To,
The Members,
AGS Transact Technologies Limited.
Your Directors are pleased to present the 21st Annual Report along with the Audited Financial Statements of your Company for the financial year ended on 31 March 2024.
1. FINANCIAL HIGHLIGHTS:
(' in Million, except per equity share data)
OVERVIEW OF COMPANY'S BUSINESS AND FINANCIAL PERFORMANCE
During the year under review, the revenue from operations on a standalone basis was ' 10,433.82 Million as compared to ' 12,102.43 Million in the previous year. The revenue from operations on a consolidated basis was ' 14,706.34 Million as compared to ' 16,712.73 Million in the previous year. The same was on account of decrease in revenue of other automation solutions to ' 497.25 in current year from ' 1,918.74 Million in the previous year. On a standalone basis, the loss for the year was ' 669.85 Million whereas on a consolidated basis the loss for the year was ' 800.88 Million. The loss was primarily on account of loss allowance of trade receivable and certain commitment payments. FY 2023-24 was the year of consolidation, as we are in the process of shifting gears towards high growth areas particularly on the digital payment side, which is a key focus area for the Company. As a result, we saw subdued performance with total income of
' 15,088 Million and Adjusted EBITDA of ' 3,815 Million. During the year under review, our operating cash flows improved to ' 3,492 Million and net debt reduced to ' 5,707 Million. The Company intends to retire the entire debt over the next 5 years.
Your Company is one of the largest integrated omni-channel payment solutions providers in India in terms of providing digital and cash-based solutions to banks and corporate clients. We provide customised products and services comprising ATM and CRM outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets. The company operates in three broad business segments, namely, Payment Solutions; Banking Automation Solutions; and Other Automation Solutions. The Company serves diverse industries such as banking, retail, petroleum, toll and transit, cash management and fintech in India and other select countries in Asia.
During the year under review, the Company has won order for 1,350 ATMs from India's largest PSU Bank under its Banking Automation Solutions portfolio. The PSU Bank will strategically deploy these 'AGS' branded ATMs on a PAN-India basis during FY 2023-24. This order will contribute towards strengthening our topline for the Banking Automation Solutions segment. Further, the Company won an order of ' 1,100 Crores over 7 years for deploying 2,500+ ATMs under Outsourced/Managed Services portfolio from India's largest PSU bank. The Company will deploy these ATMs on a Transaction fee basis under the Total Outsourcing Model. The Company has begun the deployment of these new ATMs in calendar year 2024. The addition of these ATMs will further strengthen our leadership position in the industry. These include manufacturing and deployment of ATMs alongwith managed services which include ATM management, maintenance, cash management, etc. on a PAN India basis. As a result, it will strengthen our performance in terms of topline as well as bottomline. It will also contribute to the overall revenue stream of our cash management subsidiary i.e. Securevalue India Limited (SVIL).
During the year under review, SVIL completed deployment of approximately 270 Dedicated Cash Vans (DCV) for PSU Banks. SVIL's DCV service provides secured dedicated cash vans along with a dedicated team of trained personnels to Banks and Financial Institutions for ensuring safe and seamless transport of cash and other valuables.
The Company has commenced pilot testing of a contactless fuel payment solution on the Ongo app at select fuel retail outlets of one of the leading OMCs (Oil Marketing Companies) in Mumbai. Offered on an open-loop platform, this cardless & contactless solution aims to provide consumers an enhanced digital experience at any fuel retail outlet in India. Ongo app users will be able to pre-set the desired fuel amount and enjoy a more- convenient fuel-filling and fuel payment experience via the Ongo open-loop wallet or virtual prepaid card. Additionally, consumers can use the Ongo app for making non-fueling purchases at any RuPay acceptance point. The aim of the pilot testing is to evaluate the operational performance of the Ongo open-loop solution for fuel payments while analysing any deployment challenges. The Company onboarded 580+ fleet vehicles in the pilot phase in Mumbai.
The Company has also launched Ongo Open-loop Cobranded Prepaid Cards with a leading Indian FMCG conglomerate.
As of 31 March 2024, it deployed 248,585 payment terminals and was one of the largest deployers of PoS terminals at petroleum outlets in India, having rolled out 41,756 terminals at various petroleum outlets.
At AGS Transact, we are anticipating a promising FY 2024-25 for our digital payments business with several exciting new launches in the pipeline. We are in the process of developing an asset-light digital business model focused on expanding our PPI infrastructure and leveraging our digital payment ecosystem, Ongo, through collaborations across the FMCG, Mobility, and Fuelling sectors, among others. This is expected to result in a high-growth segment, substantially improving the revenue and profitability over the next few years. Furthermore, the rapid expansion of bank branches network and the widespread adoption of cash recycler machines (CRMs) are expected to further drive growth in AGS Transact's core cash payments business. We are also actively working to further strengthen this segment through multiple contract renegotiations currently in the pipeline to improve profitability.
An analysis of the financials and business performance of the Company during the year under review is included in the Management Discussion and Analysis which forms a separate section of the Annual Report.
LISTING
The Equity shares of the Company are listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). Requisite annual listing fees for FY 2023-24 has been duly paid to both the Stock Exchanges within stipulated time.
DIVIDEND
On account of loss during the financial year under review, the Board of Directors have not recommended any dividend for FY 2023-24.
RESERVES
During the year under review, your Company has not transferred any amount to the Reserves.
CHANGE(S) IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the business or any activity of business of the Company.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
The composition of the Board of Directors of the Company is in accordance with the provisions of Section 149 of the Companies Act 2013 ("the Act") and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI Listing Regulations"], with an appropriate combination of Executive, Non-Executive, Women and Independent Directors.
As on 31 March 2024, the Board of the Company has 8 (Eight) Directors comprising of 1 (One) Managing Director, 2 (Two)
Executive Directors, 1 (One) Non-Executive Director and 4 (Four) Independent Directors.
During the financial year under review, there were below changes in the Board constitution of the Company:
• Cessation of Mr. Rahul Bhagat (DIN: 02473708) as Non- Executive, Independent Director w.e.f end of day from 6 June 2023 on account of completion of his term.
• Appointment of Ms. Preeti Malhotra (DIN: 00189958) as an Additional Director (Non-Executive, Independent Director)
w.e.f 28 June 2023.
• Regularisation of appointment of Ms. Preeti Malhotra (DIN: 00189958) as a Non-Executive, Independent Director for a period of 5 years at the 20th AGM of the Company held on 25 September 2023.
• Mr. Vinayak R. Goyal (DIN: 09199173), Executive Director, retired by rotation and was re-appointed at the 20th Annual General Meeting of the Company held on 25 September 2023.
• Re-appointment of Mr. Stanley Johnson Panacherry (DIN: 08914900) and Mr. Vinayak R. Goyal (DIN: 09199173) as Executive Directors w.e.f. 9 June 2024 for a period of 3 years approved by members through postal ballot dated 29 March 2024.
Post 31 March 2024 till the date of signing this report, there has been no change in the Board constitution.
In accordance with the Articles of Association of the Company and the provisions of the Section 152 of the Companies Act 2013, Mr. Sudip Bandyopadhyay (DIN: 00007382) will retire by rotation at the ensuing 21st Annual General Meeting ("AGM") and being eligible, has offered himself for re-appointment which has been recommended by the Nomination and Remuneration Committee and the Board of Directors of the Company and the notice for the ensuing 21st Annual General Meeting contains the details of the said re-appointment.
Mr. Ravi B. Goyal (DIN: 01374288) - Chairman and Managing Director, Mr. Saurabh Lal - Chief Financial Officer and Ms. Sneha Kadam - Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company as at the date of this Report.
None of the Directors of the Company are disqualified for being appointed as directors, as specified in Section 164 (1)/ Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.
Information on the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders' Relationship Committee, Risk Management Committee and Corporate Social
Responsibility Committee and meetings of those Committees held during the year is given in the Report on Corporate Governance annexed as "Annexure 1".
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All the Independent Directors of your Company have submitted their declarations of independence, as required, pursuant to the provisions of Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence, as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)
(b) of the SEBI Listing Regulations and are not disqualified from continuing as Independent Directors of your Company.
Further, all the Independent Directors of your Company have confirmed their registration/renewal of registration, as applicable, on the Independent Directors' Databank. All the Independent Directors of the Company have complied with the requirements laid down under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Except, Mrs. Jhuma Guha (DIN:00007454), Non-Executive, Independent Director, who holds 185 equity shares in your Company, none of the Independent Non-Executive Directors held any equity shares of your Company during the financial year ended 31 March 2024 and as on the date of this report.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS
The Independent Directors of the Company possess requisite qualifications, experience and expertise. In compliance with the rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Indian Institute of Corporate Affairs ("IICA"). Pursuant to amendments in section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of two (2) years from the date of inclusion of their names in the data bank.
All our Independent Directors i.e. Mr. Subrata Kumar Mitra, Mrs. Jhuma Guha, Mr. Sivanandhan Dhanushkodi, and Ms. Preeti Malhotra are exempted from the requirement to undertake online proficiency self-assessment test conducted by IICA.
SHARE CAPITAL
During the financial year under review, the Company has not issued any shares or made any allotments.
The Authorised Share Capital of your Company as on 31 March 2024 was ' 1,600,000,000 divided into 160,000,000 Equity Shares of ' 10 each.
The issued, subscribed and paid-up equity share capital of the Company as on 31 March 2024 was ' 1,214,030,760 divided into 121,403,076 equity shares of face value of ' 10 each.
There was no change in the Share Capital Structure of the Company during the financial year under review.
ISSUE OF SWEAT EQUITY SHARES
The Company has not issued Sweat Equity Shares during the financial year under review and hence the disclosure as required under Section 54 read with rule 8(13) of Companies (Share Capital and Debentures) Rules, 2014 is not required to be made.
EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS
The Company has not issued Equity Shares with differential voting rights during the financial year under review and hence
the disclosure as required under Section 43 read with rule 4(4) of Companies (Share Capital and Debentures) Rules, 2014 is not required to be made.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of your Company for FY 2023-24 are prepared in accordance with the provisions of the Companies Act, 2013, applicable accounting standards and as prescribed under the SEBI Listing Regulations.
Your Directors have pleasure in attaching the audited consolidated financial statements pursuant to Section 129(3) of the Act and Regulation 34 of SEBI Listing Regulations. The Audited Consolidated Financial Statements forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated under Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis, is presented in a separate section forming part of the Annual Report.
CREDIT RATING
During the financial year under review, the details of credit rating obtained/renewed by the Company are as under:
*Since no such debt has been availed by the Company, India Ratings and Research Private Limited has withdrawn the rating assigned to the captioned debt instrument basis the request made by the Company.
AWARDS AND RECOGNITIONS
The Company received below awards and recognitions during the year:
• Received recognition at the esteemed ET NOW Best BFSI Brands Conclave 2024 for excellence in providing outstanding digital customer experiences, minimising cybersecurity threats, accelerating technology innovation, minimizing their risk profile, among others;
• Received Bronze award under 'Best Project - Corporate' and 'Cafeteria Management' at iNFHRA's Workplace Excellence Conference & Awards 2023-2024;
• Received the recognition 'Economic Times Excellence in Innovation' at The Global Innovation Network 2023.
AUDITORS AND AUDITORS REPORT
At the 19th Annual General Meeting (AGM) of the Company held on 30 August 2022, M/s. B S R & Co. LLP, Chartered Accountants were re-appointed as the Statutory Auditors of the Company for a second term of four (4) years i.e. to hold office from the conclusion of the 19th AGM until the conclusion of the 23rd AGM.
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. The Report given by M/s. B S R & Co. LLP, Chartered Accountants on the financial statements of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
The Audit Committee composition and details with respect to the number of meetings and attendance at the meetings are provided in the Report on Corporate Governance forming part of the Annual Report FY 2023-24. During the year under review, there have been no instances whereby the Board of Directors of the Company has not accepted the recommendations made by the Audit Committee on any matter which is mandatorily required.
COST AUDITORS
M/s. Kishore Bhatia & Associates, Cost Accountants, will be carrying out the cost audit of the Company for the financial year 2023-24. The Company has duly maintained cost records as required under the provisions of the Companies Act 2013. The Board of Directors have re-appointed them to conduct the audit of the cost records of the Company for FY 2024-25 in compliance with section 148 of the Companies Act, 2013.
INTERNAL AUDITORS
The Board of Directors have appointed M/s. Mahajan & Aibara Chartered Accountants LLP, (Firm Registration No: 105742W), as Internal Auditors for the FY 2023-24 to conduct the internal audit of the various areas of operations and records of the Company.
SECRETARIAL AUDIT REPORT
M/s. Bhandari & Associates, Practising Company Secretaries, (Unique Identification No.: P1981MH043700) were appointed to conduct the Secretarial Audit of the Company for the financial year 2023-24 as required under Section 204 of the Companies Act, 2013 and the rules made thereunder. The report of the Secretarial Auditor, in the prescribed Form MR-3 is annexed to this report as "Annexure 2".
The Secretarial Auditors' Report for FY 2023-24 does not contain any qualification, reservation or adverse remark, except as mentioned in the form MR-3 which is annexed to this report as "Annexure 2".
The Board has taken note of the remarks of the Secretarial Auditor and commented as below:
Securevalue India Limited and India Transact Services Limited, wholly owned subsidiaries of the Company falls within the ambit of "Material Subsidiary" as per the SEBI Listing Regulations for the financial year 2023-24. The Secretarial Audit Report of Securevalue India Limited and India Transact Services Limited for the Financial Year 2023-24 is enclosed as "Annexure 2A" and "Annexure 2B" respectively to this report.
SUBSIDIARIES
As on 31 March 2024, the Company has 8 subsidiaries which include 3 Direct wholly owned subsidiaries, 1 subsidiary (section 8 company) and 4 overseas step down subsidiaries as under:
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.);
vii. Novustech Transact Lanka (Private) Limited (Second level step down subsidiary through Novus Technologies Pte. Ltd.); and
viii. AGS Community Foundation (Section 8 Company).
Further, as on 31 March 2024, the Company has an associate entity (45% stake) in Indonesia i.e. P.T. Nova Digital Perkasa through its first level step down subsidiary (Novus Technologies Pte. Ltd.).
During the year under review, none of the entities have ceased to be the Company's subsidiaries, joint ventures or associate companies.
The Board of Directors (including Audit Committee) have reviewed the affairs of the subsidiaries and associate entity. A Report on the performance and financial position of each of the subsidiaries and associate entity included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this report as "Annexure 3".
The Annual Audited Accounts of the Subsidiary Companies and the related detailed information will be made available to the Shareholders of the Company at the corporate office of the Company.
The Company has framed a Policy for determining Material Subsidiary which is available on the website of the Company at https://www.agsindia.com/corporate-policies.aspx
CODEOFCONDUCT
Your Company has in place, a Code of Conduct for the Board of Directors and Senior Management Personnel, which reflects the legal and ethical values to which your Company is strongly committed.
The Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct applicable to them, for the financial year ended 31 March 2024. The said Code is available on the website of your Company at https://www.agsindia.com/ corporate-policies.aspx. In accordance with Regulation 26 of the SEBI Listing Regulations, this is to confirm that all the Directors and the Senior Management personnel of the Company have affirmed compliance to the Code of Conduct for the Financial Year ended 31 March 2024. The declaration to this effect signed by Mr. Ravi B. Goyal, Chairman and Managing Director of the Company forms part of this Report as "Annexure 4".
RISK MANAGEMENT
The Company has devised and adopted a Risk Management Policy and implemented a mechanism for risk assessment and management. 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.
The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.
In Board's view, there are no material risks which might threaten the existence of the Company.
As on 31 March 2024, the Risk Management Committee comprises of the below:
EMPLOYEES STOCK OPTION SCHEMES
With a view to attract and retain key employees and talent working with the Company and its subsidiaries and to motivate them to contribute to the overall corporate growth and profitability of the Company, to augment shareholders' value and align the interests of employees with those of the shareholders of the Company, the Company had implemented the following:
• Employee Stock Option Scheme - ESOS 2012 ("ESOS 2012") instituted vide Board and shareholders resolutions dated 29 February 2012 respectively and amended thereafter from time to time;
• AGS Employee Stock Option Scheme 2015 ("ESOS 2015") instituted vide Board and shareholders resolutions dated 30 January 2015 and 3 February 2015 respectively and amended thereafter from time to time.
ESOS 2012 and ESOS 2015 are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ["SEBI SBEB Regulations"].
The Nomination & Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors Stock Option Plans of the Company in accordance with the SEBI SBEB Regulations.
During the year under review, the shareholders through postal ballot on 29 March 2024 have increased the option pool available to be granted ESOS 2015 by additional 3,000,000 options and also changed the manner of determination of exercise price for options to be granted under ESOS 2015.
During the year under review, the Company has not granted any stock options.
The particulars required to be disclosed pursuant to the SEBI SBEB Regulations shall be disclosed on Company website at https:// www.agsindia.com/corporate-governance/others.aspx#others.
SCHEME OF ARRANGEMENT
The Board of Directors of the Company have approved a Scheme of Arrangement ("Scheme") between the Company ("Resulting Company") and its wholly owned subsidiary i.e. India Transact Services Limited ("Demerged Company") and their respective shareholders and creditors at their meeting held on 19 March 2024 involving the demerger of the Merchant Acquisition Business Undertaking of the Demerged Company (the "Demerged Undertaking") and transfer of such Demerged Undertaking to the Resulting Company.
The Scheme has been filed with the National Company Law Tribunal ("NCLT") in furtherance of the objective of consolidating the payment services activities of the Group relating to merchant acquisition business at the Resulting Company. The rationale of the Scheme is as under:
• The Resulting Company is engaged in the business of providing customized products and services comprising ATM and Cash Recycler Machines ("CRM") outsourcing, cash management and digital payment solutions. The Demerged Company is engaged in the business of Merchant Acquisition Business and also holds a valid PPI license, issued by the Reserve Bank of India. The Demerged Company is a wholly owned subsidiary of the Resulting Company.
• Currently, many large Merchant Acquisition Business contracts are secured by the Resulting Company which are further subcontracted and serviced by the Demerged Company.
• The Scheme aims to consolidate the Merchant Acquisition Business activities under the Resulting Company, fostering better, more efficient, and economical resource management. This consolidation is expected to create synergies, particularly in the development of the Merchant Acquisition Business, offering improved opportunities for growth and scalability.
• The Scheme, inter-alia, also leads to vertical integration of the Merchant Acquisition Business into the Resulting Company, thereby enabling it to position itself in a better manner in the market. The Resulting Company will be capable of providing a comprehensive range of services, from software solutions development to seamless transaction platforms, enhancing its competitiveness and market presence allowing the Resulting Company to offer the entire range of services to its customers starting from development and designing of software solutions to providing payment platforms for carrying out transactions.
• The Scheme shall facilitate the Demerged Company to entirely focus on the PPI business, which includes contracts from
prominent entities like Patanjali Ayurved Limited, Bharuwa Solution Pvt. Limited and Bangalore Metro Rail Corporation Limited (BMRCL). The Demerged Company has also initiated pilot in automated fuelling based solution through the PPI business. This focused approach is expected to enable the Demerged Company to capitalize on the existing contracts and explore prospective business opportunities, thus aligning with and attracting potential clients interested in the PPI business. PPI license enables us to provide consumer centric solutions and open loop PPI card shall create better opportunities providing better consumer experience in making payments.
• The Scheme will reduce management overlap and integrate the business functions, thereby streamlining the business structure of the group. The Scheme will ultimately result in better, efficient, and economical management, cost savings, pooling of resources, creating better synergies across the group, optimum utilization of resources, rationalization of administrative expenses/ services, and further development and growth of the respective businesses.
• The Scheme is between a holding company and its wholly owned subsidiary and shall not in any manner be prejudicial to the interests of concerned shareholders/ creditors of the Companies and the general public at large.
DIVIDEND DISTRIBUTION POLICY
In terms of Regulation 43A of the SEBI Listing Regulations, top 1,000 listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. Accordingly, your Company had formulated and adopted its Dividend Distribution Policy, which is available on the Company's Website at https:// www.agsindia.com/corporate-policies.aspx.
BOARD CONSTITUTION
As on 31 March 2024, your Board comprises 8 (Eight) Directors comprising of 1 (One) Managing Director, 2 (Two) Executive Directors, 1 (One) Non-Executive Director and 4 (Four) Independent Directors.
The Board met 8 times during the FY 2023-24, the details of which are given in the Report on Corporate Governance forming part of the Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and the SEBI Listing Regulations.
On the basis of the written representations received from the Directors, none of the above Directors is disqualified under Section 164 (2) of the Act.
Post 31 March 2024 till the date of signing this report, there have been no changes in the Board constitution.
COMPANY'S POLICY RELATING TO PAYMENT OF REMUNERATION TO DIRECTORS AND KMPS:
The Company's policy on Nomination and Remuneration of Directors, Key Managerial Personnel and S?nior Management Personnel includes criteria for determining qualifications, positive attributes, independence of a Director and other matters as prescribed under Section 178(3) of the Companies Act, 2013. The compensation structure is merit-based, market- led and benchmarked against industry standards. The policy includes provisions w.r.t. criteria for appointment and payment of remuneration to Directors, Key Managerial Personnel and Senior Management Personnel of the Company.
The Company's Nomination and Remuneration Policy is available on the website of the Company at https://www.agsindia.com/ corporate-policies.aspx.
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 2023-24 at their meeting held on 29 May 2024. During the financial year under review, the Independent Directors of your Company in separate meeting held on 19 March 2024 without presence of other Directors and management evaluated performance of the Chairman, Managing Director and other Non-Independent Directors including Executive Directors, along with performance of the Board/Board Committees and other senior management members. The evaluation of the performance of the Directors was done through discussions, the criteria of which included, inter alia, board structure, contributions made at the Board meeting, attendance, instances of sharing best and next practices, domain knowledge, vision, strategy, engagement with senior management.
The Board of Directors (excluding the director being evaluated) have also evaluated the performance of Independent and Non- Independent Directors, fulfilment of their independence criteria and their independence from the management, performance of the Board as a whole and that of the Chairman of the Meetings/Committees.
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 and Regulation 22 of the SEBI Listing Regulations. The policy is a
channel to the Directors, Employees and Stakeholders 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 ensures to protect the whistle blower from unfair adverse personal action and no individual has been denied access to the audit committee under the policy. The policy is available on the website of the Company and can be viewed on: https://www. agsindia.com/corporate-policies.aspx.
DEPOSITS
During the financial year 2023-24, your Company has not invited, accepted or renewed any fixed deposits from the Public within the meaning of Section 73 and 76 of the Companies Act, 2013 ("the Act") read with Companies (Acceptance of Deposits) Rules, 2014. Accordingly, as on 31 March 2024, there was no principal or interest outstanding in respect thereof.
ANNUAL RETURN
Pursuant to the requirement under Section 92(3) of the Companies Act, 2013, copy of the annual return for the financial year ended 31 March 2024 in Form MGT-7 can be accessed on our website at https://www.agsindia.com/corporate-governance.aspx.
STATEMENT ON MATERIAL CHANGES & COMMITMENTS
Except as stated below, there are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 202324 and the date of this Report:
• The Company has approved issuance of upto 25,236,500 Convertible Warrants ("Warrants") carrying an entitlement to subscribe to an equivalent number of equity shares of face value of ' 10/- each to Promoter/Promoter Group and Non- Promoters on a preferential basis in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018, as amended.
• Further, pursuant to the special resolution passed on 18 July 2024 by the members of the Company through Postal Ballot and in-principal approvals granted by National Stock Exchange of India Limited and BSE Limited on 31 July 2024 and 1 August 2024 respectively, the Board of Directors of AGS Transact Technologies Limited (the "Company") at their meeting held on Wednesday, 14 August 2024 approved the allotment of 20,109,100 Warrants convertible into equal number of equity shares of face value of ' 10/- each at an Issue Price of ' 79.25/- per warrant on preferential basis to Promoter/Promoter Group and Non-Promoters allottees.
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.
INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Company has an effective internal control and risk mitigation system, which is reviewed and constantly updated. The internal controls including the internal financial control of the Company are managed and reviewed by the Audit Committee and apart from the staff employed by the Company, the Company has also appointed independent Internal Auditors to review and monitor the internal financial controls and their adequacy. The Internal Financial Controls of the Company are adequate and commensurate with the size and nature of business of the Company.
REPORTING OF FRAUDS
There were no instances of fraud as required to be reported by the Statutory Auditors of the Company to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013 read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The following is a summary of sexual harassment complaints received and disposed of during the year 2023-24:
• No. of complaints at the beginning of the year 2023-24 : NIL
• No. of complaints received during the year 2023-24: NIL
• No. of complaints disposed of during the year 2023-24 : NIL
• No. of complaints at the end of the year 2023-24: NIL
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 5" forming part of this Report.
PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES
The Company has complied with the provisions of Section 185 & 186 of the Act w.r.t. granting loans, making investments and providing guarantees & securities to its subsidiaries. Further, The Company has availed guarantee from one of its subsidiary during the period under review. Details of the same are referred at Note 46 (Notes to the financial statements) of the standalone financial statements as on 31 March 2024.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered by the Company during the financial year under review were in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI Listing Regulations. During the year under review, there are no materially significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interests of the Company at large.
All Related Party Transactions were placed before the Audit Committee and also before the Board for their approval. Prior in- principle approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the in-principle approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The disclosures pertaining to related party transactions as per the applicable Accounting Standards form part of the notes to the financial statements provided in this Annual Report.
The Company has framed a Related Party Transactions Policy which is available at the below link: https://www.agsindia.com/corporate-policies.aspx
There are no material related party transactions which are not in ordinary course of business or which are not on arm's length
basis and henee there is no information to be provided as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014.
MD AND CFO CERTIFICATION:
As required under Regulation 17(8) of the SEBI Listing Regulations, the Managing Director and CFO of your Company have certified the aeeuraey of the Financial Statements, the Cash Flow Statement and adequacy of Internal Control Systems for financial reporting for the financial year ended 31 March 2024. Their Certif?cate is annexed as "Annexure 6" to this report.
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:
• Review and recommend the CSR Policy to the Board of Directors;
• Recommend the amount of annual expenditure to be incurred on the CSR activities;
• Formulate the annual action plan for each financial year and recommend the same to the Board;
• Review and recommend to the Board, certain CSR projects/ programmes as ongoing projects in accordance with the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014;
• Review the impact assessment reports of CSR projects, whenever applicable as per the Act and CSR Rules;
• Annually report to the Board, the status of the CSR activities and contributions made by the Company.
• 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 brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year as detailed in CSR Report are set out in "Annexure 7" in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
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 for the concerned FY 2023-24:
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 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;
e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. 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.
REPORT ON CORPORATE GOVERNANCE
As required by Regulation 34 of the SEBI Listing Regulations, a detailed Report on Corporate Governance is included in the Annual Report as "Annexure 1".
M/s. Bhandari & Associates, Practising Company Secretaries, Mumbai, have certified your Company's compliance requirements in respect of Corporate Governance, in terms of Regulation 34 of the SEBI Listing Regulations; and their Compliance Certif?cate is annexed to the Report on Corporate Governance. ("Annexure 8").
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The Business Responsibility and Sustainability Report for the financial year ended 31 March 2024 as stipulated under Regulation 34(2) of SEBI Listing Regulations is attached as a part of this Annual Report as "Annexure 9".
PARTICULARS OF EMPLOYEES
The information under Section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as follows:
• Ratio of the remuneration of each director to the median remuneration of the employees of the Company and percentage increase in remuneration of each Director in the financial year:
Notes:
• The Non-Executive, Independent Directors of the Company are paid remuneration in the form of commission and sitting fees for meetings attended by them during FY 2023-24.
• Mr. Sudip Bandyopadhyay, Non-Executive, Non-Independent Director of the Company is paid remuneration in the form of commission and sitting fees.
• Mr. Sivanandhan Dhanushkodi was appointed w.e.f. 11 March 2023.
• Mr. Rahul Narain Bhagat ceased to be an Indepenent Director w.e.f. 6 June 2023.
• The median remuneration of employees of the Company during FY 2023-24 was ' 490,014.
• Except sitting fees which is disclosed in financial statements, no director of the Company is in receipt of any remuneration or commission from the Company's subsidiary company.
• Percentage increase in remuneration of Chief Financial Officer and Company Secretary in the financial year:
• Percentage increase in the median remuneration of employees in the financial year: 4.79%
• Number of permanent employees on the rolls of the Company as on 31 March 2024: 1,106
• Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: NIL
• It is affirmed that the remuneration paid is as per the Remuneration Policy of the Company: Yes
• Receipt of any remuneration or commission by MD or WTD of the company from any subsidiary company is required to be disclosed pursuant to Section 197(14) - Not applicable
Any Member desirous of obtaining the statement containing particulars of remuneration of employees as required under Section 197(12) of the Act, read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 may write to the Company Secretary at the e-mail ID companysecretary@agsindia.com. In terms of Section 136(1) of the Act, the Annual Report is being sent to the Members excluding the aforesaid annexure.
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.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your Company is in compliance with the applicable Secretarial Standards, issued by the Institute of Company Secretaries of India.
OTHER DISCLOSURES
• No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.
• The requirement to disclose the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
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.
CAUTIONARY STATEMENT
Statements in the Board's Report and the Management Discussion and Analysis describing the Company's objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include: global and domestic demand and supply conditions, availability of critical materials and their cost, changes in government policies and tax laws, economic development of the country, and other factors which are material to the business operations of the Company.