Allsec Technologies Ltd.
|BSE: 532633||Sector: IT|
|NSE: ALLSEC||ISIN Code: INE835G01018|
|BSE LIVE 15:40 | 21 Apr||395.35||
|NSE 15:42 | 21 Apr||392.00||
|Mkt Cap.(Rs cr)||602.51|
|Mkt Cap.(Rs cr)||602.51|
Allsec Technologies Ltd. (ALLSEC) - Director Report
Company director report
The Directors take pleasure in presenting to you the 17th Annual Report of the companycovering the financial year ended 31st March 2016.
HR Bpo division is a vertical which has been growing organically for us and this willcontinue in the coming years too. our plans to expand HR Bpo to new geographies haveyielded results and we have added more clients in philippines as well as in the MiddleEast during 2015-16. Marketing efforts will be increased for business development indestinations like philippines Asia Middle east uK and in the uS in the coming year. Webelieve HR Bpo business will be a significant revenue generator for your Company in thenext few years.
Your Company has also progressed well in the Domestic business during the year. pricingin the market has been increasing gradually. We now have good capacity utilization in thisbusiness at rates which are much higher than what we were getting 2 years back. the planis to keep looking for strategic contracts where we can command higher rates and improvemargins.
exports revenue has remained as in previous year. the International outsourcingdivision continues to be affected by the global slowdown and we are actively pursuingtargets both by increasing the sales force as well as increase the marketing efforts bydoing more targeted marketing. through increased marketing efforts and focus in additionalgeographies we believe we will have growth in this business.
overall financial performance of your Company has improved substantially during thisyear. profit before Interest Depreciation and tax (EBIDTA) has increased from INR 486lakhs last year to INR 1525 Lakhs (214%). Your company has reported net profit after taxfor the current year at INR 948 lakhs as compared to net loss after tax of INR 174 lakhsfor the previous year. Detailed analysis of the Standalone results forms part of theManagement Discussion and Analysis (MDNA) report provided in Annexure C of the DirectorsReport.
Consolidated results of your Company have shown growth due to improved performance ofall the entities during the year. there has been an increase in Standalone profits inIndia & Manila and substantial increase in uS operations resulting in a much improvedperformance. Consolidated Revenues has increased to INR 23338 lakhs from INR
15086 lakhs in the previous year. Consolidated Profit before Interest Depreciation andTax (EBIDTA) was at INR 4192 lakhs as against a loss of INR 41 lakhs last year. Yourcompany has reported net profit after tax for the current year at INR 3094 lakhs ascompared to net loss after tax of INR 1406 lakhs for the previous year.
The company is continuing to pursue growth through the organic route and sees very goodtraction for growth in all the entities. the company has delivery centers in India Manilaand in uS for the international segment and has Domestic delivery centers in three majorcities in India.
The Board of Directors of your Company cannot recommend any dividend for the FinancialYear 201516 in view of the accumulated losses.
Your company has not accepted any deposit from the public during the period underreview and did not have any outstanding deposits.
Mr. S. prem Kumar a Director on the Board of the Company has resigned on 20th May2016. the Board wishes to place on record its sincere appreciation for the valuableservices rendered by him.
Mr. C. Jayaram was appointed as an Additional Director on 20th May 2016 and who holdsoffice up to the date of Seventeenth Annual General Meeting of the Company and in respectof whom Notice under section 149(6) of Companies Act 2013 has been received from memberssignifying their intention to propose Mr. C. Jayaram as a candidate for the office ofDirector and accordingly a resolution is placed before the members at the forthcomingAnnual General Meeting.
Mr. D. padmanabhan was appointed as an Additional Director on 20th May 2016 and whoholds office up to the date of Seventeenth Annual General Meeting of the Company and inrespect of whom Notice under section 149(6) of Companies Act 2013 has been received frommembers signifying their intention to propose Mr. D. padmanabhan as a candidate for theoffice of Director and accordingly a resolution is placed before the members at theforthcoming Annual General Meeting.
Mr. A. Saravanan who was originally appointed as Whole time Director for 3 years bythe shareholders through postal Ballot on 15th March 2013 was deputed to yourCompanys subsidiary Retreat Capital Management Inc USA with effect from 1st April2014
and has been rendering his services predominantly from USA. As per the Companies Act2013 a Whole Time Director needs to be a resident in India; hence Mr. A. Saravanan isbeing re-designated as promoter Director.
Mr. R. Jagadish Director retires at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.
Key Managerial Personnel
The Key Managerial Personnel of Allsec Technologies Limited are:
1. Mr. R. Jagadish - Chief Executive Director
2. Mr. A. Mohan Kumar - Company Secretary
3. Mr. K. Narasimhan - Chief Financial officer
As per the provision of Section 136 of the companies Act 2013 the Report of Accountsare being sent to all members of the company excluding the Information relating toEmployees to be given under Section 197(12) of the Companies Act 2013. The saidinformation would be filed with the Registrar of Companies and also would be available forinspection by the members at the Corporate office of the Company. Any member interested inobtaining such particulars may also write to the Company Secretary Allsec TechnologiesLimited 46B Velachery Main Road Velachery Chennai-600042.
Your Company is fully compliant with the requirements under SEBI (LODR) Regulations2015. The report on Corporate Governance is given in Annexure A.
Certificate from Auditors confirming the compliance of conditions of CorporateGovernance is included in Annexure B. CEO/CFO certification is attached in Annexure H.
In terms of regulation 34 of Securities and Exchange Board of India (Listingobligations and disclosure requirements) regulations 2015 the Management Discussion andAnalysis report is given in Annexure - C.
The Company has three subsidiaries as at year end namely Allsectech Inc USA AllsectechManila Inc. philippines and Retreat Capital Management Inc uSA.
The Consolidated Financial statements of the company and its subsidiaries prepared inaccordance with Accounting Standards AS 21 and forms part of this Annual Report andaccounts.
The Annual Accounts of the said subsidiaries and the related detailed information willbe made available to the investors of the Company seeking such information at any point oftime. the copies of the Annual accounts of the subsidiaries will also be kept forinspection by any investor at the corporate office of the Company.
the Company monitors performance of subsidiary companies (list of subsidiary companieshas been provided in the financial statements) inter-alia by the following means:
a) the Company does not have any material unlisted Indian subsidiary and hence is notrequired to nominate an Independent Director of the Company on the Board of anysubsidiary.
b) the Audit Committee reviews the financial statements in particular the investmentsmade by the subsidiary companies.
c) Your Company has formulated a policy on Material Subsidiary as required underRegulation SEBI (LoDR) and the policy is hosted on the website of the Company under theweb link http://www.allsectech.com/Allsec/investor-information.aspx
Compliance under Companies Act 2013
pursuant to Section 134 of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 your Company complied with the compliance requirements and the details ofcompliances under Companies Act 2013 are enumerated below:
Extract of Annual Return
An extract of the Annual Return as of 31st March 2016 pursuant to the sub section (3)of Section 92 of the Companies Act 2013 and forming part of the report is attached inAnnexure D.
Board Meetings held during the year
During the year 4 meetings of the Board of Directors were held. the details of themeetings are furnished in the Corporate Governance Report which is attached as Annexure-Ato this Report.
Directors responsibility statement
The Board of Directors acknowledges the responsibility of ensuring compliance with theprovisions of Section 134(3)(c) of the 2013 Act. To the best of their knowledge and beliefand according to the information and explanations obtained by them your Directors makethe following statements:
Your Directors confirm the following that:
(i) In preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;
(ii) the directors had 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 at the end of the financial year and ofthe profit or loss of the company for that period;
(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(iv) the directors had prepared the annual accounts on a going concern basis.
(v) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively.
(vi) proper systems were in place so as to ensure compliance with the provisions of allapplicable laws and were adequate and operating effectively
independent Directors and Board Evaluation
The Independent Directors of the Company have declared that they meet the criteria ofIndependence in terms of Section 149(6) of the Companies Act 2013.
Independent Directors considered / evaluated the performance of the non-independentDirectors at a meeting without anyone from the non-independent Directors and Management.
The Board subsequently evaluated performance of the Board the Committees andIndependent Directors (without participation of the relevant director)
Your company follows an orientation and familiarization programme through variousreports/codes/internal policies for all the Directors with a view to update them on thecompanys policies and procedures on a regular basis.periodic presentations are madeat the Board Meetings on business and performancelong term strategy initiatives and risksinvolved.the detail about the familiarization programme have been posted in the website ofthe Company under the web link
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. the Companys policy on appointment and remuneration including criteriafor determining qualifications positive attributes and independence are provided in theCorporate Governance Report forming part as an Annexure-A to this Report.
Related Party Transactions
The Company has formulated a policy on Related Party Transactions as approved by theBoard and the same is uploaded on the Companys website http://www.allsectech.com/Allsec/investor-information.aspx
All the Related Party Transactions that were entered into by the Company during thefinancial year 2015-16 were on an arms length basis and were in the ordinary courseof business. All Related Party Transactions are placed before the Audit Committee fortheir prior approval in accordance with the requirements of the SEBI (LODR) Regulation2015. The transactions entered into pursuant to such approval are placed periodicallybefore the Audit Committee.
There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel which may have a potential conflict withthe interest of the Company at large. None of the Directors has any pecuniaryrelationships or transactions vis-a-vis the Company otherwise than disclosed in theCorporate Governance Report forming part of this report.
Details of the transaction are provided in Form AOC-2 which is attached as Annexure-Fto this Report.
Risk Management Policy
Your Company recognizes that Risk Management is an integral part of good managementpractice. Risk Management is an essential element in achieving business goals and derivingbenefits from market opportunities. Accordingly the Board have approved and adopted a Riskmanagement policy. The company has constituted a risk Management Committee with thefunctional heads as its members.
The purpose of the policy is to achieve the Companys objectives in a dynamicenvironment as well as to effectively manage the risks arising and associated with itsbusiness. A Structured Risk Management framework
has been put in place covering various risks involved and to ensure that the risksattributed to the Company are identified analyzed and mitigated.
Vigil Mechanism / Whistle Blower Policy
In accordance with the requirements of the Companies Act 2013 your Company hasestablished a Vigil Mechanism / Whistle Blower Policy for Directors and Employees toreport genuine concerns. The said Policy meets the requirement of the Vigil Mechanismframework under the 2013 Act and the members can view the details of the policy on
Corporate social Responsibility
The Board of Directors of your Company has constituted the CSR Committee to help theCompany to frame monitor and execute the CSR activities.
As per Sec. 135 of the Companies Act 2013 the Board of every company referred to insub-section (1) shall ensure that the company spends in every financial year at least2% of the average net profits of the company made during the three immediately precedingfinancial years. Due to past losses contribution to Corporate Social responsibilityactivity will not be applicable to the Company this year.
Particulars of loans guarantees or investments under section 186 of the companies Act2013
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to the financial statements.
Internal Financial control and Adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to Companys policies safeguarding ofits assets prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial disclosures.
The office of M/s. S.R. Batliboi & Associates the Statutory Auditors of the Companywill expire at the conclusion of the ensuing Annual General Meeting and the Company has toappoint auditors for the Financial Year 2016-2017. In the last Annual General Meeting heldon 7th August 2015 M/s. S.R. Batliboi & Associates was appointed for a period of oneyear.
As per Sec. 139 (2) listed Companies and other specified Companies can appoint Auditfirms as their statutory auditors for two terms of five Consecutive years. If at theCommencement of the Act (ie: 1.4.2014) the said audit firm has already completed 10years then the Company shall appoint a new Audit firm to comply with the requirement ofSec 139 within a period of 3 years (on or before 31st March 2017).
The Management felt that it is prudent to make a change of audit firm in this yearitself and the Board recommends the appointment of M/s. Walker Chandiok & Co LLp asthe Statutory Auditors of the Company for a period of 5 years from the conclusion of thisAnnual General Meeting.
The Company has received necessary certificate from M/S. Walker Chandiok & Co LLpunder Sections 139 and 141 of the 2013 Act to the effect that they satisfy the conditionsunder the 2013 Act and the rules made thereunder for the above appointment. As requiredunder the SEBI (LoDR) Regulations 2015 the Statutory Auditors have also confirmed thatthey hold a valid certificate issued by the peer Review Board of the Institute ofChartered Accountants of India.
Comments on Auditors report
There are no qualifications reservations or adverse remarks or disclaimers made by theStatutory Auditors and Company Secretary in practice in their reports respectively. theStatutory Auditors have not reported any incident of fraud to the Audit Committee of theCompany in the year under review.
Material changes and commitments affecting the financial position of the Company whichhave occurred between march 312016 and may 20 2016 (date of the Report)
there were no material changes and commitments affecting the financial position of theCompany between the end of financial year (March 312016) and the date of the Report (May20 2016).
pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial personnel) Rules 2014 the Company hasappointed Mr. p. Sriram a Company Secretary in practice to undertake the SecretarialAudit of the Company. the Report of the Secretarial Audit Report is given as an Annexure -E and forms part of this Report.
Names of companies which have ceased / become subsidiaries / Joint Ventures /Associates
During the year there is no change in the status of any subsidiary.
Quality & information security
The vision of Quality and Information security at Allsec is to institutionalizeexcellence in quality of services and security of data of Clients customers andorganization by developing and deploying simple efficient and effective processes usingthe latest Quality models in accordance with ISo 9001:2008 interlined with data securitycontrols prescribed by International standards such as ISo 27001:2013. ISo 9001:2008(Quality Management System) & ISo 27001:2013 (Information Security Management) havebeen renewed at Chennai location and ISo 27001:2013 has been renewed for the Manilalocation. pCI DSS compliance certifications are renewed at Chennai and Manila locationsduring the year. Also this year we have got certified for ISo 27001:2013 at the DallasLocation. Further existing ISAE 3402 which is a graduated version of SAS 70 type IIcertification for the HRo business has been renewed.
Disclosure as per securities and Exchange Board of india (employees stock option schemeand employee stock Purchase scheme) Guidelines 2011
The details are given in Annexure -G to Directors Report
Conservation of energy technology absorption foreign exchange earnings and outgo
Since your Company is in the Information technology Enabled Services (ITES) businessthe provisions relating to conservation of energy and technology absorptions are notapplicable. the details of the earnings and expenditure in foreign currency are givenbelow:
Your company will constantly endeavor to give the best possible services to theinvestors. Towards this end the following are some of the initiatives taken by theCompany:
The investor Information section of the Website of the Company (
The Company has appointed M/s Karvy Computershare pvt Ltd as Registrars & Sharetransfer Agents for attending to issues relating to physical shares and routine servicesrequests.
Shareholders can also address any unresolved issues or information requests by postalmail to - Company Secretary Allsec technologies ltd 46B Velachery Main Road Chennai600042.
Shareholders are requested to update their email addresses with their respectivedepository participants so that the Company can provide better services at all times.
Your Directors wish to place on record their appreciation for the excellent support andco-operation given by customers shareholders service providers and Government Agencies.
Your Directors also record their appreciation and gratitude to Financial Institutionand Bankers for their continued support and timely assistance in meeting theCompanys resource requirements. Your Directors acknowledge the dedicated servicesrendered by all the employees of the company.
For and on behalf of the Board of Directors