and residents.

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 5 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. The Digital Personal Data Protection Act 2023, popularly called as DPDPA 23 is an Indian Data

Privacy Law introduced by Indian Government and received the assent of President of India on

11-August-2023. This act aims at safeguarding the digital personal data of Indian citizens and is applicable to the processing of digital personal data within India where such data is collected online, or collected offline and is digitised. It will also apply to such processing outside India, if it is for offering goods or services in India. The effective date of this

Act has not yet been announced by Government of India and also a notification providing more details on some of the requirements of this Act is awaited. We reviewed the requirements of this Act and commenced the deployment of processes and controls in our Organization so as to be ready and be compliant with the requirements once

Government of India announces the effective date and additional rules.

Capacity

Today, Allsec has a pan India presence and a capacity of over ~4,300 seats with facilities in 3 locations which are in NCR, Bengaluru and Chennai. We have also added additional ~200 seats in a new facility in Chennai recently. Apart from India, we also have a capacity of ~1,200 seats in Manila. We will further add capacity during the year based on the business prospects.

RISKS AND CONCERNS BUSINESS RISK

The CXM international business showed promising signs of growth. But the economic conditions with respect to the BFSI segment remains uncertain. The new vertical of healthcare added in the Q423 has shown significant growth in FY 24 & also helped to mitigate client concentration risk.

EXM division has been growing organically for us and this will continue in the coming years too. Management also continues to evaluate right opportunities to grow inorganically as well in International market for both verticals. The Company believes that with higher competition the price may be under pressure in the coming years.

We believe that our efforts in technology will help us in being a key differentiator in the market superior service delivery standard will strengthen existing client relationships. As a key step towards technology upgradation we capitalized SP4 (Smartpay 4) & new HRMS ? two major tech platform during the FY 23-24.

THREAT FROM NEWER TECHNOLOGIES / AI

We have completed the upgrade of both our platforms ? Smartpay 4 & HRMS (Buzzily) during the course of the year ensuring scalability, improved employee experience (in terms of UI/ UX) & easily customisable to individual client needs ? demonstrating our ability to continue to make relevant investments.

We also continue to remain vigilant to the risks that emerging AI technologies may pose to the Business models / revenues of the Company. Whilst these technologies may disrupt some of the routine transactional activities we do not foresee any significant risk to our current revenue streams owing to the fact that in the CXM business we run a larger component of Outbound (Sales) processes which would continue to need significant human interface. Further we would continue to leverage these technologies in our EXM business with a view to reducing our Operating costs / increasing end employee experience for our customers.

FINANCIAL RISK

Geographical concentration of clients

Our Company has a global footprint and the revenues in the international segment are dependent on clients located predominantly in North America. Our EXM International business also has been increasing over the last year. As a strategy we continue to focus on increasing the share of our export revenues as the margins are better compared to domestic business. As a result, the Company is exposed to various risks typically associated with doing business in various counties, many of which are beyond the control of the management. We are and our exploring global channel partners to further expand our global footprint.

Pressure on Margins

Our margins can be impacted due to pressure on pricing owing to competition. The Company engages customers regularly briefing them on the value added support being provided. Since our processes, especially in the CXM segment are heavily dependent on manpower our margins may be impacted if there are increases in salaries on account of revision in minimum wages in any of our locations in the domestic business. Hence, the focus is to increase our share of international business to avoid margin pressures. Our CXM international business % increased YoY 30% by 2x FTE expansion in Manila. In the EXM business, whilst the per payslip realization can be impacted due to pricing pressure for new business, we will endeavor to mitigate this through higher share of International business & continued focus on process efficiencies.

Exchange Fluctuation

Movements in exchange rates continue to be a threat. There has been volatility in the exchange rate between INR and USD and PHP and these currencies may continue to fluctuate significantly in future as well. During the year there has been volatility in the Rupee & PHP. We have hedging strategies as approved by the Board and in addition use bank balances in foreign currency to meet our foreign currency expenses & liabilities. Also the increase in share of domestic revenue will mitigate this risk to an extent.

COMPLIANCE RISK

Taxes and other levies imposed by the Government of India and / or various states including Tamil Nadu may affect our performance. In particular, we will be affected by the taxes and laws levied by authorities such as a) Income Tax b) Goods and Services Tax etc. We are taking adequate efforts to comply with the entire statutory requirement on an ongoing basis and the same is subject to Internal Audit on a quarterly basis. We also take the help of external consultants to handle specific issues as and when need arises.

Our business is subject to a variety of country specific regulations. Particularly, we must comply with a number of laws in the United States in relation to debt collection and telephone and email based solicitation and the mortgage servicing businesses.

The requirements of many of these regulations are complex and the failure to comply could result in enforcement or private actions which can potentially affect our reputation and in turn adversely affect our business. In addition, these laws are subject to change and new laws affecting our business may be enacted, which could significantly affect the demand for, and our ability to provide certain service offerings and significantly increase the cost of regulatory compliance. However, on regular basis, we have taken the following steps to mitigate this risk:

? ?Implementation of robust system of ensuring compliance, processes and reporting

? ?Obtaining applicable registration applicable to the industry and our business as per the geography.

? ?System of ensuring relevant provisions governing call center business in India such as DOT approval and adherence to Do Not call Registry norms.

? There are no specific issues or non-compliance notified in any of these areas during the year.

? In respect of client and other commercial contracts such as lease and other purchase contracts, adequate measures are in place for vetting the contracts by legal team and due vetting and clearance procedures are followed before signing off contracts.

CUSTOMER CREDIT RISK

Company follows a process of due client qualification in respect of orders received and contracts signed. However, owing to business reasons or reasons specific to delivery /disputes there are collection risks which the company faces. There is a regular follow-up process to ensure that amounts due are billed in time and collections received in time. Periodic confirmation of balance is also obtained from major clients. Due provisions are made in accounts for amounts considered not collectible. During FY 23-24, we had 2 clients who filed for Chapter- 11 delinquency. We have taken required provision in financials as per applicable

Accounting Standards.

INFRASTRUCTURE RISK

The Company has invested substantially in the state-of-the-art infrastructure and equipment in its centers to provide a world-class service to its customers. Service to our clients also depends on the uninterrupted functioning of these equipment, power and stability of telecom network. Any obsolescence in the infrastructure and equipment leading to incompatibility with clients systems or any disruption in the essential services may affect the business of the Company. Adequate backups and redundancy measures are in place for uninterrupted functioning of IT and telecom equipment. AMC of all equipment is being monitored for timely renewals wherever needed. Insurance for fixed assets and all office locations are in force and are monitored for timely renewals and adequacy of risks covered under Officepackage policy. The

Company managed Business continuity well during cyclone Michaung in Dec23 with minimal impact on client deliveries.

HUMAN RESOURCES RISK

Whilst attrition is an industry wide concern, the Company recognises the need to take proactive measures to ensure that we have an uninterrupted supply of right talent and have increased focus and rigor on retaining them through active engagement measures.

In order to maintain a seamless pipeline of talent, the Company has tied up with several skill development institutes. This ensures a steady supply of skilled talent with a good language mix especially for the CXM business. Our recruitment team conducted virtual campus drives at various colleges across the country for both CXM & EXM hiring.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a well-defined and documented internal control system that is adequate and commensurate with the size and nature of its business.

Adequate checks and balances and control systems are established to ensure that assets of the Company are safeguarded, and transactions are executed under proper authorization and are properly recorded in the books of account. There exists a proper definitionof roles and responsibilities across the organization to ensure information flow and effective monitoring. The Company has an independent Internal Audit carried out periodically by a firmof Chartered Accountants who draw out their audit program based on risk assessments and in consultation with the Audit Committee. The Company has an Audit Committee consisting of

4 Directors which has a majority of Independent Directors. This committee reviews the internal audit reports, statutory audit reports, the quarterly and/ or annual financial statements and discusses all significant audit observations and follow up actions arising from them. It further monitors the risk exposures of the Company. The Committee also reviews and recommends to the Board the terms of appointment of the statutory auditors and internal auditors.

The Companies Act provisions relating to Internal Financial controls (IFC) and Internal Financial control over Financial Reporting are applicable to your

Company from the financial year ended March31,

2016. Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the 2013 Act” or “the Act”) requires the auditors report to state whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls. Clause (e) of Sub-section 5 of Section 134 to the Act requires the directors responsibility statement to state that the directors, in the case of a listed company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. The auditors objective in an audit of internal financial controls over financial reporting is to express an opinion on the effectiveness of the Companys internal financial controls over financial reporting and the procedures in respect thereof are carried out along with an audit of the financial statements. Your Company complied with these requirements.

HEADCOUNT (FTE)

As of 31st March 2024, total Global FTE stood at ~5,600 (India FTE ~4,600), from the previous year end Global FTE of ~5,300 (India FTE ~4,700).

FINANCIAL PERFORMANCE OF THE COMPANY

The following is based on our audited standalone and consolidated, Rupee denominated financial results pertaining to financial year ended31st March 2024. The financial statements of the Company are prepared in accordance with the Indian Accounting Standards (referred to as “Ind-AS”) prescribed under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards)

Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the financialstatements. The discussion should be read in conjunction with the Audited Financial statements of the Company and notes on Accounts including significant Accounting Policies, thereto.

Financial Performance

	Consolidated				Standalone
Particulars
	FY24	FY23	YOY	FY24	FY23	YOY
Revenue	46,937	39,045	20.2%	31,405	27,907	12.5%
Less: Employee expenses	26,422	22,170	19.2%	18,895	17,145	10.2%
Less: Other Expenses	8,957	8,032	11.5%	6,031	5,818	3.7%
EBITDA	11,558	8,843	30.7%	6,479	4,944	31.0%
EBITDA Margin	24.6%	22.6%	2.0%	20.6%	17.7%	2.9%
Add: Other Income	690	803	-14.1%	4,518	3,415	32.3%
Less: Finance Costs	380	367	3.5%	292	310	-5.8%
Less: Depreciation & Amortisation Expense	3,358	2,825	18.9%	2,428	2,264	7.2%
Profit Before Tax	8,510	6,454	31.9%	8,277	5,785	43.1%
Profit Before Tax Margin	18.1%	16.5%	1.6%	26.4%	20.7%	5.6%
Less: Tax Expense	2,110	1,568	34.6%	1,640	1,153	42.2%
Profit After	6,400	4,886	31.0%	6,637	4,632	43.3%
Profit After Tax Margin	13.6%	12.5%	1.1%	21.1%	16.6%	4.5%
Add: Other Comprehensive Income/(Losses)	(251)	186	(234.9%)	(62)	12	(616.7%)
Total-Comprehensive Income /Losses	6,149	5,072	21.2%	6,575	4,644	41.6%
Basic & Diluted EPS (in Rs.)	42.0	32.1	31.0%	43.6	30.4	43.3%

KEY HIGHLIGHTS FOR FY24 ON CONSOLIDATED BASIS

Revenue from Operations

The table below provides the details of income and its composition:

Revenue Segments	FY24	% of Total Revenue	FY 23	% of Total Revenue	% Growth
CXM ? International	22,775	48.5%	17,507	44.8%	30.1%
CXM ? Domestic	8,768	18.7%	7,968	20.4%	10.0%
Total	31,543	67.2%	25,475	65.2%	23.8%
EXM ? International	3,743	8.0%	2,916	7.5%	28.4%
EXM ? Domestic	11,651	24.8%	10,654	27.3%	9.4%
Total	15,394	32.8%	13,570	34.8%	13.4%
Grand Total	46,937	100%	39,045	100%	20.2%

? Customer Experience Management (CXM):

Revenue for the vertical reached Rs. 31,543 lakhs in FY24, reflecting a 23.8% year-over-year increase. This growth was driven by increase of 30.1% in international business and a 100 . % increase in domestic revenue.

? Employee Experience Management (EXM):

Revenue reached Rs. 15,394 lakhs in the current year, showing a growth of 134 . %, mainly attributed to significan increase of 18.2% in the payroll business.

Expenditure

During the year there was an increase in total expenditure by Rs. 5,723 lakhs. Composition of total expenses and brief analysis thereon are given below:

Cost Category	FY24	% of Revenue	FY23	% of Revenue	YOY%
Employee costs and benefits (Note1)	26,422	56.3%	22,170	56.8%	19.2%
Other expenses (Note 2)	8,957	19.1%	8,032	20.6%	11.5%
Finance charges	380	0.8%	367	0.9%	3.5%
Depreciation (Note 3)	3,358	7.2%	2,825	7.2%	18.9%
	39,117	83.4%	33,394	85.5%	17.1%

Note 1: Employee costs to revenue has gone down from 56.8% to 563 . % YoY.

Note 2: Other expenses increased by 11.5 % YoY with primarily due to increase in S&M, Facility and IT cost for growth in revenue.

Note 3: YoY depreciation increased primarily due to higher depreciation for ROUA - Rs. 382 Lakhs (New building leases for expansion), PPE - Rs. 188 Lakhs (Primarily IT assets).

Tax expense

Rs. 589 lakhs increase in tax expenses is because of growth in profitability both in terms of value and %. Tax expenses also increased due to increase in Manila Dividend tax owing to higher dividend paid during the year.

BALANCE SHEET ANALYSIS

Particulars ( in Rs. lacs)	31-Mar-24	31-Mar-23	YoY
Assets
Non-Current Assets
Property, Plant and Equipment	2,167	1,220	947
Right of Use Assets	4 ,148	4,241	(93)
Other Intangible Assets [FY 23 includes IAUD]	1 ,507	1,716	( 209)
Other Non-Current Assets	3 ,839	2,712	1 ,127
Total Non- Current Assets	11 ,661	9,889	1 ,772
Current Assets
Current Investments	5 ,628	4,678	950
Cash and Cash Equivalents	8 ,200	9,040	( 840)
Trade Receivables	6 ,573	5,924	649
Other financial assets	2 ,966	2,884	82
Other Current Assets	933	942	(9)
Assets Held for sale	801	-	801
Total Current Assets	25 ,101	23,468	1 ,633
Total Assets	36 ,762	33,357	3 ,405
Liabilities
Equity and Reserves	24 ,546	22,968	1 ,578
Non-Current Liabilities
Lease Liability	2 ,641	2,507	134
Other Non-Current Liability	927	772	155
Total Non- current Liabilities	3 ,568	3,279	289
Current Liabilities
Lease Liabilities	1 ,824	1,887	(63)
Trade Payables and Other Current Liabilities	6 ,824	5,223	1 ,601
Total Current Liabilities	8 ,648	7,110	1 ,538
Total Equity and Liabilities	36 ,762	33,357	3 ,405

Brief analysis of Balance sheet is given below:

1. Property, Plant & Equipment: Additions of

Rs. 947 lakhs primarily to below assets for Manila new facility and FTE growth

? Computer and server Rs. 716 lakhs

? Furniture and fixtureRs. 207 lakhs

2. Right of Use Asset (ROUA):

The Company adopted Indian Accounting Standard-116(Ind-AS116) on Leases as notified from byMinistryofCompany

01-04-2019. Accordingly, the Right of Use of Asset (ROUA) being an asset that represents a lessees right to use an underlying asset for the lease term, recognized under Cost model wherein the cost represents the present value of lease payments less any incentives and any initial indirect cost incurred thereto. The ROUA is also subject to depreciation and impairment tests like other assets. The balance of ROUA as at March 31, 2024 stood at Rs. 4,148 lakhs as compared to Rs. 4,241 lakhs as at March 31, 2023. There was addition to ROU for Manila new facilities offset by the amortization for the financial year.

3. Other Intangible Assets:

Intangible assets comprise a block of software used for call centre operations & for running the EXM Payroll platforms. During the year, there was an addition in software of Rs. 995 lakhs due to the capitalization of intangible assets under development. The closing net block of intangible assets is Rs. 1,507 lakhs as of March 31, 2024, compared to Rs. 1,716 lakhs [FY 23 includes IAUD] as of March 31, 2023.

4. Other Non-current Financial Assets:

Other Financial Assets represents security deposits made with suppliers of goods and services and non-current category represents the maturity/refund tenure of the security deposits falling beyond 12 months from the reporting date.

Other Non-current financial assets increased by Rs. 692 Lakhs for deposits to TNEB under protest, Increase in income Tax is Rs. 468 Lakhs

[TDS Rs. 326 lakhs & deferred tax Rs. 106 Lakhs] and balance increased for lease deposit for Manila expansion.

5. Current Investments:

Current investments represent balances invested in mutual funds. The Company invests surplus funds in liquid debt funds and these are disclosed at Mark to Market (MTM) values. The Balance as at March 31, 2024 is

Rs. 5,628 Lakhs (previous year: Rs.4,678 lakhs).

6. Cash and Bank Balances:

Company generated a OCF of Rs. 9,101 lakhs which is maintaining the steady EBITDA conversion ratio around the level of 79%. Cash and Bank balances stood at Rs. 8,200 lakhs as at March 31, 2024 as against Rs. 9,040 lakhs as at March 31, 2023. The decrease in cash and cash equivalents of Rs. 840 lakhs during the year is primarily investment in the mutual fund.

7 Trade Receivables:

Current Trade receivables was at Rs. 6,573 lakhs as at March 31, 2024 as against Rs. 5,924 lakhs as at March 31, 2023. Increase in trade receivable is due to increase in business revenue levels while the DSO remains flat at55 days to YoY.

8. Assets Held for Sale:

Represents the net assets under sale for EXM

Stat LLC (Labour Law Compliances) business segment as part of our portfolio restructuring initiative.

9. Equity Share Capital:

The Equity Capital of the Company as on March 31, 2024 stands at Rs. 1,524 Lakhs and has remained constant over the previous Balance sheet date.

10 . Other Equity:

Other equity represents Reserves and Surplus balances which includes Securities Premium reserve, Capital Reserve, General Reserve, Retained earnings and Foreign Currency Translation reserve. During the year retained earnings increased by Rs. 1,578 lakhs primarily due to earnings from operations.

11 . Other Non-current Liabilities & Lease

Liability:

Increase in Non-current liability is due to renewal of lease in the Chennai and new leases for Manila expansion. Pursuant to the adoption of Ind AS-116 on Leases effective from April 1, 2019, the Company classifiedthe present value of the unpaid lease payments and finance charges thereto as lease liabilities, as prescribed in the said accounting standard. The non-current portion represents obligation against the lease liabilities falling due beyond 12 months from the reporting date and the balance are classified as current liability.

12 . Trade Payables & Other Current Liabilities:

Trade payables being payable to suppliers of goods and services, accrued salaries. The increase in balance i.e Rs. 4,187 lakhs against previous year Rs. 3,809 lakhs is due to higher scale of Operations.

Increase in other current liability includes

Rs. 405 lakhs advance received for EXM Stat

LLC sale, balance due to increase in employee statutory dues by Rs. 444 lakhs & Unearned revenue of Rs. 203 lakhs.

FINANCIAL RATIOS & METRICS:

	Consolidated
Particulars
	FY24	FY23
Working Capital Metrics
Billed Receivable DSO ? Flat YoY	55 days	55 days
Unbilled Receivable DSO	23 days	26 days
Current Ratio	2.9	3.3
Return Metrics
Return on Equity (RoE)	25.1%	22.1%
Return on Capital Employed (RoCE)	30.6%	24.9%
Liquidity Metrics
Debt ? Equity Ratio	0.2	0.2
Operation Profit Margin %	13.6%	12.5%
Cash Flow from Operations ( Rs. in Lakhs)	9,083	7,128
Operating EBITDA to OCF	78.6%	80.6%
Cash and balances with banks ( Rs. in Lakhs)	8,172	9,012
Short term investments ( Rs. in Lakhs)	5,628	4,678

Return Metrics: ROE & RoCE improved during the year due to better margins generated by increase in international mix & laser sharp focus on cost management.

Dear Members,

Your Board takes pleasure in presenting the twenty fifth 25^th) Annual Report of Allsec

Technologies Limited (“the Company” or “Allsec”)

(CIN: L72300TN1998PLC041033) along with the audited financial statements (Standalone and Consolidated) for the financial year ended March 31, 2024.

In compliance with the applicable provisions of the Companies Act, 2013 (“the Act”) and the Securities and Exchange Board of India (Listing Obligations ( and Disclosure Requirements) Regulations, 2015

(“Listing Regulations”), this report covers the financial results and significant developments during the financial year from01 April, 2023 to

31 March, 2024.

1. Financial Performance

The standalone and consolidated financial highlights of the Companys operations are as follows:

(Rs. In Lakhs)

	STANDALONE			CONSOLIDATED
PARTICULARS	YEAR ENDED			YEAR ENDED
	March 31, 2024	March 31, 2023	F/(A)*	March 31, 2024	March 31, 2023	F/(A)*
Revenue from
	31,405	27,907	13%	46,937	39,045	20%
Operations
Total Costs	24,926	22,963	(9%)	35,379	30,202	(17%)
EBIDTA	6,479	4,944	31%	11,558	8,843	31%
EBIDTA (%)	21%	18%		25%	23%
Other Income	(4,518)	(3,415)	32%	(690)	(803)	(14%)
Depreciation and amortization expense	2,428	2,264	(7%)	3,358	2,825	(19%)
Finance costs	292	310	6%	380	367	(4%)
Profit before exceptional items and tax	8,277	5,785	43%	8,510	6,454	32%
Exceptional items	-	-	-	-	-	-
Profit before tax	8,277	5,785	43%	8,510	6,454	32%
Profit after tax	6,637	4,632	43%	6,400	4,886	31%

*F / (A) stands for Favourable / Adverse

2. B usiness Outlook

The Company operates into two business segments. As per current market dynamics and upgraded service offerings to our clients, it was strongly felt that name of line of business segments be refreshed and aligned with market aspirations, expectations and advance service features. Accordingly, existing Line of Businesses (LOBs) were re-named from

Digital Business Services (“DBS”) to Customer Experience Management (“CXM”) and from Human Resources Outsourcing (“HRO”) to Employee Experience Management (“EXM”). This change was only limited to re-naming of existing business segments, without changing the reporting structure of segments of business. During the year, there is no change in the nature of the Companys business.

EXM business caters to the payroll and other HR services for our clients and the CXM business provides the voice and non-voice services to domestic and international clients. The EXM business is largely delivered out of India and Manila. The EXM business segment has a great year with more than 13.5% increase in sales over the previous financial year and in making some key client acquisitions both in the domestic and international market. The year also marked bagging large deals with few large clients in terms of value. Nevertheless, the business segment has set for itself a steadfast path for the upcoming FY with a planned product road map and a trained sales team.

Another business segment of your Company, CXM has also marked remarkable growth of 24% compared to previous financial year.

This year was a remarkable year for CXM with introducing multiples service offerings and processes for various industries, resulting in rapid expansion with increased capacity both in domestic as well as international centres. The path going forward for the CXM business would be improvement in business through increased offering and digital solution offerings. The CXM business is delivered out of India, Dallas (United States of America) and Manila.

Overall, the operational financial performance of your Company continued to improve during this year. Standalone Profitbefore Tax and

Exceptional Items (PBTE) stood at Rs.8,277 lakhs as compared to Rs.5,785 lakhs in the previous year. Your Company has reported Net profit after tax for the current year at Rs.6,637 lakhs as compared to Net profit after tax of Rs.4,632 lakhs for the previous year. Consolidated Revenues including other income for the year stands at Rs.47627 , lakhs as compared to Rs.39,848 lakhs in the previous year. Consolidated Profit before Tax and

Exceptional Items increased to Rs.8,510 lakhs from Rs.6,454 lakhs in the previous year. Net profit after tax stood atRs.6,400 lakhs from

Rs. 4,886 lakhs in the previous year. Detailed analysis of the business outlook and standalone/consolidated results forms part of the Management Discussion and Analysis (MD & A) report provided separately as part of the Annual Report.

3. Reserves

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

Pursuant to Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), dividend, if not claimed for a period of seven years from the date of transfer to Unpaid Dividend Account of the Company along with corresponding shares are liable to be transferred to IEPF.

During the year under review, there were no unclaimed dividend and corresponding shares which were due to be transferred to IEPF Authority by the Company.

5. Dividend Distribution Policy

In terms of Regulation 43A of the Listing Regulations, the Board of Directors of the Company had adopted the Dividend Distribution Policy, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders. These parameters include Companys distributable profits, utilization and future plans, capital expenditure and such other factors as may be considered by the Board for optimum dividend payouts. The Dividend Distribution Policy is available on the Companys website at www.allsectech.com/ investor-information/.

6. D ividend

In line with the Dividend Distribution Policy, your Board of Directors have considered following dividends to the equity shareholders: - a. declared an Interim Dividend at their meeting held on October 26, 2023 for Rs.30/- per equity share of face value of Rs.10/- each amounting to a total dividend payout of Rs.4,57150 . lakhs; and b. recommended final dividend for approval of shareholders, at their meeting held on May 6, 2024 for Rs.15/- per equity share of face value of Rs.10/- each amounting to a total dividend payout of Rs.2,28575 . lakhs.

7. Share Capital

During the year under review, there has been no change in the authorized share capital of the Company. The paid-up Equity Share Capital of the Company as of March 31, 2024 stood at Rs.15,2383 , ,260/- consisting of

1,5238 , ,326 equity shares of Rs.10/- each with no change during the year.

8. Subsidiary Companies

As on March 31, 2024, your Company has two subsidiaries namely Allsectech Inc., USA and Allsectech Manila Inc., Philippines. During the year under review, there has been no change in the status of subsidiary/ joint venture/ associate companies and no other entities have been added or ceased to be the subsidiary/ joint venture/ associate of the Company.

In accordance with Section 129(3) of the Act, the Company has prepared consolidated financial statements of the Company and a separate statement containing the salient features of the financial statements of all subsidiaries of the Company (Form AOC -

1) is attached to the consolidated financial statements.

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 included in the Consolidated Financial Statements.

Further, pursuant to the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company along with audited financial statements of the subsidiaries, are available on the Companys official website at https:// www.allsectech.com/investor-information/. The Company has a policy for determining the materiality of subsidiaries and the same is uploadedontheCompanyswebsiteathttps:// www.allsectech.com/investor-information/. As stated above, both subsidiaries i.e. Allsectech Inc., USA and Allsectech Manila Inc., continues to be material subsidiaries of the Company.

9. Significant Developments during the year a. Merger of Conneqt Business Solutions Limited, Holding Company with Quess Corp Limited, Ultimate Holding Company

During the year under review, National

Company Law Tribunal, Bengaluru Bench had passed an Order dated November 07, 2023 approving the Scheme of Amalgamation of

MFX Infotech Private Limited, Greenpiece Landscapes India Private Limited and Conneqt Business Solutions Limited (“Transferor Companies”) with Quess Corp Limited

(“Transferee Company”) and their respective shareholders and creditors (“Scheme”). Pursuant to the same, Transferor and Transferee Companies have implemented the

Scheme by filing certified copy of the order passed by Honble NCLT, Bengaluru Bench with the jurisdictional Registrar of Companies on November 30, 2023.

As a consequence of implementation of the Scheme, equity shareholding of 7339 . % held by Conneqt Business Solutions Limited

(Holding Company) in the Promoter Category have been transmitted to Quess Corp

Limited, (Ultimate Holding Company). Hence, Quess Corp Limited became our Holding

Company and holds 73.39% of total equity shareholding in the category of Promoter as of March 31, 2024. b. Sale of Labour Law Compliances services business (“LLC Business”)

During the year under review, the Company agreed to sell its Labour Law Compliances services business (“LLC Business”) by way of slump sale to Aparajitha Corporate

Services Private Limited (“Purchaser”) in terms of a Business Transfer Agreement (“BTA”) executed on February 06, 2024. The purchaser, is engaged in the business of providing compliance assurance solutions, related products in the Governance, Risk and Compliance domain. The purchaser is not related to promoter/promoter group nor a related party.

The rationale behind sale of the LLC

Business was to simplify the organisational and operational structure by enabling sharper management focus on specialised business verticals and unlocking value for other businesses to optimize future business growth of your Company.

Accordingly, in terms of the signed BTA, the sale of the LLC Business was completed with effectfrom April 30, 2024, as mutually agreed between the parties.

Your Company had made appropriate and timely dissemination of information in this regards vide intimations to Stock Exchanges and uploads to the Companys official website at https://www.allsectech.com/investor-information/, as and when there were material updates.

10. Directors and Key Managerial Personnel

(KMPs):

As on March 31, 2024, the Board comprises of three (3) Non-executive Non-Independent Directors and three (3) Non-Executive

Independent Directors, including a Woman Director. The Company has a Non-Executive Chairman and the number of Independent Directors is not less than half of the total number of Directors. A detailed update on the Board and its Committees composition have been given in the Report of Corporate Governance forming part of this Report.

a. Director retiring by rotation

In accordance with the provisions of Section 152 of the Act, read with the rules made thereunder, Mr. Ajit Abraham Isaac (DIN: 00087168), Chairman and Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible, has offered himself for re-appointment.

A resolution seeking shareholders approval for his re-appointment forms part of the AGM Notice.

b. Appointment and Resignation of Directors

During the year under review, there has been no change in the Directors of the Company. None of the Directors of the Company is disqualified for being appointed as Directors as specified in Section 1642 ( ) of the Act and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules,2014.

Consequent to the expiry of the tenure of Independent Directors, the Board of your Company being satisfiedwith the integrity, expertise and experience of the Independent Directors has proposed to take up the resolution for reappointment of Independent Directors for their second term of five( 5) consecutive years at the ensuing Annual General Meeting. Resolution seeking shareholders approval for reappointment of Independent Directors for the second term of five (5) consecutive years forms part of this AGM Notice.

c. Appointment and Resignation of Key Managerial Personnel

During the year, Mr. Neeraj Manchanda was appointed as the Company Secretary and

Compliance recommendations of the Nomination and

Remuneration Committee with effect from

September 28, 2023; Ms. Sripiriyadarshini, resigned and ceased to be the Company

Secretary and Compliance Officer with effect September 27, 2023.

Pursuant to the provisions of Section 203 of the Act, Mr. Naozer Dalal, Chief Executive

Officer; Mr. Gaurav Mehra, Chief Financial Officer and Mr. Neeraj Manchanda, Company SecretaryandCompliance

Managerial Personnel of the Company as on March 31, 2024.

d. Meetings of the Board and Committees of the Board

During the year under review, the Board of your Company met five (5) times. A detailed update on the Board and its Committees composition, terms of reference and the number of meetings held during the year have been given in the Report of Corporate Governance forming part of this Report.

e. Board Diversity and Policy on Nomination and Remuneration

The Board of Directors values the significance of diversity and firmly believes that diversity of background, gender, geography, expertise, knowledge and perspectives, leads to sharper and balanced decision-making and sustainable development.

The Board is of the opinion that all Directors including the Independent Directors of the

Company possess requisite qualifications, integrity, expertise, experience and such other criteria as formulated through the Nomination and Remuneration Policy of the Company.

In terms of the requirement of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations, the Board of Directors has adopted Policy on Board Diversity and Policy on Nomination and Remuneration. The Policies framed on the subject can be accessed from the Companys website at the web link: https://www.allsectech.com/ investor-information/.

In furtherance, additional details on Board Diversity and Board Skills are elaborated in the Board Skills Matrix of the Corporate Governance Report.

f. Annual Board Evaluation

Pursuant to Section 134 (3) of the Companies Act, 2013, the applicable Companies (Accounts) Rules, 2014 and Listing Regulations, annual performance evaluation was conducted by way a detailed and structured questionnaire formulated based on various performance parameters and evaluation matrix. Evaluation was separately carried out for the Board as a whole and its committees, all individual directors including independent directors and chairman. In a separate meeting of Independent Directors held in compliance with the requirements of Regulation 25(7) of the Listing Regulations, the performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company were evaluated.

The Nomination and Remuneration Committee also reviewed the performance evaluation and its outcome. The Board subsequently reviewed the outcome of the Board evaluation process.

g. Declaration of Independence

Pursuant to Section 149(7) of the Act, the Company has received declarations from all

Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Act, as amended, read with Rules framed thereunder and Regulation

16(1)(b) of the Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management. The

Independent Directors have also confirmed that they have complied with the Companys Code of Conduct.

The Board of Directors of the Company have taken on record the aforesaid declaration and confirmation submitted by the Independent

Directors.

h. Familiarisation Programme

Familiarisation Programme for Independent Directors have been conducted with a view to update them on the policies and procedures of the Company, overall business and industry structure, internal and external factors etc.. Periodic presentations are also made at the Board Meetings on business and performance, long term strategy initiatives and risks involved to familiarize the Independent Directors of the same. The details about the familiarization programme adopted by the Company have been posted on to the website of the Company under the web link https:// www.allsectech.com/investor-information/.

11. Audit & Auditors a. Statutory Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Reg. No.:008072S), were appointed as Statutory Auditors of the Company by the shareholders at the 20^th Annual General Meeting held on September

30, 2019, to hold office up to the conclusion of the 25^th Annual General Meeting.

Based on the recommendations of the audit committee, your Board of Directors have recommended the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the

Company, to hold officefor a further period of five ( 5) years from the conclusion of the 25^th Annual General Meeting till the conclusion of the 30^th Annual General Meeting and accordingly, the resolution seeking reappointment forms part of the AGM Notice for consideration by shareholders.

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 and consented to be appointed as statutory auditors of the Company for their second (2^nd) term. 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 Auditors Report is enclosed with the financial statements given in this Report.

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 1343 ( ) (ca) of the Act. b. Internal Auditors

M/s. Ernst & Young LLP were appointed as the Internal Auditors of the Company for the financial year 2023-24 by the Board upon recommendation of the Audit Committee in its meeting held on 8^th of May, 2023. However, to ensure consistency among Group Companies;

M/s. Grant Thornton LLP were appointed as the Internal Auditors by the Board for Internal

Audit with effect from Q2 of FY 2024.

In ternal Auditors 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.

c. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and rules made thereunder, the Board of Directors had appointed M/s. SPNP & Associates, Practicing Company Secretaries, as Secretarial Auditors to undertake Secretarial Audit of the Company for the financial year ending March31, 2024. The Secretarial Audit Report for financial year ending March 31, 2024 is annexed as Annexure A and forms an integral part of this Report. The Secretarial Audit Report does not contain any qualification or adverse remark for the year under review. During the year under review, the Secretarial Auditors have not reported to the Audit Committee any instances of fraud committed against the

Company by its officers or employees under

Section 14312 ( ) of the Act and therefore no details are required to be disclosed under Section 1343 ( )(ca) of the Act.

Further, as per the amended Regulation 24A of the Listing Regulations, the Secretarial

Compliance Report of the Company for the financial year ended March 31, 2024 is annexed as Annexure B.

d. Cost Auditors

Maintenance of cost records as specified by the Central Government under Section 1481 ( ) of the Act is not required by the Company and accordingly, such accounts and records are not maintained.

12. Risk Management

Risk Management is an integral part of the

Companys business process. To have a the sharper focus, the Company has constituted a Risk Management Committee to focus on risk management and mitigation including determination of Companys risk assessment, risk categories, action plan, risk tolerance and risk mitigation strategies (risk identification, risk quantification and risk evaluation) etc.

The Risk Management policy, as approved by the Board, is displayed on the official website of the Company and can be accessed by using the link https://www.allsectech.com/ investor-information/.

Detailed update on risks posed before the Company has been covered under the Management Discussion and Analysis Report and Business Responsibility and Sustainability Report forming part of this Annual Report.

13. Internal Financial Control and Adequacy

The Company has established a robust framework for internal financial controls. This framework is having adequate safeguards and procedures & policies for ensuring orderly and efficient conduct of business, including adherence to the Companys policies and safeguarding of its assets. Board has adopted adequate policies and procedures for prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

Moreover, Internal Audit is also conducted by an independent agency and the main scope of the Audit is to test and review controls, appraisal of risks and business processes.

Your Board periodically reviews the internal processes, systems and the internal financial controls and accordingly, the Directors Responsibility Statement contains a confirmation as regards adequacy of the internal financial controls.

14. Related Party Transactions

Transactions entered into with wholly owned subsidiaries of the Company are generally exempted under Section 188 of the Companies Act, 2013. Apart from this, there were no materially significant related party transactions entered by the Company during the year that required shareholders approval under Regulation 23 of the Listing Regulations. All related party transactions entered during the year were on an arms length basis and in the ordinary course of business. Prior omnibus approval has been obtained from the Audit Committee for the related party transactions which are repetitive in nature, based on the criteria approved by the Board. The Company has adopted a policy for dealing with related party transactions and the same is made available on the Companys website at https://www.allsectech.com/ investor-information/.

The Audit Committee reviews all transactions entered into pursuant to the omnibus approvals so granted on a quarterly basis. Pursuant to Regulation 23(9) of the Listing Regulations, the Company has filed reports on related party transactions with the Stock Exchange(s).

Information on transactions with related parties, if any, pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and the same forms part of this report as Annexure C. Details pertaining to the related party transactions entered during the year under review are also provided in the notes to the Financial Statements, forming part of this Report.

None of the Directors of the Company have any pecuniary relationship or transactions with the Company, other than disclosed in the Corporate Governance Report, forming part of this report.

15. 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 requirements of the Vigil Mechanism framework under the 2013 Act, 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 through Vigil Mechanism.

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

Your Company being in Information Technology Enabled Services (ITES) business sector, requires only minimal usage of energy and further each and every endeavor is being made to ensure optimal use of energy, avoid wastages and conserve energy.

The Company is a pioneer in workforce management and technology and has used information technology extensively in its operations. The Company has an in-house information technology team which constantly works on the adoption and implementation of new technology into the businesses of the Company.

The details of the earnings and expenditure in foreign currency are given below: ( Rs. In Lakhs)

Particulars	Amount
Earnings in Foreign Currency	31,404.96
Expenditure in Foreign Currency	685.54

17. Corporate Social Responsibility

Corporate Social Responsibility (“CSR”) is an integral part of the value system of the Company. As a responsible corporate citizen, your Company is committed towards its social responsibilities to bring a positive impact in the society which is in line with our vision: -

“T o contribute positively to the society bring about sustainable change in the lives of the marginalized communities especially that of small and medium sized enterprise employees and their families aiming towards holistic development through innovative interventions in the area of health and education.”

As part of the CSR vision and policy; the

Company had allocated Rs.53 lakhs towards

CSR activities during the financial year

2023-24.Outoftheallocatedfunds,Rs. 21,66,000 had been spent on various programmes such as School Enhancement, Health & Wellbeing and Rs.31,34,000 remains unspent as on March

31, 2024. This unspent amount was required to be utilized for the proposed Paediatric care center, being developed with a vision to create a leading speciality childrens health center by providing state of the art paediatric medical and clinical care at CMC Vellore. Currently, the project is under regulatory & medical clearance (approval stage) and therefore, CMC Vellore has not requested further funds from the Company. The amount lying unspent as of the year end had been transferred to Unspent CSR Account within stipulated timelines and shall be duly utilised for the allocated project.

A detailed report on the CSR contributions and expenditure during the year are being given as part of the Annual Report on CSR Activities as Annexure - E to this Report. Also, details of CSR Committee constituted under Section 135 of the Act along with its composition, terms of reference and meetings held forms part of the Corporate Governance Report and the CSR policy describing the Companys philosophy on CSR can be accessed by following the link: https://www.allsectech. com/investor-information/.

and 18. Public Deposits

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

19. Disclosure as per Securities and Exchange

Board of India (Employees Stock Option Scheme and Employee Stock Purchase

Scheme) Guidelines, 2011

There are no Employees Stock Option Plan or Employees Stock Purchase Scheme that is currently in vogue.

20. Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future

There were no significant and material orders passed by the Regulators, Courts or Tribunals that would impact the going concern status and the Companys operation in the future.

21. Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial

Institutions along with the reasons thereof ? Not Applicable

22. Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year? Not Applicable

23. Material changes and commitments affecting the financial position of the

Company which have occurred between the end of the financial year and the date of the

Report

Therearenomaterialchangesorcommitments affecting the financial position of which have occurred between the end of the financial year and the date of the

24. Inf ormation 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 received three (3) complaints and all the complaints stands closed.

25. 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 to ensure smooth business operations. ISO 90012015 : , Quality Management

System certification for Chennai facility and ISO 27001:2013 , Information Security

Management System certification for all

Allsecs facilities in Chennai, Bengaluru, Noida and Manila cities globally are renewed in Feb 24 and are valid till Feb 25.

The PCI DSS compliance certifications for

CXM business are renewed in June 23 for Chennai and Manila facilities and in Feb 24 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 payroll business to cater to different clients requirements as a standard practice. This increased frequency makes the system more robust.

To fulfill the requirements for one US

Healthcare business program in Manila facility, we renewed existing HIPAA certification in

Oct 23. We also got new facility taken up in

Manila HIPAA certified in Oct23. Further, we got existing HIPAA certification for Chennai facility renewed in Feb 24. 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 European Union (EU) citizens and residents. 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 the GDPR framework 5 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 fulfill the compliance requirements of Philippines Data Privacy Act and California Consumer Privacy Act (CCPA) for the client programs where these acts are applicable.

The Digital Personal Data Protection Act 2023, popularly called as DPDPA 23 is an

Indian Data Privacy Law introduced by Indian

Government and received the assent of President of India on August 11, 2023. This act aims at safeguarding the digital personal data of Indian citizens and is applicable to the processing of digital personal data within India where such data is collected online, or collected offline and is digitised. It will also apply to such processing outside India, if it is for offering goods or services in India. The effective date of this Act has not yet been announced by Government of India and also a notification providing more details on some of the requirements of this Act is awaited. We reviewed the requirements of this Act and commenced the deployment of processes and controls in our organization so as to be ready and be compliant with the requirements once Government of India announces the da additional rules. effective

26. Environment, Health & Safety

The Company is conscious of the importance of environmentally clean and safe operations. The Companys 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.

27. Annual Return

In terms of Section 92(3) read with Section 134(3)(a) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return as on March 31, 2024 is available on the Companys website at - https://www.allsectech.com/investor-information/

28. Particulars of Loans, Guarantees or

Investments

Details of loans, guarantees and investments covered under Section 186 of the Act forms part of the Notes to the financial statements provided in this Report.

29. Management Discussion & Analysis

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations is provided as a separate section and forms part of this Report.

30. Particulars of Employees

The Company is required to give disclosures relating to remuneration under Section 19712 ( ) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is annexed as Annexure E and forms an integral part of this Report.

The statement containing the top 10 employees on roll and particulars of employees employed throughout the year whose remuneration is more than Rs.102 lakhs or more per annum and employees employed part-time and in receipt of remuneration of Rs.8.5 lakhs or more per month as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, forms an integral part of this Report. However, the same is not being sent along with this Annual Report to the members of the Company in line with the provision of Section 136 of the Act. Members interested in obtaining these particulars may write to the

Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection by the Members at the Registered Office of the Company, 21 days before and up to the date of the ensuing AGM during business hours on working days.

31. Corporate Governance

A detailed Report on Corporate Governance, pursuant to the requirements of Regulation

34 of the Listing Regulations, forms part of this Report.

A Certificate from M/s. SPNP &

Practicing Company Secretaries confirming the compliance of conditions of Corporate Governance during the FY 2023-24, as stipulated under the Listing Regulations is annexed as Annexure - F of this Report.

32. Business Responsibility and Sustainability

Report:

AsstipulatedunderRegulation34 of the Listing Regulations, the Business Responsibility and Sustainability Report, describing the initiatives taken by the Company from an environmental, social and governance perspective forms a part of this Report.

33. Directors Responsibility Statement

Pursuant to Section 134( 3 )(c) of the Act, the Board of Directors to the best of their knowledge and information and explanations received from the Company, confirm that:

a. In preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; b. They 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 loss of the Company for that period; c. They 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. They 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

f. Proper systems were in place so as to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively.

34. Secretarial Standards

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 (“ICSI”) and notified by the Ministry of Corporate Affairs (“MCA”).

35. 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 Companys website (www.allsectech. com), furnishes important financial details and other data of frequent reference by the investors as per Regulation 46 of the

Listing Regulations. The Company also has a Stakeholders Relationship Committee to address shareholders grievances, if any and resolve them as and when they are reported. The Company has provided an exclusive or email id: investorcontact@allsectech.com for the investors to facilitate the redressal of their queries and complaints.

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.

36. Acknowledgement

Your Directors wish to place on record their appreciation for the excellent support and cooperation 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.

37. Cautionary on Forward-Looking Statements

Certain statements in this Report and the Managements Discussion & Analysis Report regarding our business operations may constitute forward-looking statements. These include all statements other than statements of historical facts, including those regarding the financial position, business strategy, management plans and objectives for future operations.

Forward-looking statements can be identified by words such as ‘believes, ‘estimates, ‘anticipates, ‘expects, ‘intends, ‘may, ‘will, ‘plans, ‘outlook and other words of similar meaning in connection with a discussion of future operation or financial performance.

Forward-looking statements are necessarily dependent on assumptions, data or methods thatmaybeincorrectorimpreciseandthatmay be incapable of being realised and as such, are not intended to be a guarantee of future results, but constitute our current expectations based on reasonable assumptions. Actual results could differ projected in any forward-looking statements due to various events, risks, uncertainties and other factors. We neither assume any obligation nor intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.