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Allsec Technologies Ltd.

BSE: 532633 Sector: IT
NSE: ALLSEC ISIN Code: INE835G01018
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OPEN 509.00
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VOLUME 1698
52-Week high 748.60
52-Week low 415.30
P/E 31.18
Mkt Cap.(Rs cr) 771
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 509.00
CLOSE 508.40
VOLUME 1698
52-Week high 748.60
52-Week low 415.30
P/E 31.18
Mkt Cap.(Rs cr) 771
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Allsec Technologies Ltd. (ALLSEC) - Director Report

Company director report

The Directors take pleasure in presenting to you the 23rdAnnual Report of the Company covering the Financial Year ended March 312022.

1. Financial Performance

(? In Lakhs)

STANDALONE CONSOLIDATED
YEAR ENDED YEAR ENDED
31-Mar-22 31-Mar-21 F/(A) (in %) 31-Mar-22 31-Mar-21 F/(A) (in %)
Revenue from Operations 22121 18865 17% 31720 27669 15%
Total Costs 17981 15189 (18%) 23697 21079 (12%)
EBIDTA 4140 3676 13% 8023 6590 22%
EBIDTA (%) 19% 19% 25% 24%
Other Income (9788) (381) 2469% (645) (364) 77%
Depreciation and amortization expense 1805 1719 (5%) 2345 2339 0%
Finance costs 181 210 14% 208 244 15%
Profit before exceptional items and tax 11942 2128 461% 6115 4371 40%
Profit after tax 9753 1597 511% 3564 3512 1%

*F / (A) stands for Favourable / Adverse

2. Business Outlook

The Company operates two business segments namely the Human ResourcesOperations (HRO) business that caters to the payroll and other HR service we provide toour clients and the Digital Business Services (DBS) business which provides the voice andnon-voice services to domestic and international clients. The DBS business is deliveredout of India and Manila with capability to deliver from America as well. The HRO businessis largely delivered out of India and Manila.

FY22 was a year of recovery after what was a COVID-19 impacted FY21.The pandemic did have an impact in the first quarter of the current financial year aswell. However we have seen return to near normal by end of the financial year with mostprocesses reverting to work from home by end of the year. We have also seen increase inbusiness activities and faster decision making at the customer end.

The DBS international business has had a great year with good saleswins in the North American market and we believe that this trend will continue in thecoming years as well.

Domestic DBS was largely impacted during Q1 FY22 and has since bouncedback and ended the year strongly.

HRO business has returned to normalcy with growth coming from both newcustomer wins and organic increase in our existing customer payroll count. We crossed thesignificant milestone of processing more than 1 million monthly payslips during thecurrent year which is a testament to our strong and scalable technology infra.

The Operational financial performance of your Company continued toimprove during this year. Profit before Tax and Exceptional Item (PBTE) stood at '11942lakhs as compared to '2128 lakhs in the previous year. Your Company has reported Netprofit after tax for the current year at '9753 lakhs as compared to Net profit after taxof '1597 lakhs for the previous year.

Consolidated Revenues for the year stands at '31720 lakhs as comparedto '27669 lakhs in the previous year. Consolidated Profit before Tax and Exceptional Itemincreased to '6115 lakhs from '4371 lakhs in the previous year. Net profit after taxstood at '3564 lakhs from '3512 lakhs in previous year. Detailed analysis of the resultsforms part of the Management Discussion and Analysis (MD&A) report provided separatelyas part of the Annual Report.

The Company has delivery centers in India at Chennai Bengaluru &NCR locations. On the international front Allsec has centers in Manila (Philippines) andDallas (United States of America).

There is no change in the nature of the Company's business.

3. Reserves

The Company has not transferred any amount to the general reservesduring the year under review.

4. Transfer of Unclaimed Dividend to Investor Education and ProtectionFund

There are no unclaimed dividend that are outstanding for more than 7years and therefore no amounts are required to be transferred to Investor Education andProtection Fund under Section 125(2) of the Act.

5. Dividend

Your Company declared an interim dividend of '15/- per equity share onApril 29 2021 and second interim dividend of '45/- per equity share on October 28 2021.The Board does not recommend any final dividend for the year.

6. Dividend Distribution Policy

Pursuant to Regulation 43A of the Listing Regulations the Board ofDirectors of the Company has formulated a Dividend Distribution Policy. The dividend ifany to be declared in the future will be paid as per this policy depending on a number ofparameters including but not limited to the Company's profits capital requirementsoverall financial condition contractual restrictions and other factors consideredrelevant by the Board. The Dividend Distribution Policy adopted by the Company isavailable on the Company's website which can be accessed using the linkhttps://www.allsectech.com/ investor-information/

7. Share Capital

The paid up Equity Capital of the Company as on March 312022 stood at'152383260/-

8. Subsidiary Companies

The Company has two subsidiaries as at year end namely Allsectech Inc.USA and Allsectech Manila Inc. Philippines.

The Consolidated Financial statements of the Company and itssubsidiaries are prepared in accordance with Indian Accounting Standards and forms anintegral part of this Annual Report.

The Annual Accounts of the said subsidiaries and the related detailedinformation will be made available to the investors of the Company seeking suchinformation at any point of time. Performance and financial position of subsidiariesincluded in consolidated financial statements of the Company in format AOC-1 is providedin Annexure - G.

The Company monitors performance of subsidiary companies (list ofsubsidiary companies has been provided in the financial statements) inter-alia by thefollowing means:

a) Allsectech Manila Inc is a material subsidiary of the Company andhence an Independent Director from your Company will be appointed in Allsectech Manila Incas per the requirements of SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015.

b) The Audit Committee reviews the financial statements of thesubsidiary companies on a quarterly basis.

c) Your Company has formulated a Policy on Material Subsidiary asrequired under SEBI (LODR) Regulations 2015 and the policy is hosted on the website ofthe Company under the web link https:// www.allsectech.com/investor-information/

9. Particulars of loans guarantees or investments under Section 186 ofthe Companies Act 2013

Details of loans guarantees and investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the Notes to thefinancial statements forming an integral Part of the Annual Report.

10. Management Discussion & Analysis:

In terms of Regulation 34 of SEBI (LODR) Regulations 2015 theManagement Discussion and Analysis report is given as Annexure - B.

11. Directors

The Board of Directors of your Company consists of three (3)Non-Executive Non-Independent Directors and three (3) Non-Executive Independent Directors.All the Directors of your Company have rich background of highly productive leadership andmanagement. The details of the members of the Board is given in the Corporate Governancesection of the Annual Report.

a. Director retiring by rotation

In accordance with the provisions of Section 152 of the Act read withrules made thereunder and the Articles of Association of the Company Mr. Ajit AbrahamIssac (DIN: 00087168) is liable to retire by rotation at the ensuing AGM and beingeligible has offered himself for re-appointment. A resolution seeking shareholders'approval for his reappointment forms part of the Notice.

b. Key Managerial personnel

The Key Managerial Personnel of Allsec Technologies Limited upto thereport date are mentioned below:

1. Mr. Ashish Johri - Chief Executive Director

2. Mr. Raghunath P - Chief Financial Officer

3. Mr. Gagan Preet Singh - Company Secretary (till January 312022)

4. Ms. Sripiriyadarshini - Company Secretary (appointed on May 142022)

c. Appointment of Directors & Key Managerial Personnel

The Board approved the appointment of Mr. N. Ravi Vishwanath (DIN:07332234) as an Additional Director in the capacity of Non-Executive Non-IndependentDirector of the Company with effect from April 12021 on the recommendation of the NRCwith the approval of shareholders accorded in the 22nd AGM held on September 92021.

The Board approved the appointment of

Mr. Guruprasad Srinivasan (DIN: 07596207) as an Additional Director inthe capacity of NonExecutive Non-Independent Director of the Company with effect fromFebruary 11 2022 on the recommendation of the NRC with the approval of shareholdersaccorded through the Postal Ballot. The appointment was approved by the shareholders onApril 30 2022.

The Board approved the appointment of

Ms. Sripiriyadarshini as the Company Secretary and Compliance Officerof the Company with effect from May 14 2022 on the recommendation of the NRC. Ms.Sripiriyadarshini joined the Company on April 22 2022.

d. Resignation of Directors & Key Managerial Personnel

Mr. Krishna Suraj Moraje resigned from his directorship with effectfrom the close of the business hours on February 10 2022.

Mr. Gagan Preet Singh resigned from the position of Company Secretaryand Compliance Officer with effect from the close of business hours on January 312022.

12. Independent Directors and Board Evaluation

a. Declaration of Independence

The Independent Directors of the Company have declared that they meetthe criteria of Independence in terms of Section 149(6) of the Companies Act 2013Regulation 25 of the SEBI (LODR) Regulations 2015.

During the year under review the Non-Executive Directors of theCompany had no pecuniary relationship or transactions with the Company other than sittingfees commission if any and reimbursement of expenses incurred by them for the purposeof attending meetings of the Board/ Committees of the Company.

None of the Directors of the Company is disqualified for beingappointed as Directors as specified in Section 164(2) of the Act and Rule 14(1) of theCompanies (Appointment and Qualification of Directors) Rules 2014.

b. Annual Board Evaluation

Pursuant to Section 134(3) of the Companies Act 2013 & Rule 8 ofthe Companies (Accounts) Rules 2014 and the Listing Regulations a structuredquestionnaire was prepared considering the various aspects of Board functioning andcomposition of Board committees and used to evaluate the performance of the Board. TheIndependent Directors considered / evaluated the performance of the Non-IndependentDirectors at a meeting without the Non-Independent Directors.

The Board members subsequently evaluated performance of the Board theCommittees and Independent Directors as per the criteria and questionnaire developed forthe purpose and the Board of Directors expressed their satisfaction with the evaluationprocess.

c. Familiarisation Programme

Your Company follows an orientation and familiarization programmethrough various reports / codes / internal policies for all the Directors with a view toupdate them on the Company's policies and procedures on a regular basis. Periodicpresentations are made at the Board Meetings on business and performance long termstrategy initiatives and risks involved. The details about the familiarization programhave been posted in the website of the Company under the web link https://www.allsectech.com/investor-information/

13. Directors' Responsibility Statement

The Board of Directors acknowledges the responsibility of ensuringcompliance with the provisions of Section 134(3)(c) of the Companies Act 2013. To thebest of their knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statements:

Your Directors confirm the following that:

a. In preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

b. The Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;

c. The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concernbasis.

e. Proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively.

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

14. Business Responsibility Report:

As stipulated under Regulation 34 of the Listing Regulations theBusiness Responsibility Report describing the initiatives taken by the Company fromenvironmental social and governance perspective forms a part of the Annual Report as‘Annexure - F'.

15. Audit & Auditors

a. Statutory Auditors

M/s. Deloitte Haskins and Sells Chartered Accountants the StatutoryAuditors of the Company were appointed at the 20th Annual General Meeting heldon September 30 2019 for a period of 5 years. The Company has received necessarycertificates under Sections 139 and 141 of the Companies Act 2013 to the effect thatthey satisfy the conditions under the Act and the rules made thereunder for the aboveappointment. As required under the SEBI (LODR) Regulations 2015 the Statutory Auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.

b. Internal Auditors

The Board on the recommendation of the Audit Committee in its meetingheld on July 19 2021 had approved the appointment of M/s. Ernst & Young as theInternal Auditors of the Company for FY22 to conduct the audit on basis of a detailedinternal audit plan which is reviewed each year in consultation with the Internal AuditTeam and the Audit Committee. Internal Auditors give presentations and provide a report tothe Audit Committee on a quarterly basis. The Board on the recommendation of the AuditCommittee has re-appointed M/s. Ernst & Young as the Internal Auditors for theFinancial Year 20222023.

c. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/s. Mohan Kumar & Associates Practicing Company Secretaries toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is given asan Annexure - C and forms part of this Report.

Pursuant to Regulation 24A of the Listing Regulations a SecretarialCompliance Report for the financial year ended March 312022 forms part of Annexure C.

d. Comments on Auditors' Report

There are no qualifications reservations or adverse remarks ordisclaimers made by the Statutory Auditors and Company Secretary in Practice in theirreports respectively. The Statutory Auditors have not reported any incident of fraud tothe Audit Committee of the Company in the year under review.

16. Risk Management

Risk Management is an integral part of the business process. Pursuantto Section 134(3)(n) of the Companies Act 2013 the Company has developed and implementeda Risk Management Policy. The policy has been approved by the Risk Management Committee ofthe Company on October 28 2021. The Policy envisages identification of risk andprocedures for assessment and minimization of risk. Policy adopted by the Company isavailable on the Company's website which can be accessed using the linkwww.allsectech.com/ investor-information.

17. Internal Financial Control and Adequacy

The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to Company's policiessafeguarding of its assets prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial disclosures. The Internal Audit is performed by an external agency and the mainscope of the Audit is to test and review controls appraisal of risks and businessprocesses besides benchmarking controls with best practices in the Industry. Additionallythe Company engages an external agency to review the internal controls on financialreporting. There are no observations from the said review.

18. Related Party Transactions

The Company has formulated a policy on Related Party Transactions asapproved by the Board and the same is uploaded on the Company's website https://www.allsectech.com/investor-information/

All the Related Party Transactions that were entered into by theCompany during the Financial Year 2021-22 were on an arm's length basis and were inthe ordinary course of business. All repetitive Related Party Transactions are placedbefore the Audit Committee are within the Omnibus Approval limits obtained in accordancewith the requirements of the SEBI (LODR) Regulation 2015. The transactions entered intopursuant to such approval are placed periodically before the Audit Committee.

There are no materially significant related party transactions made bythe Company with Promoters Directors Key Managerial Personnel which may have a potentialconflict with the interest of the Company at large. None of the Directors has anypecuniary relationships or transactions vis-a-vis the Company otherwise than disclosed inthe Corporate Governance Report forming part of this report.

19. Nomination & Remuneration Committee and Policy

The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Company's policy lays down the policy forappointment and remuneration including criteria for determining qualifications positiveattributes and independence are provided in the Corporate Governance Report forming partas an Annexure - A to this Report. The policy on remuneration can be accessed at web link- https://www.allsectech.com/investor-information/

Criteria for making payments to Non-Executive Directors

The criteria for making payment to Non-Executive Directors is availableon the website of the Company at https://www.allsectech.com/investor-information/

20. Disclosure as per Securities and Exchange Board of India (EmployeesStock Option Scheme and Employee Stock Purchase Scheme) Guidelines 2011

There are no Employee Stock Option Plan that is currently in vogue.

21. Particulars of Employees

The information relating to Employees to be given under Section 197(12)of the Companies Act 2013 is given in Annexure - D.

22. Corporate Governance

Your Company is compliant with the requirements under SEBI (LODR)Regulations 2015. The report on Corporate Governance and the CEO / CFO certification isattached in Annexure - A.

Certificate from Practicing Company Secretaries confirming thecompliance of conditions of Corporate Governance is included in Annexure - A.

23. Vigil Mechanism / Whistle Blower Policy

In accordance with the requirements of the Companies Act 2013 yourCompany has established a Vigil Mechanism / Whistle Blower Policy for Directors andEmployees to report genuine concerns. The said Policy meets the requirement of the VigilMechanism framework under the Companies Act 2013 and the members can view the details ofthe policy on https://www.allsectech. com/investor-information/. No member has been deniedaccess to Vigil Mechanism and no complaints have been received during the year.

24. Conservation of energy technology absorption foreign exchangeearnings and outgo

Since your Company is in the Information Technology Enabled Services(ITES) business the provisions relating to conservation of energy and technologyabsorptions are not applicable.

The details of the earnings and expenditure in foreign currency aregiven below:

Particulars 'in Lakhs
Earnings in Foreign Currency 6625
Expenditure in Foreign Currency 322

25. Corporate Social Responsibility

The Board of Directors of your Company has constituted the CSRCommittee to help the Company to frame monitor and execute the CSR activities.

As per Section 135 of the Companies Act 2013 the Board of everyCompany referred to in sub-section (1) shall ensure that the Company spends in everyfinancial year at least 2% of the average net profits of the Company made during thethree immediately preceding financial years.

As per Computations made under Section 198 of the Companies Act 2013the Company must contribute approximately '51.14 lakhs as CSR Contribution. During thefinancial year 2021-22 the CSR Committee of the Company had a meeting on January 27 2022which approved the contributions made and proposed to the tune of '51.14 Lakhs towardshealthcare and education which falls under the categories prescribed in Schedule VII ofthe Companies Act 2013 under (i) Eradicating hunger poverty and malnutrition promotinghealth care including preventive health care and sanitation including contribution to theSwach Bharat Kosh set-up by the Central Government for the promotion of sanitation andmaking available safe drinking water (ii) promoting education including special educationand employment enhancing vocational skills specially among children women elderly andthe differently abled and livelihood enhancement project.

The report on CSR activities as required under the Companies (CorporateSocial Responsibility Policy) Rules 2014 is annexed as Annexure - E and forms an integralpart of the this Report. The policy has been uploaded on the Company's website at theLink https:// www.allsectech.com/investor-information/

26. Secretarial Standards

Pursuant to the provisions of Section 118 of the Act the Company hascomplied with the applicable provisions of the Secretarial Standards issued by theInstitute of Company Secretaries of India ("ICSI") and notified by the Ministryof Corporate Affairs ("MCA").

27. Public Deposits

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

28. Details of significant and material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status and Company operations in future

There were no significant and material orders passed by the RegulatorsCourts or Tribunals that would impact the going concern status of the Company'soperation in the future.

29. Board Meetings held during the year

During the year five (5) meetings of the Board of Directors were held.The details of the meetings are furnished in the Corporate Governance Report which isattached as Annexure - A to this Report.

30. Extract of Annual Return

In terms of Section 92(3) read with Section 134(3)(a) of the CompaniesAct 2013 and Rule 12 of the Companies (Management and Administration) Rules 2014 anextract of the annual return in the prescribed format is available athttps://www.allsectech.com/investor-information/

31. Information Required Under Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013:

In order to comply with provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunderthe Company has formulated and implemented a policy on prevention prohibition andredressal of complaints related to sexual harassment of women at the workplace. All womenemployees either permanent temporary or contractual are covered under the above policy.The said policy has been uploaded on the internal portal of the Company for information ofall employees. An Internal Complaint Committee (ICC) has been set up in compliance withthe said Act.

32. Material changes and commitments affecting the financial positionof the Company which have occurred between March 312022 and May 14 2022 (date of theReport)

There are no material changes and commitments affecting the financialposition of the Company which has happened between March 312022 and May 14 2022.

33. Names of Companies which have ceased / become Subsidiaries / JointVentures / Associates

No changes during the year.

34. Quality & Information Security

The Company has a robust Quality Management and Information SecurityManagement system in place to identify the potential risks areas of improvement andfurther to have smooth business operations.

ISO 9001:2015 Quality Management System certification for Chennaifacility and ISO 27001:2013 Information security management system certification for allAllsec's facilities in Chennai Bengaluru Noida and Manila cities globally wererenewed in Q4 of 2021-22 and these are valid for next one year period.

We renewed PCI DSS Compliance certification for Bengaluru and Noidafacilities in Q3 of this year. In Q3 of this year we renewed HIPAA certification also forChennai facility. HIPAA Certification is a mandatory compliance requirement for theprograms / center where we deal with Electronic Protected Health Information (EPHI) of USCitizens.

The PCI DSS compliance certifications for Chennai and Manila facilitiesin DBS vertical are in progress of renewal in Q4 of 2021-22 i.e. audits are in progresswhich would be completed by April 22 end. Once renewed this will be valid for thefinancial year 2022-23.

Existing SSAE 18 / ISAE 3402 SOC1 Type II which is a graduatedversion of SAS 70 Type II audit reporting for HRO payroll business has been renewed duringthe year 2021-22. We perform this thrice in a year for different time periods of afinancial year to cater to different clients' requirements. This increased frequencymakes the system more robust.

General Data Protection Regulation (GDPR) is a regulation in EU law ondata protection & privacy for all individuals within the European Union (EU). It alsoaddresses the requirements to be fulfilled for export of personal data from EU to outsidethe EU. This act is applicable to all entities which can be located anywhere in the worldand have to mandatorily deploy the GDPR framework and controls if they collect or processpersonally identifiable information (PII) of EU citizens or those residing in EU. Weestablished GDPR framework three years ago. We continued strengthening the controls andour system in line with this regulation for the business lines where it is applicable.

Further we continued our efforts in strengthening the systems deployedto fulfill the compliance requirements of Philippines data privacy act and CaliforniaConsumer Privacy Act (CCPA) for the client programs where these Acts are applicable.

35. Environment Health & Safety

The Company is conscious of the importance of environmentally clean andsafe operations. The Company's policy requires conduct of operations in such a mannerso as to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.

36. Investor Services

Your Company will constantly endeavor to give the best possibleservices to the investors. Towards this end the following are some of the initiativestaken by the Company:

The investor Information section of the Website of the Company(www.allsectech.com) furnishes important financial details and other data of frequentreference by the investors as per the Regulation 46 of SEBI (LODR) Regulations 2015. TheCompany also has a Stakeholders' Relationship Committee to address shareholders'grievances if any and resolve them as & when they are reported. The Company hasprovided an exclusive email id: investorcontact@allsectech.com for the investors tofacilitate the redressal of the queries and complaints of the investors.

The Company has appointed M/s. KFin Technologies Pvt Ltd as Registrars& Share Transfer Agents for attending to issues relating to physical shares androutine services requests.

Shareholders can also address any unresolved issues or informationrequests by postal mail to - Company Secretary Allsec Technologies Ltd 46C VelacheryMain Road Velachery Chennai 600042.

Shareholders are requested to update their email addresses with theirrespective depository participants so that the Company can provide better services at alltimes.

37. Acknowledgement

Your Directors wish to place on record their appreciation for theexcellent support and co-operation given by customers shareholders service providers andGovernment Agencies.

Your Directors also record their appreciation and gratitude toFinancial Institution and Bankers for their continued support and timely assistance inmeeting the Company's resource requirements. Your Directors acknowledge the dedicatedservices rendered by all the employees of the Company.

.