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Allied Digital Services Ltd.

BSE: 532875 Sector: IT
NSE: ADSL ISIN Code: INE102I01027
BSE 00:00 | 26 Jul 67.45 3.20
(4.98%)
OPEN

67.35

HIGH

67.45

LOW

65.35

NSE 00:00 | 26 Jul 67.60 3.20
(4.97%)
OPEN

65.65

HIGH

67.60

LOW

64.85

OPEN 67.35
PREVIOUS CLOSE 64.25
VOLUME 30959
52-Week high 74.75
52-Week low 17.30
P/E 44.08
Mkt Cap.(Rs cr) 342
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 67.35
CLOSE 64.25
VOLUME 30959
52-Week high 74.75
52-Week low 17.30
P/E 44.08
Mkt Cap.(Rs cr) 342
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Allied Digital Services Ltd. (ADSL) - Chairman Speech

Company chairman speech

CMD

Mr. Nitin Shah

It gives me great pleasure to welcome you to the 26thAnnual General Meeting of yourCompany.

Industry outlook

The IT sector in India stood at US$177 billion in 2019 witnessing a growth of 6.1 percent year-on-year and is estimated that the size of the industry will grow to US$ 350billion by 2025.This is indicative of the fact that IT is continuously growing.

Road Ahead

The global sourcing market in India continues to grow at a higher pace compared to theIT industry. India is the leading sourcing destination across the world accounting forapproximately 55 per cent market share of the US$ 200-250 billion global services sourcingbusiness in 2019-20. Indian IT companies have set up over 1000 global delivery centers inabout 80 countries across the world.

India has become the digital capabilities hub of the world with around 75 per cent ofglobal digital talent present in the country.

Key Emerging Technologies

Nearly 46% of new revenue growth in technology sector is attributed to emergingtechnologies.

• loT hardware and software • AI Platforms/Applications
• SaaS + PaaS • Big Data/Analytics
• IoT connectivity • Enterprise Social Software
• Robotics/Drones • Next Gen Security
• AR/VR

It gives me great pleasure to welcome you to the 26thAnnual General Meeting of yourCompany.

Industry outlook

The IT sector in India stood at US$177 billion in 2019 witnessing a growth of 6.1 percent year-on-year and is estimated that the size of the industry will grow to US$ 350billion by 2025.This is indicative of the fact that IT is continuously growing.

Road Ahead

The global sourcing market in India continues to grow at a higher pace compared to theIT industry. India is the leading sourcing destination across the world accounting forapproximately 55 per cent market share of the US$ 200-250 billion global services sourcingbusiness in 2019-20. Indian IT companies have set up over 1000 global delivery centers inabout 80 countries across the world.

India has become the digital capabilities hub of the world with around 75 per cent ofglobal digital talent present in the country.

CMD

Mr. Nitin Shah

Smart Cities: The Future of Urban Development

The challenge of building a smart city far surpasses the "simple" engineeringobstacles to creating a fully connected urban environment. To employ a biological analogyit's more like genetic engineering than mechanical engineering and part of the solutionwill require rewriting a city's DNA — that is its people.

The engineering obstacles certainly are formidable. Any smart city worth its salt willpossess a fully integrated infrastructure with smart transportation services (includingautonomous vehicles) internet and communication systems water services and electricaland power grids all connected and unified. Such a massive city-wide system willundoubtedly require significant upgrades in infrastructural computing power just toprocess the massive amounts of raw data. New algorithms and AI programs will each havetheir roles to play and the largest cities will have an Intelligent Command & ControlCenter (iCCC) to monitor and manage centrally.

The future smart city will employ a number of purpose-built AI programs andmachine-learning algorithms to process the vast amounts of incoming "sensory"data. These programs will leverage rapid improvements in computing and neural networks inthe coming decades. In fact smart cities may witness the birth of the first truly"human-scale" AIs capable of reactive and independent cognition.

Your Company

Having bagged 4 prestigious Smart city projects we are poised to remain a leadingplayer in the Master System Integrator (MSI) space.

Industry 4.0 or the Fourth Industrial Revolution is the ongoing automation oftraditional manufacturing and industrial practices using modern smart technology. Muchbefore it became the buzzword your company with its Disruption driven strategy was at theforefront adopting smart technology and offering digital solutions across the spectrum ofvarious industries. This was a result of the thought leadership existing in the managementteam.

Allied Digital clientele include Fortune1000 large mid-size companies and Governmentbodies across the globe in multiple industry domains. As an MSI it provides IP basedsolutions and implements various SLA driven fixed priced ICT projects. These aremulti-year IT Infrastructure Management services (IMS) and Managed Security services (MSS)contracts which results into healthy annuity revenue.

Your company with an eye for the future generations has setup a 1200+ seaterco-incubation and co-workspace center in Navi Mumbai. The center will support selectedincubatees in their business models and mentor them from Idea stage to IPO. It has aCenter of Excellence (COE) for emerging technologies like AI/ ML Deep Learning IoTBlockchain AR/VR Cyber security etc. The facility will offer High Performance Computing(HPC) learning in multiple technologies and international standard classrooms forconducting training.

We have streamlined our internal processes with a new COE for Service delivery to scalenew bars and our HR function remains strong as ever with excellent leader at the helm andare ready to fly higher.

We have also expanded our direct global presence with offices in Europe too and as suchcover nearly all the continents.

Our focus has always been on the bottom-line rather than topline to ensure ourshareholders reap benefits from their reposed faith in the company. We are looking out forprojects with better margins.

We thank our investors for their patience during our transformation journey since webelieved in the dictum of "Small pain and long gain" and are pleased to say thatwe are entering the high growth phase version 6.0(disruption driven).

We are also very pleased to declare 10% dividend this year.

We are proud to announce that we are virtually debt free in Rupee terms and that toowithout selling any assets or diluting our stake in fact the promoters have increasedtheir shareholdings using preferential route.

Today in tough Covid-19 times the company is managing full operations seamlesslyunder "Work from Home" strictly adhering to high level security standards(Zerotrust strategy) based Business Continuity plan with the company's "Always- On"24x7x365 infrastructure in the cloud with secure access for the employees working fromhome.

The company firmly believes in its Corporate Social Responsibility and is helping thecommunity with suitable donations and assistance towards needy causes like foodeducation healthcare and religious nature etc.

Our progress has been appreciated and has resulted in several awards and accoladesbeing given to your company. (see details on page 7)

Outlook

Digital Disruption is the future. We plan to train personnel on newer technologies toresult into disruption in business models by leveraging IoT Big data Analytics AI andML.

We will Support Business Transformation using above skillsets by enablingcost-effective efficient solutions leveraging new technologies.

Allied Digital is positioning itself to be a major player as Global DigitalTransformation Architect focusing on B2B/B2G Smart Cities and other IP based solutions.

Our vision for the future includes remaining a front-runner in the digital economyspace and enabling the on-going lifestyle changes onto a unified digital platform

With warm regards

Nitin Shah

Chairman and Managing Director.

Your company is on an upwards growth trajectory. Government's Digital Initiatives inthe space of smart city safe city e-governance and ICT driven infrastructure projectswill boost India's IT sector. We are very strongly positioned in this vertical. Enterprisespace is also seeing a disruption in more unique service delivery model's like remoteinfrastructure management services with increasing focus on automation and support throughnetwork and security operations center.

Your company has adapted a unique partner driven business model leveraging upon largeIT and EPC companies increasing our market reach globally. Success of the partner model iscredited to the strong focus on improved service delivery capabilities.

Financial Year 2019-2020 has seen lots of major account wins in India and the US withan increasing presence in the European Markets. We have added two more smart city winstaking up our total tally to five cities four of which are currently under execution.These wins will allow sustained revenue growth for multiple forthcoming years.

Whole-time Director Mr. Prakash Shah

Pleased to inform that your Company has achieved an encouraging total consolidatedincome of INR 335.72 Crs. as against INR 243.84 Crs. in the previous financial year with arobust growth of 38% y-o-y basis whereas the total standalone income stands at INR 99.78Crs. as against INR 79.35 Crs. in the previous year with a growth of 26% on y-o-y basis.Company has substantially improved its profitability during the year and reportedconsolidated PAT of INR 19.22 Crs as against INR 12.37 Crs in the previous financial yearwith a staggering growth of 55% on y-o-y basis. Whereas standalone PAT stood at INR 7.88Crs as against INR 9.63 Crs of previous year in spite of not having exceptional incomeunlike previous financial year.

In continuation to on-going focus towards debt reduction it gives me great pleasure toinform that we have substantially reduced our debt which has also resulted in an increasein our profitability.

In continuation to on-going focus towards debt reduction it gives me great pleasure toinform that we have substantially reduced our debt which has also resulted in an increasein our profitability.

In the current COVID scenario our ability to provide scalable remote support along withend user computing services across a vast geography will led to a strong growth in thepipeline and further increase in profitability of the company. Our constant effort toupgradation of our facilities and skill set is allowing us to be the partner of choice forIT support and services.

With warm regards

Prakash Shah

Whole-time Director Executive Director Mr. Nehal Shah

Ladies and Gentlemen

It gives me great pleasure to welcome you to the 26th Annual General Meetingof your Company.

Expansion

I am pleased to inform you that your company has extended its Global footprint inEurope with our new office in DublinIreland which we see as an important market for us.We are already well established across the AmericasAsia Middle East and Australia.

Financials

The revenue growth of the company has been stellar during the year in question and ourrevenue has grown from Rs.244 crores in 18-19 to Rs.336 crores in 19-20.(38% growth). OurNPAT has grown by 55% in the same period. We have won large multi-year deals with annualprice escalation across the globe to ensure healthy sales growth for the coming years.This stupendous performance has been also a result of keeping our operational expensesunder strict control in these testing times and reducing our finance costs. We hope toachieve better results in the coming years and continue on the growth path.

Future Outlook

Your company is a well-established player in the IT Managed Services space and is aleading Master System Integrator in the country and globally. Digital Disruption is theway forward and your company is at the forefront with market leading offerings in EMTECH(emerging technologies) like IoT AIML Deep Learning. Robotics etc.

This ensures our service offerings are future-proof.

COVID-19

As you are all aware the world is grappling with the Global Pandemic and the race is onto find a cure and preventive vaccine for the Corona Virus.

In this scenario where travel is restricted we are keeping the lights on with"Work from Home" solutions and ensuring seamless operations for our customerswith innovative and secure technology to ensure there is no disruption either at ouremployee end or for our customers.

Technology is at the forefront with virtual office and other solutions and we believeyour company is in the right domain to reap the benefits with our unique IT offerings.

In fact it is safe to say that we are now a essential industry to ensure work happens.

We believe that your company is well poised to successfully tide over the challengesand emerge as a leading player in the IT Industry.

With warm regards

NehalShah

Executive Director n Chief Executive Officer Mr. Paresh Shah

Management Bytes Hello Investors

What a solid year it has been for all of us. The year 2019-20 has seen huge growth insales and is depicting in our revenue increase. The numbers clearly predict the growthpicture. We have continued to add new and also large customers in the US as well as inIndia. The sales and deliver teams have been on their toes executing on smart cities anddoing transition of newly acquired global enterprise service customers.

More importantly it has been a perfect blend of business strategy flawless executionand committed customer relationship management. We continued to apply breaks on ourfinance costs and have further improved our operational strengths in Europe. We baggedanother smart city project in the early quarters and have witnessed consistent upsurge insales every quarter. This speaks about growth consistency and good management governance.The year further ended on a brighter side of releasing our new software platform ADiTaaS5.0 and creating a new global "center of excellence" in service delivery.Besides we have created a huge capacity of office space at our Mahape premises inanticipation of growing opportunities for the company.

The current year has started with a big challenge of the Covid-19 pandemic. Globallyit has triggered a huge economic pressure. Along with several industries IT industry toois impacted. But fortunately I would like to say that we see ourselves as ‘mildlyimpacted'. The savior has been our annuity contracts which are keeping the "lightson" of so many customers. The other factor is our ability to stretch and go the extramile during the crisis. Further we have been absolutely on the dot in our servicedelivery due to our "Always-On" infrastructure and business continuityplanning. Our resources are able to work remotely and as well we are able to take somestrategic decisions to provide services as "Essential" to critical customerssuch as healthcare and government. This meticulous business continuity planning has givenus some great customer appreciation. During this tough time the management team hashuddled to invest time in sharpening our technology skills initiating new business lineslike loT and AI and propelling new marketing plans to bounce higher when macro-economicfactors improve.

As the year further unfolds global business growth would start their upward journey bythe end of third quarter. Our strengthened business development engines will generate newwins. Our sharpened resource skills and continued customer satisfaction and valueofferings should help farm more revenues from existing customers. The new partnershipswill open new sales pipelines and our next generation technology adoptions in AI and loTwill scale our long-term growth. For us the drivers will continue to be in largeenterprise contracts and smart city related opportunities. We see acceleration on cloudand managed security business and our readiness in AI (Artificial Intelligence) RoboticProcess Automation and IoT is soon going to take a growth path in the last quarter. Wesee the current situation as an opportunity for introspection and preparation for next biggrowth thus our outlook remains positive.

Thanks to the management vision and continued support from you all I strongly believethat our motto of "Passion Teamwork and Innovation" will withstand thechallenging economic weather and we will remain tall backed by robust company growth andyour trust in us.

With warm regards

Paresh Shah

Chief Executive Officer

Integrated Solutions Group

It is my pleasure to inform you that your company was successful in winning three moreSmart City Projects during the year: Aurangabad Smart City Bidkin (Maharashtra) andKalyan Dombivli Smart City Projects in Consortium Biddings. The contract period for theseprojects are for five years with assured revenue and growth potential due to possibleexpansions and scaling up of the scope during this period.

Presently these projects are under execution in addition to Rajkot Smart City that isnearing completion. Each of these projects addresses issues related to their specificlocation with solution portfolio that deals with these challenges to provide betterquality of life for its citizens leveraging on emerging technology for efficientGovernance. Delivering such projects enhances your company's established core competencyas a leading Master Systems Integrator (MSI) in the country.

Furthermore your company has taken measures to create inhouse development capabilityfor some solution component that integrates several autonomous systems and theirtechnologies. One such result of this initiative is the in house developed IP based PublicAddress System (PAS) and its Software that unlike competitive proprietary Public AddressSystem runs on the existing IT infrastructure such as Server and the digital backbonenetwork. The in house developed IP PAS

CEO (ISG)

Mr. Jawahar Ali

integrates with the Video Surveillance System with analytics software to detectviolation of social distancing norms and on detection automatically make publicannouncement by playing pre-recorded messages at those sites. Similarly it can beprogrammed to integrate with other systems such as CCTV or Access Control to detect anydefined event and make appropriate announcement automatically. Of course manualannouncement can also be made if required.

Through In-house development such as mentioned above your company is able to achievesignificant reduction in total cost of ownership of the entire solution giving itcompetitive advantage in bidding and post winning in Operation and Maintenance for thesolution life cycle. Your company strives to reduce dependencies on certain costlythird-party proprietary systems through inhouse innovative development and solutions.

Many Enterprise class Physical Security Projects such as Critical Infrastructureprotection Smart Campus Smart City Retail and Malls are now adopting emergingtechnology that uses Artificial Intelligence (AI) that enhances the capability of systemssuch as Video Surveillance with Video Analytics for detecting presence and movement ofpeople Crowd gathering and direction of movement Face Recognition Access Control Systemand Perimeter protection system. Your company has aligned with leading internationalorganizations that offers such solution and also scaling up its own capability in creatingAI and Machine Learning (ML) based solution.

Some states especially those in the coastal regions as part of National Cyclone RiskMitigation Project (NCRMP) have floated RFPs for Early Warning Dissemination System (EWDS)to Alert people in the area of impending cyclone or event that could cause disaster on alarge scale. Most of these systems are deployed on the ICT infrastructure requiringIntegration of multiple systems and your company is participating in these opportunitiesas an MSI. More states will opt for EWDS systems and these projects are generally fundedby the World Bank.

The Covid 19 Pandemic and the Lock down has impacted the industry with some delay inexecution of the projects and finalization of many contracts. The industry has made effortto overcome these challenges by adopting practises such as Work from Home. As thesemeasures have been implemented globally by almost all organization there has been a changein the work culture. With the availability of various platforms and their increased usagethere has also been an improvement in efficiency in remote working conditions. Yourcompany has successfully adapted its operations to align with the demands of remoteworking.

In addition to the existing Pune Safe City project the acquisition of five smart cityprojects with their contract period spanning over five years and with its participation inopportunities in EWDS Critical infrastructure protection Banks Retail Space and otherSmart City projects your company is positioned to increase its market share in theIntegrated solutions business.

With warm regards

Jawahar Ali

CEO-ISG

.