Your Directors have pleasure in presenting the 27th Annual Report on thebusiness of your Company together with the Audited Statements of Accounts for thefinancial year ended 31st March 2017.
1. FINANCIAL SUMMARY:
Your Company's performance during the year ended 31st March 2017 ascompared to the previous financial year is summarized as below:
| || ||(`. In Lakhs) |
|PARTICULARS ||Financial Year ||Financial Year |
| ||2016-17 ||2015-16 |
|Total Revenue ||3409.82 ||2503.41 |
|Expenses ||2971.64 ||2069.83 |
|Operating Profit ||438.18 ||433.58 |
|Depreciation ||171.39 ||173.80 |
|Finance Charges ||151.84 ||194.33 |
|Net Profit / Loss Before Tax ||114.95 ||65.45 |
|(PBT) || || |
|Provision for Tax ||0.00 ||0.00 |
|Current Tax ||23.44 ||12.47 |
|Provision for earlier years ||- ||0.00 |
|Deferred tax ||(6.30) ||(6.37) |
|Net Profit (PAT) ||97.82 ||59.35 |
|Profit brought forward ||907.37 ||896.82 |
|Profit available for appropriation ||1005.19 ||956.17 |
|Provision for Proposed Dividend ||81.09 ||40.54 |
|Provision for Dividend Tax ||16.51 ||8.25 |
|Balance carried to Balance Sheet ||907.59 ||907.37 |
2. TRANSFER TO RESERVES
The Company did not transfer any amount to the General Reserve for the Financial Yearended March 31st 2017.
3. COMPANY PERFORMANCE:
Your Company posted good financial results with a net profit of Rs. 97.82 Lakhs duringthe year under review. Due to continuous efforts of the management the turnover of thecompany increased by 36% to that of the previous year. The Company is looking forward toincrease its profits in the coming financial years with the support of all thestakeholders of the Company besides contributing to the society as a good corporatecitizen.
4. SHARE CAPITAL
The paid up equity share capital of the Company as on 31st March 2017 isRs. 40550930/-. During the year under review the Company has not issued shares withdifferential voting rights sweat equity shares or Employee Stock Options.
Your Directors recommended a dividend of Rs. 2.00/- i.e. 20% per equity share ofRs.10/- each for the financial year 2016-17. The dividend payout is subject to theapproval of the members at the ensuing Annual General Meeting.
The Dividend will be paid to members whose names appear in the register of members ason 08.09.2017 and in respect of shares held in dematerialized form it will be paid to themembers whose names are furnished by NSDL and CDSL as beneficial owners as on that date.
6. DIRECTORS & KEY MANAGERIAL PERSONAL: The tenure of Smt. AbburiSarada Whole Time Director of the Company expired on 13th May 2017. Takingin to consideration of her rich experience and contribution to the Company and pursuantto the recommendation of the Nomination and Remuneration Committee the Board of Directorsof the Company have passed a resolution on 9th February 2017 approving herre-appointment as the Whole Time Director of the Company for a further period of threeyears with effect from 14th May 2017 to 13th May 2020. The saidappointment requires the approval of the members at the ensuing Annual General Meeting.
During the financial year 2016-17 Shri. Lokesh Agarwal had tendered his resignation asthe Company Secretary and Compliance Officer of the company with effect from 03.02.2017.Subsequently the members of the board have appointed Shri. Mamillapali Ravindra as theCompany Secretary and Compliance Officer of the company with effect from 09.02.2017.
In accordance with the provisions of Section 152 of Companies Act 2013 Shri. RaghuPrasad Pidikiti Director of the Company retires by rotation and being eligible hasoffered himself for re-appointment.
7. BOARD INDEPENDENCE
The Company has received necessary declaration from each Independent director under149(7) of the Companies Act 2013that he/she meets the criteria of Independence laid downunder section 149(6) of the Companies Act 2013.
8. MEETINGS OF THE BOARD
The Board met Six times during the financial year 2016-17 viz. on 11thMay 2016 11th August 2016 3rd September 2016 5thNovember 2016 17th December 2016 and 9th February 2017. Themaximum interval between any two meetings did not exceed 120 days.
9. STATUTORY AUDITORS:
At the Annual General Meeting (AGM) held on September 25 2014 M/s. Ramanatham &Rao Chartered Accountants were appointed as the Statutory Auditors of the Company tohold office from the conclusion of that AGM till the conclusion of the 29th AGM(subject to ratification of the appointment by the members at every AGM held after thatAGM) at such remuneration as may be decided by the Board of Directors. In terms of thefirst proviso to Section 139 of the Companies Act 2013 the appointment of the auditorshall be placed for ratification at every Annual General Meeting. Accordingly theappointment of M/s. Ramanatham & Rao Chartered Accountants as the statutory auditorsof the Company is hereby placed for ratification by the shareholders. In this regard theCompany has received a certificate from the auditors to the effect that if they arereappointed it would be in accordance with the provisions of Section 141 of the CompaniesAct 2013.
10. AUDITORS' REPORT
There are no qualifications reservations or adverse remarks made by M/s. Ramanatham& Rao. Chartered Accountants Statutory Auditors in their report for the FinancialYear ended 31st March 2017. The Statutory Auditors have not reported anyincident of fraud to the Audit Committee of the Company under sub-section (12) of section143 of the Companies Act 2013 during the year under review.
11. INTERNAL AUDITORS:
The Board of Directors based on the recommendation of the Audit Committee hasre-appointed M/s. Ramesh & Co. Chartered Accountants Hyderabad as the InternalAuditors of your Company. The Internal Auditors are submitting their reports on quarterlybasis.
12. SECRETARIAL AUDITORS:
M/s. P. S. Rao & Associates Practicing Company Secretaries were appointed toconduct the Secretarial Audit of the Company for the financial year 2016-17 as requiredunder Section 204 of the Companies Act 2013 and Rule 9 there-under. The secretarial auditreport for F.Y. 2016-17 forms part of this Report as Annexure- I.
13. SECRETARIAL AUDIT REPORT
There are no qualifications reservations or adverse remarks made by M/s. P. S.Rao& Associates Practicing Company Secretaries in their report for the Financial Yearended 31st March 2017.
14. RISK MANAGEMENT POLICY
The Company has developed and implementing a risk management policy which includesthe identification therein of elements of risk which in the opinion of the board maythreaten the existence of the Company.
15. CORPORATE SOCIAL RESPONSIBILITY (CSR):
As per the provisions of the Companies Act 2013 companies having net worth of Rs. 500Crores or more or turnover of Rs. 1000 Crores or more or net profit of Rs. 5 Crore ormore during any financial year are required to constitute a Corporate Social
Responsibility (CSR) Committee of the Board of Directors comprising three or moredirectors at least one of whom should be an independent director and such company shallspend at least 2% of the average net profits of the company's three immediately precedingfinancial years. Though your Company does not fall in the aforementioned criteria andthough it does not have any mandatory obligation it has spent Rs. 1078714/- towards CSRactivities in the financial year 2016-17.
A report on CSR Activities as required under Rule 9 of the Companies (Corporate SocialResponsibility) Rules 2014 is enclosed herewith as Annexure II.
The Company has adopted Corporate Social Responsibility Policy containing theactivities to be undertaken by the Company as part of its CSR programs. The CSR Policy isdisclosed on the website of the Company www.avantel.in.
Composition of Corporate Social Responsibility Committee:
|Smt. A Sarada ||- Chairman |
|Shri. N Naveen ||- Member |
|Shri. Y Kishore ||- Member |
|Shri. B V K Durga Prasad ||- Member |
16. COMPOSITION OF AUDIT COMMITTEE:
The Audit Committee of the Company comprises the following Members
|Shri. N. Naveen ||- Chairman |
|Shri. Y. Kishore ||- Member |
|Shri. Raghu Prasad Pidikiti ||- Member |
|Shri. E.B.V. Ramana Gupta ||- Member |
|Shri. M. Narayana Rao ||- Member |
All the recommendations made by the Audit Committee of the Company have been consideredand accepted by the Board of Directors of the Company.
17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE OUTGO:
Information required under section 134(3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is enclosed herewith as Annexure- III.
18. FORMAL ANNUAL EVALUATION OF PERFORMANCE OF THE MEMBERS OF THE BOARD AND COMMITTEES
One of the key functions of the Board is to monitor and review the board evaluationframework. The Board works with the nomination and remuneration committee to lay down theevaluation criteria for the performance of executive / non-executive / independentdirectors through a peer-evaluation excluding the director being evaluated through a Boardeffectiveness survey. The questionnaire of the survey is a key part of the process ofreviewing the functioning and effectiveness of the Board and for identifying possiblepaths for improvement. Each Board member is requested to evaluate the effectiveness of theBoard dynamics and relationships information flow decision-making of the directorsrelationship to stakeholders company performance company strategy and the effectivenessof the whole Board and its various committees on a scale of one to five. Feedback on eachdirector is encouraged to be provided as part of the survey.
Independent directors have three key roles governance control and guidance.Some of the performance indicators based on which the independent directors are evaluatedinclude:
Ability to contribute by introducing international best practices to addresstop-management issues
Active participation in long-term strategic planning
Commitment to the fulfillment of a director's obligations and fiduciaryresponsibilities; these include participation in Board and committee meetings.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire
Board. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors who also reviewed the performance of theSecretarial Department. The Directors expressed their satisfaction with the evaluationprocess.
19. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company has in place an Internal Control System commensurate with the size scaleand complexity of its operations. During the year such controls were tested and noreportable material weaknesses in the design or operation were observed.
The Company has no subsidiaries as on 31st March 2017.
21. NOMINATION AND REMUENRATION POLICY:
A committee of the Board named as "Nomination and Remuneration Committee" hasbeen constituted to comply with the provisions of section 178 of Companies Act 2013 andto recommend a policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters and to frame proper systems for identification appointment of Directors& KMPs Payment of Remuneration to them and Evaluation of their performance and torecommend the same to the Board from time to time. The policy is also posted in theinvestors section of the company's website.
22. FIXED DEPOSITS:
Your Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance sheet.
23. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Details of the Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 if any are given in the notes to the financial statements pertainingto the year under review.
24. POLICY ON SEXUAL HARASSMENT:
The company has adopted policy on prevention of sexual harassment of women at workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
During the financial year ended March 31 2017 the company has not received anycomplaints pertaining to sexual harassment.
25. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act 2013 Your Directors' confirm that: i)In preparation of annual accounts for the financial year ended 31st March2017 the applicable Accounting Standards have been followed along with proper explanationrelating to material departures; ii) The Directors have selected such accounting policiesand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give true and fair view of the state of affairs of the Company at the endof the financial year ended 31st March 2017 and of the profit and loss of theCompany for the year; iii) The Directors have taken proper and sufficient care for theirmaintenance of adequate accounting records in accordance with the provisions of theCompanies Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; iv) The Directors had prepared the annual accounts on agoing concern' basis; v) The directors had laid down internal financial controls tobe followed by the company and that such internal financial controls are adequate and wereoperating effectively; and vi) The directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
26. VIGIL MECHANISM:
The Company has a Whistle Blower Policy framed to deal with instance of fraud andmismanagement if any in the Company. The details of the Policy are posted on the websiteof the Company www.avantel.in on the following link http://www.avantel.in/inversteinfo.php
27. RELATED PARTY TRANSACTIONS:
Related party transactions entered during the financial year under review are disclosedin Note No. 2.38 of the Financial Statements of the Company for the financial year ended31st March 2017. These transactions entered were at an arm's length basis andin the ordinary course of business. There were no materially significant related partytransactions with the Company's Promoters Directors Management or their relatives whichcould have had a potential conflict with the interests of the Company. Form AOC-2containing the note on the aforesaid related party transactions is enclosed herewith asAnnexure IV. The Policy on the Related Party Transactions as approved by the Boardis uploaded on the website of the Company.
28. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure - V.
29. STATE OF AFFAIRS OF THE COMPANY
The State of Affairs of the Company is presented as part of Management Discussion andAnalysis Report forming part of this Report.
30. MANAGEMENT DISCUSSION AND ANALYSIS:
Pursuant to Regulation 34 (2) (e) of SEBI (LODR) Regulations 2015 a report onManagement Discussion & Analysis is herewith annexed as Annexure-VI.
31. CORPORATE GOVERNANCE REPORT:
Since the paid up capital of the Company is less than Rs. 10 Crores and the networth ofthe Company is less than Rs. 25 Crores the provisions of Regulations 17 18 19 20 2122 23 24 25 26 27 and clauses (b) to (i) of sub-regulation 2 of Regulation 46 andpara C D & E of Schedule V of the Securities Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations 2015 are notapplicable to the Company.
32. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 (12) read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof employees of the Company is herewith annexed as Annexure- VII.
In terms of Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company does not have any employee who is employed throughoutthe financial year and in receipt of remuneration of Rs. 120 Lakhs or more or employeeswho are employed for part of the year and in receipt of Rs. 8.50 Lakhs or more per month.The Company does not have any employee who is employed throughout financial year or partthereof who was in receipt of remuneration in financial year under review which inaggregate or as the case may be at a rate which in the aggregate is in excess of thatdrawn by the Managing Director or Whole time director and holds by himself or along withhis spouse and dependent children not less than 2% of the equity shares of the Company.
33. HUMAN RESOURCES:
Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The unflinching commitment of the employees isthe driving force behind the Company's vision. Your Company appreciates the spirit of itsdedicated employees.
34. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There were no Significant and Material Orders Passed by the Regulators or Courts:
As the members are aware that the company has filed a petition with the Hon'bleNational Company Law Tribunal Hyderebad Bench to approve the Scheme of Amalgamationbetween Avantel Limited (Transferee Company) and Wiki Kids Limited (Transferor Company)and their respective shareholders and creditors. On 13th July 2017 the Hon'bleTribunal did not deem fit and have pronounced orders dismissing the proposed Scheme ofAmalgamation. The company is taking steps to file an appeal before the Hon'ble NationalCompany Law Appellate Tribunal New Delhi against the order passed by the Hon'ble NationalCompany Law Tribunal Bench at Hyderabad to approve the proposed Scheme of Amalgamationbetween Avantel Limited (Transferee Company) and Wiki Kids Limited (Transferor Company)and their respective shareholders and creditors.
There are no other significant material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations.
35. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYSALE OF IMMOVABLE PROPERTY:
During the period under review your company has sold its immovable property (includingland building furniture fixtures and electricals) located at Plot No.16 Sector-IIIHuda Techno Enclave Opp.K. Raheja IT Park Madhapur Hyderabad to M/s. Tetrasoft (India)Private Limited. The company has obtained the approval of the shareholders by way ofPostal Ballot and have made the necessary compliances in this regard.
Other than those mentioned above there have been no material changes and commitmentsaffecting the financial position of the Company which occurred during between the end ofthe financial year to which the financial statements relate and the date of this report.
36. ACKNOWLEDGMENT AND APPRECIATION:
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business associates for their consistent support and continued encouragement tothe Company.
Further your Directors convey their appreciation for the whole hearted and committedefforts by all its employees.
Your Directors gratefully acknowledge the ongoing co-operation and support provided bythe Central and State Governments Stock Exchanges SEBI RBI and other Regulatory Bodies.
|For and on behalf of the Board of Directors || |
| ||Avantel Limited |
| ||Sd/- |
|Place: Hyderabad ||N. Naveen |
|Date: 3rd August 2017 ||Director |
| ||DIN: 02726620 |