The Directors have pleasure in presenting to you the 13th Annual Report
of the company covering the financial year ended 31st March 2012.
FINANCIAL HIGHLIGHTS (Rs. in Million)
Particulars Ended Ended
March 31, March 31,
Income from Services 1,247.1 1,415.4
Other Income 50.5 35.8
Total Income 1,297.6 1,451.2
Profit/(Loss) before Interest,
Depreciation & Tax (EBITDA) (32.8) 68.6
Depreciation & Amortisation 107.9 103.3
interest & tax (140.7) (34.7)
Interest & Finance charges 6.3 4.7
Profit/(Loss) before taxation (147.0) (39.4)
Profit/(Loss) after taxation (147.0) (39.4)
Profit/(Loss) brought forward (192.6) (153.2)
Surplus/(Deficit) carried (339.6) (192.6)
forward to Balance Sheet
Due to the loss incurred during the year, the Board of Directors of
your Company does not recommend any dividend for the Financial Year
The company was able to clock higher revenues in the domestic market
during the year, growing by over 15%. However the Company is in the
process of reprising of all the Domestic Contracts, so that all
contracts are profitable. Your company''s focus on profitability will
yield better results in the coming years.
During this year, there is a reduction of exports revenue by 40%,
though this was compensated by a huge increase in Domestic business.
Drop in exports revenue is mainly due to market conditions in USA not
improving during the year. The new businesses which we got have only
gone to backfill lost business during last year and this has resulted
in a reduced revenue growth from USA, which has always been our
Even though economy in US and UK is not showing definite signs of
improvement, we believe we will see significant growth in the next few
years. With additional focus on business development in US, your company
believes that growth in business from the US and UK is achievable in the
years to come.
Due to a sharp reduction in exports revenue during the year, which is
our main strength, the results for the year have been below par as can
be seen above. In the last quarter of 2010-11, your company lost one of
the top clients from USA which has affected our performance very badly.
During the year, your Company has added a few clients and also
increased volumes with existing clients. Your company is also in talks
with existing clients to explore new opportunities and we are very
confident to get back to the old days of higher exports and
profitability. Your company is currently exploring opportunity in
specific verticals like Mortgage and Health Care Industries in the US
Acquisition of Retreat Capital Management Inc last year seems a right
step taken by your Company and the results of Retreat are very
encouraging as can be seen from the consolidated results. The growth
potential looks good and in the coming years, the contribution to
Profit from Retreat business will be substantial. Your company has also
added few clients in the mortgage non voice space and with Retreat''s
domain knowledge, business growth in this vertical can be achieved in
The company is continuing to pursue growth through the organic route in
both the markets and see very good traction for growth in both US and
Domestic Markets. The company has delivery centers in USA, India and
Manila for the international segment and has Domestic delivery centers
in major cities in India. It has the capability to offer delivery in
multiple Indian languages.
Manila centre was acquired in 2009 and has a seat capacity of around
600. This is a strategic centre for our business as many of US Clients
prefer Manila as a Delivery Centre. Due to overall market conditions in
USA, our business is affected which has resulted in loss situation in
Manila centre also. With increased possibility of billing from existing
and new clients in the current and future years, we feel the loss
situation in Manila centre will be reversed. In the view of Management,
the investment made in our Manila Centre (wholly owned subsidiary) of
Rs.102 Million and the advances recoverable given to them amounting to
Rs.122.50 Million do not require any adjustments in the stand alone
financials as of now. The Auditors have made an observation vide para 4
in their Report regarding this and this may be treated as our
The Company has not made provisions towards certain Receivables
aggregating to Rs.61.3 Million in respect of two foreign customers,
where amounts are substantially overdue. On the basis of available
information and regular confirmation of balances from customers showing
their intent to pay the same, the Company is confident of recovering
the entire amount and therefore not made any provision in the books of
accounts. The Auditors have however made an observation vide para 5 in
their Report regarding this and this may be treated as our explanation.
Quality & Information Security
The vision of Quality and Information security at Allsec is to
institutionalize excellence in quality of service and security of data
of Clients, customers and Organization by developing and deploying
simple, efficient and effective processes using the latest Quality
models in accordance with ISO 9001:2008 interlined with data security
controls prescribed by International standards such as ISO 27001:2005.
As part of its continuous improvement program, your Company is
recertified for ISO 9001:2008 (Quality Management System) and ISO
27001:2005 (Information Security Management). To take this to next
paradigm, your company is recertified for PCI DSS and accomplished
compliance with HIPAA for service delivery locations in India.
During the current year, in addition to the existing PCI DSS and HIPAA
compliance at Manila, your company has achieved PCI DSS certification
for service delivery location at Dallas in US. Further, existing SAS 70
Type II certification for HR BPO services is graduated to ISAE 3402
certification in line with the new International auditing standard to
realize higher levels of maturity and be consistent with business and
market needs in HR outsourcing.
Disclosure as per Securities and Exchange Board of India (Employees
Stock option Scheme and Employee Stock Purchase Scheme) Guidelines,
The details are given in Annexure–A to Directors Report.
Your Directors confirm the following:
(i) That in preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(ii) That the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial 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 of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
(iv) That the directors had prepared the annual accounts on a going
The company has three subsidiaries as at year end namely Allsectech
Inc, USA, Allsectech Manila Inc., Philippines and Retreat Capital
Management Inc, USA.
A Statement containing brief financial particulars of the subsidiary
companies for the year ended 31st March, 2012 is included in the Annual
Report. The Consolidated Financial Statements of the Company and its
Subsidiaries prepared in accordance 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 will be made available to the investors of the
Company/Subsidiaries, seeking such information at any point of time.
The copies of Annual Accounts of the Subsidiary Companies will also be
kept for inspection by any investor at the Corporate Office of the
Your company has not accepted any deposit from the public during the
period under review and did not have any outstanding deposits.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Your Company being in the Information Technology Enabled Services
(ITES), the provisions relating to conservation of energy and
technology absorptions are not applicable. The details of the earnings
and expenditure in foreign currency are given below:
Particulars INR (Millions)
Earnings in Foreign Currency 408.1
Expenditure in Foreign Currency 60.1
Remittance of Dividend in
Foreign Currency NIL
Mr. R. Jagadish and Mr. A. Sankarakrishnan, Directors retire at the
ensuing Annual General Meeting and being eligible offer themselves for
Mr. Manish Gaur representing M/s. First Carlyle Ventures Mauritius, was
appointed as additional director on 13th October, 2011. The Notice
under Section 257 of the Companies Act, 1956 has been received from a
member signifying the intention to propose Mr. Manish Gaur as a
candidate for the office of Director and accordingly a resolution will
be placed before the members at the forthcoming Annual General Meeting.
A Report on Management Discussion & Analysis of Performance and
Compliance of Corporate Governance under Clause 49 of the listing
agreement & Certificate from Auditors confirming compliance of
conditions of Corporate Governance is included in this Annual Report.
Your company will constantly endeavor to give the best possible
services to the investors. Towards this end, the following are some of
the initiatives taken by the Company:
The investor Information section of the Website of the Company
(www.allsectech.com), furnishes important financial details and other
data of frequent reference by the investors. The Company also has a
Shareholders/ Investors Relation Committee to address shareholders
grievances if any and resolve them as & when they are highlighted.
The Company has provided an exclusive email id:
email@example.com for the investors to facilitate the
redressal of the queries and complaints of the investors.
The Company has appointed M/s Karvy Computershare Pvt Ltd as Registrars
& Share Transfer Agents for attending to issues relating to physical
shares and routine services requests.
Shareholders can also address any unresolved issues or information
requests by postal mail to - The Company Secretary, Allsec Technologies
Limited, 46B, Velachery Main Road, Velachery, Chennai - 600 042.
Shareholders are requested to update their email addresses with their
respective depository participants so that the Company can provide
better services at all times.
M/s. S.R.Batliboi & Associates, Chartered Accountants were re-appointed
as Auditors of the company at the annual general meeting held on 4th
August, 2011. M/s. S.R.Batliboi & Associates retire at this Annual
General meeting and being eligible offers themselves for re- election.
Information as per Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules 1975, as amended
regarding the employees, is given in the Annexure to the Directors''
Report. However, as per the provisions of Section 219 of the Companies
Act, 1956, the Report and Accounts are being sent to all the members of
the Company, excluding the aforesaid information. The said information
would be filed with the Registrar of Companies and also would be
available for inspection by the members at the Corporate Office of the
Company. Any member interested in obtaining such particulars may also
write to the Company Secretary, Allsec Technologies Limited, 46B,
Velachery Main Road, Velachery, Chennai 600042.
Your Directors wish to place on record their appreciation for the
excellent support and co-operation given by customers, shareholders,
service providers and Government Agencies.
Your Directors also record their appreciation and gratitude to
Financial Institution and Bankers for their continued support and
timely assistance in meeting the Company''s resource requirements. Your
Directors acknowledge the dedicated services rendered by all the
employees of the company.
For and on behalf of the Board of Directors
A. Saravanan R. Jagadish
Date : May 14, 2012