TO THE MEMBERS
Your Directors are pleased to present the Thirtieth Annual Report Audited FinancialStatements and the report on Company's business and operations for the financial yearended 31st March 2017.
Results of Operations
The Results of operations of the Company for the year ended 31st March 2017 aresummarized below:
|Particulars ||Company ||Group |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Revenue from Operations ||29656 ||6860 ||30589 ||8958 |
|Other Income ||137 ||163 ||220 ||87 |
|Total Revenue ||29793 ||7023 ||30809 ||9045 |
|Profit Before Finance costs and Depreciation ||9504 ||1627 ||10373 ||2866 |
|Finance Costs ||415 ||72 ||415 ||72 |
|Depreciation And Amortisation ||1796 ||524 ||2372 ||1230 |
|Profit Before Tax ||7293 ||1031 ||7586 ||1564 |
|Tax Expense ||2488 ||336 ||2531 ||401 |
|Profit After Tax ||4805 ||695 ||5055 ||1163 |
|Earnings Per Share of H10/- each || || || || |
|Basic (H ) ||83.04 ||12.34 ||87.36 ||20.65 |
|Diluted (H) ||81.52 ||12.32 ||85.76 ||20.60 |
Operational and Financial Performance
The Financial year 2016-17 is a remarkable year for the Company wherein the Company hasbeen awarded contracts for acquiring 2D Seismic Data under National Seismic Program ofGovernment of India worth H1300 Crores net of taxes from Oil and Natural Gas CorporationLtd in addition to contract worth H102 Crores net of taxes from Oil India Ltd awarded inMarch 2016. The Company succeeded in procuring all the required equipment and personnelfor all its projects and necessary financial tie up with the Bankers.
Your Company always strived to be successful in executing contracts profitably and ontime. The financial year 2016-17 concluded with the orders on hand net of taxesestimated at about H1200 Crores.
The experiences gained in execution of contracts seamlessly over the years has made itpossible to scale up the operations from 4 crews as at the end of previous year to 17crews by the end of the current year and to achieve the better operational and financialperformances during the current year. During the year ended 31st March 2017 the Companyhas earned an operational income of H29656 Lakh against H6860 Lakh for the previous yearregistering a growth of 332% year on year. The Profit Before Tax for the current year isH7293 Lakh against H1031 Lakh for the previous year. The Shareholders Funds as on 31stMarch 2017 have increased to H14319 Lakh from H7646 Lakh as on March 31st 2016.
Having sizable long duration data acquisition programs on hand your directors are ofthe opinion that your Company will continue to achieve similar performances in theforthcoming years. Further your Directors believe it is time to make efforts for enteringinto other forms of Geophysical Services.
During the year ended 31st March 2017 the total operations of the Group achieved anoperational Income of H30589 Lakh against H8958 Lakh in the previous year registering aYOY growth of 241%. The falling oil price continues to make the international markets forseismic data acquisition subdued. The Profit Before Tax for the current year is H7586 Lakhagainst H1564 Lakh for the previous year. The Shareholders Funds as on 31st March 2017have increased to H17391 Lakh from H10577 Lakh as on March 31st 2016. The internationalsubsidiary of the group is making its best efforts for obtaining viable contracts.
During the year the Company has issued and allotted 485000 Equity Shares of H10 eachat a premium of H503.62p on conversion of equivalent number of warrants on exercising theoption for conversion into Equity Shares by the warrant holders. The remaining warrants245000 have been converted in to shares of the Company on 19th May 2017. The proceedsreceived at the time of conversion during the year 2016-17 and thereafter have beenutilized for the objects of the issue and there is no amount unutilized with the Company.
Board of Directors are pleased to recommend a dividend at the rate of H 4/- per Equityshare of H10/- each for the financial Year 2016-17 for the approval of the Members at30th Annual General Meeting of the Company. The Dividend if approved will be paid to thoseshareholders whose names appear on the register of the members of the Company as on 21stSeptember 2017.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review as stipulated inRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented as a separate section forming part of the Annual Report.
The Company has one 100% owned Subsidiary Alphageo International Limited incorporatedin Jebel Ali Free Zone Area in Dubai and one 100% owned First Level Step Down SubsidiaryAlphageo DMCC incorporated under Dubai Multi Commodities Center (DMCC) Regulations.
A Statement containing salient feature of the Financial and Operational information ofthe Subsidiaries is provided in Form AOC-1 as Annexure-1 to this report. The ConsolidatedFinancial Statements presented by the Company include the financial results of theseSubsidiary Companies. Pursuant to Section 136 of the Companies Act 2013 the FinancialStatements of the Subsidiaries are available on the website of the Company and also willbe made available upon the request by any member of the Company.
During the year there were no Companies which have become or ceased to be theSubsidiaries Joint Ventures or Associate Companies of the Company.
Consolidated Financial Statements
In compliance with the Accounting Standard -21 notified under the Companies Act 2013("Act") and Section 129(3) of Companies Act 2013 on consolidated financialstatements and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Consolidated Financial Statements of the Company and its Subsidiaries for the yearended 31st March 2017 have been prepared and the same together with Auditors' Reportthereon form part of this Report.
Auditors of the Company
In pursuance of the provisions of section 139 and other applicable provisions of theCompanies Act 2013 read with companies (Audit and Auditors) Rules 2014 and the terms ofappointment approved at 27th Annual General Meeting of the Company the period of officeof the present Auditors M/s. PVRK Nageswara Rao & Co. Chartered AccountantsHyderabad Statutory Auditors of the Company will be completed at the conclusion of 30thAnnual General Meeting. It is proposed to appoint M/s Majeti & Co. CharteredAccountants Hyderabad as Auditors of the Company with the approval of the Members for aterm of 5 (five) consecutive years from the conclusion of 30th Annual General meeting tillthe conclusion of 35th Annual General Meeting of the Company. The proposed Auditors haveconfirmed their eligibility and qualification required under the Act for holding theoffice as Statutory Auditors of the Company.
Statutory Auditors' report on Financial Statements
The Auditors' report on financial statements standalone and consolidated for the yearended 31st March 2017 does not contain any qualifications reservations or adverseremarks which call for any further explanation.
Number of Meetings of the Board of Directors
During the year ended 31st March 2017 the Board of Directors has met Seven times viz.20th May 2016 25th July 2016 01st August 2016 13th October 2016 11th November 201619th December 2016 and 10th February 2017.
The Audit Committee of the Board currently headed by an Independent Director asChairperson and another 2 Independent Directors and one Promoter Director as Members ofthe Company meets regularly to discharge its terms of reference effectively andefficiently. During the year there were no instances where the recommendations of theAudit Committee were not accepted by the Board. The details of Composition scope termsreference of the Audit Committee are in detail provided in Corporate Governance Reportforming part the Directors' Report.
Directors Responsibility Statements as required under Section 134 of the Companies Act2013
Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby confirmed that: i. in the preparationof the Annual Accounts for the year ended 31st March 2017 the applicable AccountingStandards read with requirements set out under Schedule III to the Companies Act 2013have been followed and that there are no material departures from the same; ii. theDirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2017 and of the profit for theyear ended on that date; iii. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; iv. the Annual Accounts for the year ended 31stMarch 2017 have been prepared on a going concern basis; v. internal financial controlshave been laid down and such controls are adequate and operating effectively; vi. theDirectors have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating efficiently; and vii.there are no instances of frauds involving the officers or employees of the Companyreported by the Auditor under section 143(12) of the Act during the year ended 31st March2017.
Directors and Key Managerial Personnel
Mr. Dinesh Alla Managing Director of the Company has been re-appointed as ManagingDirector of the Company for a period of Five (5) years effective from 21st August 2016 atthe 29th Annual General Meeting held on 29th September 2016. Mr. Rajesh Alla retired byrotation has been re-appointed as Director of the Company at the 29th Annual GeneralMeeting held on 29th September 2016.
Particulars of Remuneration to Directors and Key Managerial Personnel: Particulars ofRemuneration to Directors and Key Managerial Personnel as required under section 197(12)of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended are given in Annexure-2 and forms part of this Report.
Particulars of Remuneration to Employees
The details of remuneration to Employees as required under Rule 5(2) read with Rule5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended are given in Annexure-3 and forms a part of this Report.
Pursuant to the applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out an Annual Evaluation of its own performanceperformance of the Directors and the working of its Committees. The Board's functioningwas evaluated on various aspects including inter alia degree of fulfillment of keyresponsibilities Board structure and composition establishment and delineation ofresponsibilities to various Committees effectiveness of Board processes information andfunctioning.
The performance of the Board was evaluated based on a criterion that includes aspectslike composition and structure of the Board effectiveness of the Board processinformation and functioning of the Board etc. Evaluation of the Committees performance wasbased on the criteria like composition its terms of the reference and effectiveness ofcommittee meetings etc. Individual Director's performance evaluation is based on theirpreparedness on the issues to be discussed meaningful and constructive discussions andtheir contribution to the Board and Committee meetings. The Chairperson was evaluatedmainly on key aspects of his role. These performance exercises were conducted seekinginputs from all the Directors / Committee Members wherever applicable.
The evaluation process was carried out internally in FY 2016-17 each Board member hasprovided their inputs through a questionnaire for peer evaluation of the other BoardMembers and a feedback on Board its Committees and their functioning. The Directors wereevaluated on parameters such as level of engagement and participation flow ofinformation independence of judgment conflicts resolution attendance contribution atBoard/Committee Meetings and guidance/ support to the Management outside Board/CommitteeMeetings and their contribution in enhancing the Board's overall effectiveness.
The Nomination and Remuneration Committee reviewed the performance of the individualdirectors. A separate meeting of the individual directors was also held to review theperformance of Non-independent directors performance of the Board as a whole andperformance of the Chairperson of the Company taking into account the views of all theDirectors. The peer rating on certain parameters positive attributes and improvementareas for each Board member was also provided to them in a confidential manner. Thefeedback obtained from the interventions was discussed in detail and where requiredindependent and collective action points for improvement were put in place.
Disclosure by Independent Directors
Pursuant to and in compliance with the provisions of Section 149(7) of the CompaniesAct 2013 every independent director is providing the declaration conforming meeting thecriteria of independence as provided under section 149(6) of the Act and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Nomination and Remuneration Policy of the Company for appointment and remuneration ofDirectors Key Managerial Personnel and Other employees including criteria for determiningqualifications position attributes and directors' independence on the recommendation ofNomination and Remuneration Committee of the Board has been framed by the Board of theDirectors and the same is available on website of the Company at URL:http://www.alphageoindia. com/pdf/ REMUNERATION%20AND%20NOMINATION%20 POLICY.PDF. Theappointment of Key Managerial Personnel and revision of the remuneration to Whole TimeDirectors from time to time is in compliance with the policy.
It is affirmed that the remuneration paid to Directors Key Managerial Personnel andall other employees during the year ended March 31st 2017 is in accordance with theRemuneration Policy of the Company.
Particular of Loans Guarantees or Investments under Section 186 of the Companies Act2013:
During the year the Company has not extended any loans guarantees or investments interms of Section 186 of the Companies Act 2013 to any person or body corporate.
Particulars of Contracts or Arrangements with Related Parties Referred to in SubSection(1) of Section 188 of the Companies Act 2013
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions made available on Company'swebsite URL at http://www.alphageoindia.com/ pdf/RELATED%20PARTY% 20TRANSACTIONS%20POLICY.PDF. The Policy intends to ensure that proper reporting approval and disclosure processesare in place for all transactions between the Company and Related Parties. All contractsand transactions entered by the company during the financial year with related partieswere in the ordinary course of business and were with the approval of the Audit Committeeand in compliance with the applicable provisions of the Act and the SEBI (LODR) Regulation2015. There are no materially significant related party transactions made by the Companywith the Promoters Directors Key Managerial Personnel or other designated persons whichmay have a potential conflict with the interest of the Company during the year.
The Particulars of such transactions with related parties have been disclosed in thefinancial statements as required under
Accounting Standard-18- Related Party Disclosures and as specified under section 133 ofthe Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 are givenat Note. 26.II.10 of Notes on Financial Statements annexed to this Report.
During the year there were no contracts or arrangements or transactions entered intowith the related parties other than at arm's length price and there were no material andsignificant transaction at arm's length price with the related parties. Accordingly therewere no transactions during the year ended 31st March 2017 required to be reported inForm AOC-2 of the Companies (Accounts) Rules 2014.
Transfer to Reserves
During the year no amount has been proposed to transfer/ appropriated to any of thereserves and the entire surplus for the year ended 31st March 2017 is continued to beretained as Balance in Profit and Loss Account.
Corporate Social Responsibility Committee
In pursuance of its commitment to fulfill its obligations the Company under theguidance of corporate social responsibility committee and in accordance with Schedule VIIand other applicable provisions of the Act has discharged its obligations for the year2016-17 by making contributions in the areas of Promoting Education of girl child HealthCare and livelihood programs for youth & people with disability and support childrenfor education protection and their survival. The detailed report on CSR Activities isprovided as Annexure- 4 to this Report.
Corporate Governance and Shareholders' Information
The Companies Act 2013 and SEBI Listing Regulations have strengthened the governanceregime in the country. The Company is in compliance with all the provisions of CorporateGovernance as stipulated in the Regulations under Chapter IV of SEBI Listing Regulations.
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Corporate Governance Report is presented as a separate section forming part of theAnnual Report. A requisite Certificate from the Auditors of the Company confirmingcompliance with the conditions of corporate governance is attached to the report oncorporate governance.
The Company continuously monitors and addresses potential industrial businessfinancial and other risk that affect operations and functioning of the Company. TheCompany's policy on risk management is provided in the Management Discussion and AnalysisReport forming part of the Directors' Report.
Whistle Blower/Vigil Mechanism
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Regulations which provide a formal mechanism to the Directors andEmployees to report their concerns about unethical behaviour actual or suspected fraud orviolation of the Company's Code of Conduct or Ethics Policy. The Policy provides foradequate safeguards against victimization of Employees who avail of the mechanism and alsoprovides for direct access to the Chairman of the Audit Committee. It is affirmed that nopersonnel of the Company has been denied access to the Audit Committee. The Whistle BlowerPolicy has been posted on the website of the Company at URL: http://www.alphageoindia.com/pdf/WHISTLE%20BLOWER%20POLICY%20VIGIL%20 MECHANISM.PDF
Policy on Prevention Prohibition and Redressal of Sexual Harassment at Work place
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder. The Policy for PreventionProhibition and Redressal of Sexual Harassment at work place has been posted on thewebsite of the Company at URL: http://www.alphageoindia.com/pdf/Policy%20for%20Prevention%20and%20Prohibition%20of%20Sexual%20Harassment%20of%20Women%20at%20Workplace.PDF The Company has also constituted an InternalComplaints Committee to enquire into complaints of sexual harassment and recommendappropriate action. During the Financial Year 2016-17 no complaints of sexual harassmentwere received under "The Sexual Harassment of Women at Work Place (PreventionProhibition and Redressal) Act 2013".
Pursuant to provisions of Section 204 of the Companies Act 2013 the Company hasappointed M/s. D. Hanumanta Raju & Co. Practicing Company Secretaries as SecretarialAuditors for the year 2016-17 and the Audit Report for the year 2016-17 issued by them isprovided as Annexure -5 to this Report. The Secretarial Audit Report does not contain anyreservation qualification or adverse remark.
Extract of Annual Return
Pursuant to the provisions of Section 92 of the Companies Act 2013 read with Rule 12of Companies (Management and Administration) Rules 2014 an Extract of Annual Return ason the financial year ended on 31st March 2017 is provided as Annexure-6 to this Report.
The Company has not accepted any deposits covered under Chapter V of Companies Act2013 and also any other deposit which is not in compliance with the requirements ofChapter V of the Companies Act 2013.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference topreparation of financial statements and the same are operating efficiently and nodeficiencies have been observed during the year.
Employees Stock Option Scheme
The Company has issued Stock Options to the Employees under the Scheme "AlphageoESOS 2008". Out of total Stock Options Authorised as on 31st March 2017 235067Stock Options are available for granting to the Employees. The Stock options grantedearlier in terms of the issue were lapsed and there are no enforceable stock optionsoutstanding as on 31st March 2017.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and outgo
The particulars as prescribed under Section 134 (3) (m) of the Companies Act 2013(Act) read with the Companies (Accounts) Rules 2014 are: a. Conservation of Energy : NotApplicable b. Technology Absorption : NIL c. Foreign Exchange Earnings and Outgo: TheParticulars of Foreign Exchange Earnings and outgo during the year are given at Clause26.II.15 26.II.16 and 26.II.18 of the Notes forming part of Financial Statements for theyear 2016-17.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 124 of Companies Act 2013 read with IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 as amended declareddividends which remain unclaimed for a period of seven years are being transferred by thecompany to the IEPF which has been established by the Central Government.
The above referred rules now mandate transfer of dividends lying unpaid and unclaimedfor a period of seven years as well as the underlying equity shares to IEPF Authority. Thecompany has issued individual notices to the shareholders whose equity shares are liableto be transferred to IEPF advising them to claim their dividend.
During the year no significant and material orders were passed by the regulators orcourts or tribunals on the Company impacting the going concern status and Company'soperation in future.
During the year there was no change in the nature of business of the Company.
Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The enthusiasm and unstinting efforts of theemployees have enabled the Company to remain an industry leader. The Directors appreciateand value the contributions made by every member of the Alphageo family.
The Directors also take this opportunity to thank all Investors Clients VendorsBanks Government and Regulatory Authorities and Stock Exchanges for their continuedsupport.
| ||For and on behalf of the Board |
|Hyderabad ||Z P Marshall |
|04.08.2017 ||Chairman |