Month: August 2018

During the recently held FICCI – PSIC 2018 (3 August 2018), seventeen security guard agencies showed their commitment and came forward to sign MoUs with the Management and Entrepreneurship & Professional Skills Council (MEPSC) to impart training to over 3.17 lakh  security guards under the government’s ‘Recognition of Prior Learning’ (RPL) scheme. The companies included SIS India, G4S, Peregrine, Checkmate, NISA, SMS Security, Orion, Terrier, Raxa-GMR and so on. Addressing a gathering of over 300 security professionals at the ‘Private Security Industry Conclave, Dharmendra Pradhan, Minister of Skill Development and Entrepreneurship, GoI, said that the skilling of manpower is critical for private security industry which is growing at an annual rate of 20-25 percent. The industry must partner with the government in skilling, reskilling and upskilling of the workforce in order to meet the challenges of new RPL 4.0. “Glad that a MoU has been signed between the private security companies and the Management & Entrepreneurship and Professional Skills Council to train and certify over 3 Lakh personnel under Recognition of Prior Learning (RPL) in the Private Security Industry.”   – Dharmendra Pradhan, Minister of Skill Development and Entrepreneurship, GoI   He further said that there is a need to make the economy more formal. In other developed countries, skilling, reskilling and upskilling are the jobs of the industry, and the respective governments undergo partnership with the private sector for this purpose. The government of India has shown conviction in the industry and hence it has changed the policy to RPL 4.0. There is a need to increase the employable workforce in the country and bring them under the skilling ecosystem. “There’s a long list of things that we want the government to look into – skill is one of them. Apart from construction and logistics, the private security industry is among the top five sectors to create jobs in the country,” said Rituraj Sinha, the Chair, FICCI Committee of Private Security Industry, and Managing Director, SIS Group, “The sector has about 53 million security personnel registered with the government’s provident fund scheme.” Recognition of Prior Learning (RPL) is a key element under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme of the Ministry of Skill Development and Entrepreneurship (MSDE) which aims to impart skill based training to one crore people between 2016 – 2020. There is a large section of India’s unorganized workforce that is unskilled and semi-skilled who generally pick up skills and knowledge in an informal set up by observing people or working under their guidance or through complete self-learning. Even if they manage to get a job they may not be able to improve their skills. This also affects their productivity and quality of output. They need access to training programs and support from their employers to skill and upskill themselves. Recognition of Prior Learning (RPL) is meant to help such workforce who get assessed, trained, and certified on their current competencies as per the National Skills Qualifications Framework (NSQF) levels. RPL also shows them a path to bridge their current knowledge and skill levels to reach a competency level or go for higher skills for professional growth. The RPL certification would be at par with the certifications awarded by various skill training programs in the country.  

While inaugurating the FICCI – Private Security Industry Conclave on 3 August 2018, Shiv Pratap Shukla, Minister of State for Finance, GoI, assured the private security industry that the Finance Ministry is actively considering FICCI’s recommendations to reduce the GST rate levied on the private security agencies to minimise its impact on the industry and capitalise on its job-creation potential. FICCI organized its annual event PSIC – 2018 on the theme of – ‘Job Creation & Skill Development.’ “There is a merit in the demand for reduction of GST rate to 5% as this industry generates about 5 lakh jobs yearly. Moreover, security is no longer a luxury but a basic essential for the citizens of the country. If we aim to cultivate a strong economy, the basic entitlements of  the citizens cannot be compromised. ” – Rituraj Sinha The Chair of FICCI Committee on Private Security Industry, & Group MD, SIS Group Mr. Shukla said that the government acknowledges the contributions of the private security industry in creating jobs for the poor, ex-servicemen and those who have migrated from villages, and promised that he would do the best possible to reduce the tax. He invited a FICCI delegation to his office to discuss and take the matter further. Mr. Shukla also released a FICCI-BDO Report relating to PSI that dwells upon the skill development and jobs creation, policy issues, GST implication and its impact, shift from the unorganized to organized sector, and the need of integration of manpower and technology. Since its inception, the Goods and Services Tax (GST) has been a major impediment for the Private Security Industry in India which is one of the largest employment generating industries of the country. At the PSIC 2018, the FICCI Private Security Committee, which has been in consistent pursuit with the government on GST, reiterated the issue and sought a roll down of the GST rate from 18% to 5% slab. Rituraj Sinha, the Chair of FICCI Committee on Private Security Industry, and Group MD, SIS Group pointed out that there is a merit in the demand for reduction of GST rate to 5% as this industry generates about 5 lakh jobs yearly. Moreover, security is no longer a luxury but a basic essential for the citizens of the country. If we aim to cultivate a strong economy, the basic entitlements of the citizens cannot be compromised. Private Security has emerged as an essential service to support the government machinery in homeland security activities. With a reduction in tax, pressure from customers on manpower reduction is likely to ease significantly and that will result in job protection for private security guards. A lower rate is also likely to boost the volume of work orders, thereby paving way for demand expansion, and the resultant increase in skill development activities as well as employment generation by the private security sector Mr. Sinha clarified that they find a genuine intent on the part of the government to pass GST relief to the industry that would benefit the small players as well who are bearing an additional burden of the cost of interests on the amount of GST that they borrow to pay the levy in advance. Major Manjit Rajain (Retd.), Co-Chair of FICCI Committee on PSI & Chairman, Peregrine Guarding, was also optimistic about the serious inclination on the part of the government to give GST relief to PSI. Sandip Somany, Senior Vice President of FICCI, and Vice Chairman and MD, HSIL Ltd. opined that the private security agencies are mainly SME segments that operate on very thin margins. It is challenging for them to cope with the requirements of the GST compliances, as the high GST rate of 18% has imbalanced their cash-flows. FICCI’s recommendations on GST relief are pending with the government from the past few months.  

 Implementation of the ‘Reverse Charge Mechanism’ for the payment of GST demanded to save the interests of the industry Under the aegis of CAPSI, huge gatherings of owners and employees of the private security industry across the country staged nationwide peaceful protests on 18 July 2018 against the existing modus of GST rules which in principle, largely goes in contradiction to the business module of the industry, and has brought various security agencies to the verge of closure owing to the imposed unwarranted financial burden. The major impediment stems from the fact that GST is due to be deposited every month without fail while agencies receive payments for their respective services after 60 to 90 days. They demanded immediate implementation of the ‘Reverse Charge Mechanism’ whereby the payment of GST is done to the government directly by the recipients of the security services and not by the private security agencies, the service provider. This mechanism hardly impacts the revenue collection of the government. “ The private security industry is one of the largest job providers employing over 80 lakh people, mostly retired personnel from the armed forces and the para-military forces. Most of the security guards come from the rural and economically poor backgrounds. Any government decision resulting in the closure of even one average security agency could mean unemployment to a large number of security guards causing large scale unemployment in the rural sector.” – Kunwar Vikram Singh , Chairman, CAPSI The Delhi Chapter of CAPSI held their protest at the India Gate where hundreds of security professionals gathered in black T-shirts to support the cause. The Chairman of CAPSI, Kunwar Vikram Singh was also present there. They showed their respect to the martyrs by laying the wreath at the Amar Jawan Jyoti before the protest. “During the last six months, we have raised this issue with the government at various levels to highlight problems being faced by the industry. We made representations to the Ministry of Finance, the GST Commissioner, the Competition Commission of India (CCI), and the MSME and so on, demanding the streamlining of the GST mechanism for our industry; but no viable solutions have come forth leaving CAPSI with no other option than to hold a protest. The major issue which forces owners to close their companies is the methodology of depositing GST. The GST regulations mandate the security agencies to deposit tax on the 20th of every month when bills are raised; however, the payments against these bills are received after 60 to 90 days, or even more. This gap impacts the cash flows of our low-margin industry badly causing us to carry huge back-breaking burdens,” said Kunwar Vikram Singh, “The logical remedy to this problem is the introduction of the ‘Reverse Charge Mechanism,’ whereby the principal employer (to whom the security guards are outsourced) pay GST on due date and claim its refund later. This will reduce the financial burden on the owners of the private security agencies.” “Security service industry essentially recruits, trains, and then provides jobs to the trained manpower; which along with other statutory costs constitute about 90% of our billing amount. Our margin ranges up to 5% only. TDS at the rate of 2% of the billing amount further erodes the margins. Low margins coupled with delays in payments create a huge pressure on the cash flows in the industry. Most of the players often find it extremely difficult to pay even wages on time, besides to comply with the statuary requirements of depositing dues like PF and ESI. Under such circumstances the additional burden of GST is unbearable. The implementation of the ‘Reverse Charge Mechanism’ in GST is the only way out,” Mr. Singh concludes. The protest saw an active involvement of APDI as well.  

Security & Intelligence Services (India) Limited has recently entered into a strategic partnership with SLV Security Services Private Limited whereby it acquires a stake of 51% in SLV. Headquartered in Gurugram, SLV was founded by Vishal Swara and Shyam Swara and was incorporated in 1986. The company provides physical security, electronic surveillance, event security/ management, and security consulting services. The business currently generates annual revenues of over Rs.240 crores with the majority of them coming from the National Capital Region (NCR). The company has over 650 customers and operates in 1,575 sites. “SLV is a well-recognized brand with a strong franchise in the NCR region and several blue-chip clienteles. We are glad to have SLV in SIS Group and we look forward to leveraging our partnership to become a much more dominant player in the region which will take us closer to our goal of being the No. 1 security services company in India. Our M&A strategy is focussed on becoming the leader in key micro markets and NCR market is one of them.”  Rituraj Sinha Group Managing Director, SIS Group  As per the understanding, Vishal Swara will continue as the Managing Director of SLV to drive the growth of the company further. He will be responsible for the day to day management, and will also determine the strategic directions of the business together with the SLV Board.  Over the next few years, SIS will increase its shareholding in SLV in the mutually agreed manner. This is the first strategic transaction for SIS since its IPO. Last year, the company had notified the stock market about its Rs.1000 crore acquisition/ investment corpus. Mr. Swara said, “SLV has been a well-recognized name in the security services space with several marquee clients being served over the last many years.  With this strategic partnership with SIS, we will enhance our ability to service existing clients through new solutions, as well as increase our presence with new customers and in new geographies.  Together, we believe that we can achieve a higher growth rate and capture a larger share of the huge security market in India.” Rituraj Sinha, Group Managing Director, SIS Group commented on the acquisition, “SLV is a well-recognized brand with a strong franchise in the NCR region and several blue-chip clienteles. We are glad to have SLV in SIS Group and we look forward to leveraging our partnership to become a much more dominant player in the region which will take us closer to our goal of being the No. 1 security services company in India. Our M&A strategy is focussed on becoming the leader in key micro markets and NCR market is one of them.” The Indian security market is estimated to be of the worth of Rs.70, 000 crores, and it is growing at a rate of 20% per annum, as per a Frost & Sullivan Report. The NCR market is growing at a faster clip with the concentration of economic activities, residential developments and infrastructure spend by the Central and State governments. SIS has been looking to consolidate its market share in key geographies like these with an objective to emerge as India’s largest security services provider. Through this strategic partnership, the SIS-SLV combine shall secure the highest market share in the Gurugram- NCR market. Earlier, SIS had launched its first B2C service in Gurugram in 2017, under the brand name vProtect which is a home alarm, monitoring and response solution. The SIS-SLV partnership is also expected to offer valuable synergies in targeting the residential market in Gurugram. KPMG acted as the transaction advisor to SLV for this strategic partnership.    

Dahua Technology, a leading solution provider of the global video surveillance industry organized another series of roadshows in Chennai, Jodhpur, Gwalior and Mumbai. The theme of the roadshows was ‘Partnering To Enable A Safer & Smarter Living.’ These roadshows were successfully organized by Dahua Technology along with its national partner M/s. Aditya Infotech. Commenting on the success of these roadshows, Robbin Shen, Managing Director, Dahua Technology India Pvt. Ltd. said, “I am indeed overwhelmed by the enthusiastic response in all these cities which clearly shows that our technological innovation, quality, and services to clients and customers are well accepted here in India. This encourages and motivates our team to give out their best. More awareness has been created as more customers throng to our security products.” The events were hosted in top-class and easily accessible venues in each city. The first 50 registered visitors were given early bird gifts. There were live demonstrations in all these cities on security products displayed for the benefit of the visitors. The customers were happy to get hands-on experience in operating Dahua products. Dahua officials freely mixed with customers responded to the queries and cleared their doubts. The road shows in these cities created a special bond between the Dahua brand lovers and the company and helped enhance its brand awareness among the people. “Roadshows are very important to us that help accomplish our mission of enabling a safer society and smarter living.” – Robbin Shen Managing Director, Dahua Technology India Pvt. Ltd.