The world economy in 2011 went through a very sluggish pace and this
was characterized with significant downside risks and fragility. The
financial turmoil due to the aggravation of the financial crisis in
Europe spread far and wide, affecting both the developed and the
developing nations. Growth in the BRIC countries has considerably
slowed down and even other countries have exhibited muted growth due to
domestic policy tightening. This slowdown has contributed significantly
to a drop in global growth and world trade.
Closer home, the state of the economy has also not been one that has
projected any kind of confidence. The liquidity crunch, the rising
inflation rates and the spiraling exchange rate of rupee against the
dollar has upset many an applecart during the last financial year.
Additionally, as fiscal conditions worsened over the year, export
numbers were revised in light of data discrepancies leading to a
widening of trade deficit. In light of a perceivably weak
macro-economic environment, a well-planned economic revival policy from
the Government''s part is required to restore the Indian Economy on the
stable path towards a prosperous growth.
As the general crisis scenario looms on the horizon, customers have
generally remained cautious and refrained from making any major
Investments In IT industry. Critical investments have primarily focused
in the area of cost optimization, minimizing revenue leakages and
strengthening internal capabilities. Clients have Increasingly started
demanding ''transformational'' value propositions which go far beyond
the plain value cost arbitrage opportunity.
A change In the overall structure In global sourcing Is expected, as
organizations embark on a journey with enhanced focus on the customer.
With customers demanding more immediate value from IT and
forward-looking strategies that support growth and innovation, service
providers are adopting agile methods focusing on operational excellence
through ongoing innovation, diversification, renewed
partnerships/alliances and new business models.
The market conditions had an Impact on the business of your Company and
we concluded the year on a consolidated basis with revenue of about Rs.
585 crore. Margins at the EBITDA level were Rs. 59.35 crore and the
Company had a net profit of Rs. 9.37 crore. Services contributed 51 %
while solutions contributed 49 %. EPS for the fiscal stood at Rs. 2.02
for FY 2012 for the face value of Rs.5/ share. We are pleased to
announce a final dividend of 5% per share.
Apart from the general downturn in the market conditions and reduced
budgetary constraints of many customers, the Company had also taken a
transformation initiative across various functions to make it lean,
nimble and future-ready with the right kind of processes, systems and
people. This process took a little longer than we expected and hence
the same had an impact on the growth numbers. However, we are confident
that the steps taken by the Company to make us future-ready will be
only a short term pain and will translate to longer term gains.
As part of the transformational initiative, we have put in place a
newer executive leadership team headed by our new CEO Mr. Paresh Shah
who has extensive and diverse experience in Business Transformation,
Enterprise Solutions, Architecture and Total Outsourcing solutions. His
career experience in IT spans over 24 years In diverse technologies and
industries such as Telecom, Banking, Retail and Enterprise. I am
confident that under the leadership of Mr. Paresh Shah, the Company
will scale greater heights in the future.
This apart, we have undertaken some key strategic Initiatives during
the year to strengthen our existing relationships as well as
competencies and build some new ones, which we believe, will place us
in a position of strength as we move forward.
Key among these Initiatives is the Integrated Service Delivery
Framework or ISDF. ISDF essentially involves managing servers,
desktops, databases, applications using the best In breed tools. The
above IT assets are fit into a common management database (CMDB) and
they are easily managed through a trouble ticketing tool, the
self-service portal, work management portal, the e-mail manager and
other automation tools that help you manage the remediation process
without any complexity. The advantage of our ISDF is that it Is
multi-talented and when connected with common trouble ticketing
platform, with the help of knowledge base many of the tickets
resolution takes place automatically thus reducing people dependency.
So, the moment our monitoring tool looks at the problem, it scans at
the IT asset database looking for a possible remediation solutions and
immediately starts applying these remediation solutions to the problem
thus resolving it even before the customer is aware about the problem.
We believe that this gives us a major competitive advantage from a
differentiating perspective and will drive the business ahead.
IT Security Is another big area that we are targeting. Gartner
predicted spends of about billion by 2012 in the security space and
this is slated to grow at a rate of 9 % every year. We see a large
opportunity in compliance areas like PCI, SOXs, Basel-ll etc. Retail
and BFSI are expected to be the growth drivers for these areas.
Allied Digital''s experience In IT Infrastructure Solution and IT
Infrastructure Management services strongly positions itself to deploy
command and control center to integrate to manage several autonomous
subsystems such as Video Surveillance, Access Control, BMS and Fire
Detection System comprehensively. Emerging Physical Security Solutions
are based on IP standards that demands IT Infrastructure comprising of
servers, storage, workstations, network and Management software. Allied
Digital is uniquely positioned to provide all these components as a
single source of responsibility and accountability.
Our growing presence in the security space is further proven when
Gartner chose e-Cop as one of the leading Managed Security Service
in the Asia Pacific region. Allied e-Cop is one of the largest threat
intelligence networks in the world today with 7 Security Operating
Centers (SOCs) across the globe.
Our other subsidiary Dig comp Complete Solutions has had an outstanding
year In terms of growth and opportunities. The company has huge plans
for increasing the Dig comp foot-print across the country by way of
spreading the service offerings to the end users In a bigger way. The
company plans to launch a retail brand for catering to services,
maintenance & asset recovery operations by developing a marketing
strategy for increased awareness to customers. The company also
foresees Improved business opportunities from existing customers on the
RMA, Depot Repair & Asset Recovery front. There are also tremendous
opportunities on setting up of Brand service centers for various
leading IT & Smartphone brands. We have also strengthened our
relationships with specific OEMs while our traction with Intel contain-
ues to grow.
This year we have entered our presence in the UK market with ISDF and
we have achieved tremendous response on it and with a foot hold of
We have created a Training Academy mainly focusing on skill
development, up-scaling the employees, improvement in back-office,
front office, system and processes.
Recognizing our capabilities, we have been bestowed with many awards
this financial year, including the ''SP Summit and Solution Champ
-Managed Security Services'' by DQ Channels, ''Best Solution
Provider'' (Security) by ITPV and the ''Spirit of Partnership''
award by Dell that honors partners not only for achieving the metrics
but for the commitment towards the customers, the value for the
partnership and for continuously improving ourselves as a collaborator
and ''Best System Integrator'' of the county by CRN
We would like to place on record our appreciation and heartfelt
gratitude to our existing shareholders, clients and employees who have
stood by us in difficult times and we are confident that your patience
will be rewarded as we move ahead towards delivering greater value for
each one of you in the future.