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NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Fifteenth Annual General Meeting of allied digital services limited will be held on
Wednesday, 23rd September, 2009 at 11.30 a.m., at Walchand Hirachand Hall, Indian Merchants’ Chamber Building,
4th Floor, Churchgate, Mumbai - 400020, to transact the following business:
Ordinary Business :
1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2009, Profit and Loss Account for the
year ended on that date and the Reports of the Auditors’ and the Directors’ thereon.
2. To declare Final Dividend on Equity Shares
3. To appoint a Director in place of Mr. Shailesh Vaidya, who retires by rotation and being eligible, offers himself for
re-appointment.
4. To appoint M/s. K. M. Kapadia & Associates as Statutory Auditors of the Company for the period commencing from
the conclusion of this meeting until conclusion of the next Annual General Meeting and to authorize the Board to fix
their remuneration.
Special Business:
5. Appointment of Mr. Bimal Raj as a Director, liable to retire by rotation.
To consider and if thought fit, to pass with or without modification(s) the following resolution as an Ordinary
Resolution:
“RESOLVED THAT Mr. Bimal Raj who was appointed as an Additional Director by the Board of Directors and who
holds office upto the ensuing Annual General Meeting of the Company under Section 260 of the Companies Act,
1956 and in respect of whom the Company has received notice under Section 257 of the Companies Act, 1956
along with necessary deposit from a shareholder proposing the candidature of Mr. Bimal Raj as a Director of the
Company be and is hereby appointed as a Director of the Company liable to retire by rotation.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution any Director be and is hereby
authorised to take such steps and to do all such acts, deeds, matters and things, as may be required.”
6. Terms of Remuneration of Mr. Bimal Raj as a Whole Time Director designated as Executive Director
To consider and if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution.
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309 read with Schedule XIII and other applicable
provisions of the Companies Act, 1956 and subject to the approval of the Central Government, if required, the
Company hereby accords its approval to the appointment of Mr. Bimal Raj as a Whole-time Director designated as
Executive Director of the Company for a period of five years with effect from 28th April 2009, on the terms and
conditions, including those relating to remuneration, as set out under Item No. 6 of the Explanatory Statement
annexed to this Notice.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution any Director be and is hereby
authorised to take such steps and to do all such acts, deeds, matters and things as may, in its absolute discretion,
deem necessary or desirable or to make such alterations and modifications, as may be required.”
7. Appointment of Mr. Venugopal Iyengar as a Director, liable to retire by rotation.
To consider and if thought fit, to pass with or without modification(s) the following resolution as an Ordinary
Resolution.
“RESOLVED THAT Mr. Venugopal Iyengar who was appointed as an Additional Director by the Board of Directors
and who holds office upto the ensuing Annual General Meeting of the Company under Section 260 of the Companies
Act, 1956 and in respect of whom the Company has received notice under Section 257 of the Companies Act, 1956
along with necessary deposit from a shareholder proposing the candidature of Mr. Venugaopal Iyengar as a
Director of the Company be and is hereby appointed as a Director of the Company liable to retire by rotation.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution any Director be and is hereby
authorised to take such steps and to do all such acts, deeds, matters and things, as may be required.”
8. Increase in the Remuneration of Mr. Nitin Shah, Chairman & Managing Director.
To consider and if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution.
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 read with Schedule XIII and other
applicable provisions of the Companies Act, 1956, and subject to the approval of the Central Government, if
required, consent of the members be and is hereby accorded to increase the remuneration payable to Mr. Nitin
Shah, Chairman & Managing Director, with effect from 1st October, 2009, for the balance period of his term of
appointment, as per details given under Item No. 8 of the Explanatory Statement annexed to this Notice.

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RESOLVED FURTHER THAT for the purpose of giving effect to this resolution any Director be and is hereby
authorised to take such steps and to do all such acts, deeds, matters and things as may, in its absolute discretion,
deem necessary or desirable or to make such alterations and modifications, as may be required.”
9. Increase in the Remuneration Mr. Prakash Shah, Whole Time Director designated as Executive Director & CFO.
To consider and if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution.
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 read with Schedule XIII and other
applicable provisions of the Companies Act, 1956, and subject to the approval of the Central Government, if
required, consent of the members be and is hereby accorded to increase the remuneration payable to Mr. Prakash
Shah, Whole-time Director designated as Executive Director & CFO, with effect from 1st October 2009, for the
balance period of his term of appointment, as per details given under Item No. 9 of the Explanatory Statement
annexed to this Notice.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution any Director be and is hereby
authorised to take such steps and to do all such acts, deeds, matters and things as may, in its absolute discretion,
deem necessary or desirable or to make such alterations and modifications, as may be required.”
10. Issue and allotment of Equity Warrants to Bennett, Coleman & Company Limited.
To consider and if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution.
“RESOLVED THAT pursuant to the provision of Section 81(1A) and other applicable provisions, if any of the
Companies Act, 1956 (including any statutory modifications or re- enactment thereof, for the time being in force),
and subject to the relevant provisions of the Memorandum and Articles of Association of the Company and the
rules/ regulations/ guidelines, notifications, circulars and clarifications issued thereon from time to time by
Government of India. (GOI), the Reserve Bank of India (RBI), Securities and Exchange Board of India( SEBI) or by
any other relevant authority from time to time and in terms of the provisions of and the conditions as prescribed
under the listing Agreement entered into by the Company with the Stock Exchanges on which the Company’s
Shares are listed and the applicable guidelines, and subjects to such approvals, consents, permissions and
sanctions as might be required and subject to such conditions as might be prescribed while granting such approvals,
consents, permissions and sanctions which the Board of Directors of the Company (hereinafter referred to as “The
Board” which term shall deem to include any committee(s) constituted/to be constituted by the Board to exercise its
powers, including the powers conferred by the Resolution) thinks fit, the consent of the members be and is hereby
accorded to ‘The Board’ to create, issue, offer and allot on preferential basis to Bennett, Colemen & Company
Limited (BCCL), 100,000 Warrants in one or more tranches, subject to payment of sum of Rs. 139/- (Rupees One
Hundred and Thirty Nine only) per warrant by BCCL with an option to subscribe to 100,000 Equity Share of the
Company at a floor price of Rs. 554/- (Rupees Five Hundred and Fifty Four only) per Equity Share inclusive of
premium (the “subscription price”), aggregating to Rs. 5,54,00,000(Rupees Five Crores and Fifty Four Lacs only)
.
RESOLVED FURTHER THAT the said subscription price shall not be less than the price determined in terms of
clause 13.1.1.1 of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 AND THAT in case at the time
of conversion, the price determined in accordance with Clause 13.1.1.1 of the SEBI (Disclosure and Investor
Protection) Guidelines, 2000 is more than Rs. 554/- (Rupees Five Hundred and Fifty Four only) then the warrants
will be converted into equity shares at such higher price subject to upper cap of Rs 200/- over and above floor price
of Rs. 554/- (Rupees Five Hundred and Fifty Four only).
RESOLVED FURTHER THAT BCCL shall be entitled to exercise its option to subscribe to the Equity Shares at any
time, in one or more tranches, within 18 months from the date of allotment of the warrants, subject to full payment
of the Subscription price.
RESOLVED FURTHER THAT in the event, BCCL does not exercise the right to subscribe to the Equity Shares
within a period of 18 month from the date of allotment of Warrants, the amount paid by BCCL shall stand forfeited
and BCCL shall not be entitled for refund of the same or any part thereof, or any Equity Shares of the Company
against the amount paid.
RESOLVED FURTHER THAT without prejudice to the generality of the above, the Relevant Date, as stipulated in
SEBI (Disclosure and Investor Protection) Guidelines 2000, for determination of price for the Equity Shares to be
issued and allotted upon exercise of rights attached to the Warrants referred hereinabove, shall be 24th August,
2009 i.e. thirty days prior to the date of passing of this resolution.
RESOLVED FURTHER THAT all the Equity Shares allotted upon exercise of rights attached to the Warrants
referred hereinabove to BCCL shall rank pari passu in all respects including entitlement for dividend with the
existing Equity Shares of the Company.

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RESOLVED FURTHER THAT the Board be and is hereby authorized to decided and approve the other terms and
conditions of the issue including lock - in and also to vary, modify or alter any terms and conditions, as it may deem
expedient, subject however to the compliance with the applicable guidelines, notification, rules and regulations, to
the extent applicable, as SEBI/GOI/RBI or such other appropriate authorities, within or outside India, may prescribe
from time to time.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby
authorized to settle and decide on all questions, queries or any other matters that may arise in regard to the issue,
offer or allotment of Warrants and utilization of the issue proceeds as also subsequent allotment of Equity Shares
pursuant to exercise of rights attached to the Warrants and further to do all such acts, deeds, matters and things and
to finalise and execute all such deeds, documents and writings as may be necessary and desirable in this regard.
RESOLVED FURTHER THAT the Board be and is hereby authorized at its discretion, to further delegate by way of
authorization in favour of any of the members of the Board or a Committee thereof, to do all the necessary acts and
take necessary steps that may be deemed expedient to give effect to this resolution.”
11. Issue of Securities to Qualified Institutional Buyers (QIBs) pursuant to the Qualified Institutional Placement (QIP)
To consider and if thought fit, to pass with or without modification(s) the following resolution a Special Resolution.
“RESOLVED THAT pursuant to the provisions of Section 81(1A) and other applicable provisions, if any, of the
Companies Act, 1956, the provisions of Securities and Exchange Board of India (Disclosure & Investor Protection)
Guidelines, 2000 (the “SEBI Guidelines”), the provisions of the Foreign Exchange Management Act, 1999, and
rules and regulations made hereunder, including the Foreign Exchange Management (Transfer and Issue of
Securities by a person Resident outside India) Regulation, 2000, if applicable, the provisions of Issue of Foreign
Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and
subject to any other applicable law or laws, rules and regulations (including any amendment thereto or re-enactment
thereof for the time being in force) and subject to enabling provisions in the Memorandum and Articles of Association
of the Company and Listing Agreements, entered into by the Company with the Stock Exchanges where the
Shares of the Company are listed and subject to any approval, consent, permission and/or sanction of the Government
of India, Reserve Bank of India, Stock Exchanges, Registrar of Companies, Securities and Exchange Board of
India and /or any other competent authorities, institutions or bodies, within or outside India, and subject to such
conditions and modifications as may be prescribed by any of them while granting such approvals, permissions,
consents and sanctions and which may be agreed by the Board of Directors (hereinafter referred to as “The Board”
which term shall include any committee thereof, whether constituted or to be constituted), consent of the members
be and is hereby accorded to the Board to create, offer, issue and allot in one or more tranch(es), in the course of
domestic and / or international offerings and /or Qualified Institutional Placements (“QIP”), with or without an
over allotment/ green shoe issue option, in one or more foreign markets or domestic markets, to domestic institutions,
foreign institutions, non-resident Indians, Indian public, companies, corporate bodies, mutual funds, banks, insurance
companies, pension funds, individuals, qualified institutional buyers or other persons or entities, whether
shareholders of the Company or not, through a public issue and/or on a private placement basis and/or qualified
institutional placement within the meaning of Chapter XIIIA of the SEBI Guidelines and /or preferential issue and/
or other kind of public issue and /or private placement or through a combination of the foregoing as may be
permitted under applicable law from time to time, with or without an over allotment/ green shoe option, equity share,
secured or unsecured debentures, bonds or any other securities (other than Share Warrants) whether convertible
into Equity Shares or not, including, but not limited to, Foreign Currency Convertible Bonds (“FCCBs”), Optionally
Convertible Debentures (“OCD”), Bonds with Share Warrants attached, Global Depositary Receipts (“GDRs”),
American Depositary Receipts (“ADRs”) or any other Equity related instrument of the Company or a combination
of the foregoing including but not limited to a combination of Equity Shares with bonds and/or any other securities
whether convertible into Equity Shares or not (hereinafter referred to as “securities”) for a value equivalent upto
USD 50 million, whether to be listed on any Stock Exchange inside India or any international Stock Exchanges
outside India, through an offer document and/or prospectus and/or offer letter, and/or offering circular, and/or on
public and/or private or preferential basis, whether rupee denominated in foreign currency at such time or times, at
such price or prices in such manner and on such terms and conditions including security, rate of interest etc, as may
be decided by and deemed appropriate by the board as per applicable law, including the discretion to determine
the categories of Investors to whom the offer, issue and allotment shall be made, considering, the prevailing market
conditions and other relevant factors wherever necessary in consultation with its advisors, as the board in its
absolute discretion may deem fit and appropriate.
RESOLVED FURTHER THAT in addition to all applicable Indian laws, the Securities issued in pursuance of this
resolution shall also be governed by all applicable laws and regulations of any jurisdiction outside India where
they are listed or that may in any other manner apply to such securities or provided in the terms of their issue.

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RESOLVED FURTHER THAT any Securities that are not subscribed in issues mentioned above, may be disposed
off by the Board in its absolute discretion in such manner, as the Board may deem fit and as permissible by the law.
RESOLVED FURTHER THAT in case of a Qualified Institutional Placement pursuant to Chapter XIIIA of the SEBI
Guidelines, the allotment of specified securities shall only be to Qualified Institutional Buyers within the meaning of
Chapter XIIIA and the relevant date for the determination of the price of the Equity Shares to be issued or issued
pursuant to conversion, shall be the date on which the Board decides to open the issue of Securities or such other
time as may be allowed by SEBI Guidelines from time to time and allotment of specified Securities shall be
completed within twelve months from the date of this resolution.
RESOLVED FURTHER THAT in case of an issuance of FCCBs/ADRs/GDRs, the relevant date for the determination
of the issue price of the Securities offered, shall be determined in accordance with the Issue of Foreign Currency
Convertible Bonds and Ordinary shares (through Depository Receipt Mechanism) Scheme, 1993 as may be
amended from time to time.
RESOLVED FURTHER THAT the issue of Securities shall be subject to the following terms and conditions:
(a) The Securities shall be subject to the provisions of Memorandum and Articles of Association of the Company
and in accordance with the terms of the issue; and
(b) The number and/or price of the Securities shall be appropriately adjusted for corporate actions such as bonus
issue, rights issue, stock split, merger, demerger, transfer of undertaking, sale of division or any such capital or
corporate restructuring.
RESOLVED FURTHER THAT for the purpose of giving effect to the above resolutions, the Board be and is hereby
authorized to do all such acts, deeds, matters and things including but not limited to determining the form and
manner of the issue, including the class of investors to whom the Securities are to be issued and allotted, number
of Securities to be allotted, execution of various transaction documents, creation of mortgage/ charge in accordance
with Section 293(1)(a) of the Act, in respect of any Securities as may be required either on pari-passu basis or
otherwise, as it may in its absolute discretion deem fit and to settle all questions, difficulties or doubts that may arise
in regard to the issue, offer or allotment of Securities and utilization of the issue proceeds as it may in its absolute
discretion deem fit without being required to seek any further consent or approval of the members or otherwise to
the end and intent that the members shall be deemed to have given their approval thereto expressly by the
authority of this resolution.
RESOLVED FURTHER THAT the Board be and is hereby authorized to form a committee or delegate all or any of
its powers to any Directors (s) or Committee of Directors / Company Secretary / other persons authorized by the
Board to give effect to the aforesaid resolutions.
RESOLVED FURTHER THAT subject to the applicable laws the Board and/or the Committee authorized by the
Board be and is herby authorized to do such acts, deeds and things as the Board in its absolute discretion deem
necessary or desirable in connection with the issue of the Specified Securities (other than Share Warrants),
including, without limitation of the following;
(a) Decide the date for the opening of the issue of securities
(b) Decide the price band for the issue
(c) Finalization of the Issue Price
(d) Finalization of the allotment of the Securities on the basis of the subscriptions received.
(e) Finalization of, signing of and arrangement for the submission of the preliminary and final offering circulars/
prospectus(es)/offer document(s), and any amendments and supplements thereto, along with supporting
papers needed to be filed for seeking listing approval with any applicable Government and regulatory
authorities, institutions or bodies as may be required;
(f) Deciding the pricing and terms of the Securities, and all other related matters, including taking any action on
two-way fungibility for conversion of underlying Equity Shares into FCCBs/ GDRs/ ADRs, as per applicable
laws, regulations or guidelines;
(g) Appoint, in its absolute discretion, Managers (including Lead Manager), Investment Bankers, Merchant Bankers,
Underwriters, Guarantors, Financial and /or Legal Advisors, Depositories, Custodians, Principal Paying/
Transfer/Conversion Agents, Listing Agents, Registrars, Trustees and all other agencies, whether in India or
abroad, entering into or execution of all such agreements/ arrangements/ MoUs/ documents with any such
agencies, in connection with the proposed offering of the Securities;
(h) Approval of the Deposit Agreement(s), the Purchase/Underwriting Agreement(s), the Trust Deed(s), the
Indenture(s), the Master/Global GDRs/ADRs/FCCBS/other Securities, Letters of Allotment, Listing Application,

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Engagement Letter(s), Memoranda of Understanding and any other agreements of documents, as may be
necessary in connection with the issue/offering (including amending, varying or modifying the same, as may
be considered desirable or expedient), in accordance with all applicable laws, rules, regulations and guidelines;
(i) Settle all questions, difficulties or doubts that may arise with regards to the issue, offer or allotment of securities
and utilization of the proceeds of the issue in such manner and to do all such acts, deeds, matters and things
as it may in its absolute discretion deem fit.
RESOLVED FURTHER THAT the Board and/or the Committee authorized by the Board be and is hereby authorized
to accept any modifications in the proposals as may be required by the authorities involved in such issues but
subject to such conditions as the SEBI/GoI/RBI or such other appropriate authorities may impose at the time of their
approval and as agreed to by the Board;
RESOLVED FURTHER THAT without prejudice to the generality of the foregoing, issue of the securities may be
done upon all or any terms or combination of terms in accordance with international practices relating to the
payment of interest, additional interest, premium on redemption, prepayment or any other debt service payments
and all such terms as are provided customarily in an issue of securities of this nature.
RESOLVED FURTHER THAT the Company may enter into any arrangement with any agency or body for the issue
of depositary receipts representing the underlying Equity Shares issued by the Company in registered or bearer for
with such features and attributes as are prevalent in International Capital Markets for instruments of this nature and
to provide for the tradability of free transferability thereof as per international practices and regulations (including
listing on one or more Stock Exchange(s) inside or outside India) and under the forms and practices prevalent in
the International Markets.”
12. Sub-division of Equity Shares and Amendment in the Memorandum of Association.
To consider and if thought fit, to pass the following resolution with or without modification(s) as a Special Resolution:
“RESOLVED THAT pursuant to the provisions of Section 16, 94 and other applicable provisions, if any, of the
Companies Act, 1956 (“the Act”) and the provisions of Article 11A of the Articles of Association of the Company
and subject to the necessary approvals, consents, permissions and sanctions as may be necessary from the
appropriate authorities or bodies, the consent of the members be and is hereby accorded for sub-division of the
Equity Share of face value of Rs. 10.00/- each into 2 Equity Shares of Rs. 5.00/- each.
RESOLVED FURTHER THAT the existing Clause V of the Memorandum of Association be and is hereby substituted
in the manner as set out below:
“The authorised share capital of the company is Rs. 25,00,00,000/- (Rupees Twenty Five Crores Only) divided into
5,00,00,000/- (Five Crores) Equity shares of Rs. 5/- (Rupees Five Only) each with powers to the company to
increase, issue any part; of its capital, original or increased with or without any preference, priority or special
privilege or subject to any postponement of rights or to any conditions of issue shall otherwise be subject to the
power herein contained. The right and privileges attached to any shares having preferential, qualified, or special
rights, privileges or conditions attached hereto may be altered or dealt with in accordance with clause of the
company’s Articles of Association but not otherwise.”
RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as “the Board” which
term shall include a duly authorised Committee and / or any person(s) by the Board, for the time being exercising
the powers conferred upon the Board by this resolution) be and are hereby authorised to issue new Share
Certificates representing the sub-divided Equity Shares with new distinctive numbers, consequent to the sub-
division of Shares as aforesaid and / or credit the Shareholders’ accounts maintained with the Depositories,
subject to the rules as laid down in the Companies (Issue of Share Certificates) Rules, 1960, and the Articles of
Association of the Company and to inform the Depositories and the Registrar and Transfer Agents of the Company
and execute all such documents, instruments and writings as may be required in this connection and to delegate
all or any of the powers herein vested in the Board or to any Committee thereof or to any Director(s) or any other
officer(s) of the Company, to give effect to the aforesaid resolution”.
For and on behalf of the Board of Directors

Place: Mumbai Nitin Shah


Date: 28th August, 2009 Chairman & Managing Director
Registered Office:
3rd Floor, Kimatrai Building,
77/79, Maharshi Karve Marg,
Marine Lines,
Mumbai – 400 002

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Notes
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend the meeting and the
proxy need not be a member of the Company. Under the Companies Act, 1956, voting is by a show of hands unless
a poll is demanded by a member or members present in person, or by proxy, holding at least one-tenth of the total
shares entitled to vote on the resolution or by those holding paid-up capital of at least Rs. 50,000. A proxy shall not
vote except on a poll. The instrument appointing the proxy must be deposited at the registered office of the
Company not less than 48 hours before the commencement of the meeting.
2. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 relating to the special business
to be transacted at the meeting in annexed hereto.
3. Members /Proxies should bring duly-filled Attendance Slips sent herewith to attend the meeting.
4. Members who hold shares in demateralised form are requested to write their Client ID and DP ID and those who
hold shares in physical form are requested to write their Folio Number in the attendance slip for attending the
Meeting.
5. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be
entitled to vote.
6. The Register of Members and Share Transfer Books of the Company will remain closed from 10th September, 2009
to 23rd September, 2009 (both days inclusive) for the purpose of Annual General Meeting and Declaration of
Dividend.
7. The final dividend of Rs. 2.00/- per Equity Share for the year ended 31st March, 2009 as recommended by the
Board, if sanctioned at the Annual General Meeting, will be payable to those members whose names appear on
the Company’s register of members on 10th September, 2009.
8. Members holding shares in physical form and desirous of making/changing nomination in respect of their
shareholding in the Company, may send their request in the prescribed form 2B to the Registrar & Transfer Agents
of the Company.
9. Corporate Members are requested to send to the Company, a duly certified copy of the Board Resolution authorizing
their representative to attend and vote at the Annual General Meeting.
10. Members desirous of obtaining any information on the Accounts and Operations of the Company are requested to
write at least one week before the meeting so that the same could be compiled in advance.
11. Members are requested to notify changes, if any, in their registered addresses to the Company’s Registrar and
Transfer Agent.
12. Members are requested to bring their copy of Annual Report to the Meeting.
13. All documents referred to in the notice and explanatory statement are open for inspection at the registered office of
the Company between 10.30 a.m. and 1.00 p.m. on all working days upto the date of the meeting.
14. Member are requested to address all correspondences, including dividend matters, to the Registrar and Share
Transfer Agents, M/s. Link Intime India Private Limited, C-13 Pannalal Silk Mills Compound L B S Marg, Bhandup
(West), Mumbai - 400 078, Tel No: 25963838, Fax No.: 25960329.
INFORMATION UNDER CLAUSE 49 (IV) (E) (V) OF THE LISTING AGREEMENT REGARDING APPOINTMENT OF
DIRECTORS.
1. Mr. Bimal Raj holds a PGDBA degree in management along with a Diploma in Computer Applications. He has
been in the technology business over 20 years with deep understanding of evolution of IT in India and globally. Mr.
Bimal Raj has been with the Company for 11 years and is an integral part in the growth and strategic vision of the
Company. Mr Bimal Raj has been elevated to the position of CEO in 2003 leading the Company to its highly
successful maiden IPO in 2007. Mr. Bimal Raj is also responsible for the expanding footprint of the Company
across the world.
Shareholding of Mr. Bimal Raj (both own or held by / for other persons on a beneficial basis) as on 28th April, 2009
is 5403.
2. Prof. Venugopal Iyengar is M.Sc., Certified in Governance of Enterprise IT (CGEIT), Certified Information Security
Manager (CISM), Certified Information System Auditor (CISA), Certified Information System Security Professional
(CISSP), Associate Certified Fraud Examiner (ACFE). He was the President of ISACA Mumbai Chapter for the year
2005-06. Prof. Venugopal Iyengar is a recipient of MVP Award from the Microsoft Corporation, USA from the CEO’s

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office for the year 2006 as a mark of recognition for his contribution to the global security community. He is a
recipient of the “Pillar of Hindustani Society” award jointly from the Trans-Asian Chamber of Commerce and
Industries and Indo-Mangolian Chamber of Commerce in 2008 as recognition for his global contribution in the
area of IT Governance, IS Audit and Information Security. Prof. Venugopal Iyengar is associated with Information
Technology for almost three decades.
He had worked with TCS as head for e-Security Consulting Practice, with Tata Infotech Limited as Corporate Head
of Quality Audit, Executive Manager - Products and products led services, and Regional Manager with Tata Unisys
Limited. He is a visiting / guest faculty to various B-Schools in Mumbai for over decades. Few of these institutions
include JBIMS, NMIMS, WIMRD, GNIMS, University of Wales, etc.
Shareholding of Mr. Venugopal Iyengar (both own or held by / for other persons on a beneficial basis) as on 28th
April, 2009 is NIL.
INFORMATION UNDER CLAUSE 49 (IV) (E) (V) OF THE LISTING AGREEMENT REGARDING RE - APPOINTMENT
OF DIRECTORS.
1. Mr. Shailesh Vaidya, 51 years has been an Independent Director of the Company since January 2, 2007. He is a
practicing advocate and solicitor in Indian law, having completed his Law Degree at the Government Law College,
Mumbai in 1981 and qualifying as a Solicitor in 1983. Mr. Shailesh Vaidya has been a partner of the law firm M/s.
Kanga and Co., Solicitors, since 1985. He is presently the Chairman of the Law, Review, Reforms and Rationalisation
Committee of the Indian Merchant’s Chamber and also a member of Managing Committee of the Indian Merchants’
Chamber.
Shareholding of Mr. Shailesh Vaidya (both own or held by / for other persons on a beneficial basis) is NIL.
EXPLANATORY STATEMENT
As required under Section 173 (2) of the Companies Act, 1956.
Item No. 5 & 6
Mr. Bimal Raj was appointed as an Additional Director on 28th April, 2009 by the Board of Directors of the Company as
per the provisions of Section 260 of the Companies Act, 1956 and under Article 132 of the Articles of Association of the
Company. According to the said provisions of the Companies Act, 1956, the office of an Additional Director expires at
the ensuing Annual General Meeting.
The Company has received the requisite notice from a member signifying his intention to propose the appointment of
Mr. Bimal Raj as a Director of the Company along with required deposit as per the requirement of the Section 257 of the
Companies Act, 1956. Mr. Bimal Raj has accorded his consent to act as Director of the Company.
Due to increase in the Business operations of the Company, the Board prposes to appoint Mr. Bimal Raj as a Whole
Time Director designated as Executive Director with effect from 28th April, 2009.
The terms and conditions of his appointment, including those relating to remuneration, are as given hereunder:
Tenure:
For a period of five years with effect from 28th April 2009.
Details of Remuneration:
A. Salary Grade: Rs. 30,00,000 p.a.
Increment – as may be decided by the Board of Directors / Remuneration Committee of Directors, from time to time.
B. Commission: Such remuneration by way of commission to the above salary and perquisites, calculated with
reference to the net profits of the Company in a particular financial year and as may be determined by the Board of
Directors of the Company subject to the overall ceilings stipulated under Section 198 and 309 of the Companies
Act, 1956. The overall commission limit not to exceed 1% of the net profit of the Company computed in the manner
specified in the Companies Act, 1956 and the actual commission be determined by the Board of Directors of the
Company.
C. Perquisites: The Executive Director shall be entitled to the following perquisites as classified in four categories ‘A’,
‘B’, ‘C’ and ‘D’.
CATEGORY ‘A’
Medical Reimbursement, Club fees, Personal Accident Insurance, Children’s Education Allowance and Leave Travel
Concession. These will be provided as under:

ANNUAL REPORT 2008-2009

25
 Medical Reimbursement: Expenses incurred for the Executive Director & the family subject to a ceiling of one
month’s salary in a year.
 Club Fees: Fees for membership of one club. This will not include admission and life membership fees.
 Personal Accident Insurance: Premium not to exceed Rs. 25,000/- p.a.
 Children’s Education Allowance: In case of children studying in or outside India, an allowance limited to a
maximum of Rs. 2,000/- p.m. per child or actual expenses incurred whichever is less. Such allowances are
admissible upto maximum of two children.
 Leave Travel Concession: Return passage for self and family in accordance with the rules specified by the
Company where it is proposed that the leave be spent in the home country instead of anywhere in India.
 Explanation: for the purpose of category ‘A’ “Family” means the spouse and the dependent children of the Executive
Director.
CATEGORY ‘B’:
1. Contribution to Provident Fund or Annuity Fund will not be included in the computation of the ceiling on remuneration
to the extent these, either singly or put together, are not taxable, under the Income Tax Act.
2. Gratuity payable will not exceed half a month’s salary for each completed year of service.
3. Encashment of leave at the end of the tenure.
CATEGORY ‘C’:
Provision of car with driver and also provision of telephone at residence will not be considered as perquisites.
CATEGORY ‘D’:
Bonus: The Executive Director also entitled for performance Bonus as approved by the Board within the limits of
Schedule XIII.
The terms and conditions of the above appointment may be altered and varied from time to time by the Board of
Directors (‘the Board’ which term shall be deemed to include Remuneration Committee thereof) as it may at its discretion
deem fit within the maximum amount payable to the Whole Time Director in accordance with Schedule XIII to the
Companies Act, 1956 or any amendments made hereafter in this regard and as may be agreed to by the Mr. Bimal Raj
Minimum Remuneration
Notwithstanding anything hereinabove, where in any financial year during the currency of his tenure as the Executive
Director, the Company has no profits or its profits are inadequate, the Company will pay the aforesaid remuneration by
way of Salary, Commission and Compensation under Stock Option Plan(s) of the Company, as Minimum Remuneration
to Mr. Bimal Raj subject to approval of Central Government, if required.
Mr. Bimal Raj shall not be entitled to Sitting Fees for attending the Board Meeting or any Committee thereof.
The Board of Directors recommends Resolution No. 5 and 6 for your approval.
Except Mr. Bimal Raj none of the Directors are interested or concerned in the aforesaid resolutions.
Item No. 7
Mr. Venugopal Iyengar was appointed as an Additional Director on 28th April, 2009 by the Board of Directors of the
Company as per the provisions of Section 260 of the Companies Act, 1956 and under Article132 of the Articles of
Association of the Company. According to the said provisions of the Companies Act, 1956 the office of an Additional
Director expires at the ensuing Annual General Meeting.
The Company has received the requisite notice from a member signifying his intention to propose the appointment of
Mr. Venugopal Iyengar as a Director of the Company along with required deposit as per the requirement of the Section
257 of the Companies Act, 1956. Mr. Venugopal Iyengar has accorded his consent to act as Director of the Company.
Except Mr. Venugopal Iyengar None of the Directors is interested or concerned in the resolution.
Item No. 8 & 9
The last revision in remuneration of the Chairman & Managing Director and Executive Director & CFO of the Company
took place 3 years ago i.e. with effect from 1st April 2006. The same was approved by the Members at the 12th Annual
General Meeting of the Company held on 8th May 2006. Since then, the Company’s Turnover and Profitability have
increased significantly.

ANNUAL REPORT 2008-2009

26
In appreciation of their dedicated efforts which contributed in achieving an excellent performance by the Company and
having regard to the increased responsibilities for further improving the Company’s performance in a competitive
market, the Remuneration Committee of the Directors at its Meeting held on 28th August, 2009 has proposed an
increase in the remuneration of the Chairman & Managing Director and Executive Director & CFO with effect from 1st
October 2009, by increasing the Salary Grades. There are no changes in the perquisites and other allowances payable.
The details of the Salary Grade are as under:
Details of Remuneration:
A. Salary Grade:
Mr. Nitin Shah, Chairman & Managing Director : Rs. 50,00,000 p.a.
Mr. Prakash Shah, Executive Director & CFO : Rs. 30,00,000 p.a.
Minimum Remuneration
Notwithstanding anything hereinabove, where in any financial year during the currency of the tenure of Mr. Nitin Shah
Chairman & Managing Director and Mr. Prakash Shah, Executive Director & CFO, the Company has no profits or its
profits are inadequate, the Company will pay the aforesaid remuneration by way of Salary, Commission and
Compensation under Stock Option Plan(s) of the Company, as Minimum Remuneration to them subject to approval of
Central Government, if required.
They are not entitled to Sitting Fees for attending the Board Meeting or any Committee thereof.
This explanation, together with the accompanying Notice, is to be regarded as an Abstract of Terms and Memorandum
of Interest pursuant to the provisions of Section 302 of the Companies Act, 1956.
Except Mr. Nitin Shah and Mr. Prakash Shah, none of the Directors are interested or concerned in the resolution.
Item No. 10
The Company has been examining various growth opportunities from time to time either in the existing lines of activities
or in the new areas. The volume and portfolio of activities of the Company has been substantially widened over the
years calling for sizable fund requirements.
The Board is of the opinion that the Equity base of the Company should be strengthened as and when there are
appropriate opportunities or proposal.
Bennett, Coleman & Company Limited (BCCL), an existing Shareholder of the Company, has expressed their intention
to further contribute to the Equity of the Company. It is therefore, proposed to issue and allot 100,000 Warrants on
preferential basis to BCCL, with an option to BCCL to subscribe to equal number of Equity Shares at a price of
Rs. 554/- (Rupees Five Hundred and Fifty Four only) per share, in one or more tranches, within a period of 18 months
from the date of allotment of the Warrants.
The proposed preferential allotment of warrants to BCCL shall be in accordance with Chapter XIII of the SEBI (Disclosure
and Investor Protection) Guidelines, 2000 for Preferential Issues and the following parameters shall be subject to
change(s) as may be required in order to conform to the SEBI regulations/guidelines.
1. The pricing of the Equity arising out of exercise of rights attached to the warrants shall not be lower than the price
determined in accordance with clause 13.1.1.1 of Chapter XIII of SEBI (Disclosure and Investor Protection)
Guidelines, 2000 SUBJECT HOWEVER THAT in the event, the price determined in accordance with Clause
13.1.1.1 of Chapter XIII of SEBI (Disclosure and Investor Protection) Guidelines, 2000 is more than Rs. 554/- at the
time of conversion, then, the warrants will be converted into Equity Shares at such higher price subject to upper cap
of Rs 200/- over and above floor price of Rs. 554/- (Rupees Five Hundred and Fifty Four only).
2. The relevant date, as stipulated in SEBI (Disclosure and Investor Protection) Guidelines, 2000 for determination of
price for the Equity Shares to be issued and allotted upon exercise of rights attached to the Warrants referred
herein means 24th August, 2009, being thirty days prior to the date of passing of this resolution viz 23rd September,
2009 (i.e. the 30 days prior to the date on which the meeting of the General Body of Shareholders is to be held, in
terms of Section 81 (1A) of the Companies Act, 1956, to consider the proposed issue).
In terms of requirements of clause 13.1A of Chapter XIII of SEBI (Disclosure and Investor Protection) Guidelines, 2000,
the Company submits as under:
1) Funds mobilized through the proposed issue are intended to be utilized towards the general corporate and other
purposes including but not limited to funding the long term working capital requirements, funding the ongoing
capital expenditure and brand launching, promotion and development.

ANNUAL REPORT 2008-2009

27
2) The preferential issue of warrants with a right to subscribe to Equity Shares is being made to BCCL, an existing
shareholder of the Company. There is no intention of the Promoter/Key Management Personnel to subscribe to the
offer.
3) Shareholding pattern pre and post preferential allotment, on tentative basis shall be as under:
Category Sub Category Pre Allotment (as on Post Allotment
24th August, 2009)
Nos. of % Nos. of %
Shares Shares
Promoter and Indian Promoter 10,069,159 55.59 10,069,159 55.28
Promoter Group Foreign Promoter - - - -
Sub total 10,069,159 55.59 10,069,159 55.28
Public Shareholding Institutional Investors
Mutual Funds/UTI 1,327,632 7.33 1,327,632 7.29
FI/Banks 200 0.00 200 0.00
Insurance Companies - - - -
FIIs 2,353,478 12.99 2,353,478 12.92
Sub Total 3,681,310 20.32 3,681,310 20.21
Non Institutions
Bodies Corporate 1,121,358 6.19 1,121,358 6.16
Individuals 1,369,869 7.56 1,469,869 8.07
Others 1,873,030 10.34 1,873,030 10.28
Sub Total 4,364,257 24.09 4,464,257 24.51
Others Shares held by Custodians - - - -
and against which depository
Receipts have been issued
Sub Total - - - -
Grand Total 18114726 100.00 18214726 100.00
4) In accordance with Clause 13.4.1 of the SEBI (Disclosure and Investor Protection) Guidelines, 2000, the Company
shall complete the allotment of Warrants within 15 days from the passing of the resolution. However, in absence of
requisite approval or on pendency of any approval from any regulatory authority, the allotment shall be completed
within 15 days from the date of such approval.
5) Identity of the proposed allottees and the percentage of Post Preferential Issue Capital that may be held by them :
Names of the proposed No. of Equity Shares/ No. of Equity Shares Total Percentage of
allottees & identity warrants proposed held as on the postissue
to be allotted Relevant Date 24th shareholding *
August, 2009
(a) (b) (a)+(b)=(c)
Bennett, Coleman and 1,00,000 5,92,500 6,92,500 3.80
Company Limited
* Assuming that the Warrant holders exercise their entitlement in full.
6) BCCL would be holding 3.80% paid up Equity Share Capital after the allotment of Equity Shares assuming
exercise of rights attached to the warrants.
7) In the event, BCCL does not exercise the right to subscribe to Equity Shares within 18 months, the amount paid by
BCCL shall stand forfeited and BCCL shall not be entitled for refund of the same of any part thereof, of any Equity
Shares of the Company against the amount paid.
Due to the proposed Preferential Issue of Share Warrants as above, the following consequences are expected to
result:
i. There will be no change in the constitution of the Board of Directors of the Company,
ii. There will be no change in the Management Control over the Company consequent to the issue of Equity
Share Warrants, as aforesaid.

ANNUAL REPORT 2008-2009

28
iii. There will be no change in the business of the Company.
In terms of Chapter XIII of SEBI (DIP) Guidelines, the Equity Shares on conversion of Warrants proposed to be
issued and allotted to BCCL shall be subject to lock – in for a period of one year from the date of allotment of the
Equity Shares or such reduced period as may be permitted under the applicable SEBI Guidelines as amended
from time to time.
The Equity Shares arising from exercise of the option under the Share Warrants shall be subject to a lock-in as
prescribed under the SEBI Guidelines.
The entire pre – preferential allotment shareholding; held by the allottees prior to this preferential allotment shall be
under lock – in from the relevant date upto a period of six months from the date of preferential allotment.
A copy of the certificate issued by Statutory Auditors of the Company, confirming that the issue of Equity Shares,
their pricing etc. have been made in accordance with the requirements as set out in the SEBI Guidelines as
amended, will be placed before the Annual General Meeting.
The Equity Shares arising from the exercise of the Share Warrants to be allotted to the said investor shall be listed
on the Bombay Stock Exchange Limited and the National Stock Exchange of (India) Limited.
In terms of Section 81 (1) of the Companies Act, 1956, in the event of a Public Company proposing to increase its
Subscribed Capital by way of allotment of further shares in the circumstances specified therein, it is required to offer
such further shares to its existing Equity Shareholders in the proportion of their respective Equity Shareholding in
the Company. Pursuant to Section 81(1A) of the Companies Act, 1956, a Public Company may offer its shares/
convertible instruments in any manner whatsoever to persons other than those mentioned in Section 81(1), if a
special resolution to that effect is passed.
Your approval is thus sought, to issue Warrants on preferential basis to BCCL on the aforesaid terms and conditions.
However, the Board be and is empowered to vary and finalise any other terms and conditions, as their discretion
deem fit and appropriate.
The Board recommends the Special Resolution for the approval of members.
None of the directors of the Company is directly or indirectly concerned or interested in this Resolution.
Item No. 11:
The Board of Directors of the Company (“the Board”) has been examining opportunities to further strengthen and
consolidate the Company’s presence in the competitive Information Technology market. This can be achieved through
further investment in existing business, launching new business and acquisition opportunities. Such plans demand
that the Company augments its funds position so that as and when an opportunity(s) arises, the same can be materialized
by the Company.
The Company proposes to raise funds by way of a QIP Issue for a value equivalent upto USD 50 million including Green
Shoe Option, by way of issue of such number of Equity Shares of face value Rs.10/- each, including those issued
pursuant to conversion of convertible securities, on one or more occasions and in one or more tranches pursuant to
provisions of Chapter XIII-A of the SEBI (Disclosure and Investor Protection) Guidelines, 2000, and subject to compliance
of with other applicable enactments, rules, regulations and guidelines.
According to the SEBI (DIP) Guidelines allotment of securities to QIBs will have to be made pursuant to Chapter XIII-A
of the SEBI (DIP) Guidelines concerning QIPs and the same has to be specified in the resolution to be passed by the
Shareholders authorizing such an issue. Furthermore the said Guidelines also require that the “Relevant Date” in terms
of Clause 13A.3 of the SEBI (DIP) Guidelines based on which the price of the issue shall be determined, shall also be
included in the shareholder’s resolution.
The detailed terms and conditions for the QIP Issue will be determined in consultation with the Lead Managers, other
advisors and such other authority or authorities as may be required to be consulted by the Company considering the
prevailing market conditions and other relevant factors.
The pricing of the QIP Issue will be determined in accordance with the provisions of Clause 13A.3 of the SEBI (Disclosure
and investor Protection) Guidelines, 2000, the relevant date for the purpose of which will be the date of the meeting in
which the Board of the Company (or the Committee of Directors duly authorized) decides to open the proposed issue
or the date on which the holder of the securities which are convertible into or exchangeable with Equity Shares at a later
date becomes entitle to apply for the said shares.
The pricing of the QIP Issue will be determined in accordance with the provisions of Clause 13A.3 of the SEBI (Disclosure
and investor Protection) Guidelines, 2000, the Relevant Date for the purpose of pricing shall be the date of the meeting

ANNUAL REPORT 2008-2009

29
in which the Board of the Company (or the Committee of Directors duly authorised) decides to open the proposed issue
or the date on which the holder of the securities which are convertible into or exchangeable with Equity Shares at a later
date becomes entitled to apply for the said shares.
The Special Resolution seeks to give the Board powers to issue the Securities to ‘Qualified Institutional Buyers’ as
permitted under Chapter XIII-A of SEBI (Disclosure and investor Protection) Guidelines, 2000.
Section 81 of the Companies Act, 1956, provides, inter-alia, that when it is proposed to increase the Share Capital of the
Company by allotment of further Shares, such further Shares shall be offered to the existing Shareholders of the
Company in the manner laid down in Section 81 unless the Shareholders in a General Meeting decide otherwise. The
proposed QIP Issue as aforesaid, not being on a rights basis to all the existing Shareholders of the Company, the
consent of the Shareholders is being sought pursuant to the provisions of Section 81(1A) and other applicable provisions
of the Companies Act, 1956 and in terms of the provisions of the listing Agreement executed by the Company with the
Stock Exchanges in India where the Equity Shares of the Company are listed. Hence, the Directors seek the approval
of the members for the said QIP Issue.
The Board recommends the Special resolution for the approval of members.
None of the Directors is interested or concerned in the resolution.
Item No. 12:
The Equity Shares of your Company are listed on the National Stock Exchange of (India) Limited (NSE) and The
Bombay Stock Exchange Limited (BSE). The Shares are actively traded on both the Stock Exchanges.
The market price of the Shares of the Company has increased significantly since IPO. In order to improve the liquidity
of the Company’s Shares in the Stock Market and to make it affordable to the small investors, the Board of Directors of
the Company (“the Board”’) at their meeting held on 28th August, 2009, considered it desirable to sub-divide the existing
Equity Shares of face value of Rs. 10/- each into 2 Equity Shares of Rs. 5/- each.
Upon approval of the Shareholders for sub-division of shares, in case the shares are held in physical, the old Share
Certificates of face value of Rs. 10/- each will be cancelled on the record date and the new Share Certificates will be
sent to the Shareholders. In case the shares are in dematerialized form, the sub-divided shares will be directly credited
to the shareholders Demat Account on the record date in lieu of their existing shares. The date on which this sub-
division would become effective, will be decided by the Board after obtaining the Shareholders’ approval, which will be
notified through the Stock Exchanges.
In view of the above, the existing Capital Clause V in the Memorandum of Association of the Company relating to
Authorised Share Capital and its classification need relevant amendment to give effect to the sub-division.
Your Board of Directors recommends the resolution for your approval.
None of the Directors are interested or concerned in this resolution except to the extent of their holding.

For and on behalf of the Board of Directors

Place: Mumbai Nitin Shah


Date: 28th August, 2009. Chairman & Managing Director

Registered Office:
3rd Floor, Kimatrai Building,
77/79, Maharshi Karve Marg,
Marine Lines,
Mumbai – 400 002

ANNUAL REPORT 2008-2009

30
DIRECTORS’ REPORT
To

The Members of
ALLLIED DIGITAL SERVICES LIMITED

We are delighted to present the report on our business and operations for the financial year ended 31st March,
2009.

RESULTS OF OPERATIONS

(Rs. in Lacs)

PARTICULARS 2008-09 2007-08

Total Operational Income 39,164.10 29,703.50


Other Income 218.60 257.62
Total Income 39,382.70 29,961.12
Less: Operating Expenditure 29,467.27 23,028.62
Profit before Interest, Depreciation, Amortization Tax & Exceptional Item 9,915.43 6,932.50
Less: Depreciation 358.65 328.67
Less: Interest 259.59 138.37
Profit before Tax and Exceptional Item 9,297.19 6,465.46
Excess Depreciation reversal in respect of Earlier Years 270.07 0.00
Profit before Tax 9,567.26 6,465.46
Less: Provision for Taxation including FBT 1,476.54 2,046.89
Less: Deferred Tax Liability 136.15 62.64
Net Profit for the year 7,954.57 4,355.93
Add: Balance brought forward from the Previous year 7,655.69 3,299.76
Amount available for Appropriation 15,610.26 7,655.69
Less: Transfer to General Reserve 500.00 0
Proposed Dividend Including Dividend Tax 423.84 0
Balance carried to Balance Sheet 14,686.42 7,655.69

BUSINESS OPERATIONS

Your Company is an IT Infrastructure Management and Technical Support Services Outsourcing Company. It has
over two decades of experience in enterprise IT Infrastructure, Management and Implementation & Consulting on
complex IT Solutions for different Business Verticals. Your Company has about 2,265 Committed Professionals
from different managerial and engineering backgrounds operating across 132 locations in India and across locations
in USA and Australia.

The Company’s Gross Income for the Financial Year ended 31st March, 2009 increased to Rs.39,382.70 lacs, from
Rs 29,961.12 lacs in the previous year, registering a growth of over 31%. The Operating Profit (PBDIT) of the
Company increased 43% to Rs 9,915.43 lacs during the year, up from Rs 6,932.50 lacs in the previous year. Total
Interest & Depreciation was at Rs 618.24 lacs as against Rs.467.04 lacs in the Previous Year. The provision for
taxation including deferred tax liability during the year was Rs 1,612.69 lacs. The Net Profit for the year increased
by 83% to Rs 7,954.57 lacs from Rs 4,355.93 lacs in the previous year. An amount of Rs.500 lacs was transferred
to the General Reserve during the year under review. The Company’s Net worth as on 31st March, 2009, stood at
Rs 31,842.88 lacs as against Rs 18,100.40 lacs last year.

ANNUAL REPORT 2008-2009

31
The ‘service’ segment of the Company contributed 28% in the year under review as compared to 24% contributed
in the previous year. The increased share of ‘service’ segment has resulted in increase in operating margin during
the year under review as compared to previous year.

We seek long-term partnership with clients while addressing their IT requirements. Our customer - centric approach
has resulted in high levels of client satisfaction and retention.

DIVIDEND

In view of the Company’s profitable performance, the Directors are pleased to recommend for approval of the
Members a Final Dividend of 20% of the Paid Up Value of Equity Share of Rs. 10/- each of the Company for the
financial year 2008-09. The Final Dividend, if approved by the Members, would involve an outflow of Rs.362.29
lacs towards Dividend and Rs. 61.55 lacs towards Dividend Distribution Tax, resulting in a total outflow of Rs.
423.84 lacs.

TRANSFER TO RESERVES

During the year, the Company proposes to transfer Rs. 500.00 lacs to General Reserve out of the amount available
for appropriations.

LIQUIDITY

Your Company maintains sufficient cash to meet its strategic objectives. As on 31.3.2009, your Company has liquid
assets including investment in mutual funds of Rs 2,071.95 lacs as against Rs 5,428.55 lacs at the previous year
end. These funds are lying with banks in current accounts, fixed deposits and in mutual funds.

INCREASE IN THE SHARE CAPITAL

During the year, the Company allotted 50,436 Equity Shares of Rs. 10/-each at par under loyalty plan and 29550
Equity Shares of Rs. 10/- at premium of Rs. 85/- each under growth plan of ‘ESOP 2007’. Further your Company
issued 7,45,000 fully paid up Equity Shares to En Pointe Technologies Sales Inc. for acquisition of 46.02% stake
in En Pointe Global Services, LLC. Thus the Paid Up Equity Share Capital of the Company increased from Rs.
17,28,97,400 to Rs. 18,11,47,260.

UTILISATION OF IPO FUND

Your Company raised Rs. 8,593.00 lacs by way of its Initial Public Offering (IPO) in July 2007. The Company has
fully utilized the funds during the year. A brief synopsis of utilization of funds are as hereunder:

(Rs in Lacs)

Amount raised through IPO 8,593.00


IPO Expenses 832.00
Net proceeds 7,761.00
Deployment
Up gradation of existing infrastructure 1,228.41
Setting up new strategic business units 2,142.80
Financing working capital and other advances on account of assets acquisition 4,389.79
Total 7,761.00

STRATEGIC ACQUISITION

With the objective of moving towards its goal of being among the leading IT Infrastructure Management Service
providers globally, the Company made following acquisitions during the year directly or through its subsidiaries:

ANNUAL REPORT 2008-2009

32
EN POINTE GLOBAL SERVICES, LLC

The Company has acquired 80.5% controlling stake in En Pointe Global Services, LLC (EPGS). EPGS is an IT
Solution and outsourced managed services provider to commercial enterprises, government agencies and
educational institutions in USA and was part of En Pointe Technologies Sales Inc.

EPGS primarily offers following services to various business verticals:


a) Lifecycle services
b) Client Services
c) Managed Security Services
d) Infrastructure Management Services
e) Remote Infrastructure Management Services

With this acquisition, your Company has been able to make inroads into the highly lucrative IT market of the United
States of America.

DIGICOMP COMPLETE SOLUTIONS LIMITED

The Company has acquired 51.06% Equity Stake in Digicomp Complete Solutions Limited (Digicomp). Digcomp is
a leading player in the business of end to end technical support, reverse logistics, customer care, warranty service,
help desk services.

This acquisition is a reverse integration to the Company’s IMS/TBPO business and will help the Company to enhance
its IMS/TBPO business by leveraging the services capability of Digicomp.

ALLIED DIGITAL, INC

Allied Digital, INC (ADI) was incorporated on July 16, 2008 in the State of Delaware as a wholly owned subsidiary
of your Company for the purpose of acquiring part Equity Stake in En Pointe Global Services, LLC. ADI holds
34.48% equity of EPGS. The same is financed by a long term loan of USD 8.00 million and unsecured loan from
parent company, i.e. Allied Digital Services Limited

EN POINTE (INDIA) PRIVATE LIMITED

Your company has acquired 100% Equity Stake in En Pointe (India) Private Limited (En Point India) in the current
financial year. En Point India is in SAP practice and presently functioning as a captive unit for SAP support to En
Point Tech Inc, EPGS & at ITPL, Bangalore to support SAP customers. This NOC also acts as a Disaster Recovery
(DR) site for our other NOC at Navi Mumbai and vice versa. Your Company has plans for commercial exploitation
of En Point India’s SAP capababilities in future.

FUTURE PLAN OF ACTION

Over 2 decades of experience in Infrastructure Technology has allowed us to rip off huge benefits and to start
taking advantage of this upcoming Infrastructure Management Services wave.

With our core strength of excellence in Technology, our future plans and objectives are to maximize customers,
employees and stakeholder value and also to enhance our position as a leading provider of IT Infrastructure services
Company.

To obtain its objectives, your Company will adopt the following core strategies:
- Build further on the technical prowess of Digicomp and the geographical reach of EPGS,
- Penetrate into more advanced markets through an inorganic growth strategy.
- Utilizing and adopting best world class practices and robust back-end processes to excel in our global services
delivery capabilities
- To provide an unrivalled end-to-end IMS services offerings,

ANNUAL REPORT 2008-2009

33
With the advent of the next generation of technology, we foresee a sea change in terms of utilizing IT Infrastructure
where the business is moving to the utility model. Your Company is ready to enhance its offerings and re-engineer
itself to stay at the helm of innovation at all points

Our belief is that, enterprise adoption of the Cloud Computing Management model would be very high, considering
the current economic scenario. Your Company has already launched a plethora of services around migration and
management of the Cloud Computing model which would differentiate your Company from its peers giving your
Company an edge to stay ahead of competition.

CREDIT RATING

ICRA has assigned A1 (pronounced A one) rating to Commercial Paper program & short term bank lines to our
Company. This is the highest credit quality rating assigned by ICRA to short-term debt instruments. Also ICRA has
assigned the LA+ (pronounced L A plus) rating to your Company for long term fund based bank lines. This is the
adequate credit-quality rating assigned by ICRA to long-term debt instruments.

The ratings reflect strong profitability, a comfortable financial profile supported by a conservative capital structure
and an established market presence with a diversified client base. The contribution from your Company’s higher
margin ‘services business’ has been growing steadily, supporting improvement in profitability.

FORMATION OF MANAGEMENT COMMITTEE

Your Company has formed a Committee called “Management Committee” on April 28, 2009. The Committee will
look after several matters related to the day to day operations of the Company. The Management Committee shall
be delegated the powers of the Board (except those powers which are to be exercised by the Board of Directors
only at their duly convened meeting or by circulation) and all the decisions of the said Committee shall be effective
and binding. Mr. Nitin Shah shall act as a Chairman of the Committee and Mr. Prakash Shah & Mr. Manoj Shah
will act as the Members of the Committee.

QUALIFIED INSTITUTIONAL PLACEMENT (QIP)

Your Company had passed Special Resolution in previous Annual General Meeting of the Company duly held on
September 12, 2008 for issue of Equity Shares through Qualified Institutional Placement (“QIP”) to the Qualified
Institutional Buyers (“QIB”), whether in India and abroad for issuing further capital in Indian Rupees or Foreign
Currency upto limit of US $ 100 million. However, the resolution could not be materialized due to the adverse
economic scenario during the period and the Company has not found any sound projects / opportunities for
Investments, in India and abroad.

Your Company plans to raise amount equivalent to USD 50 Million through Qualified Institutional Placements
(“QIP”), Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Debentures (“OCD”), Bonds with
share warrants attached, Global Depositary Receipts (“GDRs”), American Depositary Receipts (“ADRs”) or any
other equity related instrument of the Company or a combination of the foregoing including but not limited to a
combination of Equity Shares with bonds and/or any other Securities whether convertible into Equity Shares or not
to fund the future growth of the Company. The Board of Directors are pleased to recommend the same for the
approval of the Shareholders.

RAISING OF FUNDS THROUGH ISSUANCE OF WARRANTS TO BENNETT, COLEMEN & COMPANY LIMITED
(BCCL)

Bennett, Coleman & Company Limited (BCCL), an existing Shareholder of the Company, has expressed their
intention to further contribute to the Equity of the Company. It is therefore, proposed to issue and allot 1,00,000
Warrants on preferential basis to BCCL, with an option to BCCL to subscribe to equal number of Equity Shares
within a period of 18 months from the date of allotment of the Warrants at a floor price of Rs 554/- per Equity
Shares. The pricing of the Equity Shares arising out of exercise of rights attached to the Warrants shall not be
lower than the price determined in accordance with clause 13.1.1.1 of Chapter XIII of SEBI (Disclosure and Investor
Protection) Guidelines, 2000 SUBJECT HOWEVER THAT in the event, the price determined in accordance with
Clause 13.1.1.1 of Chapter XIII of SEBI (Disclosure and Investor Protection) Guidelines, 2000 is more than Rs.
554/- at the time of conversion, then, the warrants will be converted into Equity Shares at such higher price subject
to a upper cap of Rs 200/- over and above floor price of Rs. 554/- .

ANNUAL REPORT 2008-2009

34
The Board of Directors are pleased to recommend the same for the approval of the Shareholders.

SPLIT OF EQUITY SHARES

The market price of the Shares of your Company has increased significantly since IPO. In order to further improve
liquidity of Shares in the stock market and to make it affordable to the small investors, the Board of Directors has
considered it desirable to sub-divide the nominal value of the Equity Shares of Rs 10/- each into 2 (Two) Equity
Shares of Rs. 5/- (Rupees Five only) each.

The Board of Directors are pleased to recommend the same for the approval of the Shareholders.

APPLICATION TO MINISTRY OF CORPORATE AFFAIRS, NEW DELHI

Your Company has made an application to the Central Government, Ministry of Corporate Affairs, New Delhi for
availing an exemption from attaching the annual accounts of its subsidiary Companies for the financial year ended
31st March, 2009 as the Subsidiary Companies are carrying limited business activities and which will save the cost
of paper, printing and dispatch of Annual Reports of the Company. Your Company has prepared consolidated
accounts of its Subsidiary Companies for the financial year ended 31st March, 2009. Audited Accounts of Subsidiaries
are available for inspection at the Registered Office of the Company and will make available these documents/
details upon request by any member of the Company.

The following are the subsidiaries of the Company:

1. En Pointe Global Services, LLC

2. Digicomp Complete Solutions Limited

3. Allied Digital Inc.

DIRECTORS APPOINTMENT

Mr. Bimal Raj and Mr. Venugopal Iyengar were appointed as Additional Directors of the Company, in accordance
with Section 260 of the Companies Act, 1956, by the Board of Directors at its meeting held on April 28, 2009, with
effect from that date. These Additional Directors would hold office till the date of the Annual General Meeting of the
Company scheduled to be held on September 23, 2009. The requisite notices together with necessary deposits
have been received from members pursuant to Section 257 of the Companies Act, 1956 proposing the election of
Mr. Bimal Raj and Mr. Venugopal Iyengar as Directors of the Company at the ensuing Annual General Meeting of
the Company.

Mr Bimal Raj has been appointed as Executive Director & CEO of the Company.

RE-APPOINTMENT

In accordance with the Articles of Association of the Company and provisions of the Companies Act, 1956 at least
two-thirds of our Directors shall be subject to retirement by rotation. One- third of these retiring Directors must
retire from office at each Annual General Meeting of the Shareholders. A retiring Director is eligible for re-election.
Mr. Shailesh Vaidya, retires by rotation and being eligible offers himself for re-appointment at this Annual General
Meeting. The Board of Governance and Committee have recommended their re-appointment for consideration of
the Shareholders.

RESIGNATION

During the year, Mr. Om Prakash Chawla tendered his resignation from the Directorship of the Company due to
personal reasons. The Board has accepted his resignation with effect from February 16, 2009 as Director of the
Company. Mr. Om Prakash Chawla had joined the Company as an Independent Non-executive Director on May
23, 2006. He has given his unstinted support and made a remarkable contribution in the growth and development
of Allied Digital during his tenure of almost three years. The Board appreciates his invaluable and constructive
contribution towards Organization.

ANNUAL REPORT 2008-2009

35
EMPLOYEE STOCK OPTION PLAN (ESOP)

Your Company had introduced two Stock Option plans for its employees, the details of Options granted under
Stock Option Scheme (2007) Loyalty Grant and Stock Option Scheme (2007) Growth Grant are given in the table:

PARICULARS LOYALTY GROWTH


GRANT GRANT

Total Options granted by the plan (no.) 63,300 4,33,300


Pricing formula on date of grant 10/- 95/-
Options granted during the year (no.) Nil 1,52,700
Weighted average price per Option granted (Rs.) NA NA
Variation in terms of Options NA NA
Options vested during the year (no.) NIL 54,900
Options exercised during the year (no.) 50,436 29,550
Total number of Shares arising as a result of exercise of option (no.) 50,436 29,550
Money raised on exercise of Options (Rs.) 5,04,360 28,07,250
Options forfeited and lapsed during the year (no.) 12,864 43,500
Total number of Options in force at the end of the year. (no.) NIL 2,62,500
Grant to senior management (no.) NIL NIL
Employees receiving 5% or more of the total number of NIL 1,46,000
Options granted during the year (no.)
Employees granted Options equal to or exceeding 1% of the issued capital (no.) NIL NIL

PARTICULARS 2009 2008


NO. OF EXERCISE NO. OF EXERCISE
OPTIONS PRICE OPTIONS PRICE
Loyalty Grant
Outstanding at the beginning of the year 63,300 10.00 Nil 10.00
Forfeited 12,864 10.00 NIL 10.00
Exercised 50,436 10.00 NIL 10.00
Outstanding at the end of the year NIL 10.00 63,300 10.00
Vested at the end of the year NIL 10.00 63,300 10.00
Growth Grant
Outstanding at the beginning of the year 2,08,200 95.00 NIL 95.00
Forfeited 43,500 95.00 NIL 95.00
Exercised 54,900 95.00 69,400 95.00
Outstanding at the end of the year 2,62,500 95.00 2,08,200 95.00
Vested at the end of the year 54,900 95.00 69,400 95.00

During the year there were no Options vested below the fair market value of the Shares, and hence no expenses
have been provided on account of Employee Stock Option cost.

ANNUAL REPORT 2008-2009

36
STATUTORY AUDITORS

M/s. K. M. Kapadia & Associates, Chartered Accountants, Mumbai, Statutory Auditors of your company hold office
till the conclusion of the forthcoming Annual General Meeting of the Company. They have signified their willingness
to accept re-appointment, if re-appointed. The Company has also received their eligibility certificate under Section
224 (1B) of the Companies Act, 1956.

COST AUDIT

The Company is not required to undertake the Cost Audit as required under Section 233B of the Companies Act,
1956.

FIXED DEPOSITS

In terms of the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of
deposits Rules), 1975, the Company has not accepted any fixed deposits during the year and, as such, no amount
of Principal or Interest was outstanding as of the Balance Sheet Date.

QUALITY & CERTIFICATION

We continue our excellence in journey with a critical focus on Quality and Processes with significant investment in
quality processes. Pursuant to our ISO 9001 certification experience, we continued further certifications for our
other activities. Your Company’s Remote Management Services (RMS) centre at Navi Mumbai has got ISO
27001 Certification during the year. By this certification, we have protected our IT Infrastructure by means of right
infrastructure and Process deployment so the customers we service are in safe hands. We are in process further
certifying these facilities under the latest standard ISO 20000-1. Your Company is ISO: 9001 certified since last 10
years. We plan to get this certification upgraded to ISO 9001:2008, the latest announced standard; this year”

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The information on Conservation of Energy required under Section 217 (1) (e) of the Companies Act, 1956 read
with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not
applicable to the Company. The Company requires minimum energy consumption and endeavor has been made
to ensure the optimal utilization of energy, avoid wastage and conserve energy.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. In Lacs)

Particulars 2009 2008

Earnings 4,880.77 860.34


Outflow (including Capital imports) 664.83 814.91
Net Foreign Exchange Earnings (NFE) 4,215.94 45.43
NFE / Earnings (%) 86 5

Particulars of Employees

As required under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out as hereunder.
The Department of Company Affairs has amended the Companies (Particulars of Employees) Rules, 1975 to the
effect that particulars of employees of Companies engaged in the Information Technology Sector posted and working
outside India, not being Directors or their relatives, drawing more than Rs. 24 lacs per financial year or Rs. 2 lacs
per month, as the case may be, need not be included in the statement under Section 217 (2A) of the Companies
Act, 1956 but such particulars shall be furnished to the Registrar of Companies.

ANNUAL REPORT 2008-2009

37
Sr Name Designnation Gross Qualification Age Date of Exper- Previous Designation of
No Remune- (yrs) joining ience employment previous
ration employment

1 Ajay kumar Financial 5,38,123/- B.Com(Hons), 39 15.1.2009 16 Gini & Jony Executive Director
Agrawal Controller ACA,ACS ICWA Limited

2 Upen Ashok Senior 12,60,000/- B,com, 33 1.12.2008 8 E-COP, Country Manager


Sachdev Director-RMS PG Diploma in Singapore
Cyber laws,
CISA

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanation obtained by them, your
Directors make the following statements in terms of Section 217(2AA) of the Companies Act, 1956, that:

a) in the preparation of the Annual Accounts for the year ended 31st March, 2009, the applicable accounting
standards have been followed alongwith proper explanation relating to material departures, if any.

b) the Directors have selected such accounting policies in consultation with statutory auditors 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 ended 31st March, 2009 and of the
profit of the Company for that year.

c) the Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance
of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm
that there are adequate systems and controls for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities.

d) the Directors have prepared the Annual Accounts for the year ended 31st March, 2009, on a going concern
basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the
Listing Agreement with the Stock Exchange in India, is presented in a separate section forming a part of this Annual
Report.

CORPORATE GOVERNANCE

Your Company has been practicing the principlels of good Corporate Governance. For the fiscal year 2009, the
compliance report is provided in the Corporate Governance section of the Annual Report and we have obtained
certification from a Practicing Chartered Accountant on our compliance with Clause 49 of the listing agreement
with Indian Stock Exchanges, described in the separate section forming a part of this Annual Report.

AWARDS AND RECOGNITION

During the year, the Company has received various awards and recognitions. The awards are listed below

 Best Managed Services Provider Award, CRN Excellence Award (2009)

 Top 100 Companies of India, Channel World awards (2009)

 Forbes, Best Under a Billion Dollar Company (2008)

 Fastest Growing Systems Integrator Award, Dataquest Excellence Award (2008)

 Company of the year by CRN Excellence Awards (2008)

ANNUAL REPORT 2008-2009

38
HUMAN RESOURSES

Employees are vital to the Company. The Company’s success depends largely upon the quality and competence
of its management team and key personnel. Attracting and retaining talented professionals is therefore a key element
of the Company’s strategy and a significant source of competitive advantage. The Company’s HR policies and
processes are aligned to effectively drive its expanding business and emerging opportunities. This has been achived
by continuously investing in attracting, learning and developing programmers, empowering employees at all levels
and maintained well structured reward and recognition mechanisms. Our model of recruiting the best and brightest
talent from top academic institutions across the Country and providing intense training has contributed greatly in
differentiating Allied Digital in the marketplace. Our culture of harmonious and constructive relations between the
management and employees helped us maintain a cordial work atmosphere and achieve business growth.

The Company effectively realigned the workforce of two acquisition made during the current year with the Parent
Company.

We added 238 employees, taking the total strength to 2265 up from 2027 at the end of the previous year. Apart
from this, the company has added 300 plus employees in USA with acquisition of En Pointe Global Services, LLC
and 350 plus employees with acquisition of Digicomp Complete Solutions Limited.

ACKNOWLEDGEMENT

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on
record our deep sense of appreciation of the contribution made by the employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, cooperation and support.

We thank Government of United States of America where we have operations. We also thank Government of India,
particularly the Ministry of Communication and Information Technology, the State Governments and various
Government Agencies for their support and look forward to their continuous support in the future.

For and on behalf of the Board of Directors

Nitin Shah Prakash Shah


Chairman & Managing Director Executive Director & CFO

Place: Mumbai
Date: 28th August 2009

ANNUAL REPORT 2008-2009

39
MANAGEMENT’S DISCUSSION AND ANALYSIS
2008 was a year of transformation of the IT sector and the Companies world over re-engineered themselves to
battle global crisis. In spite of these state of affairs, Indian IT industry witnessed a double digit growth rate and was
a net hirer. This growth was fueled by increasing diversification in the geographic base and industry verticals, and
adaptation in the service offerings portfolio.

At the same time, the survey showed that substantial growth would take place over the next two years enabling the
industry to get past the USD 60 billion export target in FY2011. (NASSCOMM)

Revenue from this sector as a proportion of national GDP grew from 1.2 per cent in FY1998 to an estimated 5.8
per cent in FY2009. The net value-added by this sector, to the economy, was estimated at 3.5-4.1 per cent for
FY2009. The sector’s share of total Indian exports (merchandise plus services) increased from less than 4 per cent
in 1998 to almost 16 per cent in 2008. Export revenues touched USD 47.3 billion in FY2009, accounting for 66 per
cent of the total IT-BPO industry revenues.

IT Services Forecast Comparison, September 2008-March 2009, (Millions of Dollars)

2008 2009 2010 2011 2012 CAGR (%)


2007-2012

September 2008 837,544 891,920 952,650 1,020,775 1,095,469


December 2008 820,073 827,419 873,132 929,285 991,413
March 2009 809,504 796,056 826,536 869,398 920,949
Growth Rate (%)
September 2008 11.3 6.5 6.8 7.2 7.3 7.8
December 2008 9.0 0.9 5.5 6.4 6.7 5.7
March 2009 7.6 -1.7 3.8 5.2 5.9 4.1

Source: Gartner (March 2009)

Worldwide: End-User Spending on IT by Technology Segment and Sub-segment (Millions of Dollars)

2007 2008 2009 2010 2011 2012 2013 CAGR


2008-
2013 (%)
IT Services
IT Product Support 140,175 152,355 146,017 150,723 157,024 164,024 172,104 2.5
Hardware Maintenance 90,046 95,734 90,160 90,941 92,870 95,029 97,568 0.4
and Support
Software Support 50,129 56,621 55,857 59,782 64,154 68,995 74,536 5.7
Professional IT Services 604,458 653,568 614,966 633,233 662,820 700,258 739,705 2.5
Consulting 67,649 73,584 67,046 68,566 71,551 75,789 79,983 1.7
Development and 231,386 253,133 235,656 239,610 249,375 262,248 275,478 1.7
Integration
Process Management 106,966 113,931 109,318 114,796 121,900 130,761 140,152 4.2
IT Management 198,457 212,920 202,945 210,262 219,994 231,460 244,092 2.8
All IT Services 744,634 805,923 760,983 783,956 819,844 864,282 911,809 2.5

(Source: Gartner)

ANNUAL REPORT 2008-2009

40
Worldwide: IT Spending by Region, (2009-2010 &2013)

Source: Gartner (June 2009)

Worldwide: IT Spending by Region, 2008-2010 and 2013 (Billions of Dollars)

2008 2009 2010 2013

United States 945.4 925.3 949.3 1,100.8


Canada 77.1 68.1 70.0 79.4
Latin America 247.5 227.6 244.1 292.6
Western Europe 899.9 782.9 783.5 847.4
Eastern Europe 167.2 147.0 144.7 162.3
Middle East and Africa 204.9 206.4 217.9 263.6
Japan 294.8 306.5 306.7 309.9
Asia/Pacific 515.8 489.2 509.5 620.1
Worldwide 3,352.5 3,152.9 3,225.7 3,676.3

The above statistics estimates robust growth in IT Infrastructure management market in years to come.

The Rise of Remote Infrastructure Management Services (RIMS)

It has been widely accepted that RIMS, as an independent industry, could unleash the next largest wave of
opportunity in off-shoring. The Study alongside other reports by business intelligence majors, indicates that looking
ahead, the US$5241 billion infrastructure management services (IMS) industry that manages an enterprise’s core
IT systems including hardware, software, connectivity and people, will become a key and core service for businesses.
The IMS industry is moving towards a remote delivery model where services are increasingly delivered by vendors
from low-cost locations and the addressable market for RIMS is estimated to be worth US$96 billion to US$104
billion. Remarkably, this emerging segment is comparable to the offshore ADM opportunity of US$77 billion to
US$93 billion and offshore BPO opportunity of US$120 billion to US$150 billion. According to Gartner, the majority
of growth will come from off-shoring midrange services, likely to account for approximately 70 percent of the overall

ANNUAL REPORT 2008-2009

41
opportunity by 2013. So far India accounts for US$3 billion to US$4 billion of the total US$6 billion to US$7 billion
worth of services off-shored. This provides a considerably large opportunity for Indian players to grab a larger part
of the global market share.

BUSINESS AND COMPANY OVERVIEW

The Company is a leading Systems Integrator and IT Infrastructure Management Services provider and is an
established player in the Indian IT industry, providing wide spectrum of Technology Solutions and Services to a
diverse customer base. Today, the Company has the ability to provide a blend of solutions and services to the
following verticals:

 Government  Entertainment
 Energy  Retail
 Telecom  Service Providers
 BFSI  Education
 Manufacturing  Hospitality
 Advertising

Headquartered at Mumbai, the Company has around 2000+ committed professionals operating across 132 direct
locations across India. The Company has laid down quality processes within Organization and is conferred with
ISO 9001:2000 certification as recognition to the Company’s stringent adherence to its quality initiatives. In addition,
the Company has adapted to the ITIL best practices aligning its service delivery mechanism to BS 15000 Standards
and is in the process of getting certified on six sigma.

FACTORS THAT MAY AFFECT RESULTS OF THE OPERATION

General Economic Conditions: General economic slowdown may compel our clients to postpone their decisions
to acquire newer technology and reduce their IT operations cost. In turn such scenario may affect our revenue and
profitability.

Foreign Currency Fluctuation: During last fiscal, 12.5% of our revenue was in foreign currency while a sizable
amount of its cost was in Indian Rupees. Primarily our foreign currency earnings are in US dollars. The exchange
rate between the Indian rupee and US dollar has fluctuated significantly in recent past and the same may continue
fluctuating in future. Currency fluctuation some time may turn out highly unfavorable to us and may adversely affect
our revenue and gross margins.

We are not Technology Originator: Our Enterprise Computing Team gives various technology solutions to customer.
These solutions are usually conceived using building blocks of different range of IT products namely computing,
storage, networking, security and software products. Very often this range of IT products belongs to difference
OEMs and functioning of final solutions highly depends on integration of all products.

Pricing Pressure: The Company’s 87.5% revenue is domestic revenue. The Indian IT market (domestic) has been
viewed as a highly emerging market compared to other markets, hence it has become a focused market for several
large Indian IT firms & various global IT giants. Though the Company is comfortably placed because of its rich
experience and vast geographical presence in the market place, but highly competitive scenario creates pricing
pressure on the Company may affect its gross margin in the long run.

Human Resources: Our services business is a highly Human Resource intensive. An increased demand of IT
professionals may result in increased attrition which may affect our business in the short term

DISCUSSION ON RESULTS OF OPERATIONS

The financial statements are prepared in compliance with the Companies Act, 1956 and generally accepted
accounting principles in India.

ANNUAL REPORT 2008-2009

42
The following table sets forth certain financial information from the financial statement as well as these items as a
percentage of our revenue for the periods indicated:

(Rs. in Lacs)

31st March, 2009 31st March, 2008


Particulars Amount % of Y-o-Y Amount % of
total Growth total
Income Income

Income
Operational Income 39,164.10 99% 32% 29,703.50 99%
Services 11,125.60 28% 56% 7,137.15 24%
Solution 27,672.63 70% 22% 22,559.95 75%
Others 365.87 1% 6.40 0%
Other Income 218.60 1% 257.62 1%
Total Income 39,382.70 100% 31% 29,961.12 100%

Expenditure
Cost of sales 24,642.24 63% 19,973.97 67%
Cost of Employees 3,666.85 9% 2,232.40 7%
Administrative, selling and other expenses 1,158.18 3% 822.25 3%
Total Expenditure 29,467.27 75% 28% 23,028.62 77%

Profit before Interest, Depreciation, 9,915.43 25% 43% 6,932.50 23%


Amortization, Tax & Exceptional Items

Interest and Finance Charges 259.59 1% 138.37 0%

Depreciation and Amortization 358.65 1% 328.67 1%

Profit before Tax & Exceptional Items 9,297.19 24% 44% 6,465.46 22%

Excess Depreciation reversal in respect 270.07 1% - 0%


of earlier years

Profit before Tax 9,567.26 24% 48% 6,465.46 22%

Provision for Taxation including FBT 1,612.69 4% 2,109.53 7%

Profit after Tax 7,954.57 20% 83% 4,355.93 15%

TOTAL INCOME:

The Total Operating Income of the Company has increased from Rs.29,703.50 lacs in FY 2007-08 to Rs. 39,164.10
lacs in FY 2008-09 showing a y-o-y growth of 32%. The increase in Total Income is due to steady growth in all
lines of business. The ‘services’ business has grown from Rs.7,137.15 lacs in FY 2007 - 08 to Rs.11,125.60 lacs
in FY 2008 – 09 whereas solution business has increased from 22,559.95 lacs in FY 2007 – 08 to Rs.27,672.63
lacs in FY 2008 - 09. Both segments i.e. ‘services’ & ‘solutions’ have shown a growth of 56% and 22% respectively.
The share of ‘services’ business in total business has increased from 24% last year to 28% for the year ended
31st March 2009.

During the year under review 87.50% of our revenues was domestic (Rupee) & 12.50% was foreign currency
revenue. Foreign currency revenue was generated by way of exports of software and services from our STPI unit
located at Millennium Business Park, Mahape, Navi Mumbai.

ANNUAL REPORT 2008-2009

43
COST OF SALES:

The Company’s cost of sales is predominantly related to its ‘solutions’ business & mainly consist of procurement of
hardware, software and other related cost for execution of solutions orders. A small portion of the same also
contributes to the Company’s ‘services’ business whereby Company consumes spares for its comprehensive
contracts. The cost of sales for the year ended March 2009 was 63% as compared to 67% during last fiscal. The
reason for de-growth in cost of sales is mainly because of increased share of ‘services’ business in total sales of
the Company and efficient consumption of material in execution of contracts.

OTHER OPERATING EXPENSES:

Our Operating Expenses including employee cost increased from 10% in FY 2007 – 08 to 12% in FY 2008 – 09.
The increase is mainly attributable to increase in employee cost by 2% as the share of ‘services’ revenue to total
revenue has increased during the year.

INTEREST, AMORTISATION & PROFIT:

Interest and finance charges for the current year was Rs.259.59 lacs as compared to Rs.138.37 lacs during last
fiscal. Increased working capital requirement has attributed to increase in interest cost during the year under review.

DEPRECIATION:

The Company has changed method of charging depreciation on its fixed assets from Written Down Method to
Straight Line Method with effect from 1st April 2008. An amount of Rs.270.07 lacs has arisen as surplus on account
of retrospective computation of depreciation with Straight Line Method. This surplus was accounted and disclosed
under exceptional items in the Profit & Loss account.

Depreciation & amortization for the current year was Rs.358.65 lacs as compared to Rs.328.67 lacs for the financial
year 2007 – 08. Since there was a change in the method of charging depreciation during the year under review,
the figures for the current year are not comparable with earlier year.

EARNINGS BEFORE INTEREST DEPRECIATION, TAXES & AMORTISATION (EBIDTA):

EBIDTA of the Company has increased from Rs.6,932.50 lacs in FY 2007 – 08 to 9,915.43 lacs in 2008 – 09
registering a growth of 43%. The EBIDTA as a percentage of total Income has increased to 25% in FY 2008-09
from 23% in FY 2007-08. The increase in EBIDTA level was due to increased ‘services’ revenue.

The Profit before Tax has increased from Rs.6,465.46 lacs in FY 2007 – 08 to 9,567.26 lacs in 2008 – 09 registering
a growth of 48% whereas Profit after Tax has increased from Rs. 4,355.93 lacs in FY 2007 – 08 to 7,954.57 lacs in
2008 – 09 registering a growth of 83%. Profit after Tax for the current year includes exceptional item of Rs.270.07
lacs which pertains to ‘excess depreciation reversal’ in respect of earlier years due to change in method of charging
depreciation.

EQUITY SHARE CAPITAL:

On 26th November 2008, the Company had issued 745,000 fully paid up Equity Shares to En Pointe Technology
Sales Inc, (USA) at a premium of Rs.820/- per Shares. These Shares were issued as part consideration against
acquisition of 80.5% Equity interest in En Pointe Global Services, LLC. During the year under review company has
also allotted 79,986 fully paid up Equity Shares to its employees by virtue of exercise of Employee Stock Options
Plan 2007.

The Securities Premium Account increased by Rs.6,153.18 lacs as a result of allotment of above mentioned Equity
Shares.

During the year the Company has transferred an amount of Rs.500.00 lacs to General Reserve.

LOAN:

Secured loan as at 31st March 2009 was Rs.4,332.03 lacs (previous year : Rs.1,071.75 lacs). This was mainly on
account of increased bank borrowings to meet the working capital requirement of the Company.

ANNUAL REPORT 2008-2009

44
DEFERRED TAX LIABILITY:

The company has provided a Deferred Tax Liability of Rs.136.15 lacs (Previous Year: Rs.62.64 lacs). The provision
was mainly on account of excess availability of depreciation under the IT Act as compared to depreciation under
the Companies Act.

FIXED ASSETS:

During the year, the Company has added Rs. 2,022.07 lacs in its Gross Block of assets (Rs. 1,280.01 lacs for fiscal
year 2008). This does not include an amount of Rs. 3,119.15 lacs which is Capital Work in Progress. The major
heads under which fixed assets were acquired during the year are ‘Computers & IT equipments.

INVESTMENTS

In Subsidiaries: During the year the Company has acquired controlling stake in following companies.

Name of the acquired company Acquisition cost

Digicomp Complete Solutions Ltd., Bangalore. Acquired 51.06% stake for a total consideration of
Rs. 573 lacs.

En Pointe Global Services, LLC CA, (USA). Acquired 80.5% Equity Interest for a total
consideration of US$.23.345 mio.

Besides above, the Company has been investing in various mutual funds. These are short term investments typically
for optimal utilization of surplus cash balance with the Company. As at 31st March 2009 the Company had
investment of Rs. 500.00 lacs in mutual funds (Previous year: Rs. 4,731.54 Lacs).

DEBTORS TURNOVER RATIO

(Rs. in Lacs)

Particulars 31st March, 31st March,


2009 2008

Outstanding Debtors at the end of the Period 18,811.71 14,801.12


Debtors less than 180 Days as a % of total debtors 74% 83%
Debtors more than 180 Days as a % of total debtors 26% 17%
No. of Days outstanding Debtors (Days) on an Average 175 182

The Company usually realize its debts within a span of 100 to 180 days from the date of sales. Average number of
days of outstanding debtors has gone up significantly during last two financial years. This is mainly because of the
Company’s focus on large & complex enterprise projects.

It is also important to note here, that Company’s revenue recognition policy is :

‘Revenues from contracts priced on a time and material basis are recognised when services are rendered and
related costs are incurred.

Sales in case of supply of goods are recognized when the goods are invoiced or dispatched to the customers and
are recorded exclusive of VAT, CST, other local levies and other discounts and rebates.

Revenue from sale of software licenses are recognized upon delivery where there is no customization required. In
case of sale of customized software the same is recognized on the basis of achieving the various milestones attached
with the customization, net of all taxes, local levies and other discounts & rebates.

Overall the debtors cycle of the company is on higher side. The company is taking necessary steps to reduce the
debtors cycle. However the present economic meltdown has also created pressure on realization of books debts.
In spite of that the company has achieved to maintain the age of the debtors for the period ended 31st March 2009
on the same level as earlier year.

ANNUAL REPORT 2008-2009

45
CASH FLOW:

(Rs. in Lacs)

Particulars 31st March, 31st March,


2009 2008

Net Cash Flow from Operating Activities 1,167.84 (2,074.50)


Net Cash flow from / (used in) investing activities (9,010.01) (6,014.57)
Net Cash flow from / (used in) financing activities 8,717.13 8,492.26
Cash and cash equivalents at the beginning of the year 697.00 293.82
Cash and cash equivalents at the end of the year 1,571.95 697.00

The company has generated net cash of Rs.1,167.84 lacs (Previous Year: -2,074.50 lacs) after adjusting increased
in net current asset of Rs. 5,927.67 lacs. The company has deployed Rs.4,740.30 lacs for purchase of fixed assets
and invested Rs.8,716.25 lacs in subsidiaries. The company has sold short term investments of Rs.4,245.76 lacs
mainly deployed in mutual funds during the current year.

As at 31st March 2009 the cash and cash equivalent was Rs.1571.95 lacs (previous year : Rs. 697.00 lacs).

HUMAN RESOURCES:

The Company makes employees realize that they are the most valuable asset of the Organization. The Company
has faith in them, trust them and respect them because the Company strongly believes that people are its most
vital resources & the success or failure of the Organization is directly linked to the talent of the work force. The
Company strongly believes in “ERA” i.e. “Empowerment, Responsibility & Accountability”. The Company empowers
the employees & give them the authority to get things done. Every employee is empowered to take decisions and
demonstrate Accountability in his/her functional area while accomplishing any task.

People continue to be the most important asset of the Company. Unlike several companies that have been forced
to retrench workforce, the Company has gone ahead and made investments in several key employees this year.
These actions reiterate faith in people who are the prime assets and the real driving force behind the success
story of the Company.

The Company feels proud to mention that during the period of recession & major slow down, the Company did not
stop identifying & selecting people who possess special skills & who can influence, contribute & drive revenue to
the business by exerting extraordinary efforts.

As a culture, the Company has always encouraged the employees to imbibe new skills and acquire new talents
from time to time. The initiatives taken by the Company in this respect are twofold: Internal Training Programs
conducted by the Company & Sponsorship of employees to external Training programs.

The Company also strongly believes that Knowledge sharing is a wonderful strategy which helps in the betterment
of the employees and their work. The Company keeps all the knowledgeable information in a central database
that can be accessed by each and every employee.

Cautionary Statement

Certain statements made in the Management Discussion and Analysis Report relating to the Company’s objectives,
projections, outlook, expectations, estimates and others may constitute ‘forward looking statements’ within the
meaning of applicable laws and regulations. Actual results may differ from such expectations, projections and so
on whether express or implied. Several factors could make significant difference to the Company’s operations.
These include climatic conditions and economic conditions affecting demand and supply government regulations
and taxation natural calamities and so on over which the Company does not have any direct control.

ANNUAL REPORT 2008-2009

46
REPORT ON CORPORATE GOVERNANCE
1) COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE
Allied Digital Services Limited believes that Corporate Governance is about values and ethical business
conduct. It is a set of laws, regulations and customs affecting the way a Company is directed, controlled,
managed and administered. This includes its corporate and other structures, culture, policies and the manner
in which it deals with various stakeholders. Some of the important best practices of Corporate Governance
framework are timely and accurate disclosure of information regarding the financial situation, performance,
ownership and governance of the Company.
Corporate Governance guidelines have evolved over a period of time. The Cadbury Report on the financial
aspects of corporate governance, published in the United Kingdom in 1992, was a landmark. Over a past
decade, various Countries have issued recommendations for Corporate Governance. The Sarbanes-Oxley
Act, 2002 brought about sweeping changes in financial reporting.
In India, the Confederation of Indian Industry (CII) took the lead in framing a desirable code of Corporate
Governance in April, 1998. This was followed by the recommendations of the Kumar Mangalam Birla Committee
on Corporate Governance. The recommendations of the Kumar Mangalam Birla Committee were incorporated
as Clause 49 of the Listing Agreement.
Securities Exchange Board of India (SEBI) instituted a committee under the Chairmanship of N. R. Narayana
Murthy which recommended enhancements in Corporate Governance. SEBI incorporated the recommendations
made by the Narayana Murthy Committee on Corporate Governance in Clause 49 of the Listing Agreement.
The revised Clause 49 has been made effective from January 1, 2006.
Following the recent financial upheaval, the National Association of Software and Service Companies
(NASSCOM) is set to focus on good Corporate Governance and ethics among its member companies.
NASSCOM has constituted a Corporate Governance and Ethics Committee headed by N. R. Narayana Murthy.
The object of the committee is to strengthen the existing appropriate code of ethics, values and corporate
code of conduct for the industry: emphasizing existing regulations and practices on Corporate Governance
and re-drafting and re-affirming appropriate code of ethics, values and corporate code of conduct for the industry.
The committee will work with authorities, policy makers and regulators in the areas of Corporate Governance
and transparency.
We believe that sound Corporate Governance is critical to enhance and retain investor trust. Accordingly, we
always seek to ensure that we attain our performance rules with integrity. Our Board exercises its fiduciary
responsibilities in the widest sense of the term. Our disclosures always seek to attain the best practices in
international Corporate Governance. We also endeavor to enhance long-term shareholder value and respect
minority rights in all our business decisions.
Our Corporate Governance philosophy is based on the following principles:
❖ Satisfy the sprit of the law and not just the letter of law. Corporate Governance standards should go beyond
the law.
❖ Be transparent and maintain a high degree of disclosure levels.
❖ Make a clear distinction between personal conveniences and corporate resources.
❖ Communicate externally, in a truthful manner, about how the Company is run internally.
❖ Comply with the laws in all the Countries in which we operate.
❖ Have a simple and transparent corporate structure driven solely by business needs.
❖ Management is the trustee of the Shareholders’ Capital and not the owner.
❖ Providing environment to harmonise the goals of maximizing stakeholder value and maintaining a customer
centric focus.
The Board of Directors is at the core of our Corporate Governance practice and oversees how the Management
serves and protects the long-term interests of all our stakeholders. We believe that an active, well-informed
and independent Board is necessary to ensure highest standards of Corporate Governance.

ANNUAL REPORT 2008-2009

47
2) BOARD OF DIRECTORS
a) Size and Composition of Board
The Composition of Board of Directors is a combination of Executive and Non-Executive Directors. The
Board consists of 7 Directors, out of which 4 are Independent Non-Executive Directors. The Composition
of the Board and Category of Directors are as follows:
Category Name of the Directors
Promoter Director Nitin Shah
(Chairman & Managing Director)
Prakash Shah
(Executive Director & CFO)
Executive Director Manoj Shah
(Executive Director - Technical)
*Bimal Raj
(Executive Director & CEO)
Independent and Non-Executive Director Mr. Shailesh Vaidya
Dr. Shrikant Parikh
**Mr. O. P. Chawla
*Mr. Venugopal Iyengar
* Appointed on April 28, 2009
** Resigned on February 16, 2009
"Independent Director” means a Non-Executive Director of the Company who apart from receiving Director’s
remuneration, does not have any material pecuniary relationships or transactions with the Company, its
promoters, its Directors or its senior management or its holding Company or its subsidiaries and associates,
which may affect independence of the Director, is not related to promoters or persons occupying
management positions at the Board level or at one level below; has not been an executive of the Company
in the immediately preceding three financial years; is not a partner or an executive or was not partner or
an executive during the preceding three years, of any of the following: the statutory audit firm or the internal
audit firm that is associated with the Company, and the legal firm(s) and consulting firm(s) that have a
material association with the Company; is not a material supplier, service provider or customer or a lessor
or lessee of the Company, which may affect independence of the Director; and is not a substantial
shareholder of the Company, meaning owning two per cent or more of the block of voting shares.The
following table gives the number of other Directorships and Chairmanships / Membership of Committees
of each Director in various Companies as on 31st March, 2009.
Name of Directors Category No. of Directorship(s) No. of Membership /
in other Companies* Chairmanship of
other Board Committees**
Public Private Member Chairman
Mr. Nitin Shah Chairman & Managing Director 4 1 - -
Mr. Prakash Shah Executive Director & CFO 2 - -
Mr. Manoj Shah Executive Director - Technical 1 - - -
Mr. Om Prakash Chawla*** Non Executive - 5 - 5 3
Independent Director
Dr. Shrikant Parikh Non Executive - 1 1 - -
Independent Director
Mr. Shailesh Vaidya Non Executive - 9 - 4 1
Independent Director
#Mr. Venugopal Iyengar Non Executive - - - -
- Independent Director
#Mr. Bimal Raj Executive Director & CEO - - - -

ANNUAL REPORT 2008-2009

48
Notes
* Excludes Directorship in Allied Digital Services limited.
** For the purpose of considering the limit of the committee memberships and chairmanships of a Director,
the Audit Committee, Shareholders’ Grievance Committee and Remuneration Committee of public limited
Companies have been considered. As per disclosure(s) received from the Directors, the Directors do not
hold Memberships in more than 10 Committees and Chairmanship in more than 5 Committees.
*** Resigned on 16th February 2009. Appointed on 28th April 2009
c) Attendance at Board Meeting and Annual General Meeting :
During the accounting year 2008 – 2009, Eight Board Meetings were held on 28th April 2008, 10th May,
2008, 22nd July 2008, 30th July, 2008, 25th October, 2008, 31st December 2008, 29th January, 2009 and
21st February, 2009.
The details of Directors attendance at Board Meeting held during the year commencing 1st April, 2008 to
31st March, 2009 and the last AGM held on 12th September, 2008.
Name of Directors No. of Board Meetings Attendance at
attended last AGM
Mr. Nitin Shah 8 Present
Mr. Prakash Shah 7 Present
Mr. Manoj Shah 8 Present
*Mr. Om Prakash Chawla 4 Present
Dr. Shrikant Parikh 2 Present
Mr. Shailesh Vaidya 6 Present
**Mr. Venugopal Iyengar - -
**Mr. Bimal Raj - -
* Resigned on 16 February 2009.
th

** Appointed on 28th April 2009


d) Board Agenda
Meetings are governed by a structured agenda. The Board Members in consultation with the Chairman,
may bring up any matters for the consideration of the Board. All major agenda items are backed by
comprehensive background information to enable the Board to take informed decision. The Agenda and
relevant notes are sent in advance separately to each Director to enable the Board to take informed
decisions.
e) Board’s Functioning & Procedures
The Board has complete access to any information within the Company. At Meetings of the Board, it
welcomes the presence of Managers who can provide additional insights into the items being discussed.
The items placed at the Meeting of the Board include the following:-
● Unaudited Quarterly / Half yearly financial results and Audited Annual Accounts of the Company with
relevant details for consideration and approval,
● Internal Audit Findings (through the Audit Committee),
● Status of Business Risk Exposures, its Management and related action plans,
● Minutes of meetings of other Committee Meetings,
● Abstracts of circular resolutions passed,

ANNUAL REPORT 2008-2009

49
● General notices of interest,
● Sale and/or Purchase of investments, fixed assets,
● Review compliance of all laws applicable to the Company including the requirements of the Listing
Agreement with the Stock Exchanges and steps taken by the Company to rectify instances of non
compliances, if any,
● Related party transactions,
● Reviewing the Company’s financial and risk management policies,
● Reviewing the business plan and strategy of the Company.
f) Post – meeting follow up system:
The governance process in the Company includes effective post – meeting followup, review and reporting
process for action taken / pending on decisions of the Board and the Board Committees.
The Minutes of the Meetings of the Board are circulated through email to all Directors and confirmed at
the subsequent Meeting. The Minutes of the Audit Committee, Remuneration Committee, Shareholders’
Grievance Committee and Compensation Committee are also individually given to the Board Directors
and thereafter tabled for discussion at the subsequent Board Meeting.
3 AUDIT COMMITTEE :
Audit Committee acts as a link between the Statutory and Internal Auditors and the Board of Directors. The
primary objective of the Audit Committee is to provide effective supervision of the management’s financial
reporting process with a view to ensure accurate, timely and proper disclosures.
a) Constitution and Composition of Committee
The Board of Directors constituted an Audit Committee in the year 2007. The Audit Committee for the
accounting year comprises of following three Non-Executive Independent Directors and one Executive
Director who have financial/legal/accounting acumen to specifically look into the internal controls and
audit procedures.
Name of Directors Designation Category of Director Nos. of
meetings attended
Mr. Shailesh Vaidya Chairman Non-Executive Independent 4
Mr. Prakash Shah Member Executive 4
*Mr. O.P. Chawla Member Non-Executive Independent 3
Dr. Shrikant Parikh Member Non-Executive Independent 2
**Mr. Venugopal Iyengar Member Non-Executive Independent -

* Resigned on February 16 2009


** Appointed on April 28, 2009
In addition to the members of the Audit Committee, these meetings are attended by the General Manager
Finance & Accounts and other respective functional heads, Internal Auditors and Statutory Auditors of the
Company, whenever necessary, and those executives of the Company who can provide inputs to the Committee.
Members have discussions with the Statutory Auditors during the meetings of the Committee and the quarterly/
half-yearly and Annual Audited Financials of the Company are reviewed by the Audit Committee before
consideration and approval by the Board of Directors. The Committee also reviews the internal control systems,
IT systems and conduct of the Internal Audit.
b) Meetings
During the accounting year 2008- 09, four Audit Committee Meetings were held on 28th April 2008, 30th
July 2008, 25th October, 2008 and 29th January, 2009

ANNUAL REPORT 2008-2009

50
c) Mr. Ravindra Joshi, Company Secretary, acts as Secretary of the Committee.
d) The function of the Audit Committee include the following:
● Reviewing the Company’s financial reporting process and the disclosure of its financial information
to ensure that the financial statement is correct, sufficient and credible,
● To recommend re-appointment of Statutory Auditors and to fix their remuneration,
● Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors,
● Reviewing with management the annual / half-yearly / quarterly financial statements before submission
to the Board,
● Reviewing with management performance of Statutory and Internal Auditors, the adequacy of the
internal control systems,
● Discussion with Statutory Auditors before the audit, any significant findings and follow up thereon,
● Discussion with Statutory Auditors before the audit commences, nature and scope of audit as well as
have post-audit discussion to ascertain any area of concern,
● Reviewing the Company’s financial and risk management policies,
● To look into the reasons for substantial defaults in the payment to the Depositors, Shareholders (in
case of non payment of declared Dividends) and creditors,
● To review Related party transactions,
● To review the matters required to be included in the Director’s Responsibility Statement to be included
in the Board’s Report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956,
● To review the Management Discussion and Analysis of financial conditions and results of operations,
● Reviewing any other areas which may be specified as a role of the Audit Committee under the Listing
Agreement, Companies Act and other Statutes, as amended from time to time.
All the items in the Agenda are accompanied by notes giving comprehensive information on the related subject
and in certain matters such as financial /business plans, financial results, detailed presentations are made.
The Agenda and the relevant notes are sent in advance separately to each Member to enable the Committee
to take informed decisions.
The Minutes of the Meetings of the Committee are circulated through email to all Directors and are confirmed
at the subsequent Meeting.
The Statutory Auditors and Managing Director are invitees to the Audit Committee Meeting.
The Chairman of Audit Committee Mr. Shailesh Vaidya was present in last Annual General Meeting of the
Company.
4 REMUNERATION COMMITTEE:
The Remuneration Committee of the Board has been constituted in the year 2007, which, inter-alia
recommends to the Board the compensation terms of Executive Directors, key managerial personnels and the
senior most level of management immediately below the Executive Directors.
a) Composition of the Committee
The Board constituted Remuneration Committee in the year 2007. The Remuneration Committee comprises
of Mr. Shailesh Vaidya, Non-Executive Independent Director as Chairman, *Mr. O. P. Chawla, Non-
Executive Independent Director, Dr. Shrikant Parikh, Non- Executive Independent Director and **Mr.
Venugopal Iyengar, Non-Executive Independent Director as Members of the Committee.
* Resigned on February 16, 2009
** Appointed on 28th April 2009

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51
b) The function of the Remuneration Committee include the following:
a) To approve the Annual Remuneration Plan of the Company;
b) To review and grant annual increments to Executive/Managing Director.
c) Such other matters as the Board may from time to time request the Remuneration Committee to examine
and recommend/approve.
c) Attendance at the Remuneration Committee Meetings
During the accounting year 2008 - 09, there were no Meetings of the Remuneration Committee.
d) Disclosure of Remuneration paid :
At present Non–Executive Independent Directors are not paid any remuneration except sitting fees for
attending Board Meetings & Committee Meetings.
Details of remuneration paid to Executive Directors during the accounting year ended March 31, 2009 are
as under:
Name of Directors Salary ContributionTo P.F. Perquisites Sitting Total Stock
Rs. Gratuity and Rs. Fees Rs. Option
Superannuation Rs. granted
Fund (Rs.)
Nitin Dhanji Shah 20,00,000 Nil - - 20,00,000 Nil
Prakash Dhanji Shah 10,00,000 Nil - - 10,00,000 Nil
Manoj Ramesh Shah 13,71,204 28,800 - - 14,00,004 41,960
*Om Prakash Chawla - - - 65,000 65,000 Nil
Shrikant Parikh - - - 45,000 45,000 Nil
Shailesh Vaidya - - - 90,000 90,000 Nil
* Resigned on 16th February 2009
5 SHAREHOLDERS’ GRIEVANCE COMMITTEE :
a) Constitution and Composition of Committee
The Board of Directors constituted a Shareholders’ Grievance Committee in the year 2007. The
Shareholders’ Grievance Committee for the accounting year comprises of following three non-executive
and Independent Directors and one Executive Director.
Name of Directors Designation Category of Director Nos. of meetingsAttended
*Mr. O.P. Chawla Chairman Non-Executive Independent 1
Mr. Prakash Shah Member Executive 2
Dr. Shrikant Parikh Member Non-Executive Independent 2
** Mr. Venugopal Iyengar Member Non-Executive Independent -
* Resigned on 16 February 2009
th

** Appointed on 28th April 2009


b) Meeting of the Shareholders’ Grievance Committee Meetings
During the accounting year 2008 – 2009, Two Shareholders’ Grievance Committee Meetings were held
on 25th October, 2008 and 29th January, 2009.
c) Compliance Officer
Mr. Ravindra Joshi, Company Secretary, has been designated as the compliance officer.

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52
d) Investor Grievance Redressal
Number of complaints received and resolved to the satisfaction of investors during the year under review
and their break-up are as under:
Nature of Complaints Opening Received Resolved Outstanding as
at 31st March, 2009
Non Receipt of Refund orders and/
or non credit of Shares in demat
account Nil 44 44 Nil
During the accounting year ended March 31, 2009, 44 complaints were received from shareholders, all of
which have been attended/ resolved as on date. All valid Share Transfers received during the accounting
year ended March 31, 2009 have been acted upon. There were no Share transfers pending as on March
31, 2009, for more than 30 days.
The Shareholders’ Grievance Committee continued to function effectively and held two meetings during
the year under review. It continued to attend the matters related to Share Transfers and redressal of
Shareholders’ complaints. The complaints and grievances of Shareholders received were duly attended
by the Committee and as of now no complaints are pending.
e) The function of the Shareholders’ Grievance Committee include the following:
● Transfer /Transmission of shares,
● Issue of duplicate Share Certificates,
● Reviewing Shares dematerialized, rematerialized and all other related matters,
● Monitoring expeditious redressal of Investors’ Grievances,
● Non receipt of Annual Report and declared Dividend,
● All other matters related to Shares.
6 COMPENSATION COMMITTEE :
The Compensation Committee was formed inter alia to formulate detailed terms and conditions of Employee
Stock Option Scheme.
a) Constitution and Composition of Committee
The Board constituted a Compensation Committee of Mr. Nitin Shah, Managing Director as Chairman and
Mr. *Om Prakash Chawla, Dr. Shrikant Parikh and Mr. **Venugopal Iyengar, Non-Executive Independent
Directors as Members of the Committee.
* Resigned on February 16, 2009
** Appointed on April 28, 2009
b) Meeting of the Compensation Committee Meetings
During the accounting year 2008 – 2009, two Compensation Committee Meetings were held on 28th April,
2008 and 25th October, 2008.
Name of Directors No. of Shareholders’ Grievance
Committee Meetings attended
Mr. Nitin Shah 2
*Mr. Om Prakash Chawla 1
Dr. Shrikant Parikh 1
** Mr. Venugopal Iyengar -
* Resigned on 16th February 2009
** Appointed on 28th April 2009

ANNUAL REPORT 2008-2009

53
c) The function of the Compensation Committee include the following :
● To decide the terms and conditions of the Employee Stock Option Scheme (ESOP),
● the quantum of any option to be granted under an Employee Stock Option Scheme per employee and
in aggregate,
● the conditions under which Option vested in employees may lapse in case of termination of employment
for misconduct,
● the exercise period within which the employee should exercise the Option and that Option would lapse
on failure to exercise the option within the exercise period,
● the specified time period within which the employee shall exercise the vested Options in the event of
termination or resignation of an employee,
● the right of the Employee to exercise all the Options vested in him at one time or at various points of
time within the exercise period,
● the procedure for making a fair and reasonable adjustment to the number of Options and to the exercise
price in case of corporate actions such as right issues, bonus issues, merger, sale of divisions and
other,
● the grant, vest and exercise of Option in case of employees who are on long leave.
e) Employee Stock Option Scheme:
The Employees has exercised 29,550 Options under Growth Plan and 50,436 Options under Loyalty Plan
during the year.
Each Option entitles the holder thereof to apply for and be allotted Equity Shares of the Company upon
payment of the exercise price during the exercise period.
The exercise prices are as follows:
● Growth Plan : Rs. 95/-
● Loyalty Plan : Rs. 10/-
7 GENERAL BODY MEETINGS :
The particulars of last Three Annual General Meetings are as under:-
Financial Year Day and Date Location of AGM Time
2007 – 2008 Friday12th M. C. Ghia Hall, Bhogilal Hargovindas, 11.00 a.m.
September 2008 Building, 2nd Floor, 18/20, Kaikhushru
Dubash Marg, Mumbai – 400 001.
2006 – 2007 Thursday 375, J.S.S. Road, Vidyut Building,
21st June, 2007 Charni Road, Mumbai – 400 002. 11:00 a.m.
2005 – 2006 Monday 375, J.S.S. Road, Vidyut Building,
8th May, 2006 Charni Road, Mumbai – 400 002. 11:30 a.m.
Details of Special Resolution passed in the previous three Annual General Meetings:
At the Annual General Meeting of the Shareholders held on September 12, 2008 the following special
resolutions were passed.
● Approval for issue of 7,45,000 Equity Shares of Rs. 10/- each to En Pointe Technologies Sales Inc. on
Preferential Allotment basis.
● Approval for Issue of Equity Shares or Convertible Securities to Qualified Institutional Buyers (QIBs).
At the Annual General Meeting of the Shareholders held on June 21, 2007 no special resolution was passed.
At the Annual General Meeting of the Shareholders held on May 8, 2006 the following special resolutions
were passed:

ANNUAL REPORT 2008-2009

54
● Alteration in Memorandum of Association for Increase in Authorised Share Capital from Rs. 12 Crores to
Rs. 20 Crores.
● Alteration in Articles of Association for Increase in Authorised Share Capital from Rs. 12 Crores to Rs. 20
Crores.
● Appointment of Mr. Nitin Shah as a Managing Director for a period of 5 years with effect from April 1, 2006
● Appointment of Mr. Prakash Shah as an Executive Director for a period of 5 years with effect from April 1,
2006
● Appointment of Mr. Manoj Shah as an Executive Director for a period of 5 years with effect from April 1,
2006
● Issue of 71,05,605 Fully Paid up Equity Shares as Bonus Shares.
● Issue of 10 Lacs Equity Shares of Rs. 10/- each in terms of Section 81 (1A) of the Companies Act, 1956.
8 DISCLOSURES :
1. Related Party Transactions
● Related Parties and transactions with them as required under Accounting Standard (AS-18) are
furnished under paragraph number 12 of the Notes to the Accounts attached with the financial
statements for the year ended March 31, 2009.
● No transaction of material nature has been entered into by the Company with its promoters, the Directors
or the Management, their subsidiary or relatives etc. that may have a potential conflict with the interest
of the Company. The Register of Contracts containing transactions, in which Directors are interested,
is placed before the Board regularly.
2. Compliance by the Company
● The Company has complied with the requirements of the Stock Exchanges, the Securities and
Exchange Board of India (SEBI) and Statutory Authorities on all matters related to Capital Markets
and no penalties / strictures were imposed on the Company during the last three years.
3. Mandatory & Non Mandatory requirement of this clause
● Adoption of non mandatory requirements under Clause 49 of the Listing Agreement are being reviewed
by the Board from time to time.
9 MEANS OF COMMUNICATION:
● The Quarterly and Half Yearly results of the Company are published in one English and one Regional
newspaper. The results are also displayed on the Company’s website: www.alliedindia.com
● SEBI/CFD/DIL/LA/4/2007/27/12 dated 27th December, 2007 pertaining to the Amendments in the Listing
Agreement, Clause 51 relating to EDIFAR filing has been removed and a new Clause 52, pertaining to
shareholding pattern etc. through Corporate Filing and Dissemination System (CFDS) with the Stock
Exchanges, has been introduced. The Company’s name has not been identified by the participating Stock
Exchanges for filing through CFDS. The Company currently submits the documents through fax and E-
Mail. The Company also files hard copy of the same to the Stock Exchanges by hand delivery.
● The Company informs the Stock Exchanges about all price sensitive matters or such other matters which
are material and of relevance to the Shareholders and subsequently issues a Press Release on the said
matters. A Management Discussion and Analysis Statement is a part of the Company’s Annual Report.
10 CODE OF CONDUCT :
● The Board of Directors has adopted the Business Ethics Policy and Code of Conduct for Directors and
Senior Management. The Code is reviewed from time to time by the Board. The said Code has been
communicated to the Directors and the Members of the Senior Management. The Code has also been
posted on the Company’s website www.alliedindia.com

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55
11 TRADING IN THE COMPANY’S SHARES BY DIRECTORS AND DESIGNATED EMPLOYEES:
● In compliance with the SEBI (Prevention of Insider Trading) Regulations, 1992, the Company has appointed
Mr. Ravindra Joshi, Company Secretary of the Company as Compliance Officer who is responsible for
setting policies, procedures for the preservation of price sensitive information, pre-clearance of trade,
monitoring of trades and implementation of the Code of Conduct for trading in Company’s securities under
the overall supervision of the Board. The Company has adopted a Code of Conduct for Prevention of
Insider Trading.
12 GENERAL SHAREHOLDER INFORMATION :
a) Annual General Meeting
● Date : September 23, 2009
● Time : 11:30 a.m.
● Venue : Walchand Hirachand Hall,
Indian Merchants’ Chamber Building,
4th Floor, Churchgate,
Mumbai – 400 020
b) Financial Calendar
● Quarterly Financial Reporting for
Quarter ending June 30, 2009 By end July 2009
Quarter/Half year ending September 30, 2009 By end October 2009
Quarter ending December 31 , 2009 By end January 2009
Quarter/Year ending March 31, 2010 By end April 2010
● Date of Book Closure: September 10, 2009 to September 23, 2009 (both days inclusive)
c) Market information
● Listing on Stock Exchange : The Bombay Stock Exchange Limited
The National Stock Exchange of (India) Limited
● Listing fee for the year 2009 – 2010 has been paid in full to both the Stock Exchanges.
● Stock Code :
National Stock Exchange (India) Limited - ADSL
The Bombay Stock Exchange Limited - 532875
● ISIN in NSDL and CDSL for Equity Shares : INE102I01019
● Corporate Identification No. : L72200MH1995PLC085488
● Market Price Data: High low during each month in last financial year

ANNUAL REPORT 2008-2009

56
ALLIED DIGITAL SERVICES LIMITED BSE Sensex
Date Open High Low Close No. of No. of Net T/O High Low Close
(Rs.) (Rs.) (Rs.) (Rs.) Shares Trades (Rs.) (Rs.) (Rs.) (Rs.)
2008
Apr 775.00 900.00 755.00 828.30 115495 1685 93834324.00 17378.46 15343.12 17287.31
May 850.00 944.50 830.10 934.65 73967 1544 66592453.00 17600.12 16275.59 16415.57
Jun 915.00 1049.60 740.00 819.15 240096 2692 196308392.00 16063.18 13461.60 13461.60
Jul 800.00 932.00 730.00 840.50 107831 2943 91606900.00 14942.28 12575.80 14355.75
Aug 802.05 890.00 660.00 713.35 169722 2614 125131726.00 15503.92 14048.34 14564.53
Sept 724.00 780.05 655.00 669.30 110920 2489 79522380.00 15049.86 12595.75 12860.43
Oct 699.20 699.20 233.90 297.50 241367 3045 113896414.00 13055.67 8509.56 9788.06
Nov 310.00 310.00 237.00 272.55 117545 2226 32414461.00 10631.12 8451.01 8739.24
Dec 274.0 397.00 247.00 372.75 216247 4088 63123717.00 10099.91 8739.24 9647.31
2009
Jan 366.05 379.90 297.00 302.85 89408 1240 31722297.00 10335.93 8674.35 9424.24
Feb 300.00 323.00 183.00 190.95 59657 2300 14839914.00 9647.47 8822.06 8891.61
Mar 191.90 198.90 146.05 175.90 417791 6178 67722489.00 10048.49 8160.40 9708.50

ANNUAL REPORT 2008-2009

57
ALLIED DIGITAL SERVICES LIMITED NSE Nifty
Date Open High Low Close No. of No. of Net T/O High Low Close
(Rs.) (Rs.) (Rs.) (Rs.) Shares Trades (Rs.) (Rs.) (Rs.) (Rs.)
2008
Apr 793.50 900.00 716.00 840.25 277085 2563 225540372.00 5230.75 4628.80 5160.90
May 840.00 940.00 965.60 931.65 129964 2029 118297147.00 5298.90 4801.90 4870.10
Jun 946.00 982.20 725.10 812.40 130979 3023 106477754.00 4908.80 4021.70 4040.55
Jul 800.00 935.00 702.15 843.30 156684 3963 133977841.00 4440.90 3790.20 4332.95
Aug 826.00 890.00 670.75 716.55 137007 3065 100449033.00 4649.90 4201.90 4360.00
Sept 724.00 779.95 636.05 661.30 82217 2908 58046637.00 4522.40 3715.10 3921.20
Oct 672.00 679.90 224.20 299.75 99297 2864 46094398.00 4000.50 2252.80 2885.60
Nov 340.00 340.00 229.00 278.75 83816 2702 23436808.00 3240.60 2502.90 2755.10
Dec 266.55 389.00 241.10 374.25 139547 4550 45494869.00 3110.50 2570.70 2959.15
2009
Jan 370.30 384.95 291.10 298.85 85817 2543 27933783.00 3147.20 2661.70 2874.80
Feb 300.00 310.00 184.00 195.25 45967 2980 10980952.00 2969.80 2677.60 2763.65
Mar 190.00 199.85 145.05 174.45 431257 10673 68667857.00 3123.40 2539.50 3020.95

ANNUAL REPORT 2008-2009

58
d) Share Transfer System & Other Related Matters.
● Share Transfer System
The Shares lodged for transfer are processed by the Registrar and Transfer Agent and are approved
by Shareholders Grievance Committee. Shares sent for transfer in physical form are registered and
returned within a maximum period of 30 days from the date of receipt, subject to documents being
valid and complete in all respects. Similarly all requests for demat are received and processed by the
Registrar and Transfer Agent and confirmations are given to the depositories within the prescribed
time limit.
● Registrar and Share Transfer Agent:
Link Intime India Private Limited,
C 13, Pannalal Silk Mills Compound,
L.B.S Marg, Bhandup (West),
Mumbai 400078.
Tel. No. : +91 22 25946969, 25963838
Fax No. : +91 22 25960329
Email : helpline@linkintime.co.in
Website : www.linkintime.co.in
● Nomination Facility for Shareholding:
As per the provisions of the Companies Act, 1956, facility for making nomination is available for
Shareholders, in respect of the Shares held by them. Nomination forms can be obtained from the
Registrar and Transfer agents of the Company.
● Payment of Dividend through Electronic Clearing Service:
The Securities and Exchange Board of India has made it mandatory for all Companies to use the
bank account details furnished by the depositories for depositing Dividend through Electronic Clearing
Service (ECS) to Investors wherever ECS and bank details are available. In the absence of ECS
facilities, the Company will print the bank account details, if available, on the payment instrument for
distribution of Dividend.
● Correspondence regarding Change in Address:
Members are requested to address all correspondences, including Dividend matters, to the Registrar
and Share Transfer Agents, Link Intime India Private Limited, Tel No: +91 22 2594 6969, 2596 3838,
Fax No.: +91 22 25960329, Email: helpline@linkintime.co.in
Distribution of Share Holding as on 31.3.2009
NO. OF EQUITY NO. OF SHARE % OF TOTAL NO. OF % OF
SHARES HOLDERS SHARE SHARES TOTAL
HELD HOLDERS HELD NUMBER
OF SHARES
1 - 5000 9326 97.2066 408750 2.2565
5001 - 10000 72 0.7505 57006 0.3147
10001 - 20000 63 0.6567 86388 0.4769
20001 - 30000 17 0.1772 40922 0.2259
30001 - 40000 13 0.1355 44332 0.2447
40001 - 50000 17 0.1772 76933 0.4247
50001 - 100000 22 0.2293 165953 0.9161
100001 AND ABOVE 64 0.6671 17234442 95.1405
TOTAL 9594 100.00 18114726 100.00
Shareholding Pattern as on 31.3.2009

ANNUAL REPORT 2008-2009

59
CATEGORY NO. OF SHARES PERCENTAGE
HELD TO TOTAL NUMBER OF
SHARES (%)
a. Promoters, Directors & Relatives 11018159 60.82
b. Mutual Funds / UTI 2063321 11.39
c. Banks, FIs & Insurance Cos. 200 0.01
d. Foreign Institutional Investors (FIIs) 1878445 10.37
e. Domestic Companies 1151726 6.36
f. NRIs/OCBs/Pak Enemy Cases 796914 4.40
g. Public 1205961 6.65
TOTAL 18114726 100.00

● Dematerialisation of Shares
The Shares of the Company can be held and traded in electronic form. As on March 31, 2009, 95.88
% (17368749 Shares) of total Shares of the Company were held in demat form.
Break up of shares in physical and demat form as of 31st March, 2009:
No. of Share Percentage of Shares
Physical Segment 4.12%
Demat Segment
NSDL 88.83%
CDSL 7.05%
Total 100.00

ANNUAL REPORT 2008-2009

60
● Outstanding GDRs/ ADRs : NIL
/ Warrants or any
convertible Instrument,
conversion date and
likely impact on Equity
● Plant Location : Not Applicable.
● Address for Correspondence : ALLIED DIGITAL SERVICES LIMITED
3rd Floor, Kimtrai Building,
77/79, Maharshi Karve Marg,
Marine Lines, Mumbai – 400 002.
Tel. : +91 22 22002020
Fax : +91 22 22064170
Email : investors@alliedindia.com
Website: www.alliedindia.com
● E-mail Id for Investor’s Grievances:
The Company has designated separate Email Id for the Investor Grievance and to improve the quality
of the services to the investor. The e-mail address for Investor Grievance is
investors@alliedindia.com
● Secretarial Audit Report:
As stipulated by the Securities and Exchange Board of India, a qualified Practising Company
Secretary carries out the Secretarial Audit to reconcile the total admitted capital with National
Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and
the total issued and listed Capital. This audit is carried out every quarter and the report thereon is
submitted to the Stock Exchanges and is also placed before the Board of Directors. The audit, inter-
alia, confirms that the total listed and Paid Up Capital of the Company is in agreement with the
aggregate of the total number of Shares in dematerialised form (held with NSDL and CDSL) and
total number of Shares in physical form.
13 MANAGEMENT DISCUSSION AND ANALYSIS
As required by Clause 49 of the Listing Agreement the Management Discussion and Analysis is included as a
separate section in this Annual Report.
14 CEO/CFO Certification
As required by Clause 49 of the Listing Agreement the CEO/CFO Certificate is provided in the Annual Report.
15 AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE
As required by Clause 49 of the Listing Agreement the Auditor’s Certificate is obtained and provided in the
Annual Report.

ANNUAL REPORT 2008-2009

61
AUDITORS’ REPORT ON CORPORATE GOVERNANCE
To The Members of Allied Digital Services Limited
We have examined the compliance of conditions of Corporate Governance by Allied Digital Services Limited for the Year ended March 31, 2009 as
stipulated in Clause 49 of the Listing Agreement entered into with the Stock Exchanges.
The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and
implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an
expression of opinion on the Financial Statement of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the
Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing
Agreement.
We state that no investor grievances are pending for a period exceeding one month against the Company as peer the records maintained by the
Shareholders/ Investors Grievances Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which
the management has conducted the affairs of the Company.
For K . M. Kapadia & associates
Chartered Accountants

Place : Mumbai Kamlesh Kapadia


Date : 28th August, 2009 Membership No.: 039707

CHIEF EXECUTIVE OFFICER (CEO) and CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION
We, Nitin Shah, Chairman & Managing Director and Prakash Shah, Executive Director & CFO, of Allied Digital Services Limited, to the best of our
knowledge and belief, certify that:
1. We have reviewed the Balance Sheet and Profit and Loss Account and Notes on Accounts, as well as the Cash Flow Statements and the
Directors’ Report;
2. Based on our knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the statements made;
3. Based on our knowledge and information, the financial statements and other financial information included in this report, fairly present in all
material respects, the financial condition, results of the operations and cash flows of the Company as of, and for the periods presented in this
report, are in compliance with the existing accounting standards and/or applicable laws and regulations.
4. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the
Company’s Code of Conduct.
5. The Company’s other certifying officers and we, are responsible for establishing and maintaining disclosure controls and procedures for the
Company, and we have :
a. designed such disclosure controls and procedures to ensure that material information relating to the Company, is made known to us by
others within those entities particularly during the period during which this report is being prepared; and
b. evaluated the effectiveness of the Company’s disclosure, controls and procedures.
6. The Company’s other certifying officers and we, have disclosed based on our most recent evaluation, wherever applicable, to the Company’s
auditors and the Audit Committee of the Company’s Board of Directors (and persons performing equivalent functions):
a. all significant deficiencies in the design or operation of internal controls, which could adversely affect the Company’s ability to record,
process, summarize and report financial data, and have identified for the Company’s auditors, any material weakness in internal controls;
b. any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal
controls;
c. the company’s other certifying officers and we, have indicated in this report whether or not there were significant changes in internal
controls or other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material weakness; and
d. all significant changes in the accounting policies during the year, if any, and that the same have been disclosed in the notes to the
financial statements.
7. In the event of any materially significant misstatements or omissions, the signing officers will return to the Company that part of any bonus or
incentive or equity –based compensation, which was inflated on account of such errors, as decided by the Audit Committee;
8. We affirm that we have not denied any personal access to the Audit Committee of the Company;
9. We further declare that all Board members and senior managerial personnel have affirmed compliance with the code of conduct for the current
year.
Place: Mumbai Nitin Shah Prakash Shah
Date: 28th August, 2009 Chairman & Managing Director Executive Director & CFO

DECLARATION
As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board Members have confirmed
compliance with the Code of Conduct and Ethics for the year ended 31st March 2009.

For Allied Digital Services Limited

Place : Mumbai Nitin Shah


Date : 28th August, 2009 Chairman & Managing Director

ANNUAL REPORT 2008-2009

62
AUDITORS’ REPORT
TO THE MEMBERS OF
ALLIED DIGITAL SERVICES LIMITED
We have audited the attached Balance Sheet of ALLIED DIGITAL SERVICES LIMITED (“the Company”), as at 31st
March, 2009, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date
annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditor’s Report) Order, 2003 issued by the Department of Company Affairs,
Government of India, in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said Order on the basis of such checks as we
considered appropriate and according to the information and explanations given to us.
Further to our comments in the Annexure referred to above, we report that:
i. We have obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit;
ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears
from our examination of those books;
iii. The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in
agreement with the books of account;
iv. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
v. On the basis of written representations received from the Directors, as on 31st March, 2009, and taken on
record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2009
from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies
Act, 1956;
vi. In our opinion and to the best of our information and according to the explanations given to us, subject to the
accounts give the information required by the Companies Act, 1956 in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;
b. in the case of Profit and Loss Account, of the Profit for the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For K. M. KAPADIA & ASSOCIATES


Chartered Accountants

Place: Mumbai (KAMLESH KAPADIA)


Date: 28th August, 2009 Membership No.: 039707

ANNUAL REPORT 2008-2009

63
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE
TO THE SHAREHOLDERS OF ALLIED DIGITAL SERVICES LIMITED
As required by the Companies (Auditors Report) Order, 2003 issued by the Department of Company Affairs,
Government of India in terms of Section 227(4A) of the Companies Act 1956 and on the basis of such checks of
books and records of the Company as we considered appropriate and according to the information and explanations
given to us during the course of audit, we further state that:
I (a) The Company has maintained proper records showing full particulars including quantitative details and
situation of Fixed Assets.
(b) We are informed that most of the Fixed Assets have been verified once during the year, which in our
opinion is reasonable having regard to the size of the Company and the nature of its assets. No material
discrepancies were noticed by the management as compared with the records maintained by the Company.
(c) The Company has not disposed off any fixed assets during the year so as to affect its going concern
status.
II (a) The Stock of Goods have been physically verified by the management during the year at reasonable
intervals.
(b) The procedure of physical verification of stocks followed by the management are reasonable and adequate
in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining reasonable records of inventory. The discrepancies noticed on verification
between the physical stock and book records were not material.
III In respect of loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other
parties covered in the register maintained under section 301 of the Companies Act, 1956;
(a) The Company has granted loans secured / unsecured to the Companies, firms or other parties listed in
the register maintained under section 301 of the Companies Act, 1956. The balance amount due to be
received from these parties as on 31st March, 2009 is Rs. 2,100.19 lacs. The maximum amount due from
such loans during the year was Rs. 2,107.26 lacs.
(b) The Company has not taken interest free / interest bearing loans, secured / unsecured loans during the
year under review from any party and the balance outstanding as on 31st March, 2009 is Rs. Nil. The
maximum amount involved during the year was Rs. Nil.
(c) The registers required to be maintained u/s 301 of the Companies Act 1956 have been maintained in the
prescribed format by the Company.
(d) In our opinion and according to the information and explanation given to us, the rate of interest in case of
loan taken, wherever applicable and other terms and conditions are not prima- facie prejudicial to the
interest of the Company.
(e) In respect of the loans taken by the Company, the principal as well as interest is regularly paid by the
Company.
(f) There is no over due amount in respect of the loans taken by the Company.
IV In our opinion and according to the information and explanation given to us, there are adequate internal control
procedures commensurate with the size of the Company and the nature of the business, for the purchase of
the inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness in
internal controls were either reported or noticed.
V (a) The registers required to be maintained u/s 301 of the Companies Act 1956 have been maintained in the
prescribed format by the Company.
(b) In our opinion and according to the information given to us, all the transactions entered into by the Company
with related parties in pursuance to Section 301 of the Companies Act have been done with fair amount
of reasonability vis-à-vis the prevailing market prices at the relevant time.
VI The Company has not accepted any deposits from public during the year.

ANNUAL REPORT 2008-2009

64
VII The Company has in-house Internal Audit system which is commensurate with its size and nature of its
business.
VIII No Cost Records have been prescribed by the Central Govt. under Clause (d) of Sub Section (1) of Section
209 of the Companies Act, 1956.
IX (a) According to the records of the Company, the Company has generally been regular in depositing with
appropriate authorities undisputed statutory dues such as Provident Fund, Employees State Insurance,
VAT, CST, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it. However some
delays have been noticed in payment of some of the above liabilities.
(b) According to the information and explanation given to us, details of Income Tax which has not been
deposited on account of dispute is as follows:
Name of the Nature of Amount Amount Period of Forum where
Statute Dues paid Dues Dispute is
pending
Income Tax Disallowance of 40 lacs 10 lacs A.Y. 2006-07 CIT (Appeals).
deduction u/s. 10A
X The Company does not have accumulated losses as at the end of the year and the Company has not incurred
any cash losses in the current and immediately preceding financial year.
XI As per the explanation and information given to us, the Company has not defaulted in repayment of any
dues to any Financial Institutions or Banks. There is no issue of any Debentures by the Company in the year
under review or any of the preceding years.
XII The Company has not granted loans and advances on the basis of security by way of pledge of Shares,
debentures or other securities.
XIII In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision
of clause 4 (xiii) of said order are not applicable to the Company.
XIV In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.
Therefore the provision of clause (xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to
the Company.
XV According to the information and explanation given to us, the Company has not given any guarantee for the
loans taken by others from Banks and Financial Institutions. Accordingly, clause 4(xv) of the said order is not
applicable.
XVI According to the information and explanations given to us by the Company, term loans taken have been
applied for the purpose for which they were obtained.
XVII In our opinion and according to the information and explanations given to us and on an overall examination
of the balance sheet of the Company, we report that funds raised on short term basis have not been used for
long term investment.
XVIII During the year, the Company has not made any preferential allotment of shares to the parties and the
Company covered in the register maintained under section 301 of the Act.
XIX In our opinion and according to the information and explanation given to us, the Company has not issued
any debentures during the period covered by our report. Accordingly, clause 4 (xix) of the said order is not
applicable.
XX During the period covered by our report, the Company has not raised any money by way of public issue.
XXI According to the information and explanation given to us, no fraud on or by the Company has been noticed
or reported during the course of our audit.
For K. M. KAPADIA & ASSOCIATES
Chartered Accountants

Place: Mumbai (KAMLESH KAPADIA)


Date: 28th August, 2009 Membership No.: 039707

ANNUAL REPORT 2008-2009

65
BALANCE SHEET AS AT 31ST MARCH, 2009
(Rs. in Lacs)
Schedule As At As At
31st March, 2009 31st March, 2008
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital 1 1,811.47 1,728.97
Reserves and Surplus 2 30,031.40 16,371.43
Loan Funds
Secured Loans 3 4,332.03 1,071.75
Unsecured Loans 4 - 500.18
Deferred Tax Liability 147.75 11.59
Total 36,322.65 19,683.92
Application of Funds
Fixed Assets 5
Gross Block 4,280.61 2,258.54
Less: Depreciation 723.71 635.13
Net Block 3,556.90 1,623.41
Capital Work in Progress 3,119.15 400.93
6,676.05 2,024.34
Investments 6 7,310.92 4,745.75
Current Assets, Loans and Advances
Inventories 7 755.32 496.99
Sundry Debtors 8 18,811.71 14,801.12
Cash and Bank Balances 9 1,571.95 697.00
Loans and Advances 10 4,628.03 1,611.96
25,767.01 17,607.07
Less : Current Liabilities and Provisions 11
Current Liabilities 1,642.68 2,204.36
Provisions 1,788.65 2,488.88
3,431.33 4,693.24
Net Current Assets 22,335.68 12,913.83
Total 36,322.65 19,683.92
Significant Accounting Policies and
Notes on Accounts 18

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

66
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars Schedule For the year ended For the year ended
31st March, 2009 31st March, 2008
Income
Operational Income 12 39,164.10 29,703.50
Other Income 13 218.60 257.62
39,382.70 29,961.12
Expenditure
Cost of Sales 14 24,642.24 19,973.97
Employee Costs 15 3,666.85 2,232.40
Administration, Sales and Other Expenses 16 1,158.18 822.25
29,467.27 23,028.62
Profit before Interest, Depreciation,
Amortization, Tax & Exceptional Items 9,915.43 6,932.50
Interest and Finance Charges 17 259.59 138.37
Depreciation and Amortization 5 358.65 328.67
Profit before Tax & Exceptional Items 9,297.19 6,465.46
Excess Depreciation reversal in
respect of earlier years 270.07 -
Profit before Tax 9,567.26 6,465.46
Provision for Taxation including FBT 1,476.54 2,046.89
Deferred Tax Liability/(Asset) 136.15 62.64
Profit after Tax 7,954.57 4,355.93
Balance in Profit and Loss account b/f 7,655.69 3,299.76
Amount available for Appropriation 15,610.26 7,655.69
Appropriations
Transfer to General Reserve 500.00 -
Proposed Dividend 362.29 -
Dividend Tax 61.55 -
Balance in Profit and Loss account c/f 14,686.42 7,655.69
Earning per share
Basic (Rs.) 45.15 27.36
Diluted (Rs.) 45.15 27.27
Significant Accounting Policies and
Notes on Accounts 18

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

67
CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars For the year ended For the year ended
31st March, 2009 31st March, 2008
Cash Flow from Operating Activities:
Net Profit before tax 9,567.26 6,465.46
Adjustments for :
Depreciation and Amortization 114.09 328.67
Interest Expenses 259.59 138.37
Interest and Dividend Income (200.79) 243.50
Amortization of ESOP compensation cost (4.86) 19.39
Operating profit before working capital changes 9,735.29 7,195.39
Adjustments for :
Trade and other receivables (4,036.10) (8,837.84)
Inventories (258.33) (368.32)
Trade Payables (522.51) 1,195.61
Loans and Advances (1,110.73) (1,006.69)
Direct Tax Paid (2,639.78) (252.65)
Net Cash from operating activities 1,167.84 (2,074.50)
Cash Flow from Investing Activities:
Purchase of Fixed Assets (4,740.30) (1,314.52)
Sale/(Purchase) of Investments (2,565.17) (4,456.55)
Balance with Subsidiaries (1,905.33) -
Interest and Dividend Received 200.79 (243.50)
Net Cash used in investment activities (9,010.01) (6,014.57)
Cash Flow from Financing Activities:
Issue of Equity Shares 6,216.62 7,855.46
Proceeds from borrowings 2,760.10 775.17
Financing Charges (259.59) (138.37)
Net Cash used from financing activities 8,717.13 8,492.26
Increase in cash and cash equivalents:
Cash and Cash equivalents (Opening) 697.00 293.82
Cash and Cash equivalents (Closing) 1,571.95 697.00
Net increase in cash and cash equivalents 874.95 403.18
Notes :
1 The above cash flow statement has been prepared under the “Indirect Method” as set out in the Accounting Standard - 3 on
cash flow statement issued by the Institute of Chartered Accountants of India.
2 Cash and cash equivalent at the end of the year consist of cash in hand and balances with banks.
Rs. in lacs
Particulars As at As at
31st March, 2009 31st March, 2008
Cash in hand 32.47 26.24
Balances with Bank 1,539.48 670.76
Total 1,571.95 697.00

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO
Kamlesh Kapadia Ravindra Joshi
Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

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68
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009
(Rs. in Lacs)
Particulars As at As at
31st March, 2009 31st March, 2008
Schedule “1” :- Share Capital
Authorised
2,50,00,000 (Previous year 2,00,00,000) Equity Shares of Rs. 10/- each 2,500.00 2,000.00
Issued, Subscribed and Paid up
1,81,14,726 (Previous year 1,72,89,740)
Equity Shares of Rs.10/- each fully paid up 1,811.47 1,728.97
1,811.47 1,728.97
Note:
1) Out of the above, 13,22,300 Equity Shares were allotted as fully paid up bonus shares by capitalising reserves in 1999-2000.
2) Out of the above, 71,05,605 Equity Shares were allotted as fully paid up bonus shares by capitalising reserves in 2006-07.
3) Out of the above, 745,000 Equity Shares were allotted as fully paid up shares to En Pointe Technologies Sales Inc., at the
premium 820/- per share under the Swap arrangement for the acquisition of En Pointe Global Services LLC during current year.

Schedule “2” :- Reserves and Surplus


Securities Premium
At the commencement of the year 8,354.03 950.81
Additions during the year 6,153.18 8,140.40
14,507.21 9,091.21
Less : IPO Expenses adjusted - 737.16
14,507.21 8,354.05
General Reserve
At the commencement of the year 337.77 337.77
Transfer during the year 500.00 -
837.77 337.77
Stock Options Outstanding Account - 23.92
Balance in Profit and Loss Account 14,686.42 7,655.69
30,031.40 16,371.43
Schedule “3” :- Secured Loans
- Term Loans from Banks 53.95 99.79
- Working Capital Loans from Banks 4,278.08 971.96
4,332.03 1,071.75
Notes:
Security Details:-
(I) Term Loan:
Specific charge on the receivable under the project with an escrow on project cashflow and vehicles loan are secured by charge
on vehicles under finance.
(II) Working Capital Loan:
a) Working Capital Loan from State Bank of India and Standard Chartered Bank are Secured by hypothecation of Stock, Book
Debts and further secured by way of Collateral charge on office premises, Fixed Deposits with Banks and the personal
guarantees of Mr. Nitin Shah and Mr. Prakash Shah.
b) Foreign Currency Loan from Barclays Bank PLC is secured against SBLC issued by Standard Chartered Bank.

Schedule “4” :- Unsecured Loans


- Overdraft from Bank 0.00 500.18
0.00 500.18

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69
Schedule : 5
Fixed Assets

GROSS BLOCK Depreciation/Amortisation Net Block

Description of Assets As at Additions / As at Upto Depreciation For the Upto As at As at


31st March, 2008 (Deductions) 31st March, 2009 31st March, 2008 upto Period 31st March, 2009 31st March, 2009 31st March, 2008
st
31 March, 2008
written back

Leasehold Premises 149.82 9.22 159.04 13.10 10.78 1.72 4.04 155.00 136.72

Freehold Premises 270.65 - 270.65 4.69 2.53 4.40 6.56 264.09 265.96

Civil and Plumbing Work 50.04 8.02 58.06 1.16 0.78 0.87 1.25 56.81 48.88

Furniture and Fixtures 526.46 305.92 832.38 84.73 49.65 34.44 69.52 762.86 441.73

Office Equipments 222.01 15.92 237.93 34.43 19.23 11.33 26.53 211.40 187.58

Motor Vehicles 64.94 49.46 114.40 26.81 7.17 8.92 28.56 85.84 38.13

ANNUAL REPORT 2008-2009


Computers and IT Equipments 818.64 1,633.53 2,452.17 330.97 159.78 271.69 442.88 2,009.29 487.67

Computers (Given on lease) 155.98 - 155.98 139.24 20.15 25.28 144.37 11.61 16.74

Total 2,258.54 2,022.07 4,280.61 635.13 270.07 358.65 723.71 3,556.90 1,623.41

Capital Work-In-Progress including Capital Advances 3,119.15 400.93

70
Grand Total 6,676.05 2,024.34

Previous Year 978.53 1,280.01 2,258.54 306.46 - 328.67 635.13 1,623.41 672.07
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009
(Rs. in Lacs)
Particulars As at As at
31st March, 2009 31st March, 2008
Schedule “6” :- Investments
I) Long Term, Unquoted:-
a) En Pointe Global Services LLC (USA) 6,237.98 0.00
46017(Previous year: Nil) Equity Shares of USD 10/- each fully paid up
b) Digicomp Complete Solutions Ltd. 572.94 0.00
19300 (Previous year: Nil) Equity Shares of Rs. 100/- each fully paid up
c) Allied CNT Solutions Private Limited, 0.00 14.20
Nil (Previous Year: 142,000) Equity Shares of Rs.10/- each fully paid up
II) Current Investments:-
a) Standard Chartered Fixed Maturity Plan - Yearly 500.00 500.00
5,000,000 units of Rs. 10 each
b) ICICI Prudential Floating Rate Plan C 0.00 1,929.31
Nil( Previous Year :19,285,344.56 units of Rs. 10.004 each)
c) Kotak Mutual Fund 0.00 957.09
Nil (Previous Year :9,541,202.068 units of Rs. 10.031 each)
d) SBI Arbitrage Opportunities - Growth 0.00 1,000.00
Nil (Previous Year: 9,198,870.379 units of Rs. 10.870 each)
e) Principal Mutual Fund 0.00 345.15
Nil (Previous Year: 3,444,661.81 units of Rs. 10.02 each)
7,310.92 4,745.75

Schedule “7” :- Inventories


- Stock in trade 755.32 496.99
755.32 496.99

Schedule “8” :- Sundry Debtors


Other Debts
- Considered Good 13,867.21 12,254.53
- Considered Doubtful - -
13,867.21 12,254.53
Debts outstanding for a period exceeding six months
- Considered Good 4,944.50 2,546.59
- Considered Doubtful 25.50 178.87
4,970.00 2,725.46
Total Debtors 18,837.21 14,979.99
Less : Provision for Doubtful Debts 25.50 178.87
18,811.71 14,801.12

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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009
(Rs. in Lacs)
Particulars As at As at
31st March, 2009 31st March, 2008
Schedule “9” :- Cash and Bank Balances
Cash in Hand 32.47 26.24
Balances with Scheduled Banks
- in Current Accounts 241.68 320.40
- in Deposit Accounts 1,297.80 350.36
1,571.95 697.00
Schedule “10” :- Loans and Advances
(Unsecured, Considered Good)
Advance recoverable in cash or kind or for value to be received 2,499.99 1,437.49
Balance with Subsidiaries 1,905.33 -
Staff advances 88.96 52.65
Sundry Deposits 133.75 121.82
4,628.03 1,611.96
Schedule “11” :- Current Liabilities and Provisions
Current Liabilities
Sundry Creditors for Goods 1,276.25 2,072.01
Sundry Creditors for Expenses 310.95 44.60
Other Liabilities 55.48 87.75
1,642.68 2,204.36
Provisions
- Taxation 1,262.50 2,429.90
- Gratuity 42.95 19.22
- Dividend including Dividend tax 423.85 -
- Others 30.30 14.87
- Fringe Benefit Tax 29.05 24.89
1,788.65 2,488.88
3,431.33 4,693.24

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SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars For the year ended For the year ended
31st March, 2009 31st March, 2008

Schedule “12” :- Operational Income


Services, Solutions and Sales 38,798.23 29,697.10
Lease Rent 12.92 29.12
Gain/(Loss) on foreign currency (net) 303.69 (74.25)
Others 49.26 51.53
39,164.10 29,703.50

Schedule “13” :- Other Income


Interest Income 65.40 4.84
Dividend Income 135.38 238.67
Other Miscellaneous Income 17.82 14.11
218.60 257.62

Schedule “14” :- Cost of Sales


Opening Stock in Trade 496.99 128.67
Add : Purchases during the year 24,854.99 20,337.14
25,351.98 20,465.81
Less : Closing Stock in Trade 755.32 496.99
24,596.66 19,968.82
Add : Other Direct Expenses 45.58 5.15
24,642.24 19,973.97

Schedule “15” :- Employees Cost


Salaries and Wages 3,427.39 2,030.64
Directors’ Remuneration 44.00 39.20
Contribution to PF and other Funds 139.08 87.18
Employee Stock Compensation Cost - 19.39
Provision for Gratuity 25.74 17.27
Staff Training and Welfare Expenses 30.64 38.72
3,666.85 2,232.40

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SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars For the year ended For the year ended
31st March, 2009 31st March, 2008

Schedule “16” :- Administration, Sales and Other Expenses


Rent, Rates & Taxes 142.95 99.79
Travelling & Conveyance Expenses 170.43 118.24
Communication Expenses 175.71 124.72
Printing & Stationery Expenses 26.31 18.49
Electricity Expenses 58.53 40.84
Legal & Professional Fees 111.06 58.67
Repairs & Maintenance 50.39 8.51
Insurance 6.96 2.81
Other Administrative Expenses 131.58 81.60
Provision for Doubtful Debts 25.50 106.68
Bad debts written off 60.07 -
Sales Promotion Expenses 15.44 8.54
Freight Outwards 90.18 65.54
Advertisement Expenses 93.07 87.82
1,158.18 822.25

Schedule “17” :- Interest and Financial Charges


Interest to Banks:
- On Term Loans 8.95 11.15
- On Working Capital Loans 208.79 83.81
Bank and Other Financial Charges 41.85 43.41
259.59 138.37

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SCHEDULE ‘18’ – SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
A) Significant Accounting Policies
1) Basis of Preparation
The financial statements are prepared under the historical cost convention and as per the requirements of
the Companies Act, 1956.
2) Use of Estimates
The preparation of financial statements requires the management of the Company to make estimates and
assumptions that affect the reported balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and reported amounts of income and expenses
during the year. Examples of such estimates include provision for doubtful debts, employee benefits, provision
for income taxes, accounting for contract costs expected to be incurred to complete software development
and the useful lives of depreciable fixed assets.
3) Fixed Assets
Fixed Assets are stated at cost, less accumulated depreciation. Costs include all expenses incurred to bring
the assets to its present location and condition. Financing cost related to acquisition of Fixed Assets are also
included to the extent they relate to the period till such assets are ready to put to use.
4) Depreciation
The Company has changed its accounting method of charging depreciation on its Fixed Assets from Written
Down Method to Straight Line Method as per the Companies Act, 1956 with effect from 1st April, 2008.
Fixed Assets individually costing Rs.5,000/- or less are fully depreciated in the year of acquisition itself.
Depreciation other than on Capital Work-in-Progress is charged so as to write-off the cost of assets, on the
following basis:
Leasehold Land & Buildings Straight line 1.63
Freehold Buildings Straight line 1.63
Furniture and Fixtures Straight line 6.33
Computer Equipment (Own Use and Leased) Straight line 16.21
Motor Car Straight line 9.5
Office Equipment Straight line 4.75
Civil and Plumbing Work Straight line 1.63
Depreciation is charged only from the date the asset concerned is put to use by the Company.
5) Leases
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with
the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the
profit and loss account on pro-rata basis over the period of the lease.
6) Impairment
At each Balance Sheet date, the management reviews the carrying amounts of its assets included in each
cash generating unit to determine whether there is any indication that those assets were impaired. If any
such indication exists, the recoverable amount of the asset is re-estimated in order to determine the extent of
impairment loss. Any deviation in the value of such asset is recognized in the Profit and Loss Account.
Recoverable amount is the higher of an asset’s net selling price and value in use.
7) Investments
Long-term investments are stated at cost, less provision for other than temporary diminution in value. Current
investments comprising investments in mutual funds are stated at the lower of cost and fair value, determined
on a portfolio basis.
Profit or Loss on sale of Investment is determined on the specific identification basis.

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8) Employee Benefits
(i) Post Retirement Benefit Plans
Payments to the defined retirement benefit schemes are recognized as expenses when employees
have rendered services entitling them to contributions.
In accordance to the applicable Indian Laws and as per the Accounting Standard 15 (Revised) for
“Accounting for Employees Benefit”, the Company with effect from April 1, 2006 provides for gratuity for
its eligible employees. The Actuarial Gains or Losses are charged to the Profit and Loss Account for
the period in which they occur.
(ii) Employees Defined Contribution Plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying
employees. Under the schemes, the Company is required to contribute a specified percentage of the
payroll costs to fund the benefits. This contribution is made to the Government’s Provident Fund.
9) Revenue Recognition
Revenues from contracts priced on a time and material basis are recognised when services are rendered
and related costs are incurred.
Sales in case of supply of goods are recognized when the goods are invoiced or dispatched to the customers
and are recorded exclusive of VAT, CST, other local levies and other discounts and rebates.
Revenue from sale of software licenses are recognized upon delivery where there is no customization required.
In case of sale of customized software the same is recognized on the basis of achieving the various milestones
attached with the customization, net of all taxes, local levies and other discounts & rebates.
Service revenue is considered on acceptance of the contract and is accrued over the period of the contract,
net of all taxes, local levies and other discounts & rebates.
Dividends are recorded when the right to receive payment is established.
Interest income is recognised on time proportion basis.
10) Taxation
Current income tax expense comprises taxes on income from operations in India.
Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax expense or benefit is recognised on timing differences, being the difference between taxable
income and accounting income that originate in one period and are capable of reversal in the subsequent
periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws prevailing as on
the date of the Balance Sheet.
In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised to
the extent that there is virtual certainty that sufficient taxable income will be available in future to realise such
assets.
Provisions for income taxes are presented in the Balance Sheet after offsetting Advance Taxes paid and
TDS deductions for the respective assessment years.
The Company offsets deferred tax assets and deferred tax liabilities, if it has a legally enforceable right and
these relate to taxes on income levied by the same governing taxation laws.
Consequent to the introduction of Fringe Benefit Tax (FBT) effective 01st April 2005, in accordance with the
‘Guidance Note on Accounting for Fringe Benefit Tax’ issued by the ICAI, the Company has made provision
for FBT under Income Tax.
11) Foreign Currency Transactions
The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on
the date of transaction. The difference on account of fluctuation in the rate of exchange prevailing on the
date of transaction and the date of realization is treated as revenue / expenditure.
Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year end are
recognized in the Profit and Loss Account except those relating to acquisition of fixed assets which are adjusted
in the cost of the assets.

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12) Employee Stock Option Scheme
In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines,
1999 issued by the Securities and Exchange Board of India (“SEBI”), the Company is following the Intrinsic
Value Method of ESOP cost whereby the excess of Fair Market Value of the shares of the Company one day
prior to the date of issue of the Shares over the price at which they are issued is recognised as employee
compensation cost. This cost is amortized on straight-line basis over the period of vesting of the Option.
However, during the year there were no options vested below the Fair Market Value of the Shares hence no
expenses have been provided on account of Employee Stock Options Cost (Previous Year:Rs.19.39 lacs).
13) Inventories
Inventories are carried at lower of cost and net realizable value. Cost is determined on a first in first out
basis. Purchased goods in transit are carried at cost. Stores and spare parts are carried at cost less provision
for obsolescence.
B) Notes on Accounts
1) Acquisitions / Divestments
(i) On 10th April, 2008 the Company has acquired 51.06 % Equity Stake for a total consideration of Rs.
572.94 lacs in Digicomp Complete Solutions Ltd., a Company engaged and specialised in the business
of end-to-end technical support, customer care, warranty services, help desk services, project roll-outs,
etc.
(ii) On 9th July, 2008 the Company has acquired 80.50% stake in En Pointe Global Services, LLC for a
total consideration of USD 23.345 million. For the purpose of this acquisition, the Company floated a
wholly owned subsidiary Allied Digital Inc. U.S.A. ( a C Corporation based in the state of Delaware,
USA ) on 16th July, 2008
On behalf of the company, Allied Digital Inc. holds 34.48 % Equity interest & the balance Equity interest
of 46.02 % is held by the Company directly.
(iii) The company has divested its 47.33 % Equity Stake in Allied CNT Solutions Pvt. Ltd., for a total
consideration of Rs. 14.20 lacs
2) Depreciation on Fixed Assets
The difference in the value of depreciation amounting to Rs. 270.07 lacs due to the change in the method of
charging depreciation from written down value to straight line method w.e.f 1st April, 2008 has been calculated
since the inception of the company up to 31st March, 2008 and has been debited to the Profit & Loss Account.
The company shall henceforth follow the Straight Line Method of depreciation on its Fixed Assets.
3) Employee Benefits
(i) An amount of Rs. 2.00 Lacs (Previous Year Rs. 10.00 Lacs) has been contributed towards the Employees
Gratuity Fund against the current year liability of Rs. 25.74 Lacs (Previous Year Rs.17.27 Lacs) as per
the Actuarial Valuation for Gratuity as on 28th February 2009. The Company has its Employees Gratuity
Fund managed by Birla Sun Life Insurance Company.
(ii) The Company recognised Rs.84.46 Lacs (Previous year: Rs. 48.67 Lacs) for provident fund contributions
during the year. The contributions payable to this plan by the Company are at rates specified in the
rules of the scheme and the same are charged to the Profit and Loss Account of the Company.
(iii) Employees Stock Options
The Company by a Special Resolution passed at the Extra Ordinary General Meeting held on January
02, 2007 approved the Employee Stock Option Scheme under Section 79 A of the Companies Act,
1956 to be read along with SEBI (Employee Stock Option and Employee Stock Purchase Scheme)
Guidelines, 1999 whereby options convertible into Equity Shares had been granted to eligible
employees of the Company. The Board of Directors had resolved to grant the options to the eligible
employees vide resolution dated January 22, 2007, consequently the options were granted to eligible
employees.
The Company has two Stock Options Plans which are summarized as under:

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(a) Stock Option Scheme (2007) Loyalty Grant
Under this scheme, the Company had granted 63,300 Options @ Rs.10/- each on 22nd January
2007 to the eligible employees.
Out of the above mentioned grant of 63,300 options, during the year under review 50,436 options
were exercised by the eligible employees.
(b) Stock Option Scheme (2007) Growth Grant
Under this scheme, the Company had granted 1,52,700 Options @ Rs.95/- each on to the eligible
employees during the year.
Out of the total grant of 4,30,300 options, 29,550 options were exercised by the eligible employees
during the year under review.
The summary of the stock options exercised by the eligible employees during the year under
review is as under :
Outstanding options as at April 1, 2008 - 3,40,900
Granted during the year - 1,52,700
Exercised during the year - 79,986
Forfeited/lapsed during the year - 96,214
Outstanding options as at March 31, 2009 - 3,17,400
4) Contingent Liabilities
(i) As per the Certificate issued by the banks, value of bank guarantees outstanding as on 31st March,
2009 amounts to Rs. 744.64 Lacs (Previous Year Rs. 717.34 Lacs) and the value of Letter of Credit
Outstanding as on 31st March, 2009 amounts to Rs. 145.52 Lacs (Previous Year Rs. 167.29 Lacs).
(ii) Claim against the Company not acknowledged as debts Rs. 5.92 Lacs (Previous Year Rs.2.92 Lacs).
The Company has deposited Rs. 4.50 Lacs (Previous Year Rs.1.50 Lacs) against the same in the
Mumbai High Court.
(iii) Vide order of the Deputy Commissioner of Income Tax dated 26.05.2008 for the A.Y. 2006-07, the
Company’s claim of deduction u/s 10A of Rs. 93.05 Lacs out of the total claim of Rs. 552.37 Lacs has
been disallowed on account of delay in realization of export proceeds. An amount of Rs. 40.00 Lacs is
payable on account of this disallowance. The Company has preferred an appeal with the Commissioner
of Income Tax (Appeals)-IV, Mumbai against this order and is likely to get substantial relief after this
appeal is decided. The Company has already paid Rs. 10.00 Lacs out of the total demand as per the
aforesaid order.
(iv) Central Sales Tax claim against the Company on account of non submission of ‘C’ Forms as assessed
under the Central Sales Tax Act amounts to Rs. 6.95 Lacs for the F.Y. 2002-03. The Company is in
process of obtaining these ‘C’ Forms and get this order rectified.
5) Current Assets, Loans and Advances
In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated
and are realisable in the ordinary course of business.
(i) Balances of sundry debtors, and loans and advances are subject to confirmation and reconciliation.
Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of
such reconciliation.
Debtors include debts due from Companies in which the directors are interested are as under.
(Rs. In Lacs)
Name of the Company Nature of interest Year Ended Year Ended
31st March, 2009 31st March, 2008
Assetlite Equipment Directors interested 20.88 4.58
Private Limited as Directors
Digicomp Complete Subsidiary 0.03 Nil
Solutions Ltd.

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(ii) Loans and Advances includes
Dues from the Companies under the same management –
(Rs. In Lacs)
Name of the Company Nature of interest Year Ended Year Ended
31st March, 2009 31st March, 2008
Assetlite Equipment Directors interested 103.00 48.29
Private Limited as Directors
Digicomp Complete Subsidiary 45.76 Nil
Solutions Ltd.
En Pointe Global Subsidiary 458.42 Nil
Services LLC.
Allied Digital INC. Subsidiary 1,395.53 Nil
6) Current Liabilities and Provisions
In the opinion of the Board, the current liabilities are approximately at the fair value in the Balance Sheet.
Balances of sundry creditors are subject to confirmation and reconciliation.
The Company creates a provision when there is a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.
7) Additional Information pursuant to the Provisions of Part II of the Schedule VI of the Companies Act 1956
(Rs. In Lacs)
Year Ended Year Ended
31st March, 2009 31st March, 2008
(i) Income in Foreign Currency
Sales of services, Software & Solution 4,880.77 860.34
(ii) Expenditure in Foreign Currency
(subject to deduction of tax where applicable)
(a) Travelling Expenses 28.05 3.50
(iii) Value of Imports calculated on C.I.F. basis
(a) Capital goods 253.33 375.62
(b) Imported Material 383.45 435.79
8) Quantitative Information
Considering the nature of business of the Company, it is not practically possible to give quantitative information
in the absence of common expressible unit.
9) Dues to Micro, Small and Medium Enterprises
The names of the Micro, Small and Medium Enterprises to whom the Company owes a sum exceeding Rs. 1
Lac, which is outstanding for more than 30 days, could not be identified, as the necessary information is not
in the possession of the Company.
10) Earnings Per Share
Year Ended Year Ended
31st March, 2009 31st March, 2008
A Weighted average number of equity shares of Rs. 10/- each
I Number of shares at the beginning of the year (Nos.) 1,72,89,740 1,27,67,305
ii Number of at the end of the year (Nos.) 1,81,14,726 1,72,89,740
iii ESOP Offer to employees of 63,300 Equity Shares of Rs.10/- at par Nil 63,300
iv ESOP outstanding to employees of 3,17,400( previous year 2,77,600)
Equity Shares of Rs.10/- @ Rs.95/- per share 3,17,400 2,77,600
v Weighted average number of Equity Shares outstanding during the year
(Nos) for Basic EPS 1,76,17,791 1,59,18,182
vi Weighted average number of Equity Shares outstanding during the year
(Nos) for Dilutive EPS 1,76,17,791 1,59,71,596
B Net Profit after tax available for equity shareholders (In Rs. Lacs) 7,906.39 4,355.93
C Basic income per share (in rupees) [B/A (v)] Rs. 45.15 Rs. 27.36
D Diluted income per share (in rupees) [B/A (vi)] Rs. 45.15 Rs. 27.27

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11) Taxes on Income
(i) Provision for taxation for the year has been made in accordance with the provisions of the Income Tax
Act, 1961.
(ii) Provision for Fringe Benefit Tax for the year under consideration has been made on the basis of
expenditure incurred on the taxable heads of expenses.
(iii) In terms of Accounting Standard on “Accounting for Taxes on Income” (AS 22) the Company has
recognised Deferred Tax Liability amounting to Rs.136.15 Lacs (Previous Year Rs.62.64 Lacs) for the
period ended 31st March, 2009 in the Profit and Loss Account.
The amount of Deferred Tax Liability as on 31st March, 2009 comprises of:
(Rs. In Lacs)
Sr. No. Particulars Year Ended Year Ended
31st March, 2009 31st March, 2008
Deferred Tax Liability/ (Asset)
1 Depreciation 301.25 48.12
2 Provision for Bad Debts (8.67) (36.26)
3 On account of Exchange Rate Fluctuation - (27.01)
4 On account of Deferred Revenue Expenses
(IPO Exp) (169.28) -
5 On account of other disallowable Expenses
and Income 20.92 74.39
6 Gratuity (8.07) 3.40
Deferred Tax Liability / (Assets) 136.15 62.64
12) Related Party Disclosures
A) Related Parties and their Relationship
(i) Key Management Personnel
Mr. Nitin Shah Chairman & Managing Director
Mr. Prakash Shah Executive Director & CFO
Mr. Manoj Shah Executive Director - Technical
Mr. Bimal Raj* Executive Director & CEO
Mr. Bharat Shah** Brother of Director
Mrs.Tejal P. Shah Wife of Mr. Prakash Shah
Mr. Ramesh Shah Father of Director
(* Appointed w.e.f. 28/04/2009)
(** Expired on 06/06/2008)
(ii) Names of the enterprises having same Key Management Personnel and/or their relatives as the
reporting enterprise with whom the Company has entered into transactions during the year.
1. Assetlite Equipment India Pvt. Ltd.
2. Digicomp Complete Solutions Ltd.
3. En Pointe Global Services LLC
4. Allied Digital INC
5. The Gateways

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B) Nature of transactions with the related parties
(Rs. In Lacs)
Year Ended Year Ended
31st March, 2009 31st March, 2008
(i) Revenues
Assetlite Equipment India Pvt. Ltd. 16.30 4.58
Digicomp Complete Solutions Ltd 0.03 Nil
The Gateways 0.43 4.45
Allied CNT Solutions Pvt. Ltd. 9.00 12.00
En Pointe Global Services LLC 8.72 Nil
(ii) Purchase of goods and services
Assetilite Equipment India Pvt. Ltd. Nil 4.58
Digicomp Complete Solutions Ltd. 21.18 Nil
The Gateways 80.95 88.28
Mr. Bharat Shah 0.38 1.50
(iii) Debtors, Loans and Advances
Assetlite Equipment India Pvt. Ltd. 123.88 52.87
Digicomp Complete Solutions Ltd. 45.79 Nil
Allied Digital INC 1,401.14 Nil
The Gateways 262.93 92.98
Allied CNT Solutions Pvt. Ltd. Nil 85.36
En Pointe Global Services LLC 458.43 Nil
(iv) Sundry Creditors, Loans Liabilities
Allied CNT Solutions Pvt. Ltd. Nil 15.95
Digicomp Complete Solutions Ltd. 7.72 Nil
The Gateways 0.24 Nil
Mr. Bharat Shah Nil 0.25
(v) Loans given during the year
Assetlite Equipment India Pvt. Ltd. 61.00 48.29
Digicomp Complete Solutions Ltd. 45.76 Nil
Allied Digital INC 13.96 Nil
The Gateways 0.43 Nil
Allied CNT Solutions Pvt. Ltd. Nil 0.08
En Pointe Global Services LLC 458.43 Nil
(vi) Remuneration to Key Management Personnel
(a) Managing Director and other Whole-Time Directors
Mr. Nitin Shah 20.00 20.00
Mr. Prakash Shah 10.00 10.00
Mr. Manoj Shah 14.00 9.20
Total Remuneration 44.00 39.20

ANNUAL REPORT 2008-2009

81
Year Ended Year Ended
31st March, 2009 31st March, 2008
(vii) Computation of Net Profit in accordance with Section
198 and with Section 349 of the Companies Act, 1956
(a) Net Profit as per Profit and Loss Account 7,954.57 4,355.93
Add: Provision for Income Tax and Fringe
Benefit Tax 1,476.54 2,046.89
Provision for Deferred Tax 136 .15 62.64
Profit under Section 349 of the Companies
Act, 1956 9,567.26 6,465.46
Add: Managerial Remuneration 44.00 39.20
Depreciation as per accounts 88.58 328.67
Provision for bad and doubtful debts 25.50 178.87
Less: Depreciation as per Section 350 of the
Companies Act, 1956 358.65 328.67
Profit under Section 198 of the Companies
Act, 1956 9,366.69 6,683.58
(b) Details of Managerial Remuneration under
Section 198 of the Companies Act, 1956
Salaries, Remuneration and Allowances 44.00 39.20
Total 44.00 39.20
13) Auditors’ Remuneration
(Rs. In Lacs)
Year Ended Year Ended
31st March, 2009 31st March, 2008
For services as Auditors, including quarterly audits 2.00 * 31.00**
For Tax Audit 0.50 * 0.30
2.50 31.30
* excluding service tax
** Audit fees disclosed above includes fees of Rs.29.90 lacs towards IPO expenses for audit in connection
with issue of Equity shares of the Company which has been off set against the balance available in the
Securites Premium Account.
14) Lease Incomes
In accordance with the Accounting Standard 19, “Leases” issued by the Institute of Chartered Accountants of
India, the Company has given Assets on Operational Lease on or after 1st April 2001. These assets have
been capitalised and consequently depreciation has also been provided on these assets. The minimum lease
rent receivable as at 31st March, 2009 are as follows:
(Rs. In Lacs)
Year Ended Year Ended
31 March, 2009
st
31 March, 2008
st

Lease Rent Receivable


Not Later than One Year 19.57 21.53
Later than One Year but Not Later than Five Years 38.21 71.08

ANNUAL REPORT 2008-2009

82
15) Statement of Utilization of IPO Funds as of 31st March, 2009
(Rs. In Lacs)
Amount raised through IPO 8,593.00
IPO expenses (832.00)
Net proceeds 7,761.00
Deployment
Upgradation of existing infrastructure 1,228.41
Setting up of new Strategic Business Units 2,142.80
Financing Working Capital & other advances on account of assets acquisitions 4,389.79
7,761.00
16) Segment Reporting
During the year under review, the Company’s business consisted of two reportable business segments i.e.
Solutions and Infrastructure Management Services. The details pertaining to attributable Revenues, Profits
and Capital employed are given hereunder.
(Rs.In Lacs)
Sr. No. Particulars Year Ended
31st March, 2009
1 Segment Revenue
Solutions 27,672
Infrastructure Management Services 11,126
Unallocated 585
Net Segment Revenue 39,383
2 Profit before Interest, unallocable expenses & Tax
Solutions 8,440
Infrastructure Management Services 7,865
16,305
Less : i) Interest 260
ii) Un-allocable Expenses (net of un-allocable income) 6,478
Total Profit Before Tax 9,567
3 Capital Employed
Unallocable 23,328
Total Capital Employed 23,328
17) Previous year’s figures have been recast / restated wherever necessary.
18) Previous year’s figures are in italics.

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

83
Balance Sheet Abstract and Company’s General Business Profile:
Information pursuant to Part IV of schedule VI to Companies Act, 1956.
I Registration Details
Registration No. : 85488 State Code: 11
Balance Sheet Date : 31 March 2009
Date Month Year
II. Capital Raised during the Year (Rs. in Lacs)
Public Issue N.A. Right Issue N.A.
Bonus Issue N.A. Private Placement/ 6,238
Promoter’s Contribution
Call Unpaid/ Received N.A.
III. Position of Mobilisation and Deployment of Funds (Rs. In Lacs)
Total Liabilities 36,323 Total Assets 36,323
Sources of Funds
Paid up Capital 1,811 Reserve and Surplus 30,031
Share Application Money NIL Secured Loans 4,332
Unsecured Loans NIL Deferred Tax Liability 148

Application of Funds
Net Fixed Assets 6,676 Investments 7,311
Net Current Assets 22,336 Deferred Tax Asset NIL
Accumulated Losses NIL
IV. Performance of Company. (Rs. In Lacs)
Turnover and Income 39,383 Total Expenditure 29,467
Profit/ Loss Before Tax 9,567 Profit/Loss After Tax 7,955
(Please tick appropriate box.+ Profit, - for Loss)
Earnings Per Share in (Rs.) 43.54 Dividend Rate % 20%
V. Generic Names of Three Principal Prodicts/Services of Company (As Per Monetary Terms)
Item Code No. (ITC Code) 84713010 Item Code No. (ITC Code) 85249113

Product Description Personal Computers Product Description I.T Software

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

84
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF


ALLIED DIGITAL SERVICES LIMITED
We have audited the attached Consolidated Balance Sheet of ALLIED DIGITAL SERVICES LIMITED and its
subsidiaries (collectively referred as “the ADSL Group) as at 31st March, 2009 and the Consolidated Profit & Loss A/
c and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial
statements are the responsibility of the Company’s management and have been prepared by the management on the
basis of separate financial statements and other financial information regarding components. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosure in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the over all financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
We did not audit the financial statements of certain subsidiaries whose financial statements reflect total assets (net)
of Rs 6,616.83 lacs as at 31st March, 2009, total revenues of Rs. 14,588.41 lacs and net cash out flows amounting to
Rs 14,942.69 lacs for the year ended on that date. These financial statements and other financial information have
been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on these
reports of other auditors.
We report that the consolidated financial statement have been prepared by the ADSL Group’s management in
accordance with the requirements of the Accounting Standards (AS) 21, Consolidated Financial statements and
Accounting Standards (AS) 23 Accounting for Investments in Associates in Consolidated Financial Statements issued
by the Institute of Chartered Accountants of India.
Based on our audit and on consideration of reports of other auditors on separate financial statement and on the
financial statement of the component, and to the best of our information and according to the explanation given to us,
we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with
the accounting principle generally accepted in India:
(i) In the case of the Consolidated Balance Sheet, of the state of affairs of the ADSL Group as at 31st March, 2009;
(ii) In the case of Consolidated Profit and Loss A/c , of the profit on that date; and
(iii) In the case of Consolidated Cash Flow Statements, of the cash flows for the year ended that date.

For K . M. Kapadia & associates,


Chartered Accountants

(Kamlesh Kapadia)
Membership No.: 039707
Place : Mumbai
Date : August 28, 2009.

ANNUAL REPORT 2008-2009

85
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH , 2009
(Rs. in Lacs)
Particulars Schedule As at
31st March, 2009
Sources of Funds
Shareholders’ Funds
Share Capital 1 1,811.47
Reserves and Surplus 2 29,820.95
Minority Interest 361.17
Loan Funds
Secured Loans 3 8,413.12
Unsecured Loans 4 600.36
Deferred Tax Liability 160.39
Total 41,167.46
Application of Funds
Fixed Assets 5
Gross Block 5,082.77
Less: Depreciation 915.82
Net Block 4,166.95
Capital Work in Progress 3,385.89
7,552.84
Goodwill (On Consolidation) 11,252.22
Investments 6 500.00
Current Assets, Loans and Advances
Inventories 7 1,059.47
Sundry Debtors 8 22,718.41
Cash and Bank Balances 9 1,651.94
Loans and Advances 10 3,304.78
28,734.60
Less : Current Liabilities and Provisions 11
Current Liabilities 5,035.84
Provisions 1,836.36
6,872.20
Net Current Assets 21,862.40
Total 41,167.46
Significant Accounting Policies and Notes on Accounts 18

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

86
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars Schedule For the year ended
31st March, 2009
Income
Operational Income 12 55,574.93
Other Income 13 222.78
55,797.71
Expenditure
Cost of Sales 14 34,461.01
Employee Costs 15 7,366.92
Administration, Selling and Other Expenses 16 3,785.45
45,613.38
Profit before Interest, Depreciation,Amortization,Tax
& Exceptional Items 10,184.33
Interest and Finance Charges 17 561.79
Depreciation and Amortization 5 496.82
Profit before Tax & Exceptional Items 9,125.72
Excess Depreciation reversed in respect of earlier years 270.07
Profit before Tax 9,395.79
Provision for Taxation including FBT 1,530.92
Deferred Tax Liability/(Asset) 145.09
Profit after Tax 7,719.78
Minority Interest 28.38
Profit after Minority Interest 7,691.40
Balance in Profit and Loss account b/f 7,655.69
Profit available for Appropriation 15,347.09
Appropriations :
Transfer to General Reserve 500.00
Proposed Dividend 362.29
Dividend Tax 61.55
Balance in Profit and Loss account c/f 14,423.25
Earning per share
Basic (Rs.) 43.66
Diluted (Rs.) 43.66
Significant Accounting Policies and Notes on Accounts 18

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

87
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars For the year ended
31st March, 2009
Cash Flow from Operating Activities:
Net Profit before tax 9,395.79
Adjustments for :
Depreciation and Amortization 441.16
Loss on sale of assets 1.38
Interest Expenses 561.79
Interest and Dividend Income (201.98)
Amortization of ESOP compensation cost (4.86)
Operating profit before working capital changes 10,193.28
Adjustments for :
Trade and other receivables (8,131.76)
Inventories (562.48)
Trade Payables 2,909.07
Loans and Advances (1,681.59)
Direct Tax Paid (2,696.12)
Net Cash from operating activities 30.40
Cash Flow from Investing Activities:
Purchase of Fixed Assets (5,812.50)
Sale/(Purchase) of Investments (6,614.00)
Foreign Currency Translation Reserves 52.72
Interest and Dividend Received 201.98
Net Cash used in investment activities (12,171.80)
Cash Flow from Financing Activities:
Issue of Equity Shares 6,216.61
Proceeds from borrowings 7,441.54
Financing Charges (561.79)
Net Cash used from financing activities 13,096.35
Increase in cash and cash equivalents:
Cash and Cash equivalents (Opening) 697.00
Cash and Cash equivalents (Closing) 1,651.95
Net increase in cash and cash equivalents 954.95
Notes :
1 The above consolidated cash flow statement has been prepared under the “Indirect Method” as set out in the Accounting
Standard - 3 on cash flow statement issued by the Institute of Chartered Accountants of India.
2 Cash and cash equivalent at the end of the year consist of cash in hand and balances with banks.
Particulars As at
31st March, 2009
Cash in hand 33.99
Balances with Bank 1,617.96
Total 1,651.95

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

88
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009
(Rs. in Lacs)
Particulars As at
31st March, 2009
Schedule “1” :- Share Capital
Authorised
2,50,00,000 (Previous year 2,00,00,000) Equity Shares of Rs. 10/- each 2,500.00
1,811.47
Issued, Subscribed and Paid up
1,81,14,726 (Previous year 1,72,89,740) Equity Shares of Rs.10/- each fully paid up
1,811.47
Note:
1) Out of the above, 13,22,300 Equity Shares were allotted as fully paid up bonus shares by capitalising reserves in 1999-2000.
2) Out of the above, 71,05,605 Equity Shares were allotted as fully paid up bonus shares by capitalising reserves in 2006-07.
3) Out of the above, 745,000 Equity Shares were allotted as fully paid up shares to En Pointe Technologies Sales Inc., at the premium 820/- per
share under the swap arrangement for the acquisition of En Pointe Global Services LLC during current year.

Schedule “2” :- Reserves and Surplus


Securities Premium
Securities Premium
At the commencement of the year 8,354.03
Additions during the year 6,153.18
14,507.21
General Reserve
At the commencement of the year 337.77
Transfer during the year 500.00
837.77
Foreign Currency Translation Reserve 52.72
Balance in Profit and Loss Account 14,423.25
29,820.95

Schedule “3” :- Secured Loans


- Term Loan from Banks 4,135.04
- Working Capital Loans from Banks 4,278.08
8,413.12
Notes:
Security Details:-
(I) Term Loan:
Specific charge on the receivable under the project with an escrow on project cashflow and vehicles loan are secured by charge
on vehicles under finance.
(II) Working Capital Loan:
a) Working Capital Loan from State Bank of India and Standard Chartered Bank are Secured by hypothecation of Stock, Book
Debts and further secured by way of Collateral charge on office premises, Fixed Deposits with Banks and the personal
guarantees of Mr. Nitin Shah and Mr. Prakash Shah.
b) Foreign Currency Loan from Barclays Bank PLC is secured against SBLC issued by Standard Chartered Bank.

Schedule “4” :- Unsecured Loans


- Overdraft from Bank 38.06
- From Shareholders 50.00
- From Others 512.30
600.36

ANNUAL REPORT 2008-2009

89
Schedule : 5
Fixed Assets

Gross Block Depreciation/Amortisation Net Block

Description of Assets As at Additions Deductions As at Upto Depreciation Deductions For the Translation Upto As at
31st March, 31st March, 31st March, upto Period Exchange 31st March, 31st March,
st
2008 2009 2008 31 March, 2009 Difference 2009 2009
written back

Leasehold Premises 149.82 151.93 - 301.75 13.10 10.78 - 33.60 2.29 38.21 263.54

Freehold Premises 270.65 - - 270.65 4.69 2.53 - 4.40 - 6.56 264.09

Civil and Plumbing Work 50.04 8.02 - 58.06 1.16 0.78 - 0.87 - 1.25 56.81

Furniture and Fixtures 548.03 379.79 - 927.82 92.83 52.58 - 52.52 1.14 93.91 833.91

Office Equipments 239.11 131.95 - 371.05 41.72 22.86 - 27.92 -1.08 47.86 323.19

Motor Vehicles 76.40 85.51 (0.55) 161.36 33.03 10.14 (0.37) 13.59 0.23 36.34 125.03

ANNUAL REPORT 2008-2009


Computers and IT Equipments 882.68 1,833.44 - 2,716.12 372.89 173.62 - 335.70 3.75 538.72 2,177.40

Computers (Given on lease) 155.98 - - 155.98 139.24 20.15 - 25.28 - 144.37 11.61

Plant & Machinery 32.85 89.89 (2.76) 119.98 12.81 7.17 (0.49) 3.45 - 8.60 111.38

Total 2,405.56 2,680.53 (3.31) 5,082.77 711.47 300.61 (0.86) 497.33 8.50 915.82 4,166.95

90
Less, Depreciation reversal in respect preacquistion period of Digicomp Complete Solutions Limited 30.54 0.51

Depreciation provided in consolidated Profit & Loss Account 270.07 496.82


SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009
(Rs. in Lacs)
Particulars As at
31st March, 2009
Schedule “6” :- Investments
Current Investments:-
Standard Chartered Fixed Maturity Plan - Yearly 500.00
5000000 units of Rs. 10.00 each
500.00

Schedule “7” :- Inventories


- Stock in trade 1,059.47
1,059.47

Schedule “8” :- Sundry Debtors


Other Debts
- Considered Good 17,754.70
- Considered Doubtful -
17,754.70
Debts outstanding for a period exceeding six months
- Considered Good 4,963.71
- Considered Doubtful 214.47
5,178.18
Total Debtors 22,932.88
Less : Provision for doubtful debts 214.47
22,718.41

Schedule “9” :- Cash and Bank Balances


Cash in Hand 33.99
Balances with Scheduled Banks
- in Current Accounts 293.00
- in Deposit Accounts 1,324.95
1,651.94

Schedule “10” :- Loans and Advances


(Unsecured, Considered Good)
Advance recoverable in cash or in kind or for value to be received 3,008.21
Staff Advances 95.27
Sundry Deposits 190.07
Advance Tax and TDS 11.23
3,304.78

ANNUAL REPORT 2008-2009

91
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009
(Rs. in Lacs)
Particulars As at
31st March, 2009

Schedule “11” :- Current Liabilities and Provisions


Current Liabilities
Sundry Creditors for Goods 3,660.60
Advance received against order 0.75
Sundry Creditors for Expenses 1,219.55
Book overdraft with bank 26.59
Other Liabilities 128.35
5,035.84
Provisions
- Taxation 1,271.77
- Gratuity 46.10
- Dividend including dividend tax 423.85
- Service Tax 35.29
- Others 30.30
- Fringe Benefit Tax 29.05
1,836.36
6,872.20

ANNUAL REPORT 2008-2009

92
SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars For the year ended
31st March, 2009

Schedule “12” :- Operational Income


Services, Solutions and Sales 55,210.43
Lease Rent 12.92
Gain/(Loss) on foreign currency (net) 302.31
Others 49.27
55,574.93

Schedule “13” :- Other Income


Interest Income 66.60
Dividend Received 135.38
Other Miscellaneous Income 20.80
222.78

Schedule “14” :- Cost of Sales


Opening Stock in Trade 605.32
Add : Purchases during the year 34,746.17
35,351.49
Less : Closing Stock in Trade 1,059.47
34,292.02
Add : Other Direct Expenses 168.99
34,461.01

Schedule “15” :- Employees Costs


Salaries and Wages 5,853.80
Directors’ Remuneration 51.22
Contribution to PF and other Funds 703.71
Gratuity Expenses 30.50
Staff Training and Welfare Expenses 727.69
7,366.92

ANNUAL REPORT 2008-2009

93
SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2009
(Rs. in Lacs)
Particulars For the year ended
31st March, 2009

Schedule “16” :- Administration, Selling and Other Expenses


Rent, Rates & Taxes 431.60
Travelling & Conveyance Expenses 461.65
Communication Expenses 378.15
Printing & Stationery Expenses 34.12
Electricity Expenses 68.99
Legal & Professional Fee 173.49
Repairs & Maintenance 85.50
Insurance 106.15
Other Administrative Expenses 726.05
Provision for Doubtful Debts 214.40
Bad debts written off 60.07
Loss on sale of assets 1.38
Prior period expenses 1.02
Sales Promotion Expenses 24.44
Freight Outwards 99.60
Commission 824.69
Advertisement Expenses 94.15
3,785.45

Schedule “17” :- Interest and Financial Charges


Interest to Banks:
- On Term Loans 199.29
- On Working Capital Loans 315.75
Bank and Other Financial Charges 46.75
561.79

ANNUAL REPORT 2008-2009

94
SCHEDULE ‘18’ – SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
A) Significant Accounting Policies
1) Basis of Preparation
The Consolidated Financial Statements of Allied Digital Services Limited and its subsidiaries are prepared
under the historical cost convention and as per the requirements of the Companies Act, 1956.
As the Company did not have any subsidiaries in the previous year, comparable consolidated figures of the
earlier year are not provided.
2) Principles of Consolidation
The financial statements of the subsidiary companies used for the publishing of the consolidated results are
drawn upto the same reporting date as of the Company.
The consolidated financial statements have been prepared on the following basis:
(i) The financial statements of the Company and its subsidiary companies have been combined on the line
by line basis by adding together like item of assets, liabilities, income and expenses. Inter-Company
balances and transactions and unrealized profits or losses have been fully eliminated.
(ii) The excess of cost to the Parent Company of its investments in subsidiary companies over its share of the
equity of the subsidiary companies at the dates on which the investment in subsidiary companies are
made, is recognized as ‘Goodwill’ being an asset in the consolidated financial statements. Alternatively,
where the share of equity in the subsidiary companies as on the date of investment is in excess of cost of
investment of the Company, it is recognized as ‘Capital Reserve’ and shown under the head ‘Reserves
and Surplus’, in the consolidated financial statements.
(iii) Minority interest in the net assets of the consolidated subsidiaries consists of the amount of the equity
attributable to the minority shareholders at the dates on which investments are made by the Company in
the subsidiary companies and further movements in their share in the equity, subsequent to the dates of
investments.
3) Use of Estimates
The preparation of financial statements requires the management of the Company to make estimates and
assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent
liabilities as at the date of the financial statements and reported amounts of income and expenses during the
year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income
taxes, accounting for contract costs expected to be incurred to complete software development and the useful
lives of depreciable fixed assets.
4) Fixed Assets
Fixed Assets are stated at cost, less accumulated depreciation. Costs include all expenses incurred to bring
the assets to its present location and condition. Financing cost related to acquisition of Fixed Assets are also
included to the extent they relate to the period till such assets are ready to put to use.
5) Depreciation
The Company has changed its accounting method of charging depreciation on its Fixed Assets from Written
Down Method to Straight Line Method as per the Companies Act, 1956 with effect from 1st April, 2008.
Fixed Assets individually costing Rs.5,000/- or less are fully depreciated in the year of acquisition itself.
Depreciation other than on capital work-in-progress is charged so as to write-off the cost of assets, on the
following basis:
Leasehold Land & Buildings Straight line 1.63%
Furniture and Fixtures Straight line 6.33%
Computer Equipment (Own Use and Leased) Straight line 16.21%
Motor Cars Straight line 9.5%
Office Equipment Straight line 4.75%
Civil and Plumbing Work Straight line 1.63%

ANNUAL REPORT 2008-2009

95
Depreciation is charged only from the date the concerned asset is put to use by the Company. The depreciation
has been charged using straight line Method over the estimated life of assets of three to seven years in case
of En Pointe Global Services, LLC,
6) Leases
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with
the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the
profit and loss account on pro-rata basis over the period of the lease.
7) Impairment
At each Balance Sheet date, the management reviews the carrying amounts of its assets included in each
cash generating unit to determine whether there is any indication that those assets were impaired. If any such
indication exists, the recoverable amount of the asset is re-estimated in order to determine the extent of
impairment loss. Any deviation in the value of such asset is recognized in the Profit and Loss Account.
Recoverable amount is the higher of an asset’s net selling price and value in use.
8) Investments
Long-term investments are stated at cost, less provision for other than temporary diminution in value. Current
investments comprising investments in mutual funds are stated at the lower of cost and fair value, determined
on a portfolio basis.
Profit or Loss on sale of Investment is determined on the specific identification basis.
9) Employee Benefits
(i) Post Retirement Benefit Plans
Payments to the defined retirement benefit schemes are recognized as expenses when employees have
rendered services entitling them to contributions.
In accordance to the applicable Indian Laws and as per the Accounting Standard 15 (Revised) for
“Accounting for Employees Benefit”, the Company with effect from April 1, 2006 provides for gratuity for its
eligible employees. The Actuarial Gains or Losses are charged to the Profit and Loss Account for the
period in which they occur.
(ii) Employees Defined Contribution Plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying employees.
Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to
fund the benefits. This contribution is made to the Government’s Provident Fund.
10) Revenue Recognition
Revenues from contracts priced on a time and material basis are recognized when services are rendered and
related costs are incurred.
Sales in case of supply of goods are recognized when the goods are invoiced or dispatched to the customers
and are recorded exclusive of VAT, CST, other local levies and other discounts and rebates.
Revenue from sale of software licenses are recognized upon delivery where there is no customization required.
In case of sale of customized software the same is recognized on the basis of achieving the various milestones
attached with the customization and are recorded exclusive of VAT, CST, other local levies and other discounts
and rebates.
Service revenue is considered on acceptance of the contract and is accrued over the period of the contract
and are recorded exclusive of local levies and other discounts and rebates
Dividends are recorded when the right to receive payment is established.
Interest income is recognized on time proportion basis.
11) Taxation
Current income tax expense comprises taxes on income from operations in India.
Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.Tax
expenses relating to overseas operations is determined in accordance with tax laws applicable in countries
where such operations are domiciled.

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96
Deferred tax expense or benefit is recognized on timing differences; being the difference between taxable
income and accounting income that originate in one period and are capable of reversal in the subsequent
periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws prevailing as on the
date of the Balance Sheet.
In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized to the
extent that there is virtual certainty that sufficient taxable income will be available in future to realise such
assets.
Provisions for income taxes are presented in the Balance Sheet after offsetting Advance Taxes paid and TDS
deductions for the respective assessment years.
The Company offsets deferred tax assets and deferred tax liabilities, if it has a legally enforceable right and
these relate to taxes on income levied by the same governing taxation laws.
Consequent to the introduction of Fringe Benefit Tax (FBT) effective 01st April 2005, in accordance with the
‘Guidance Note on Accounting for Fringe Benefit Tax’ issued by the ICAI, the Company has made provision
for FBT under Income Tax.
12) Foreign Currency Transactions
The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on
the date of transaction. The difference on account of fluctuation in the rate of exchange prevailing on the date
of transaction and the date of realization is treated as revenue / expenditure.
Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year-end are
recognized in the Profit and Loss Account except those relating to acquisition of fixed assets which are adjusted
in the cost of the assets.
For the purpose of consolidation, Income & expenses are translated at average rates and assets & liabilities
are stated at closing rate. The net impact of such change is disclosed under foreign exchange translation
reserve.
13) Employee Stock Option Scheme
In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines,
1999 issued by the Securities and Exchange Board of India (“SEBI”), the Company is following the Intrinsic
Value Method of ESOP cost whereby the excess of Fair Market Value of the shares of the Company one day
prior to the date of issue of the shares over the price at which they are issued is recognised as employee
compensation cost. This cost is amortized on straight-line basis over the period of vesting of the Option.
However during the year there were no options vested below the fair market value of the Shares, and hence
no expenses have been provided on account of Employee Stock Option cost (Previous year Rs 19.39 Lacs).
14) Inventories
Inventories are carried at lower of cost and net realizable value. Cost is determined on a first in first out basis.
Purchased goods in transit are carried at cost. Stores and spare parts are carried at cost, less provision for
obsolescence.
B) Notes on Accounts
1) Acquisitions / Divestments
(i) On 10th April, 2008 the Company has acquired 51.06 % Equity Stake for a total consideration of Rs. 572.94
lacs in Digicomp Complete Solutions Ltd., engaged and specialised in the business of an end-to-end
service technical support, customer care, warranty services, help desk services, project roll-outs, etc.
(ii) On 9th July, 2008 the Company has acquired 80.50% stake in En Pointe Global Services, LLC, for a total
consideration of USD 23.345 million. For the purpose of this acquisition, the Company floated a wholly-
owned subsidiary Allied Digital Inc. U.S.A. ( a C Corporation based in the state of Delaware, U.S.A.).
On behalf of the Company, Allied Digital Inc. holds 34.48% equity interest & the balance Equity interest of
46.02% is held by the Company directly.
(iii) The company has divested its 47.33 % Equity Stake in Allied CNT Solutions Pvt. Ltd., for a total
consideration of Rs. 14.20 lacs.

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97
2) Depreciation on Fixed Assets
The difference in the value of depreciation amounting to Rs.270.07 lacs due to the change in the method of
charging depreciation from written down value to straight line method w.e.f 1st April, 2008 has been calculated
since the inception of the company up to 31st March, 2008 and has been debited to the Profit & Loss Account.
The company shall henceforth follow the Straight line method of depreciation on its Fixed Assets.
3) Employee Benefits
(i) An amount of Rs.7.25 Lacs has been contributed towards the Employees Gratuity Fund against the current
year liability of Rs. 30.50 Lacs as per the Actuarial Valuation for Gratuity.
(ii) The Company recognised Rs.94.28 Lacs for provident fund contributions during the year. The contributions
payable to these plans by the Company are at rates specified in the rules of the schemes and the same
are charged to the Profit and Loss Account of the Company.
(iii) The US Subsidiary of the Company viz. En Pointe Global Services, LLC has employee saving plans (the
401(k) plan) that cover substantially all full time employees who are twenty year of age or older. The
Company’s contribution to the 401(k) plan are at the discretion of the Board of Directors and vest over
seven years of service. To the date the Company has made no contribution to the 401(k) plan.
(iv) Employees Stock Options
The Company by a Special Resolution passed at the Extra Ordinary General Meeting held on January
02, 2007 approved the Employee Stock Option Scheme under Section 79 A of the Companies Act, 1956
to be read along with SEBI (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines,
1999 whereby options convertible into Equity Shares had been granted to eligible employees of the
Company. The Board of Directors had resolved to grant the options to the eligible employees vide resolution
dated January 22, 2007, consequently the options were granted to eligible employees.
The Company has two Stock Options Plans which are summarized as under:
(a) Stock Option Scheme (2007) Loyalty Grant
Under this scheme, the Company had granted 63,300 Options @ Rs.10/- each on 22nd January 2007
to the eligible employees.
Out of the above mentioned grant of 63,300 options, during the year under review 50,436 options
were exercised by the eligible employees.
(b) Stock Option Scheme (2007) Growth Grant
Under this scheme, the Company had granted 1,52,700 Options @ Rs.95/- each to the eligible
employees during the year under review.
Out of the total grant of 4,30,300, options, 29,550 options were exercised by the eligible employees
during the year under review..
The summary of the stock options exercised by the eligible employees during the year under review
is as under :
Outstanding options as at April 1, 2008 - 3,40,900
Granted during the year - 1,52,700
Exercised during the year - 79,986
Forfeited/lapsed during the year - 96,214
Outstanding options as at March 31, 2009 - 3,17,400
4) Contingent Liabilities
(i) As per the Certificate issued by the banks, value of bank guarantees outstanding as on 31st March, 2009
amounts to Rs. 764.16 Lacs and the value of Letter of Credit Outstanding as on 31st March, 2009 amounts
to Rs. 145.52 Lacs.
(ii) Claim against the Company not acknowledged as debts Rs. 5.92 Lacs. The Company has deposited Rs.
4.50 Lacs against the same in the Mumbai High Court.

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98
(iii) Vide order of the Deputy Commissioner Of Income Tax dated 26.05.2008 for the A.Y. 2006-07 the
Company’s claim of deduction u/s 10A of Rs. 93.05 Lacs out of the total claim of Rs. 552.37 Lacs has
been disallowed on account of late realization of export proceeds. An amount of Rs. 40.00 Lacs is payable
on account of this disallowance. The Company has preferred an appeal with the Commissioner of Income
Tax (Appeals)-IV, Mumbai against this order and is likely to get substantial relief after this appeal is decided.
The Company has already paid Rs. 10.00 Lacs out of the total demand as per the aforesaid order.
(iv) Central Sales ax Claims against the Company on account of non submission of ‘C’ Forms and as Assessed
under the Central Sales Tax Act amounts to Rs. 6.95 Lacs for the F.Y. 2002-03.
The Company is in process of obtaining these ‘C’ Forms and get this order rectified.
5) Current Assets, Loans and Advances
In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated
and are realisable in the ordinary course of business.
(i) Balances of sundry debtors, and loans and advances are subject to confirmation and reconciliation.
Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of
such reconciliation.
Debtors include debts due from a Company in which the directors are interested is as under.
(Rs. In Lacs)
Name of the Company Nature of interest Year Ended
31st March, 2009
Assetlite Equipment Private Directors interest as 20.58
Limited Directors
(ii) Loans and Advances includes
Dues from a Company under same management –
(Rs. In Lacs)
Name of the Company Nature of interest Year Ended
31st March, 2009
Assetlite Equipment Private Limited Directors interested as Directors 103.00

6) Current Liabilities and Provisions


In the opinion of the Board, the current liabilities are approximately at the fair value in the Balance Sheet.
Balances of sundry creditors are subject to confirmation and reconciliation.
The Company creates a provision when there is a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.
7) Additional Information pursuant to the Provisions of Part II of the Schedule VI of the Companies Act 1956
(Rs. In Lacs)
Year Ended
31st March, 2009
(i) Income in Foreign Currency
Sales of services, Software & Solution 5,286.50
(ii) Expenditure in Foreign Currency
(subject to deduction of tax where applicable)
(a) Travelling Expenses 31.84
(iii) Value of Imports calculated on C.I.F. basis
(a) Capital goods 318.22
(b) Imported Material 505.18

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99
8) Quantitative Information
Considering the nature of business of the Company, it is not practically possible to give quantitative information
in the absence of common expressible unit.
9) Dues to Micro, Small and Medium Enterprises
The names of the Micro, Small and Medium Enterprises to whom the Company owes a sum exceeding Rs.1
Lakh, which is outstanding for more than 30 days, could not be identified, as the necessary information is not
in the possession of the Company.
10) Earnings Per Share
31st March, 2009
A Weighted average number of equity shares of Rs. 10/- each
i Number of shares at the beginning of the year (Nos.) 1,72,89,740
ii Number of at the end of the year (Nos.) 1,81,14,726
iii ESOP Offer to employees of 63,300 Eq. Shares of Rs.10/- at par Nil
iv ESOP outstanding to employees of 3,17,400( previous year 2,77,600)
Eq. Shares of Rs.10/- @ Rs.95/- per share 3,17,400
v Weighted average number of Equity Shares outstanding during the year
(Nos) for Basic EPS 1,76,17,791
vi Weighted average number of Equity Shares outstanding during the year
(Nos) for Dilutive EPS 1,76,17,791
B Net Profit after tax available for equity shareholders (In Rs. Lacs) 7,691.39
C Basic income per share (in rupees) [B/A (v)] Rs. 43.66
D Dilutive income per share (in rupees) [B/A (vi)] Rs. 43.66
11) Taxes on Income
(i) Provision for taxation for the year has been made in accordance with the provisions of the Income Tax
Act, 1961.
(ii) Provision for Fringe Benefit Tax for the year under consideration has been made on the basis of
expenditure incurred on the taxable heads of expenses.
(iii) In terms of Accounting Standard on “Accounting for Taxes on Income” (AS 22) the Company has recognised
Deferred Tax Liability amounting to Rs.145.09 Lacs for the period ended 31st March, 2009 in the Profit
and Loss Account.
The amount of Deferred Tax Liability as on March 31, 2009 comprises of:
(Rs. In Lacs)
Sr. No. Particulars Year Ended
31 March 2009
st

Deferred Tax Liability/ (Asset)


1 Depreciation 311.09
2 Provision for Bad Debts (9.57)
3 On account of Exchange Rate Fluctuation -
4 On account of Deferred Revenue Expenses (IPO Exp) (169.28)
5 On account of other disallowable Expenses and Income 20.92
6 Gratuity (8.07)
Deferred Tax Liability / (Assets) 145.09

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100
12) Related Party Disclosures
A) Related Parties and their Relationship
(i) Key Management Personnel
Mr. Nitin Shah Chairman & Managing Director
Mr. Prakash Shah Executive Director & CFO
Mr. Manoj Shah Executive Director - Technical
Mr. Bimal Raj* Executive Director & CEO
Mr. Bharat Shah** Brother of Director
Mrs.Tejal P. Shah Wife of Mr. Prakash Shah
Mr. Ramesh Shah Father of Director
Mr. Suresh K. S. Managing Director
Mr. Pradeep P. Wholetime Director
Mr. Kaleere Gowda Co- Promoter
Mr. Ravikiran N. Co- Promoter
Mr. Ranganath P. Co- Promoter
Mr. Bob Din Director
(* Appointed w.e.f. 28/04/2009)
(** Expired on 06/06/2008)
ii) Names of the enterprises having same Key Management Personnel and/or their relatives as the
reporting enterprise with whom the Company has entered into transactions during the year.
1) Assetlite Equipment India Pvt. Ltd
2) The Gateways
3) En Pointe Technologies Sales Inc.
4) Allied CNT Solutions Pvt. Ltd.
B) Nature of transactions with the related parties
(Rs. In Lacs)
Year Ended
March 31, 2009
(i) Revenues
Assetlite Equipment India Pvt. Ltd. 40.54
The Gateways 0.43
Allied CNT Solutions Pvt. Ltd. 9.00
(ii) Salaries, Purchase of goods & services
Assetlite Equipment India Pvt. Ltd. 31.35
The Gateways 80.95
Mr. Bharat Shah 0.38
Mr. Kaleere Gowda 3.80
Mr. Ravikiran N. 3.76
Mr. Ranganath P. 3.66
(iii) Debtors, Loans and Advances
Assetlite Equipment India Pvt. Ltd. 123.58
The Gateways 262.93

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101
Year Ended
31st March, 2009
(iv) Sundry Creditors, Loans Liabilities
The Gateways 0.24
En Pointe Technologies Sales Inc. 2,183.14
(v) Loans given during the year
Assetlite Equipment India Pvt. Ltd. 61.00
The Gateways 0.43
The company’s subsidiary En Pointe Global Services, LLC (USA) had sales, purchase and other related
transaction with En Pointe Technologies Sales (Inc.), however the reporting of the same was not done
by the statutory auditors of En Pointe Global Services, LLC as the same is not mandatory under the US
GAAP.
(vi) Remuneration to Key Management Personnel
(a) Managing Director and other Whole-time Directors
Mr. Nitin Shah 20.00
Mr. Prakash Shah 10.00
Mr. Manoj Shah 14.00
Mr. Suresh K. S. 3.53
Mr. Pradeep P. 3.69
Total Remuneration 51.22
13) Auditors’ Remuneration
(Rs. In Lacs)
Year Ended
31st March, 2009
For services as Auditors, including quarterly audits 23.13
For Tax Audit 0.75
23.88
* excluding service tax
14) Lease Income
In accordance with the Accounting Standard 19, “Leases” issued by the Institute of Chartered Accountants of
India, the Company has given Assets on Operational Lease on or after 1st April 2001. These assets have been
capitalised and consequently depreciation has also been provided on these assets. The minimum lease rent
receivable as at 31st March, 2009 are as follows:
(Rs. In Lacs)
Year Endded
31st March, 2009
Lease Rent Receivable
Not Later than One Year 19.57
Later than One Year but Not Later than Five Years 38.21

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102
15) Segment Reporting
During the year under review, the Company’s business consisted of two reportable business segments i.e.
Solutions and Infrastructure Management Services. The details pertaining to attributable Revenues, Profits
and Capital employed are given hereunder.
(Rs.In Lacs)
Sr. No. Particulars Year Ended
31st March, 2009
1 Segment Revenue
Solutions 27,672
Infrastructure Management Services 27,539
Unallocated 587
Net Segment Revenue 55,798
2 Profit before Interest, unallocable expenses & Tax
Solutions 8,440
Infrastructure Management Services 19,265
27,705
Less : i) Interest 562
ii) Un-allocable Expenses (net of un-allocable income) 17,747
Total Profit Before Tax 9,396
3 Capital Employed
Unallocable 25,637
Total Capital Employed 25,637

As per our report of even date For Allied Digital Services Ltd.

For K. M. Kapadia & Associates Nitin Shah Prakash Shah


Chartered Accountants Chairman & Managing Director Executive Director & CFO

Kamlesh Kapadia Ravindra Joshi


Membership No.039707 Company Secretary

Place : Mumbai
Dated : 28th August 2009.

ANNUAL REPORT 2008-2009

103
STATEMENT REGARDING SUBSIDIARY COMPANIES PURSUANT TO SECTION 212 OF THE
COMPANIES ACT, 1956.
(Currency: Indian Rupees in lacs)

Particulars En Pointe Global Digicomp Complete Allied Digital Inc.


Services, LLC. Solutions Ltd.
Acquired on Acquired on Floated on
9th July 2008 10th April 2008 16th July 2008
Capital 509.50 37.80 -
Reserves (140.02) 549.23 (229.64)
Loans 1,006.26 156.24 5503.60
Total Assets 4,582.51 972.88 212.59
Total Liabilities 4,213.03 385.85 5,537.23
Investment Other than Investment
in subsidiary - - 5,095.00
Turnover 14,588.67 1,888.56 -
Profit before tax (133.61) 193.66 (229.64)
Provision for tax 6.41 58.52 -
Profit after tax (140.02) 135.15 (229.64)
Proposed dividend - - -
Country USA INDIA USA

ANNUAL REPORT 2008-2009

104
ALLIED DIGITAL SERVICES LIMITED
Registered Office : 3rd Floor, Kimmatrai Building, 77/79, Maharshi Karve Marg, Marine Lines, Mumbai – 400 002

ATTENDANCE SLIP

Fifteenth Annual General Meeting

I hereby record my presence at the FIFTEEN ANNUAL GENERAL MEETING of the Company at Walchand
Hirachand Hall, Indian Merchants’ Chamber Building, 4th Floor, Churchgate, Mumbai- 400 020 at 11.30 a.m
on Wednesday, September 23, 2009.

Name of Member’s/Proxy’s Member’s/Proxy’s Signature


Note: Please fill up this attendance slip and hand it over at the Entrance of the meeting hall. Members are requested
to bring their copies of the Annual Report to the Meeting.
Tear Here

ALLIED DIGITAL SERVICES LIMITED


Registered Office : 3rd Floor, Kimmatrai Building, 77/79, Maharshi Karve Marg, Marine Lines, Mumbai – 400 002

PROXY FORM

Folio No. : No. of shares held :

DP ID : Client ID :

I/We of
being a member/members of Allied Digital Services Limited, hereby appoint
of or failing him/her of
as my/our proxy to vote for me/us and on my/our behalf
at the Fifteenth Annual General Meeting of the Company to be held on Wednesday, 23rd day of September,
2009 at 11.30 a.m. at Walchand Hirachand Hall, Indian Merchant Chamber Building, 4th Floor, Churchgate,
Mumbai – 400 020 or at the adjournment thereof.
Affix
Signed this day of 2009 Revenue
Stamp

Signature[s] of the
Shareholder[s]

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