Allsec Technologies Ltd.
|BSE: 532633||Sector: IT|
|NSE: ALLSEC||ISIN Code: INE835G01018|
|BSE 15:41 | 27 Mar 2018||Allsec Technologies Ltd|
|NSE 05:30 | 01 Jan 1970||Allsec Technologies Ltd|
|Mkt Cap.(Rs cr)||512|
|Mkt Cap.(Rs cr)||512|
Allsec Technologies Ltd. (ALLSEC) - Director Report
Company director report
The Directors take pleasure in presenting to you the 16th Annual Report of the companycovering the financial year ended 31st March 2015.
(Rs. In Lakhs)
The Board of Directors of your Company does not recommend any dividend for theFinancial Year 2014-15 in view of the losses incurred during the year.
Your Company has progressed well in the Domestic business during the year and has addedclients with better pricing resulting in an increase of 33% in revenues over the previousyear. Capacity utilization in domestic business is better and we expect that the profitsfrom this division will increase in the coming years.
HR BPO division is a vertical which is growing organically for us in India and thiswill continue to do so in the coming years. HR BPO services will also be expanded to newgeographies. We have added clients in Manila during the year and are confident ofincreasing our client base in Manila in the coming years. The new markets in Manila aswell as in the Middle East will be a key growth area for the future. Efforts will beincreased to market HR BPO services in destinations like Philippines Middle East and inthe US in the coming year. We believe that the HR BPO business will see significant growthin the next 2 years.
Exports revenue has decreased by 45% in USD terms because of a ramp down of one of ourmajor customers due to change in UK legislation relating to payday loans. Since theexchange rate was almost at similar levels the reduction in local currency terms was at44%. Economy in US and UK is now showing signs of improvement and we believe that we willbe able to expand our exports revenue in the next few years. We are increasing themarketing activity both by increasing the feet on street sales force as well as by addingto the marketing team in India for more targeted marketing. With additional focus onbusiness development in US/UK and in some new geographies your company believes thatgrowth in business in exports will happen and profitability will improve substantially inthe coming years.
Profit before Interest Depreciation and Tax (EBIDTA) has decreased from INR 1329 Lakhsto INR 486 Lakhs due to reduction in exports business as stated in the previousparagraphs. Your company has reported Net Loss after tax for the current year at INR 174Lakhs as compared to Net Profit after tax of INR 543 Lakhs for the previous year. Detailedanalysis of the Standalone results forms part of the Management Discussion and Analysis(MDNA) report is attached as Annexure C to this report.
Consolidated performance of your Company was however better during the year mainly dueto profits in Manila Operations and reduced losses in Retreat. Though ConsolidatedRevenues have come down to INR 15086 Lakhs from INR 19962 Lakhs in 2013-14 the Net Losseson a consolidated basis have come down significantly to INR 1406 Lakhs from INR 3714 Lakhsin the last year. Manila Operations reported a Net Profit of INR 290 Lakhs as compared toNet Loss of INR 130 Lakhs in 2013-14. The improvement in performance was significant insecond half of 201415 and your Company has posted a Net Profit of INR 10 Lakhs in the lastquarter on a Consolidated basis.
The company continues to pursue growth through the Organic route and see traction forgrowth in both the US and Domestic Markets. The company has delivery centers in India andManila for the international segment has Domestic delivery centers in major cities inIndia which has the capability to offer delivery in multiple Indian languages.
Quality & Information Security
The vision of Quality and Information security at Allsec is to institutionalizeexcellence in quality of service and security of data of Clients customers and theOrganization by developing and deploying efficient and effective processes using thelatest Quality models in accordance with ISO 9001:2008 interlined with data securitycontrols prescribed by International standards such as ISO 27001:2013. As part of itscontinuous
improvement program ISO 9001:2008 (Quality Management System) has been renewed andexisting ISO 27001:2005 (Information Security Management) has been transitioned upgradedand certified to an upgraded version of the standard i.e. ISO 27001:2013 at Chennailocation. PCI DSS compliance certifications are renewed at Chennai and Manila locations ofyour company during the FY 2014-15. Manila location of your company is also certified forthe upgraded version of the information security standard i.e. ISO 27001:2013. Furtherexisting ISAE 3402 which is a graduated version of SAS 70 Type II certification for the HRBPO business has been re-certified to ensure consistency with business and market needs inHR outsourcing. A healthy information security management system is deployed in RetreatCapital Management Inc. as well and the process to get this unit certified for ISO27001:2005 and transition to ISO 27001:2013 is in progress now. Several client audits oninformation security and data privacy took place at all our service delivery locations andresults indicated that the company accomplished required compliance with their contractualand standards requirements.
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:
Mr. A. Saravanan Director retires at the ensuing Annual General Meeting and beingeligible offer himself for re-appointment.
Mr. Kapil Modi a Director who was appointed as an Additional Director and who holdsoffice as such upto the date of Sixteenth 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.
Kapil Modi as a candidate for the office of Director and accordingly a resolution willbe placed before the members at the forthcoming Annual General Meeting.
Ms. Lalitha Sankaran a Director who was appointed as an Additional Director and whoholds office as such upto the date of Sixteenth Annual General Meeting of the Company andin respect of whom Notice under section 149(6) of Companies Act 2013 has been receivedfrom members signifying their intention to propose Ms. Lalitha Sankaran as a candidate forthe office of Director and accordingly a resolution will be placed before the members atthe forthcoming Annual General Meeting.
Dr. Krishnakumar Srinivasan who was originally appointed by the shareholders at theirAnnual General Meeting held on 14th August 2014 as an Independent Director under Section149 of the Companies 2013 is redesignated as a Director of the Company. This was approvedby the Board of Directors in their meeting held on 20th May 2015 and a resolution is nowbeing placed before the members of the Company for the re-designation of Dr. KrishnakumarSrinivasan as a Director whose Office is liable to retire by rotation.
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 requirements under Companies Act 2013 and thedetails are enumerated below:
Extract of Annual Return
An Extract of the Annual Return as of 31st March 2015 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 5 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 andbelief and according to the information and explanations obtained by them your Directorsmake the following statements:
Your Directors confirm the following:
i. That in preparation of the annual accounts the applicable accounting standards hadbeen followed
along with proper explanation relating to material departures;
ii. That 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;
iii. That 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. That the directors had prepared the annual accounts on a going concern basis.
v. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
vi. That proper systems were in place so as to ensure compliance with the provisions ofall applicable laws and were adequate and operating effectively.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and fixingtheir remuneration. The Companys policy on appointment and remuneration is providedin the Corporate Governance Report forming part as an Annexure A to this Report.
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 Annexure E tothis Report.
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.
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 2014-15 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 Listing Agreement. Thetransactions entered into pursuant to such approval are placed periodically before theAudit 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 contracts with Related parties are available in Form AOC-2 which is attachedas Annexure F.
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 theRisk Management 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 frame work has been put in place covering variousrisks involved and to ensure that the risks attributed to the Company are identifiedanalyzed and mitigated.
Corporate Social Responsibility (CSR)
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 leasttwo per cent. of the average net profits of the company made during the three immediatelypreceding financial years. Since the average net profits of your Company during the pastthree financial
The Key Managerial Personnel of Allsec Technologies Limited are mentioned below:
1. Mr. R. Jagadish - CEO & Director
2. Mr. A. Mohan Kumar - Company Secretary
3. Mr. K. Narasimhan - Chief Financial Officer
Your company has not accepted any deposit from the public during the period underreview and did not have any outstanding deposits.
Key Managerial personnel
years is not positive contribution of 2% to Corporate Social responsibility activitywill not be applicable to the Company.
Independent Directors & Board Evaluation
In order to improve the effectiveness of the Board and its Committees as well as theeffectiveness of each individual Director the Board carried out an annual performanceevaluation of its own performance and that of its committees and the directorsindividually.
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.
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 performance long term strategy initiatives andrisks involved. The detail about the familiarisation programme have been posted in thewebsite of the Company under the web linkhttp://www.allsectech.com/Allsec/investor-information. aspx
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 Employees and othersto report genuine concerns. The said Policy meets the requirement of the Vigil Mechanismframework and the members can view the details of the policy onhttp://www.allsectech.com/Allsec/ investor-information.aspx
Names of Companies which have ceased / become Subsidiaries / Joint Ventures /Associates
During the year consequent to a settlement agreement between Retreat CapitalManagement Inc. USA its promoter and Allsec the Retreat promoters shares werebought back by Retreat and accordingly Retreat has become a wholly owned subsidiary ofAllsec Technologies Ltd.
In the year 2012 the Company had acquired 80% of the paid up share capital ofCentigral Inc. USA engaged in the business of providing management consultancy servicesin health care and business analytics. Due to lack of business opportunities and clearvisibility of future business the board of directors of Centigral Inc. USA had decidedto dissolve the Company. The company had filed appropriate documents with US authoritiesduring December 2014.
As per the provisions of Section 136 of the Companies Act 2013 the Report andAccounts are being sent to all the members of the Company excluding the informationrelating to Employees to be given under Section 197 (12) of the Companies Act 2013. Thesaid information would be filed with the Registrar of Companies and also would beavailable for inspection by the members at the Corporate Office of the Company. Any memberinterested in obtaining such particulars may also write to the Company Secretary AllsecTechnologies Limited 46B Velachery Main Road Velachery Chennai 600042.
Your Company is fully compliant with the requirements given under Clause 49 of thelisting agreement. The Report on Corporate Governance is given in Annexure A. Certificatefrom Auditors confirming compliance of conditions of Corporate Governance is included inAnnexure B. CEO/CFO certification is attached in Annexure H.
Statement indicating the manner in which formal annual evaluation has been made by theBoard
1. Independent Directors at a meeting without the presence of Wholetime Directors andmanagement considered / evaluated the Boards performance performance of theChairman and other non-independent Directors.
2. The Board subsequently evaluated performance of the Board the Committees andIndependent Directors (without participation of the relevant director)
The company has three subsidiaries as at year end namely Allsectech Inc USAAllsectech Manila Inc. Philippines & Retreat Capital Management Inc USA.
The Consolidated Financial Statements of the Company and its Subsidiaries prepared inaccordance with
Accounting Standard AS-21 form part of the Annual Report and Accounts.
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 Annual Accounts of the Subsidiary Companies will also be kept forinspection by any investor at the Corporate Office of the Company.
The Company monitors performance of subsidiary companies inter-alia by the followingmeans:
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 under Clause49 (V) (D) and the policy is hosted on the website of the Company under the web linkhttp://www.allsectech.com/Allsec/ investor-information.aspx
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 (www.allsectech.com)furnishes important financial details and other data of frequent reference by theinvestors. The Company also has a Shareholders/ Investors Relation Committee to addressshareholders grievances if any and resolve them as & when they are highlighted.
The Company has provided an exclusive email id: email@example.com for theinvestors to facilitate complaints of the investors and its redressal.
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 -The Company Secretary Allsec Technologies Ltd 46B Velachery Main RoadVelachery Chennai 600042.
Shareholders are requested to update their email addresses with their respectivedepository participants so that the Company can provide better services at all times.
M/s. S.R.Batliboi & Associates LLP Chartered Accountants were re-appointed asAuditors of the company at the annual general meeting held on 14th August 2014. M/s.S.R.Batliboi & Associates LLP retire at this Annual General meeting. The Company hasreceived necessary certificate from the Auditors to the effect that they satisfy theconditions given in Sections 139 and 141 of the Companies Act 2013 and the rules madethereunder for the above appointment. The Directors recommend their re-appointment.
As required under the Listing Agreement the Statutory Auditors have also confirmedthat they 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
There were no material changes and commitments affecting the financial position of theCompany between the end of financial year (March 312015) and the date of the Report (May20 2015).
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.