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Allied Digital Services Ltd.

BSE: 532875 Sector: IT
NSE: ADSL ISIN Code: INE102I01027
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VOLUME 48418
52-Week high 64.80
52-Week low 25.85
P/E 58.48
Mkt Cap.(Rs cr) 177.57
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 33.05
CLOSE 34.00
VOLUME 48418
52-Week high 64.80
52-Week low 25.85
P/E 58.48
Mkt Cap.(Rs cr) 177.57
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Allied Digital Services Ltd. (ADSL) - Director Report

Company director report

TO

THE MEMBERS

ALLIED DIGITAL SERVICES LIMITED

Your Directors are pleased to present herewith the 21st Annual Report on the businessand operations of your Company and Audited Accounts for the Financial Year ended March312015 together with the Audited Statement of Accounts and Auditor's Report thereon.

The State of the Company's Affairs:

1. KEY FINANCIAL HIGHLIGHTS :

(INR in Lakhs)

Particulars

2014-15

2013-14

Total Operational Income

12549.52

14938.06

Other Income

1075.61

3250.95

Total Income

13625.13

18189.01

Less: Operating Expenditure

9395.47

13492.09

Profit before Interest Depreciation

4229.66

4696.92

Amortization Tax & Exceptional Item
Less: Depreciation

2394.88

2325.24

Less: Interest

1618.87

1437.98

Profit before Tax and Exceptional Item

215.91

933.69

Exceptional Item

-

_

Profit before Tax

215.91

933.69

Less: Provision for Taxation

40.00

194.80

Less: Deferred Tax Liability

174.10

(542.28)

Net Profit for the year

41.81

1281.17

Add: Balance brought forward from the Previous

28707.51

27426.34

Year
Less: Adjustment for Depreciation

1734.01

-

Amount Available for Appropriation

27015.31

28707.51

Less: Transfer to General Reserve

-

-

Proposed Dividend Including Dividend Tax

-

-

Short provision of Tax of earlier years (Net)

-

-

Add: Excess provision of Tax of earlier years

-

-

Balance carried to Balance Sheet

27015.31

28707.51

During the year under review your Company has reported a total income of INR 13625.13lakhs out of which nonoperating income amounts to INR 530.42 lakhs. Revenue from OperatingIncome decreased by INR 2388.54 lakhs

1. e. by 15.99% as compared to the previous year.

2. RECENT DEVELOPMENTS:

During the Financial Year 2014-2015 your Company has made the following Developments:

• Completed the prestigious Pune City Surveillance (safe city) project first ofits kind and size in India;

• Won the large global deal in retail industry and expanded globally to 20 othercities;

• Looking forward for better opportunities for trading in Africa and Middle East;

• Robust business growth in the United States of America;

• New initiatives in Digital business such as IOT Analytics & Security.

3. OUTLOOK:

During Financial Year 2015-2016 the company aims to deepen its engagements withexisting clients draw repeat business and emerge as the "First Choice" and thepreferred partner for its marquee global customers.

The Company sees its eco-system of critical partnerships and alliances with reputedglobal companies as an important asset and will continue to explore opportunities tofurther expand it.

The Company's differentiated business model with strong capabilities in its chosenverticals programme management track-record investments in intellectual property and areinforced leadership team are great advantages in the prevailing macro-environment thatremains volatile.

4. DIVIDEND:

In recognition of the fact that the economy is recovering and in view of the Company'sperformance the Directors do not recommend any Dividend for the Financial Year 2014-2015.

5. CONSOLIDATED FINANCIAL STATEMENT:

Your Directors are pleased to attach the Consolidated Financial Statements pursuant toSection 129 and all other applicable provisions of the Companies Act 2013 and as per therequirement of Clause 32 of the Listing Agreement entered into with the Stock Exchangesand prepared in accordance with the Accounting Standards (AS) - 21 and all otherapplicable Accounting Standards prescribed by the Institute of Chartered Accountants ofIndia in this regard.

6. DETAILS OF SUBSIDIARY/JOINT VENTURES/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; Subsidiary 02nd July 2008
2. Allied Digital INC; Subsidiary 31st October2007
3. Allied Digital Singapore Pte Ltd Subsidiary 12th October2010
4. Allied Digital Asia Pacific PTY LTD (Australia) Subsidiary 16th September2010
5. En Pointe Technologies India Private Limited Subsidiary 29th December2006
6. Allied-eCop Surveillance Private Limited Subsidiary 6th August2007

Details of the Company who ceased to be its Subsidiary/ Joint ventures/AssociateCompanies:

Sr. No

Name of Company

Subsidiary / Joint ventures/ Associate Company

Date of cession of Subsidiary / Joint ventures/ Associate Company.

Not Applicable

Pursuant to the provisions of Section 129 of the Companies Act 2013 ("theAct") the Company is required to attach to its Annual Report the Balance SheetProfit and Loss Account Directors' Report and the Report of the Auditors' (collectivelyreferred to as "the accounts and reports') of its subsidiaries for the year endedMarch 31st 2015.

As required under the Listing Agreement with the stock exchange(s) a consolidatedfinancial statement of the Company and all its subsidiaries have been prepared andattached hereto.

The Ministry of Corporate Affairs has granted a general exemption to the companies fromattaching financials of the subsidiaries subject to the laid down conditions. The Boardof Directors has also given their consent for not attaching the accounts and reports ofits subsidiary to the Annual Report. Therefore the Company shall not be attaching theaudited accounts of the subsidiaries to the annual accounts of the Company for the currentyear. The annual accounts of the subsidiary companies and related detailed informationwill be made available to any member of the Company or subsidiary company upon request andare also available for inspection by any member of the Company during the business hoursat the registered office of the Company and that of the subsidiary company concerned.

7. TRANSFER TO RESERVES:

The Company has not proposed to transfer any amount to the General Reserve out ofamount available for appropriations.

8. MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR:

No material changes and commitments have occurred after the close of the year till thedate of this Report which affects the financial position of the Company.

9. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO /SECTION 134 (3) (ml OF THE COMPANIES ACT. 2013:

Particulars required to be furnished by the Companies as per Rule 8 of Companies(Accounts) Rules 2014 are as follows:

A. RULE 8 SUB-RULE 3 (A) PERTAINING TO CONSERVATION OF ENERGY

Although operations of the Company are not energy intensive steps are always beentaken to conserve energy in all possible areas.

B. SUB-RULE 3 (B) PERTAINING TO TECHNOLOGY ABSORPTION

The sub rule is not applicable to the company.

C. RULE 8SUB-RULE 3 (O PERTAINING TO FOREIGN EXCHANGE EARNINGS AND OUTGO-

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows:

(INR in Lakhs)

Particulars

2014-15

2013-14

Earnings

1343.17

2748.95

Outflow (including Capital imports)

738.14

151.52

Net Foreign Exchange Earnings (NFE)

605.03

2597.43

NFE/Earnings (%)

45

94

10. MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report for the year under review as stipulatedunder Clause 49 of the Listing Agreement with the Stock Exchange in India is presented ina separate section forming a part of this Annual Report.

11. ANNUAL RETURN:

The extract of Annual Return pursuant to Section 92 of the Companies Act 2013 readwith The Companies (Management and Administration) Rules 2014 in the prescribed FormMGT-9 is annexed as "ANNEXURE 1" to this report as on 31st March 2015.

12. FIXED DEPOSITS:

During the year under review your Company has not accepted any fixed deposits from thepublic however there are certain outstanding fixed deposits accepted in earlier yearsfrom the public as on the Balance Sheet date falling within the ambit of Section 73(1) ofthe Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

The details relating to deposits covered under Chapter V of the Act:

(INR in Lakhs)

Sr. No

2014-15

2013-14

Deposits accepted during the; year

--

--

Deposits unpaid or unclaimed at the end of the year

108.33

""

Default in repayment of deposits or payment of interest:

10.66

""

Further in case of default in repayment of deposits or payment of interest:

(INR in Lakhs)

Number of cases

At the beginning of the year

Maximum during the year

At the end of the year

Total amount involved

118.99

118.99

118.99

Details of Deposits not in compliance with the Companies (Acceptance of Deposits)Rules. 2014:

There are no deposits which are not in compliance with the requirement of theaforementioned rules as on 31st March 2015.

13. BOARD MEETINGS:

The Board of Directors (herein after called as "the Board") met for Fourtimes during the Year under review:

Sr. No. Date of Meetings Venue and time of the meeting Directors present Directors to whom Leave of absence was granted
1 30.05.2014 Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai - 400021. 1) Mr. Nitin Shah 2) Mr. Prakash Shah 3) Dr.Shrikant Parikh 4-) Mr. Paresh Shah 5) Dr. Roop Kishan Dave Prof. Venugopal Iyengar.
Time: 11 A.M.
2 14.08.2014 Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai - 400021 1) Mr. Nitin Shah 2) Mr. Prakash Shah 3) Dr.Shrikant Parikh 4) Mr. Paresh Shah 5) Dr. Roop Kishan Dave 6) Prof. Venugopal Iyengar None
Time: 4:30 P.M
3 14.11.2014 Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai - 400021 1) Mr. Nitin Shah 2!) Mr. Prakash Shah 3) Prof. Venugopal Iyengar 4) Dr. Roop Kishan Dave 1) Dr.Shrikant Parikh 2) Mr. Paresh Shah
Time: 3:00 P.M.
4 12.02.2015 Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai - 400021 1) Mr. Prakash Shah 2) Dr. Shrikant Parikh 3) Mr. Paresh Shah 4) Prof. Venugopal Iyengar 5) Ms. Shubhada Jahagirdar 1) Mr. Nitin Shah 2) [Or. Roop Kishan Dave
Time: 5:00 P.M.

14. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Changes in Directors and Key managerial personnel are as follows:

Sr. No

Name of the Director/Key managerial personal

Particulars

Date of Appointment and resignation

NOT APPLICABLE

15. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS UNDER SECTION 149 (6)OF THE COMPANIES ACT. 2013:

As per the provisions of Section 149(4) of the Companies Act 2013 every listed publiccompany shall have atleast one-third of the total number of directors as independentdirectors.

In view of the above your Company has duly complied with the provision by appointingfollowing Independent Directors:

Sr. No. Name of the Independent Director

Date of appointment / Reappointment

Date of passing of resolution (if any)

1. Ms. Shubhada Jahagirdar

01/10/2014

25.09.2014

2. Prof. Venugopal Ramaswami Iyengar

2(3/04/2009

25.09.2014

3. Dr. Shrikant Navnitlal Parikh

2(3/05/2006

25.09.2014

4. Dr. Roopkishan Sohanlal Dave

05/10/2009

25.09.2014

All the above Independent Directors meets the criteria of 'independence' prescribedunder section 149(6) and have submitted declaration to the effect that they meet with thecriteria of 'independence' as required under section 149(7) of the Companies Act 2013.

15. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

A new concept of' Familiarisation programme for Independent Directors' has beenintroduced by Clause 49.

As per Clause 49(H) (B) (7) of the Equity Listing Agreement:

"The Company shall familiarise the independent directors with the Company theirroles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company etc. through various programmes."

The Company is in the process of developing familiarisation programmes for itsindependent directors including their roles rights responsibilities in the Companynature of the industry in which the Company operates business model of the Company andrelated matters. The same shall be updated on website of the Company in due course.

16. COMMITTEES OF BOARD:

I. Nomination and Remuneration Committee:

The Remuneration Committee of the Board has been constituted in the year 2007 whichinter-alia recommends to the Board the compensation terms of Executive Directorsmanagerial personnel's and the senior most level of management immediately below theExecutive Directors. The Remuneration Committee deals with all elements of remunerationpackage of all the Executive Directors i.e. salary benefits bonuses stock optionspension etc.

including details of fixed component and performance linked incentives along with theperformance criteria.The remuneration of Executive Directors is decided by the Board ofDirectors and the Remuneration Committee as per the remuneration policy of the Companywithin the overall ceiling limits approved by shareholders.

a) Composition of the Committee:

The Composition of the Committee is as under:

Chairman : Dr. Shrikant Parikh- Non- Executive and Independent Director
Members : 1. Prof. Venugopal Iyengar - Non-Executive and Independent Director
2. Dr. Roopkishan Dave - Non-Executive and Independent Director

b) Terms of reference of the Committee inter alia includes the following:

To approve the Remuneration Plan of the Company;

To review and grant increments to Executive/ Managing Director;

Such other matters as the Board may from time to time request the RemunerationCommittee to examine and recommend/approve.

c) Attendance at the Remuneration Committee Meetings:

During the Financial Year 2014 -15 No meeting of the Remuneration Committee was held.

d) Disclosure of Remuneration paid:

At present Non - executive and Independent Directors are not paid any remunerationexcept sitting fees for attending Board and Committee Meetings.

Details of remuneration paid to Directors during the accounting year ended March 31st2015 are as under:

Name of Directors!

Salary

Sitting fees

Total

Stock Option granted

(Amt. in Rs)

(Amt. in Rs)

(Amt. in Rs)

Mr. Nitin Shah

5000004

-

5000004

-

Mr. Prakash Shah

300000C

-

3000000

-

Mr. Paresh Shah

1351864

-

1351864

-

Dr. Shrikant Parikh

-

80000

80000

-

Dr. Roopkishan Dave;

-

40000

40000

-

Prof. Venugopal Iyengar

-

80000

80000

-

Mr. Nitin Shah Managing Director and Chairman and Mr. Prakash Shah Whole-timeDirector were appointed w.e.f. April 01st 2011 and the details of the remuneration duringthe accounting year ended March 31st 2015are given as under:

Name of Directors

Fixed Salary

Perquisite

Performance linked Incentive

Sitting Fees

Total

Service Contract / Notice Period

Stock Option granted if any

Mr. Nitin Shah

1500004

3500000

N.A.

NIL

5000004

The appointment is for five years. The appointment is terminable by giving three months’ notice of either party

NIL

Mr. Prakash Shah

750000

2250000

N.A.

NIL

3000000

The appointment is for five years. The appointment is terminable by giving three months’ notice of either party

NIL

Nomination and Remuneration Policy

The Company's Nomination and Remuneration Policy for Directors Key ManagerialPersonnel and other employees is annexed as "ANNEXURE 2" to the Directors'Report.

Further the Company has devised a Policy for performance evaluation of IndependentDirectors Board Committees and other individual directors. The Company's Nomination andRemuneration Policy is directed towards rewarding performance based on review ofachievements periodically. The Nomination and Remuneration Policy is in consonance withthe existing industry practice.

II. Audit Committee:

The management is responsible for the Company's internal controls and the financialreporting process while the statutory auditors are responsible for performing independentaudits of the Company's financial statements in accordance with generally acceptedauditing practices and for issuing reports based on such audits. The Board of Directorshas entrusted the Audit Committee with the responsibility to supervise these processes andthus ensure accurate and timely disclosures that maintain the transparency integrity andquality of financial control and reporting.

In accordance with the provisions of Section 177 of the Companies Act 2013 yourCompany has constituted an "Audit Committee" comprising of minimum threedirectors consisting of two non- executive Independent directors and one executivedirector with the Chairman being Independent director. The Audit Committee acts inaccordance with the Terms of Reference specified by the Board in writing.

a) The Composition of the Committee is as under:

Chairman :

Dr. ShrikantParikh-Non-Executive & Independent Director

Members :

1. Prof.Venugopal Iyengar- Non-Executive & Independent Director

2. Mr. Prakash Shah- Executive Director

The Board of Directors constituted the Audit Committee in the year 2007. The AuditCommittee for the accounting year comprises of following two non-executive and independentdirectors and one executive director who have financial / legal / accounting acumen tospecifically look into the internal controls and audit procedures.

In addition to the members of the Audit Committee these meetings are attended by theHead of Finance & Accounts and other respective functional heads internal auditorsand statutory auditors of the Company whenever necessary and those executives of theCompany who can provide inputs to the Committee. The quarterly / half-yearly and annualaudited financials of the Company are reviewed by the audit committee before considerationand approval by the Board of Directors. The Committee also reviews the internal controlsystems IT systems and conduct of the internal audit.

b) Meetings:

Four (4) Audit Committee Meetings were held during the Financial Year 2014-15. The dateon which the said meetings were held are May 30th 2014 August 14th 2014 November14th 2014 and February 12th 2015.

c) Mr. Ravindra Joshi Company Secretary acts as Secretary of the Committee.

d) Terms of reference of the Committee inter alia includes the following:

The Terms of reference of the Audit Committee are broadly stated as under:

1. Recommendation for appointment remuneration and terms of appointment of auditors ofthe company;

2. Review and monitor the auditor's independence and performance and effectiveness ofaudit process;

3. Examination of the financial statement and the auditors' report thereon;

4. Approval or any subsequent modification of transactions of the company with relatedparties;

5. Scrutiny of inter-corporate loans and investments;

6. Valuation of undertakings or assets of the company wherever it is necessary;

7. Evaluation of internal financial controls and risk management systems;

8. Monitoring the end use of funds raised through public offers and related matters.

A summary statement of transactions with related parties was placed periodically beforethe Audit Committee during the year. Suitable disclosures have been made in the financialstatements. The Minutes of the Meetings of the Committee are circulated through email toall Directors and are confirmed at the subsequent Meeting.

III. INVESTORS/SHAREHOLDER'S GREIVANCE COMMITTEE:

a) Composition:

Chairman: Prof. Venugopal lyengar-Non-Executive & Independent Director Member: 1)Mr. Prakash Shah-Executive Director

2) Dr. Shrikant Parikh-Non-Executive & Independent Director

The Board of Directors constituted a Shareholders Grievance Committee in the FinancialYear 2007. The Shareholders' Grievance Committee for the Accounting Year comprises offollowing two Non-Executive and Independent Directors and one Executive Director

b) Meeting of the Shareholders' grievance Committee Meetings: Four (4) Shareholders'Grievance Committee Meetings were held during the Financial Year 2014-15. The dates onwhich the said Meetings were held are May 30th 2014 August 14th 2014 November 14th2014and February 12th 2015.

C) Compliance Officer:

Mr. Ravindra Joshi Company Secretary has been designated as the Compliance Officerfor complying with requirements of Securities Laws and Listing Agreements with StockExchange.

d) Investors'/Shareholders' Grievance Redressal:

The number of complaints received and resolved to the satisfaction of investors duringthe year under review and their breakup are as under:

Nature of Complaint:;

Opening

Received

Resolved

Pending

Non Receipt of Annual Report

0

1

1

0

Non receipt of dividenc

0

0

0

0

Total

0

1

1

0

During the Accounting Year ended March 31st 2015 one complaint was received fromshareholders and the same has been resolved as on date.

All valid Share Transfers received during the accounting year ended March 31st 2015have been acted upon. There were no share transfers pending for more than 30 days for thehalf-year ended September 30th 2014 and for more than 15 days for the half-year endedMarch 31st 2015.

The Shareholders' Grievance Committee continued to function effectively and held Four(4) meetings during the year under review. It continued to attend the matters related toShare Transfers and redressal of Shareholders' complaints. The complaints and grievancesof shareholders received were duly attended by the Committee and as of now no complaintsare pending.

e) Terms of reference of the Committee inter alia includes the following:

• Transfer/Transmission of shares;

• Redressal of the Complaints of the share holders;

• Issue of duplicate share certificates;

• Review of shares dematerialized and all other related matters;

• Monitors expeditious redressal of investors' grievances;

• Non receipt of Annual Report and declared dividend;

• Non receipt of Notices Share Certificates Annual reports Dividends;

• All other matters related to shares.

III. COMPENSATION COMMITTEE:

The Compensation Committee was formed inter alia to formulate detailed terms andconditions of Employee Stock Option Scheme.

a) Constitution and Composition of Committee:

Chairman: Mr. Nitin Shah- Chairman & Managing Director

Members:

1) Dr. Shrikant Parikh -Non-Executive & Independent Director

2) Prof. Venugopal Iyengar- Non-Executive & Independent Director

b) Meeting of the Compensation Committee:

During the Financial Year 2014-2015 No Compensation Committee Meeting was held.

c) Terms of reference of the Committee inter alia includes the following:

To decide the terms and conditions of the Employee Stock Option Scheme (ESOP);

The quantum of any option to be granted under an employee stock option scheme peremployee and in aggregate;

The conditions under which option vested in employees may lapse in case of terminationof employment for misconduct;

The exercise period within which the employee should exercise the option and thatoption would lapse on failure to exercise the option within the exercise period;

The specified time period within which the employee shall exercise the vested optionsin the event of termination or resignation of an employee;

The right of the employee to exercise all the options vested in him at one time or atvarious points of time within the exercise period;

The procedure for making a fair and reasonable adjustment to the number of options andto the exercise price in case of corporate actions such as rights issues bonus issuesmerger sale of divisions and other; The grant vest and exercise of option in case ofemployees who are on long leave.

IV. MANAGEMENT COMMITTEE:

a) Constitution and Composition of Committee:

The Board constituted Management Committee on April 28th 2009 comprising of Mr. NitinShah Chairman and Managing Director as Chairman Mr. Prakash D. Shah and Mr. Paresh Shahas Members of the Committee.

b) Meeting of the Management Committee:

Management Committee Meetings were held Four times during the Financial Year 2014-2015.The dates on which the said Meetings were held are May 30th 2014 August 14th 2014November 14th 2014 and February 12th 2015.

c) Terms of reference of the Committee inter alia includes the following:

To borrow monies not exceeding specified sum or such other amount as may be authorizedby the Shareholders at the General Meeting together with the monies already borrowed bythe Company (apart from temporary loans obtained from the Company's Bankers in theordinary course of business) from Financial Institutions / Banks and others from time totime;

To authorize employees of the Company for purchase whether on hire purchase orotherwise or sale of vehicle;

To open Bank Accounts and to authorize Directors/Authorized Signatories to operate theBank Accounts;

To withdraw/change the authority to operate any of the Company's Bank Account;

To appoint attorney for and on behalf of the Company for specific power or for generalpurposes;

To authorize Company Executives to represent the Company and sign and execute all thedocuments and papers related to the Central Government State Government Local Authorityor any other authority in relation to the business of the Company;

To take premises on leave and license / lease to be used as office / store / godown ofthe company or for the purpose of residence of employees or for any other purpose;

To decide on opening Branches/Godowns at different places in the country or abroadsubject to such permission as may be required from different authorities;

To authorize Company Executives for obtaining Telephone / Electricity connections orother permissions in the name of the Company;

To decide on filing recovery suits against distributors / dealers / customers and toauthorize company's executives to prosecute the same;

To launch criminal proceedings against those misusing the company's rights under theDesign Patents Trademarks and Copyright Laws;

To authorize company's executives to defend civil suits filed by third parties againstthe company;

Other general day-to-day affairs of the Company

V. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

In accordance with Section 135 of the Companies Act 2013 your Company has constituteda Corporate Social Responsibility Committee consisting of 3 Directors out of which 2directors are independent Directors.

The Composition of this Committee is as under.

Chairman: Ms. Shubhada Jagirdar Members: Mr. Prakash Shah

Dr. ShrikantParikh

Corporate Social Responsibility (CSR) Initiatives:

As part of its initiatives under "Corporate Social Responsibility (CSR) theCorporate Social Responsibility Committee (CSR Committee) has been formed in accordancewith Schedule VII of the Companies Act 2013. However formulation of the Corporate SocialResponsibility Policy (CSR Policy) indicating the activities to be undertaken by yourCompany is under process and shall be recommended to the Board for their approval in duecourse.

23. LISTING FEES:

The Equity Shares of your Company are listed on the BSE Limited (BSE) and the NationalStock Exchange of India Limited (NSE). Your Company has paid the applicable listing feesto the above Stock Exchanges for the financial year 2014 - 2015. Your Company's shares arealso traded in dematerialized segment for all investors compulsorily and your Company hadentered into agreements with the Central Depository Services (India) Limited (CDSL) andNational Securities Depository Limited (NSDL) for custodial services.

24. THE VIGIL MECHANISM:

Your Company believes in promoting a fair transparent ethical and professional workenvironment.

The Board of Directors of the Company has established a Whistle Blower Policy &Vigil Mechanism in accordance with the provisions of the Companies Act 2013 and theListing Agreement for reporting the genuine concerns or grievances or concerns of actualor suspected fraud or violation of the Company's code of conduct. The said Mechanism isestablished for directors and employees to report their concerns. The policy provides theprocedure and other details required to be known for the purpose of reporting suchgrievances or concerns. The same shall be uploaded on the website of the Company in duecourse.

25. QUALIFICATION GIVEN BY THE AUDITORS:

(a) QUALIFICATION GIVEN BY THE STATUTORY AUDITORS:

There are no qualificatory remarks made by the Statutory Auditors of the Company intheir report.

(b) QUALIFICATION GIVEN BY THE SECRETARIAL AUDITOR:

The Secretarial Auditor is appended as "ANNEXURE 3" in their report.

26. CONTRACT OR ARRANGEMENT WITH RELATED PARTIES

Pursuant to Section 188 read with Rule 15 of The Companies (Meetings of the Board andits Powers) Rules 2014 a Company shall enter into any contract or arrangement with arelated party with respect to the following only with consent of Board of Directors at ameeting of the Board:

a. sale purchase or supply of any goods or materials;

b. selling or otherwise disposing of or buying property of any kind;

c. leasing of property of any kind;

d. availing or rendering of any services;

e. appointment of any agent for purchase or sale of goods materials services orproperty;

f. such related party's appointment to any office or place of profit in the companyits subsidiary company or associate company; and

g. underwriting the subscription of any securities or derivatives thereof of thecompany.

Further these transactions as mentioned above with the related parties shall beentered only with the prior approval of the company by a special resolution if the sameexceeds the limits prescribed under the aforementioned Rules.

A detailed disclosure of these transactions with the Related Parties is annexed withthis Report in Form AOC-2 in "ANNEXURE-4" of the rules prescribed under ChapterIX relating to Accounts of Companies under the Companies Act 2013 is duly entered in theregister.

27. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEESAND INDIVIDUAL DIRECTORS:

During the year the Board adopted a formal mechanism for evaluating its performanceand as well as that of its Committees and individual Directors including the Chairman ofthe Board. The exercise was carried out through a structured evaluation process coveringvarious aspects of the Boards functioning such as composition of the Board &committees experience & competencies performance of specific duties &obligations governance issues etc. Separate exercise was carried out to evaluate theperformance of individual Directors including the Board Chairman who were evaluated onparameters such as attendance contribution at the meetings and otherwise independentjudgment safeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the NonIndependent Directors were carried out by the IndependentDirectors.

The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.

Having regard to the industry size and nature of business your company is engaged inthe evaluation methodology adopted is in the opinion of the Board sufficientappropriate and is found to be serving the purpose.

28. LOANS. GUARANTEES OR INVESTMENTS BY THE COMPANY:

As provided in Section 186 of the Companies Act 2013 read with the Companies (Meetingsof the Board and its Powers) Rules 2014 every Company shall:

1. Give any loan to any person or other body corporate;

2. Give any guarantee or provide security in connection with a loan to any other bodycorporate or person;

3. Acquire by way of subscription purchase or otherwise the securities of any otherbody corporate.

Exceeding sixty per cent of its paid-up share capital free reserves and securitiespremium account or one hundred per cent of its free reserves and securities premiumaccount whichever is more only with prior approval by means of a special resolutionpassed at a general meeting.

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the notes to Financial Statement and alsodetailed in "ANNEXURE 5".

29. STATUTORY AUDITOR:

M/s. Shah & Taparia Statutory Auditors of your Company bearing (Registrationnumber: 033594) retires at the ensuing Annual General Meeting and are eligible forre-appointment. The Auditors have given their consent in writing and have furnished acertificate to the effect that their re-appointment if made would be in accordance withthe provisions of Section 139(1) and that they meet with the criteria prescribed undersection 141 of the Companies Act 2013. Yours Directors recommend their re-appointment inthe ensuing Annual General Meeting.

30. INTERNALAUDITOR:

Pursuant to the provisions of Section 138 and 179(3) of the Companies Act 2013 readwith Rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014 the Directorsof the Company hereby appoint M/s. Satya Prakash Natani & Co. (Firm Registration No.115438W) Mumbai as Internal Auditors of the Company for the financial year 2015-2016 onsuch remuneration as may be decided by the Board in consultation with the InternalAuditor.

31. SECRETARIAL AUDITOR

Pursuant to the provisions of the Section 179(3) and 204 of the Companies Act 2013read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014 and as ameasure of good corporate governance practice the Board of Directors of the Companyhereby appoint M/s. Pramod S. Shah & Associates (Membership No. 334) PracticingCompany Secretaries as a Secretarial Auditors of the Company for the Financial Year2015-2016 on such remuneration as may be decided by the Board in consultation with theSecretarial Auditor.

32. ESQP2010:

At present the Company has an Option plan for its employees "ESOP 2010"."ESOP 2010" was approved by the members at their meeting held on September29th 2010. The Company had granted total 502500 options under "ESOP 2010" tothe eligible employees in tranches out of total 3000000 grants allocated under theeffective ESOP scheme. During the financial year ended March 31st 2015 No options weregranted to employee of the Company or its Subsidiary. Each option entitles the holderthereof to apply for and be allotted Equity Shares of the Company upon payment of theexercise price during the exercise period.

The details of present ESOP are given in the table:-

PARICULARS

ESOP 2010 GRANT

Total Options granted by the plan (no.)

502500

Pricing formula on date of grant

Fair Market Value

Options granted during the year (no.)

Nil

Weighted average price per Option granted (')

N.A

Variation in terms of Options

N.A

Options exercised during the year (no.)

Nil

Money raised on exercise of Options (Lakhs)

Nil

Options forfeited and lapsed during the year (no.)

Nil

Total number of Options in force at the end of the year (no.)

487500

Grant to senior management

Nil

Employees receiving 5% or more of the total number of Options granted during the year

N.A

Employees granted Options equal to or exceeding 1% of the issued capital

Nil

Diluted EPS in accordance with [AS-20]

N.A

33. DISCLOSURE OF REMUNERATION PAID TO DIRECTOR AND KEY MANAGERIAL PERSONNEL ANDEMPLOYEES:

a. None of the employees of the Company is drawing remuneration in excess of the limitsprescribed under Rule (5)(2) Chapter XIII as provided under Section 197 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

b. The further details with regard to payment of remuneration to Director and KeyManagerial Personnel is provided in Form No. MGT 9-extract of annual return appended as"ANNEXURE1."

34. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to sub-section (5) of Section 134 of the Companies Act 2013 and to the bestof their knowledge and belief and according to the information and explanations obtained/received from the operating management your Directors make the following statement andconfirm that-

a) In the preparation of the annual accounts for the year ended March 312015 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312015 and of the profit ofthe Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively and;

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

35. PARTICIPATION IN THE GREEN INITIATIVE:

Your Company continues to wholeheartedly participate in the Green Initiative undertakenby the Ministry of Corporate Affairs (MCA) for correspondences by Corporate to its Membersthrough electronic mode. All the Members are requested to join the said program by sendingtheir preferred e-mail addresses to the Registrar and Share Transfer Agent.

36. CORPORATE GOVERNANCE CERTIFICATE:

Our Company acknowledges its responsibilities to its Stakeholders and believes thatCorporate Governance helps to achieve commitment and goals to enhance stakeholder's valueby focusing towards all stakeholders. Your Company maintains highest level oftransparency accountability and good management practices through the adoption andmonitoring of corporate strategies goals and procedures to comply with its legal andethical responsibilities. Your Company is committed to meeting the aspirations of all itsstakeholders.

our Company has taken appropriate steps and measures to comply with all the applicablemandatory provisions of Clause 49 of the Listing Agreement entered with the StockExchanges. The Company's governance practices are described separately in the CorporateGovernance section of this Annual Report. We have obtained certification from a StatutoryAuditor on our compliance with Clause 49 of the Listing Agreement with Indian StockExchanges described in the separate section forming a part of this Annual Report.

37. AWARDS AND RECOGNITION:

During the year Company has received various awards & recognitions. The awards arelisted below:

• Pune city surveillance project was awarded best smart city surveillance projectin the country by ELETS Technomedia in New Delhi and Bhopal

• Winner of Channel world Premier 100 awards2015 for being agile and adoptingrapidly to the changing technology and business landscape.

• Mr. Nitin shah was awarded Entrepreneur of the year services-security 2015 byFranchise India.

38. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION. PROHIBITION AND REDRESSAL1 ACT. 2013:

In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee.

Your Company has always believed in providing a safe and harassment free workplace forevery individual through various interventions and practices. The Company always endeavorsto create and provide an environment that is free from discrimination and harassmentincluding sexual harassment.

During the year ended 31 March 2015 no complaints have been received pertaining tosexual harassment.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to express their grateful appreciation for theexcellent assistance and co-operation received from all our customers vendors investorsand bankers for their continued support during the year. We place on record ourappreciation of the contribution made by employees at all levels.

We thank the Government of India the Ministry of Communication and InformationTechnology the State Government various government agencies and the Government of UnitedStates of America where we have operations for their immense support and look forward totheir continued support in the future.

For and on behalf of the Board

Sd/- Sd/-
Nitin D. Shah Prakash D. Shah
Chairman & Managing Director Executive Director- Commercial
DIN: 00189903 DIN: 00189842
Place : Mumbai
Date :29th May2015

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