AFFLUENCE

DIRECTORS’ REPORT

To,

The Members,

AGS Transact Technologies Limited.

Your Directors are pleased to present the 14th Annual Report alongwith the Audited Financial Statements of your Company for the financial year ended on 31st March, 2017.

v  FINANCIAL HIGHLIGHTS

v  REVIEW OF COMPANY’S AFFAIRS

Operations & Performance

During the year under review, the Revenue from Operations increased to Rs. 12,516,316,365/- as compared to     Rs.11,442,423,338/- in the previous year. The Profit for the year is Rs. 86,524,712/- as compared to                         Rs. 35,641,755/- in previous year.

Your Company, in continuation with its focus on the ATMs and Payments business, continues to explore various growth opportunities – organic and inorganic – across the payments landscape in India.

Your Directors believe that the Company is well poised to play an important role in the overall growth of the Indian payments sector during financial year 2017-18.

v  DIVIDEND

Your Directors have not recommended any dividend for the financial year ended 31st March, 2017.

v  RESERVES

For the financial year ended 31st March 2017, no amount was transferred to General Reserve Account.

v  CHANGE(S) IN THE NATURE OF BUSINESS

There were no material changes with regard to the nature of business of the Company during the year under review.

v  DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Mahesh Chhabria, Nominee Director of Oriole Limited, resigned from the Board w.e.f. 17th June, 2016 and Mr. Shomik Mukherjee was appointed in his place as an additional Director (Nominee of Oriole Limited) w.e.f. 17th June, 2016.

Mrs. Anupama R. Goyal, Director of the Company, retires by rotation and being eligible offers herself for                   re-appointment at the ensuing Annual General meeting of the Company.

The Independent Directors of your Company hold office for a period of 3 years w.e.f. 12th March 2015 and are not liable to retire by rotation. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013.

Mr. Ajit Pethe, Company Secretary of the Company (Key Managerial personnel) has resigned w.e.f 17th May 2017.

v  SHARE CAPITAL

During the year under review, there was no change in the Share Capital of the Company.

v  AUDITORS AND AUDITORS REPORT

At the 13th Annual General Meeting of the Company held on 30th September 2016, M/s. S.R Batliboi & Associates LLP (F.R.No.: 101049W/E00004), Chartered Accountants, were deemed appointed as the Statutory Auditors of the Company in terms of section 139(10) of the Companies Act, 2013 to hold office upto the conclusion of the ensuing 14th Annual General meeting.

Pursuant to the resignation of M/s. S.R Batliboi & Associates LLP w.e.f. 20th December 2016, the Board of Directors at their meeting held on 22nd December 2016 appointed M/s. B S R & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company to hold office upto the conclusion of the ensuing 14th Annual General meeting.

In terms of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to re-appoint them as the Statutory Auditors of the Company to hold office upto the conclusion of the 19th Annual General Meeting of the Company subject to ratification of their appointment by the Members at every Annual General Meeting held after the ensuing 14th Annual General Meeting.

The Company has received confirmation from the Auditors i.e. M/s. B S R & Co. LLP, Chartered Accountants to the effect that their reappointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014. The Members are requested to consider their        re-appointment and authorize the Board of Directors to fix their remuneration.

The observations and comments given in the Auditors Report read together with the notes to the accounts are self-explanatory and do not call for any further information and explanation.

v  COST AUDITORS

M/s. Kishore Bhatia & Associates, Cost Accountants, will be carrying out the cost audit of the Company for the financial year 2016-2017. The Board of Directors have re-appointed M/s. Kishore Bhatia & Associates, Cost Accountants to conduct the audit of the cost records of the Company for the financial year 2017-2018 in compliance with section 148 of the Companies Act, 2013.

v  SECRETARIAL AUDIT REPORT

The Board has appointed M/s Bhandari & Associates, Practising Company Secretaries, to conduct Secretarial Audit for the financial year 2016-17. The observations and comments given in the Secretarial Audit Report (read together with its annexures), forming part of this report (“Annexure A”) are self -explanatory and hence do not call for any further information and explanation. The Secretarial Audit Report contains the following observations:

1.    During the year under review, the Company has not appointed Chief Financial Officer of the Company as required under section 203 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

2.    The Company had paid Rs. 94 Lakhs excess managerial remuneration to the Managing Director over and above the limits prescribed under section 197 and Schedule V of the Companies Act, 2013 for the financial year 2015-16 which was treated as receivable as at March 31, 2016. The same was subsequently recovered/adjusted from the salaries payable to the Managing Director.

v  SUBSIDIARIES

           As on 31st March, 2017, the Company has the following subsidiaries:

i.       Securevalue India Limited (Wholly owned subsidiary);

ii.      India Transact Services Limited (Wholly owned subsidiary);

iii.     Global Transact Services Pte. Ltd. (Wholly owned subsidiary);

iv.     Novus Technologies Pte. Ltd. (First level step down subsidiary through Global Transact Services Pte. Ltd.);

v.      Novus Technologies (Cambodia) Company Limited (Second level step down subsidiary through Novus Technologies Pte. Ltd.);

vi.     Novus Transact Philippines Corporation (Second level step down subsidiary through Novus Technologies Pte. Ltd.); and

vii.    Novustech Transact Lanka (Private) Limited (Second level step down subsidiary through Novus Technologies Pte. Ltd.).

            A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies forms part of this report as “Annexure B”.

v  RISK MANAGEMENT

The Risk Management Committee comprises of the below entailed Directors:

1.    Mr. Sudip Bandyopadhyay                  – Chairman of the Committee;

2.    Mr. Jagadish Capoor                         – Member; and

3.    Mr. Bharat Shah                                – Member

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment and incorporates risk treatment plans in its strategy, business and operational plans. Further, the Board has formally adopted a Risk Management Policy.

EMPLOYEES STOCK OPTION SCHEME

A.    EMPLOYEE STOCK OPTION SCHEME – ESOS 2012

The Company instituted the ESOS 2012 pursuant to resolutions passed by the Board and the Shareholders, each dated February 29, 2012. The SEBI ESOP Guidelines and the SEBI ESOP Regulations were not applicable to our Company at the time when ESOS 2012 was implemented. Subsequently, ESOS 2012 was amended and currently, the ESOS 2012 is compliant with the SEBI ESOP Regulations.

The issue of equity shares pursuant to exercise of options does not affect the Statement of Profit and Loss of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

Under ESOS 2012, preferential allotment of 5,31,980 Equity Shares of the Company was made on                      9th February, 2015.

a)      Options granted:

·            565,500 comprising 467,500 options granted in financial year 2012, 12,500 options granted in financial year 2013 and 85,500 in financial year 2015.

·            Pursuant to adjustments made on account of the bonus issue, a total of 1,886,000 options have been granted.

b)      Options vested: 446,480 options, adjusted to 1,544,000 options on account of the bonus issue.

c)      Options exercised: 60,480

d)      The total number of shares arising as a result of exercise of option: 60,480

e)      Options lapsed: 33,520

f)       The exercise price (as on the date of grant of options):

·       Financial year 2012 – 467,500 options, adjusted to 1,544,000 options on account of the bonus issue: Rs.156.52, adjusted to Rs.39.13 on account of the bonus issue

·           Financial year 2013 – 12,500 options: Rs.156.52

·       Financial year 2015 – 45,500 options, adjusted to 182,000 options on account of the bonus issue: Rs. 156.52, adjusted to Rs.39.13 on account of the bonus issue (“Grant I”); 40,000 options, adjusted to 160,000 options on account of the bonus issue: Rs.444.50, adjusted to Rs.111.125 on account of the bonus issue (“Grant II”).

g)      Variation of terms of options: NIL

h)      Money realized by exercise of options: Rs. 9,466,330/-

i)       Total number of options in force: 471,500, adjusted to 1,886,000 options on account of the bonus issue

j)       Employee wise details of options granted to;-

(A)   Key managerial personnel;

Details regarding options granted to the senior managerial personnel, i.e., Directors and key management personnel, under the ESOS 2012 are set forth below:

(B)   Employees who received a grant in any one year of options amounting to 5% or more of the options granted during the year under the ESOS 2012 are set forth below:

*Mr. Anand Agarwal is no longer an employee of our Company

(C)  Identified employees who are granted options, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of our Company at the time of grant: NIL

During the year under review, No options were granted by the Company under ESOS 2012.

B.    EMPLOYEE STOCK OPTION SCHEME – ESOS 2015

The Company instituted the ESOS 2015 on January 30, 2015 pursuant to resolutions dated January 30, 2015 and February 3, 2015 passed by the Board and Shareholders, respectively. The ESOS 2015 is compliant with the SEBI ESOP Regulations.

Pursuant to a Shareholders’ resolution dated February 3, 2015, bonus shares were allotted in the ratio of 3:1 to the Shareholders as on a record date of February 11, 2015. Pursuant to the adjustments made as a result of such bonus issue, the total number of options that can be granted under ESOS 2015 is 1,216,000 convertible into 1,216,000 Equity Shares.

During the year under review, No options were granted by the Company under ESOS 2015.

v  BOARD & ITS COMMITTEES

1.      Composition of the Board & its Meetings

In accordance with the provisions of the Companies Act, 2013, Your Board comprises of 10 Directors including 3 Promoter Directors, 5 Independent Directors (ID) and 2 Nominee Directors.

During the financial year under review, your Board met 4 (Four) times as on the below entailed dates:

1.    17th June, 2016;

2.    30th September, 2016;

3.    22nd December, 2016; and

4.    30th January, 2017.

The necessary quorum was present for all the meetings. The names, categories and attendance of Directors is mentioned below:

2.      Composition of the Audit Committee & its Meetings

In accordance with the requirements of Section 177 of Companies Act, 2013, the Company’s Audit Committee comprises of 6 Members.

All the members of the Committee have relevant experience in financial matters. During the financial year under review, the Audit Committee met 4 (Four) times as entailed:

1.    17th June, 2016;

2.    30th September, 2016;

3.    22nd December, 2016; and

4.    30th January, 2017.

The constitution of Audit Committee and the details of meetings attended by its members are entailed below:

3.      Composition of the Nomination and Remuneration Committee & its Meetings

In accordance with the requirements of Section 178 of Companies Act, 2013, the Company’s Nomination and Remuneration Committee comprises of 4 Members as under:

Mr. Bharat Shah                                      Chairman of the Committee (Non-Executive, Independent Director)

Mr. Ravi B. Goyal                                   Chairman and Managing Director

Mr. D. Sivanandhan                                 Non-Executive, Independent Director

Mr. Sudip Bandyopadhyay                        Non-Executive, Independent Director

During the financial year under review, no meetings of the Nomination and Remuneration Committee were held. The Company’s Remuneration Policy is annexed as “Annexure C”.

4.      Composition of the Corporate Social Responsibility (CSR) Committee & its Meetings

In accordance with the requirements of Section 135 of Companies Act, 2013, the Company’s CSR Committee comprises of 3 Members. The constitution of the Committee is as entailed:

1)      Mr. D. Sivanandhan (ID)                   Chairman of the Committee (Non-Executive, Independent Director)

2)      Mr. Ravi B. Goyal                            Chairman and Managing Director

3)      Mr. Bharat Shah (ID)                        Non-Executive, Independent Director

During the financial year under review, no meetings of the CSR Committee were held.

5.      Composition of the Stakeholders Relationship Committee & its Meetings

The Company’s Stakeholders Relationship Committee comprises of 3 Members. The constitution of the Committee is as entailed:

1)      Mr. Sudip Bandyopadhyay (ID)          Chairman of the Committee

2)      Mr. Bharat Shah (ID)                        Member

3)      Mr. Jagadish Capoor (ID)                 Member

During the financial year under review, no meetings of the Stakeholders Relationship Committee were held.

6.      Composition of the Risk Management Committee & its Meetings

The Company’s Risk Management Committee comprises of 3 Members. The constitution of the Committee is as entailed:

1.    Mr. Sudip Bandyopadhyay (ID)            – Chairman of the Committee;

2.    Mr. Jagadish Capoor (ID)                   – Member; and

3.    Mr. Bharat Shah (ID)                         – Member

During the financial year under review, no meetings of the Risk Management Committee were held.

7.      Composition of the Management Committee & its Meetings

In accordance with the provisions of the Companies Act, 2013 & the Articles of Association of the Company, the Company’s Management Committee comprises of 3 Members.

The constitution of Management Committee and the details of meetings attended by its members is as entailed below:

During the financial year under review, the Management Committee met 13 (Thirteen) times as entailed:

1.    9th May, 2016;

2.    8th June 2016;

3.    24th June 2016;

4.    25th July 2016;

5.    30th August, 2016;

6.    13th September 2016;

7.    30th September 2016;

8.    18th October 2016;

9.    4th November 2016;

10.  2nd December 2016;

11.  22nd December 2016;

12.  6th February 2017; and

13.  20th March 2017.

v  ANNUAL EVALUATION OF BOARD’S PERFORMANCE

The Nomination & Remuneration Committee carried out annual performance evaluation of the Board, its Committees and Individual Directors for the financial year 2016-17 at their meeting held on 9th May 2017. The Independent Directors of your Company, in a separate meeting held on 30th March 2016 without presence of other Directors and management evaluated performance of the Chairman, Managing Director and other Non-Independent Directors along with performance of the Board/Board Committees.

v  VIGIL MECHANISM

Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. Accordingly, the Board of Directors have formulated a “Whistle Blower Policy/Vigil Mechanism” which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013. The policy is a channel to the Employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Code or the Terms of reference or the Policy without fear of punishment or unfair treatment. The policy is available on the website of the Company and can be viewed on http://agsindia.com/investor-relations/ Whistle Blower Policy / Vigil Mechanism.

v  DEPOSITS

       During the financial year 2016-17, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

v  RELEVANT EXTRACT OF THE ANNUAL RETURN

Relevant extract of annual return in Form MGT-9 for the financial year 2016-17 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 under the Companies Act, 2013 is given in “Annexure D” to this report.

v  STATEMENT ON MATERIAL CHANGES & COMMITMENTS

There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 2016-17 and the date of this Report.

v  STATEMENT ON MATERIAL AND SIGNIFICANT ORDERS PASSED BY REGULATORS & COURTS

No significant and material orders have been passed by any regulators or courts or tribunals against the Company impacting the going concern status and Company’s operations in future.

v  ADEQUATE INTERNAL FINANCIAL CONTROLS FOR FINANCIAL STATEMENTS

The Company has adequate internal control systems and effective systems & policies for safeguarding its assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

v  DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has a ‘Policy on Prevention of Sexual Harassment of Employees’ in line with the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. It ensures prevention and deterrence towards the commissioning of acts of sexual harassment and communicates procedures for their resolution and settlement. During the year under review, no complaints were received under the same.

v  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN  EXCHANGE EARNINGS AND OUTGOING

     Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013, read with      Rule 8 of the Companies (Accounts) Rules, 2014, are set out in “Annexure E” forming part of this Report.

v  PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES

There are no loans, investments, guarantees and securities granted in respect of which provisions of Section 186 of the Act are applicable. For details of investment made in subsidiaries refer the standalone financial statements.

v  PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Pursuant to Section 134(3)(h) of the Act, read with rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in form AOC-2 is annexed as “Annexure F” to this report.

v  CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE - TERMS OF REFERENCE

The terms of reference of the CSR Committee are as follows:

·            TERMS OF REFERENCE OF CSR COMMITTEE:

ü   Formulate and Recommend to the Board, the Corporate Social Responsibility (CSR) initiatives of the Company together with overseeing their implementation.

ü   Recommend and Review the amount of expenditure to be incurred on the aforesaid CSR activities out of the “AGSTTL - CSR Corpus”.

ü   Monitor, alter and amend the CSR Policy of the Company, as and when required.

ü   Prepare a transparent monitoring mechanism for ensuring implementation of the projects/ programmes / activities proposed to be undertaken by the Company in line with its CSR Policy.

ü   To discharge any other function as may be delegated to it by the Board and falling under the purview of the Company’s CSR Policy.

The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out herewith as “Annexure G” to this Report.

v  HUMAN CAPITAL

The Directors acknowledge and appreciate the contribution of all employees towards the performance of the Company and believe that the employees are the most valuable assets of the Company. The Company has a scalable recruitment and human resources management process.

v  DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (3)(c) & 134(5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

a.      in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b.      the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c.      the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d.      the Directors had prepared the annual accounts on a going concern basis; and

e.      the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

v  ACKNOWLEDGEMENTS

  The Board wishes to place on record their sincere appreciation and gratitude to the various government authorities, bankers, customers, vendors, shareholders and all other stakeholders for their continued co-operation and generous support. Your Directors would also like to take this opportunity to express their appreciation for the dedicated efforts of the employees of the Company.

For and on behalf of the Board of Directors 

AGS Transact Technologies Limited

Ravi B. Goyal                                                

Chairman & Managing Director

(DIN: 01374288)

Address: C-3101, 31st Floor, Beau Monde, Appasaheb Marathe Marg, Prabhadevi, Mumbai- 400025                      

Place: Mumbai          

Date: 22nd August 2017

“Annexure A”

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2017

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,            

The Members,

AGS Transact Technologies Limited

CIN: U72200MH2002PLC138213

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by ‘AGS Transact Technologies Limited’ (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2017 according to the provisions of:

      i.         The Companies Act, 2013 (The Act) and the Rules made thereunder;

    ii.         The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made thereunder#;

  iii.         The Depositories Act, 1996 And the Regulations and Bye-laws framed thereunder;

  iv.         Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment. The Company does not have any External Commercial Borrowings;The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

a)       The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 #;

b)       The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015 #;

c)       The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 #;

d)      The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 #;

e)       The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 #;

f)        The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g)       The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 #; and

h)      The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998#;

# The Regulations or Guidelines, as the case may be is not applicable for the period under review.

We have also examined compliance with the applicable clauses of the following:

i)                    Secretarial Standards issued by The Institute of Company Secretaries of India.

ii)                  The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, if applicable #.

# Not applicable for the period under review.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above, to the extent applicable subject to the following observations:

1.       During the year under review, the Company has not appointed Chief Financial Officer of the Company as required under section 203 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

2.       The Company had paid Rs. 94 Lakhs excess managerial remuneration to the Managing Director over and above the limits prescribed under section 197 and Schedule V of the Companies Act, 2013 for the financial year 2015-16 which was treated as receivable as at March 31, 2016. The same was subsequently recovered/adjusted from the salaries payable to the Managing Director.

We further report that -

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings. Agenda and detailed notes on agenda were sent in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

During the period under review, decisions were carried through unanimously and no dissenting views were observed, while reviewing the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, the Company has undertaken following events/actions -Member’s approval has been obtained at the extra-ordinary general meeting pursuant to section 180 (1)(c) for borrowing such sums of money as the Board may deem fit for the purpose of the business of the Company and outstanding at any time shall not exceed the sum of Rs. 650 Crores.

For Bhandari & Associates

Company Secretaries

S. N. Bhandari

FCS No: 761; C P No. : 366                             

Mumbai | August 22, 2017                                            

This report is to be read with our letter of even date which is annexed as Annexure ‘A’ and forms an integral part of this report.

‘Annexure A’

To,         

The Members,

AGS Transact Technologies Limited

[CIN: U72200MH2002PLC138213]

Our Secretarial Audit Report for the Financial Year ended on March 31, 2017 of even date is to be read along with this letter.Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For Bhandari & Associates

Company Secretaries

S. N. Bhandari

FCS No: 761; CP. No: 366

Mumbai | August 22, 2017

“Annexure B”

Form AOC-1

STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/ ASSOCIATE COMPANIES/ JOINT VENTURES

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Part “A”: Subsidiaries 

(Information in respect of each subsidiary- Amount in INR)

*Novus Technologies Pte. Ltd. is a step down subsidiary of the Company through Global Transact Services Pte. Ltd.;

**Novus Technologies (Cambodia) Company Limited, Novus Transact Philippines Corporation & Novustech Transact Lanka (Private) Limited are second generation step down subsidiaries of the Company through Novus Technologies Pte. Ltd.

Notes:

1.     None of subsidiaries are yet to commence operations;

2.     None of the subsidiaries have been liquidated or sold during the year;

3.     Investment refers to investments made in subsidiaries;

4.     Exchange rate as on 31st March, 2017 are considered as follows:

Closing Rate:                          1 SGD = INR 46.3678; 1 USD= INR 64.8020; 1 PHP= INR 1.2907 & 1 LKR = INR 0.4251.

Average Rate:                        1 SGD = INR 48.4616; 1 USD= INR 67.0526; 1 PHP= INR 1.3928 & 1 LKR = INR 0.4540.

Part “B”:

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures: Not Applicable

For and on behalf of the Board of Directors 

AGS Transact Technologies Limited

Ravi B. Goyal                                         Badrinarain K. Goyal                 

Chairman & Managing Director             Director                                            

Place: Mumbai  

Date: Date: 22nd August 2017

“Annexure C”

COMPANY’S REMUNERATION POLICY ON DIRECTORS/KMP/EMPLOYEES

Ø  Objective of Nomination and Remuneration Committee

The Nomination and Remuneration Committee (the Committee) is constituted by the Board of Directors (the Board) of AGS Transact Technologies Limited (the Company) as per the provisions of section 178 of the Companies Act, 2013 by virtue of its paid up capital being more than INR 10 Cr & its borrowings/loans exceeding INR 50 Cr. The Committee’s primary objectives will be of implementing the Company’s Remuneration policy (the Policy) and ensuring that the same is in line with the Company’s objectives, ethos, business strategies and the regulatory provisions.

Ø  Members of Nomination and Remuneration Committee

1)      Mr. Bharat Shah (ID)                        Chairman of the Committee

2)      Mr. Ravi B. Goyal                            Member

3)      Mr. Sudip Bandyopadhyay (ID)          Member

4)      Mr. D. Sivanandhan (ID)                   Member

Ø  Terms of Reference of Nomination and Remuneration CommitteePeriodically oversee an evaluation of the Board, and recommend desirable changes in Board size, composition, Committee structure and processes, and other aspects of the Board’s functioning; Recommend new Board members in light of resignation of current members or a planned expansion of the Board; Examine all major aspects of the Company’s organizational health, and recommend changes as necessary, including:

Organization design;

Management and employee hiring, training, development, deployment and motivation; and Internal communication and culture building.

·       Review and recommend the compensation and variable pay for Executive Directors to the Board;

·       Appoint the CEO/CFO of the Company unanimously.

·       Establish, in consultation with the management, the compensation program for the Company, and recommend it to the Board for approval. In that context:

Ø   Establish annual Key Result Areas (KRAs) for CEO/CFO and oversee the evaluation of their achievement and review and recommend salary and variable pay of CEO, CFO, Key Managerial Personnel and Executive Directors accordingly to the Board;

Ø   Review, discuss and provide guidance to the management on the KRAs for members of the Management Council; review the outcome of evaluation processes and resulting senior management’s compensation;

Ø   Review the Company’s ESOP Schemes and recommend changes as necessary; oversee administration of the ESOP Schemes;

Ø   Grant Options to eligible employees, in consultation with management; and

Ø   Allot shares when options are exercised.

·       Perform other activities related to this Charter as requested by the Board of Directors.

For and on behalf of the Board of Directors 

AGS Transact Technologies Limited

Ravi B. Goyal                                                

Chairman & Managing Director

DIN: 01374288

Address: C-3101, 31st Floor, Beau Monde, Appasaheb Marathe Marg, Prabhadevi, Mumbai- 400025                      

Place: Mumbai          

Date: Date: 22nd August 2017

“Annexure D”

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN FOR THE FINANCIAL YEAR ENDED ON 31ST March, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I.          REGISTRATION AND OTHER DETAILS:

II.         PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

III.       PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

IV.       SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i)       CATEGORY-WISE SHARE HOLDING

ii)     Shareholding of Promoters

iii)    Change in Promoters’ Shareholding ( please specify, if there is no change)

iv)    Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

v)      Shareholding of Directors and Key Managerial Personnel:

V.         INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

VI.       REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A.  Remuneration to Managing Director, Whole-time Directors and/or Manager:

B. Remuneration to other directors:

*No commission was paid during FY 2016-17. Further, sitting fees paid to the Directors is not included in determining the Overall Ceiling as per the Act.

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

VII.      PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

There were no penalties / punishment / compounding of offences for breach of any section of Companies Act against the Company or its Directors or other officers in default, if any, during the year.

For AGS Transact Technologies Limited

Ravi B. Goyal                                                 

Chairman & Managing Director

(DIN: 01374288)

Address: C-3101, 31st Floor, Beau Monde, Appasaheb Marathe Marg, Prabhadevi, Mumbai- 400025

Place: Mumbai  

Date: 22nd August 2017

“Annexure E”

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

I       Conservation of Energy:

The operations of your Company are not energy-intensive. However, adequate measures have been initiated for conservation of energy.

II      Technology absorption, Research and Development, adoptions and innovation:

Your Company is engaged in a business, which demands absorption of emerging technologies and trends so as to cater the needs of its esteemed clients. Your Company has developed methods for absorption and adaptation of new/ emerging/ developing technologies, in accordance with the needs of its Clients and its own requirements.

III    Foreign Exchange earnings and outgo:

The Earnings in Foreign Exchange were Rs.166,504,460/- (Previous Year Rs.1,946,199/-) as against Expenditure incurred in Foreign Currency of Rs.43,239,043/- (Previous Year Rs. 29,160,908/-).

For and on behalf of the Board of Directors 

AGS Transact Technologies Limited

Ravi B. Goyal                

Chairman & Managing Director

Address: C-3101, 31st Floor, Beau Monde, Appasaheb Marathe Marg, Prabhadevi, Mumbai- 400025                                                 

Place: Mumbai  

Date: 22nd August 2017

“Annexure F”

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1.      Details of contracts or arrangements or transactions not at arm’s length basis:

The Company has not entered into any contract or arrangement or transaction with its related parties which is not at arm’s length during financial year 2016-17.

2.      Details of material contracts or arrangement or transactions at arm’s length basis:

For and on behalf of the Board of Directors 

AGS Transact Technologies Limited

Ravi B. Goyal                

Chairman & Managing Director                                                

Address: C-3101, 31st Floor, Beau Monde, Appasaheb Marathe Marg, Prabhadevi, Mumbai- 400025.                                                

Place: Mumbai                                                                           Date: 22nd August 2017

“Annexure G”

FORMAT FOR THE ANNUAL REPORT ON CSR INITIATIVES TO BE INCLUDED IN THE BOARD REPORT BY QUALIFYING COMPANIES

1.     Brief outline of the Company’s CSR Policy:

The Board of Directors at its meeting held on 16th January, 2015 approved the amended CSR Policy of your Company upon recommendation of the CSR Committee pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The CSR Committee has identified the following thrust areas and shall be focusing its CSR initiatives and channelizing the resources on a sustained basis:

1.      Promoting Education & vocational skills especially among children & women;

2.      Promoting Financial Education/financial literacy;

3.      Promoting facilities for senior citizens by setting up old age homes;

4.      Promoting Preventive Healthcare & Sanitation.

The Committee’s prime responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the framework of ‘corporate social responsibility policy’, observe practices of Corporate Governance at all levels, and to suggest remedial measures wherever necessary.

The Committee’s constitution and terms of reference meet with the requirements of the Companies Act, 2013.

The CSR Policy may be accessed on the Company’s website at the link: http://www.agsindia.com/Corporate Social-Responsibility-Policy.aspx

2.     Composition of the Committee:

1)    Mr. D. Sivanandhan                    Chairman of the Committee (Independent Director)

2)    Mr. Ravi B. Goyal                       Member

3)    Mr. Bharat Shah                         Member (Independent Director)

3.     Average Net Profit of the company for last 3 financial years  :     Rs. 231,219,325/-

4.     Threshold Limit-(2% of this amount as in 3 above)                :       Rs. 4,700,000/- approximately

5.     Details of CSR spent during the financial year:

a. Total amount to be spent for the year                                      : Rs. 4,700,000/- approximately

b. Amount spent and the manner in which it was spent during the year        : N.A.

c. Amount unspent, if any                                                                       : Rs. 4,700,000/-

6.     In case the company has failed to spend the 2% of the Average Net Profit (INR) of the last 3 financial years, please provide the reasons for not spending the amount: The Company has not been able to spend the prescribed threshold limits during the year as it is still under the process of evaluating possible organizations/initiatives for incurring this expenditure.

7.     A Responsibility statement, of the CSR Committee, that the CSR policy implementation and monitoring thereof is, in letter and spirit, in compliance with CSR objectives.                                                                                                                                              

‘The CSR Committee confirms that the implementation and monitoring of the CSR Policy is in compliance with the CSR objectives and Policy of your Company.’

For and on behalf of the Board of Directors 

AGS Transact Technologies Limited

Place: Mumbai                                                                      Date: Date: 22nd August 2017