Allied Digital Services Limited
Your Directors take great pleasure in presenting the Twenty Second Annual Reportof Allied Digital Services Limited on the business and operations of your Company andaudited financial statements for the financial year ended 31st March 2016.
The State of the Companys Affairs:
1. KEY FINANCIAL HIGHLIGHTS:
a. Financial Results
The Companys performance for the year ended 31st March 2016 as compared to theprevious financial year is summarized below:
| || || |
(Rs. in Lakhs)
|Particulars ||STANDALONE ||CONSOLIDATED |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Total Operational Income ||10340.70 ||12549.52 ||23705.85 ||23375.54 |
|Other Income ||553.59 ||1075.61 ||554.35 ||1125.55 |
|Total Income ||10894.29 ||13625.13 ||24260.20 ||24501.09 |
|Less: Operating Expenditure ||7187.93 ||9395.47 ||19357.49 ||19964.37 |
|Profit before Interest Depreciation Amortization Tax & Exceptional Item ||3706.36 ||4229.66 ||4902.71 ||4536.72 |
|Less: Depreciation ||1596.65 ||2394.88 ||2175.41 ||2770.15 |
|Less: Interest ||1787.83 ||1618.87 ||1832.03 ||1652.56 |
|Profit before Tax and Exceptional Item ||321.88 ||215.91 ||895.27 ||114.01 |
|Exceptional Item ||- ||- ||- ||(19.21) |
|Profit before Tax ||321.88 ||215.91 ||895.27 ||133.22 |
|Less: Provision for Taxation ||55.00 ||40.00 ||204.13 ||(28.93) |
|Less: Deferred Tax Liability ||58.31 ||174.10 ||58.31 ||175.32 |
|Net Profit for the year ||208.57 ||41.81 ||632.83 ||(31.03) |
|Add: Balance brought forward from the Previous Year ||27015.31 ||28707.51 ||25831.12 ||27565.99 |
|Less: Adjustment for Depreciation ||- ||1734.01 ||0.38 ||1734.39 |
|Less: Adjustments ||(22942.05) || ||(22942.05) || |
|Add: Minority interest || || ||(78.8) ||30.57 |
|Amount Available for Appropriation ||4281.82 ||27015.31 ||3442.71 ||25831.12 |
|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 ||4281.82 ||27015.31 ||3442.71 ||25831.12 |
b. Operating Performance ongoing projects & state of affairs:
Despite the challenging environment of the global as well as the Indian economy theCompany demonstrated the resilience of its business model. The highlights of theCompanys performance are as under: The Company has achieved a turnover of INR10340.70 lakhs (on consolidated basis Rs. 23705.85 Lakhs) Revenue from Operating Incomedecreased by INR 2208.82 lakhs i.e. by 17.60% as compared to the previous year. TheCompany has earned a Profitafter Tax (PAT) of Rs. 208.56 Lakhs (on consolidated basis Rs.632.83 Lakhs) as against previous years Profit of Rs. 41.81 Lakhs (on consolidatedbasis ` -31.03 Lakhs).
c. Consolidated Financial Statements:
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) - 21 on Consolidated Financial Statements read with AS - 27 on FinancialReporting of Interests in Joint Ventures the audited consolidated financial statement isprovided in the Annual Report.
d. Revision of Financial Statement:
There was no revision of the financial statements for the year under review.
e. Disclosure of Internal Financial Controls
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls.
2. RECENT DEVELOPMENTS:
The Company has proved mettle by delivering a successful large safe city project andrunning its operations at top service levels. Company face top challenges in finance inspite of local IT industry remaining on dismal growth. Globally the company has alsospread our operations and strengthened the partnerships. The IT industry is also goingthrough transformation. New disruptive technologies are taking big market share. Largecompanies are facing challenges on margins and the need to innovate fast. New technologiessuch as robotics analytics and IoT are getting main stream. The company will continue tofocus on building strong skills in each areas of offering as there is continued potentialfor growth. The company will also restructure its resources focus on strongerpartnerships and broaden international business. The company is keen to drive newtechnologies such as IoT (Internet of Things) as well as grow the business in IT security.
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 Companys 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.
The motto of "Passion" "Teamwork" and "Innovation" withthe assurance of "Commitment" of top service delivery to our customers iskeeping us focused and agile and to summarize The Company is going to focus more onbusiness-ready solutions and services to support a shorter sales cycle IT analytics andvalue-added services.
In recognition of the fact that the economy is recovering and in view of theCompanys performance the Directors do not recommend any Dividend for the FinancialYear 2015-2016.
5. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURECOMPANIES:
During the year the Board of Directors reviewed the affairs of the Subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 ("the Act") and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") we have prepared consolidated Financial Statements of the Companywhich forms part of this Annual Report. Further a Statement of containing the salientfeatures of the financial of our Subsidiaries in the prescribed format AOC-1 is appendedas Annexure I to the Boards Report. The Statement also provides the detailsof performance and financial positions of each of the Subsidiaries of the Company.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitei.e. www.allieddigital.net. These documents will also be available for inspection duringbusiness hours at our registered office in Mumbai India.
None of the Companys Subsidiaries ceased to be a subsidiary and no other companyhas become subsidiary of the Company during the year under review.
Additional information on Subsidiary Companies:
|Sr. No. ||Name of Company ||Subsidiary / Joint ventures/ Associate Company ||Date of becoming of Subsidiary / Joint ventures/ Associate Company |
|1. ||Allied Digital Services LLC (USA); ||Subsidiary ||2nd July 2008 |
|2. ||Allied Digital INC (USA); ||Subsidiary ||31st October 2007 |
|3. ||Allied Digital Singapore Pte Ltd ||Subsidiary ||12th October 2010 |
|4. ||Allied Digital Asia Pacific Pty Ltd (Australia) ||Subsidiary ||16th September 2010 |
|5. ||En Pointe Technologies India Private Limited ||Subsidiary ||29th December 2006 |
|6. ||Allied-eCop Surveillance Private Limited ||Subsidiary ||6th August 2007 |
|7. ||Allied Digital Services (UK) Ltd. ||Subsidiary ||4th December 2013 |
|8. ||Assetlite Equipment India Private Limited ||Associate ||26th September 2009 |
6. TRANSFER TO RESERVES:
The Company has not recommended transfer of any amount of profit to reserves during theyear under review. Hence the entire amount of profit for the year . under review has beencarried forward to the loss statement of profit and loss
7. DISCLOSURE UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
No material changes and commitments which could affect the Companys financial endof the financial year of the Company and date of this report.
8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO:
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.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 8 sub-rule 3 (c) pertaining to Foreign Exchange Earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year in terms ofactual outflows:
| || ||( Rs. in Lakhs) |
|Particulars ||2015-16 ||2014-15 |
|Earnings ||2874.17 ||1343.17 |
|Outflow (including Capital imports) ||717.37 ||738.14 |
|Net Foreign Exchange Earnings (NFE) ||2156.81 ||605.03 |
|NFE / Earnings (%) ||75% ||45% |
9. MANAGEMENT DISCUSSION AND ANALYSIS:
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming a part of this Annual Report.
10. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended 31st March 2016 made under the provisionsof Section 92(3) of the Act is attached as Annexure II which forms part of thisReport.
11. 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. Thedetails relating to deposits covered under Chapter V of the Act:
|Particulars ||2015-16 ||2014-15 |
|Deposits accepted during the year || || |
|Deposits unpaid or unclaimed at the end of the year ||445.78 ||477.52 |
|Default in repayment of deposits or payment of interest ||212.70 ||10.66 |
Further in case of default in repayment of deposits or payment of interest:
| || || ||( Rs. in Lakhs) |
|Particulars ||At the beginning of the year ||Maximum during the year ||At the end of the year |
|Total amount involved ||10.66 ||212.70 ||212.70 |
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 2016.
12. BOARD MEETINGS:
The Board of Directors (hereinafter called as "the Board") met for Four (4)times 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 ||14.05.2015 ||Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai 400021. ||1) Mr. Prakash Shah ||1) Mr. Nitin Shah |
| || ||Time: 04.30 P.M. ||2) Dr. Shrikant Parikh ||2) Dr. Roop Kishan Dave |
| || || ||3) Mr. Paresh Shah || |
| || || ||4) Prof. Venugopal Iyengar || |
| || || ||5) Ms. Shubhada Jahangirdar || |
|2 ||14.08.2015 ||Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai 400021 ||1) Mr. Prakash Shah ||1) Mr. Nitin Shah |
| || ||Time: 5:00 P.M ||2) Dr. Shrikant Parikh ||2) Dr. Roop Kishan Dave |
| || || ||3) Mr. Paresh Shah || |
| || || ||4) Prof. Venugopal Iyengar || |
| || || ||5) Ms. Shubhada Jahangirdar || |
|3 ||09.11.2015 ||Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai 400021 ||1) Ms. Shubhada Jahangirdar ||1) Mr. Nitin Shah |
| || ||Time: 4:00 P.M. ||2) Mr. Prakash Shah ||2) Mr. Paresh Shah |
| || || ||3) Prof.Venugopal Iyengar || |
| || || ||4) Dr.Roop Kishan Dave || |
| || || ||5) Dr. Shrikant Parikh || |
|4 ||12.02.2016 ||Venue: Premises No.13A 13th Floor Earnest House Back Bay Reclamation NCPA Road Block III Nariman Point Mumbai 400021 ||1) Mr. Nitin Shah ||1) Mr. Paresh Shah |
| || ||Time: 4:00 P.M. ||2) Dr. Shrikant Parikh ||2) Ms. Shubhada Jahagirdar |
| || || ||3) Mr. Prakash Shah || |
| || || ||4) Prof.Venugopal Iyengar || |
| || || ||5) Dr. Roop Kishan Dave || |
13. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Prakash Shah resigned as Chief Financial Officer of the Company w.e.f. 14thAugust 2015 on account of personal commitments and involvement in the business. The Boardof Directors places on record its deep sense of appreciation for the invaluablecontributions made by Mr. Prakash Shah during his tenure.
Mr. Gopal Tiwari was appointed as the Chief Financial Officer of the Company w.e.f.14th August 2015. The Board welcomed Mr. Gopal Tiwari on the Board and designated him asthe Key Managerial Personnel of the Company.
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Paresh Shahwill retire by rotation at the ensuing Annual General Meeting of the Company. The Boardrecommends his re-appointment.
In accordance with the provisions of the Act none of the Independent Directors isliable to retire by rotation.
14. DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS UNDER SECTION 149 (6) OF THECOMPANIES ACT 2013:
As per the provisions of Section 149(4) of the Companies Act 2013 every listed publiccompany shall have at least 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 ||28/04/2009 ||25.09.2014 |
|3. ||Dr. Shrikant Navnitlal Parikh ||23/05/2006 ||25.09.2014 |
|4. ||Dr. Roopkishan Sohanlal Dave ||05/10/2009 ||25.09.2014 |
All the above Independent Directors meet the criteria of independenceprescribed under Section 149(6) and have submitted declaration to the effect that theymeet with the criteria of independence as required under Section 149(7) of theCompanies Act 2013.
15. INTERNAL CONTROL SYSTEMS:
Adequate internal control systems commensurate with the nature of the Companysbusiness and size and complexity of its operations are in place has been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.
16. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The familiarization programme aims to provide Independent Directors with the industryscenario the socio-economic environment in which the Company operates the businessmodel the operational and financial Company significant developments so as to enablethem to take well informed decisions in a timely manner. The familiarization programmealso seeks to update the Directors on the roles responsibilities rights and duties underthe Act and other statutes.
The details of programme for familiarisation of Independent Directors are hosted on thewebsite of the Company at the link:https://www.allieddigital.net/in/downloads/Inv_Policies/Familiarisation_Programme_Independent_Directors.pdf
17. DIRECTORS RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2016 the Board ofDirectors hereby confirms that:
a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation and there are no material departures;
b. such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2016 and of the profit of the Company for thatperiod;
c. proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively and;
f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
18. COMMITTEES OF BOARD:
I. NOMINATION AND REMUNERATION COMMITTEE:
The Remuneration Committee of the Board has been constituted which inter-alia recommendsto the Board the compensation terms of Executive Directors managerial personnelsand the senior most level of management immediately below the Executive Directors. TheRemuneration Committee deals with all elements of remuneration package of all theExecutive Directors i.e. salary benefits bonuses stock options pension etc. includingdetails of fixed component and performance linked incentives along with the performancecriteria.
The remuneration of Executive Directors is decided by the Board of Directors and theRemuneration Committee as per the remuneration policy of the Company within the overallceiling limits approved by shareholders.
Composition of the Committee terms of reference of the Committee attendance at theRemuneration Committee Meetings disclosure of Remuneration paid details of remunerationpaid to Directors during the accounting year ended March 31 2016 are stated in CorporateGovernance Report which forms part of this Annual Report.
Nomination and Remuneration Policy:
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual directors. The Companys 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.
The Companys Nomination and Remuneration Policy for Directors Key ManagerialPersonnel and other employees is hosted on the Website of the Company. The Web-link of thesame is as follows:https://www.allieddigital.net/in/downloads/Inv_Policies/Nomination_Remuneration_policy.pdf
II. AUDIT COMMITTEE:
The Board of Directors has entrusted the Audit Committee with the responsibility tosupervise these processes and thus ensure accurate and timely disclosures that maintainthe transparency integrity and quality of financial control and reporting.
The scope and terms of reference of the Audit Committee have been amended in accordancewith the Act and the SEBI Regulations. During the year under review the Board ofDirectors of the Company had accepted all the recommendations of the Committee.
Composition of the Committee terms of reference of the Committee attendance at theAudit Committee Meetings are stated in Corporate Governance Report which forms part ofthis Annual Report.
III. INVESTORS /SHAREHOLDERS GRIEVANCE COMMITTEE:
The company has duly constituted comprising of Two (2) Non- Executive IndependentDirectors and One (1) Executive Directors. The Company Secretary acts as the Secretary ofthe Stakeholders Relationship Committee. Composition of the Committee terms ofreference of the Committee attendance at the Investors/ Shareholders GrievanceCommittee Meetings number of complaints received all valid Share Transfers receivedduring the year are stated in Corporate Governance Report which forms part of this AnnualReport.
IV. COMPENSATION COMMITTEE:
Composition of the Committee terms of reference of the Committee attendance at theCompensation Committee Meetings are stated in Corporate Governance Report which forms partof this Annual Report.
V. MANAGEMENT COMMITTEE:
Composition of the Committee terms of reference of the Committee attendance at theManagement Committee Meetings are stated in Corporate Governance Report which forms partof this Annual Report.
VI. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
In accordance with Section 135 of the Companies Act 2013 your Company has constituteda Corporate Social Responsibility Committee consisting of Three (3) Directors out of whichTwo (2) Directors are Non Executive Independent Directors. The said Committee hasbeen entrusted with the responsibility of formulating and recommending to the BoardCorporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken by the Company monitoring the implementation of the framework of the CSRPolicy and recommending the amount to be spent on CSR activities.
During the year under review the company has not made expenditure under CSR as duringthe financial year 2015-2016
16 the Company had to execute Pune City Surveillance Project offered by Government ofMaharashtra (GOM) without any mobilization advance and milestone Payments from GOM due towhich Company is facing severe cash flowcrises hence Company could not spend CSR amount.Also the Board of Directors are in the process of identifying the valid avenues to spendthe said CSR amount and shall be spending the said amount during the financial year2016-2017.
Also during the year under review no meeting of CSR Committee was held. Further theformulation of the Corporate Social Responsibility Policy (CSR Policy) indicating theactivities to be undertaken by your Company is under process and shall be recommended tothe Board for their approval and uploaded on the website of the Company in due course.
Further Composition of the Committee terms of reference of the Committee are statedin Corporate Governance Report which forms part of this Report.
Annual Report on CSR activities is attached as Annexure III to this report.
19. 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 Section 177(9) of the Companies Act2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 andListing Regulations for reporting the genuine concerns or grievances or concerns of actualor suspected fraud or violation of the Companys code of conduct. The said Mechanismis established for directors and employees to report their concerns. The policy providesthe procedure and other details required to be known for the purpose of reporting suchgrievances or concerns. The same has hosted on the website of the Company and the weblinkfor the same is as follows:https://www.allieddigital.net/in/downloads/Inv_Policies/Whistle_blower_and_vigil_mechanism.pdf
20. AUDITORS AND REPORTS:
The matters related to Auditors and their Reports are as under:
a. Observations of Statutory Auditors on accounts for the year ended 31st March 2016:
The observations made by the Statutory Auditors in their report for the financial yearended 31st March 2016 read with the explanatory notes therein are self-explanatory andtherefore do not call for any further explanation or comments from the Board except asmentioned below under Section 134(3) of the Companies Act 2013.
The Boards Comments on such qualification as given below:
The Boards Comments on qualificatory remarks by the statutory Auditors pertainingto Bad Debt written off to the extent of Rs. 229.43 Crs. and the same being directlyadjusted against the opening balance of Surplus (Profit & Loss A/c) as below:
The said debit balance of Rs. 229.43 Crs. pertains to earlier years and become bad debtduring the year inspite of all efforts taken by the Company further the Board thought itprudent to adjust the said bad debt amount against the opening balance of surplus profitsof earlier years instead of routing through profit and loss review.
b. Secretarial Audit Report for the year ended 31st March 2016
Provisions of Section 204 read with Section 134(3) of the Companies Act 2013 mandatesto obtain Secretarial Audit Report from Practicing Company Secretary. M/s. Pramod S. Shah& Associates (Membership No. 334) Company Secretaries had been appointed to issueSecretarial Audit Report for the financial year 2015-16.
Secretarial Audit Report issued by M/s. Pramod S. Shah & Associates in form MR-3for the financial year 2015-16 along with management response on the observation providedtherein forms part of this report and marked as Annexure IV.
c. Internal Audit Report for the financial year 2015-16:
M/s. Satya Prakash Natani & Co. (Firm Registration No. 115438W) Internal Auditorsof the Company have carried out audit on various expense heads of the Company and site andinventory management. The findings of the
Internal Auditors are discussed on an on-going basis in the meetings of the AuditCommittee and corrective actions are taken as per the directions of the Audit Committee.
d. Ratification of Appointment of Statutory Auditors:
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. Shah & Taparia Chartered Accountants Mumbaihaving Firm Registration Number 109463W had been appointed for a term of five years i.efrom the conclusion of Twentieth Annual General Meeting until the Twenty Fifth AnnualGeneral Meeting of the Company. However their appointment as Statutory Auditors of theCompany shall be required to be ratified by the Members at the ensuing Annual GeneralMeeting. The Company has received a confirmation from the said Auditors that they are notdisqualified to act as the Auditors and are eligible to hold the office as Auditors of theCompany.
Yours Directors recommend their re-appointment in the ensuing Annual General Meeting.
e. Appointment of Internal Auditor:
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 2016-2017 onsuch remuneration as may be decided by the Board in consultation with the InternalAuditor.
f. Appointment of Secretarial Auditor of the Company
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 Year2016-2017 on such remuneration as may be decided by the Board in consultation with theSecretarial Auditor.
21. PARTICULARS OF CONTRACTS 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 partys appointment to any office or place of profit in thecompany its subsidiary company or associate company; and
g. underwriting the subscription of any securities or derivatives thereof of thecompany.
h. 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 V of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Companies Act 2013 is duly entered in theregister.
The Policy on dealing with Related Party Transactions may be accessed on theCompanys website at the link:https://www.allieddigital.net/in/downloads/Inv_Policies/Related_Party_Transaction_Policy.pdf
22. 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 & obligations governance issues etc. Separate exercise wascarried out & competencies performance of specific to evaluate the performance ofindividual Directors including the Chairman who were evaluated on parameters such asattendance contribution at the meetings and otherwise independent judgment safeguardingof minority shareholders interest etc.
The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent 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.
23. LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:
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 VI.
24. ISSUE AND ALLOTMENT OF EQUITY SHARES:
CONVERSION OF 4018801 CONVERTIBLE WARRANTS INTO EQUITY SHARES ALLOTMENT OF SUCHEQUITY SHARES AND APPLICATION FOR LISTING OF SHARES ON STOCK EXCHANGE:
The Company had allotted 5433732 convertible share warrants (the"Warrants") on preferential basis to promoters with an option to convert thesame into equal number of equity shares at a price of `15 per warrant including premiumof Rs. 10/- per share on face value of `5/- per share within a period of 18 months fromthe date of allotment of warrants (i.e. August 14 2014) as per terms and conditionsapproved in Annual general meeting held on September 25 2013. The Company has also hasreceived In-principle approval from Bombay Stock Exchange Limited and National StockExchange of India Limited on October 25 2013 and August 01 2014 respectively.
The Company received upfront payment of 25% of the warrants allotted at the time ofsubscription of the warrants from the promoters to whom warrants were allotted. As perterms of issue of warrants the warrant holders shall deposit the remaining portion of 75%for conversion of warrant into equity share while exercising right to subscribe for equityshares of the Company.
The Company further received 75% from the warrant holders belonging to the promotergroup for exercise of 4018801 warrants into equity shares.
The details for the allotment are as follows:
4018801 share warrants converted into 4018801 equity shares of Rs. 15/- each fullypaid up including `10/- premium per share be and are hereby allotted in pursuance of 1(one) warrant converted into 1(one) equity shares of Rs. 15/- each fully paid as per termsapproved by shareholders in Annual general meeting held on September 25 2013 and SEBIGuidelines for Preferential Issue and the details of allotment of equity shares are asfollows:
|Sr.No. ||Name of Allottees ||Category ||No. of Equity shares of Rs.15/- each fully paid. |
|1 ||Mr. Prakash Dhanji Shah ||Promoter ||1832134 |
|2 ||Mr. Nitin Dhanji Shah ||Promoter ||2186667 |
| ||Total || ||4018801 |
Further the Company has made application to NSE and BSE for conversion of theaforesaid warrants and the approval for the same is waited from the Stock exchange.
25. ESOP 2010:
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:-
|PARTICULARS ||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 (Rs.) ||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 |
26. 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 Section197 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 AnnexureII
27. 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.
28. CORPORATE GOVERNANCE CERTIFICATE:
Your Company acknowledges its responsibilities to its Stakeholders and believes thatCorporate Governance helps to achieve commitment and goals to enhance stakeholdersvalue by 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.
Your Company has taken appropriate steps and measures to comply with all the applicablemandatory provisions of the Listing Regulations entered with the Stock Exchanges. TheCompanys governance practices are described separately in the Corporate Governancesection of this Annual Report. We have obtained certification from a Statutory Auditor onour compliance with Listing Regulations with Indian Stock Exchanges described in theseparate section forming a part of this Annual Report.
Code of Conduct
Pursuant to SEBI Regulation the declaration signed by the Managing Director affirmingthe compliance of Code of Conduct by the Directors and senior management personnel for theyear under review is annexed to and forms part of the Corporate Governance Report.
29. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) 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 31st March 2016 no complaints have been received pertaining tosexual harassment.
30. GENERAL DISCLOSURES:
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions pertaining to these matters during financialyear 2015-16:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
3. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries. by the Regulators or Courtsor Tribunals which impact the going
4. No significant concern status and Companys operations in future.
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 of Directors of Allied Digital Services Limited |
| ||Sd/- ||Sd/- |
| ||Nitin Shah ||Prakash Shah |
|Place: Mumbai ||Chairman Managing Director ||Executive Director-Commercial; |
|Date: 01.09.2016 ||DIN: 00189903 ||DIN: 00189842 |