The Board of Directors of your Company have pleasure in presenting the 25thAnnual Report of Avonmore Capital & Management Services Limited alongwith the AuditedStandalone and Consolidated Statements of Accounts and the Auditor's Report for the yearended 31st March 2017.
The standalone and consolidated financial highlights of your Company are as follows:
| || || || ||(Rs. in Lakhs) |
|Particulars || |
| ||Year ended 31.03.2017 ||Year ended 31.03.2016 ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|Gross Income ||692.96 ||190.00 ||6129.09 ||5497.04 |
|Profit before Interest Depreciation & Tax ||628.27 ||139.42 ||1071.67 ||711.28 |
|Less/(Add): Prior Period Items expenses/(income) ||- ||- ||3.48 ||(11.23) |
|Less: Interest ||6.76 ||18.75 ||386.26 ||425.74 |
|Less: Provision/(Reversal of Depreciation) ||0.22 ||0.10 ||153.11 ||192.12 |
|Less: Provisions Taxes ||0.66 ||8.37 ||8.93 ||95.91 |
|Net Profit after Tax ||620.63 ||142.34 ||519.89 ||8.74 |
|Add: Profit/(loss) of Associates ||- ||- ||84.98 ||13.60 |
|Less: Minorities share of profit ||- ||- ||17.24 ||4.05 |
|Net surplus carried to reserves and surplus ||- ||- ||587.63 ||18.29 |
STANDALONE & CONSOLIDATED FINANCIALS
Total revenues for the year ended March 31 2017 amounted to Rs 692.96 Lakh as comparedto Rs. 190.00 Lakh in the previous year. As per the Consolidated Accounts the totalrevenues are Rs. 6129.09 Lakh as against the previous year's revenue of Rs. 5497.04 Lakh.Net Profit for the financial year 2016-17 is amounted to Rs. 620.63 Lakh as against Rs.142.34 Lakh in the last year. As per the Consolidated Accounts the net profit for thefinancial year 2016-17 is Rs. 519.89 Lakh as against the profit of Rs. 8.74 Lakh in theprevious financial year.
The Board of Directors does not recommend any dividend on the Equity Shares of theCompany for the current financial year due to conservation of Profits for the futureaspects.
Our Company has in accordance with the provisions of Section 45- IC of the Reserve Bankof India (RBI) Act 1934 created a Reserve Fund and during the year under review theCompany has transferred an amount of Rs. 124.12 Lakh out of the profits of the year to thesaid Reserve Fund.
The Company proposes the total amount of Rs. 496.50 Lakh available for appropriation tobe retained in the profit and loss account.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Regulation 34 of the SEBI (LODR) Regulations 2015 and Section 129(3) ofthe Companies Act 2013 your Company has prepared Consolidated Financial Statements asper the Accounting Standards applicable to the Consolidated Financial Statements issued bythe Institute of Chartered Accountants of India. Audited Consolidated Financial Statementsalong with the Auditors' Report are annexed with this Report. The said FinancialStatements are also available on the website of the Company www.avonmorecapital.in.
CASH FLOW STATEMENT
In conformity with the provisions of SEBI (LODR) Regulations 2015 the Cash FlowStatement for the year ended 31 March 2017 is annexed hereto.
INFORMATION ON MATERIAL CHANGES AND COMMITMENTS
*Almondz Insurance Brokers Private Limited ceased to be subsidiary of Avonmore Capital& Management Services Limited w.e.f. 06.07.2017.
There are no other material changes or commitments affecting the financial position ofthe Company which have occurred between March 312017 and August 28 2017 being the dateof this report.
The Company is registered with the Reserve Bank of India as a NBFC within theprovisions of the NBFC (Reserve Bank of India) Directions 1998. The Company continues tocomply with all the requirements prescribed by the Reserve Bank of India as applicable toit.
During the year under review the Company has not issued shares or increased its ShareCapital.
Your Company had neither accepted any Public Deposits during the year nor does theCompany have any plan to accept any deposits from the public.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
As on March 312017 your Company has the following entities as its subsidiaries andAssociates:
a. Almondz Infosystem Private Limited.
b. Almondz Global Securities Limited.
c. Latitude 23 Communications Limited.
d. Red Solutions Private Limited.
e. Apricot Infosoft Pvt Limited
f. Avonmore Developers Pvt. Limited.
g. Anemone Holdings Pvt. Limited.
h. Glow Apparels Pvt. Limited.
i. Almondz Insurance Brokers Private Limited.*
j. Shivsathi Niketan Limited.
k. Yug Infrastructures Private Limited. (Associates)
l. Carya Chemicals & Fertilizers Private Limited. (Associates). *Almondz InsuranceBrokers Private Limited ceased to be subsidiary of Avonmore Capital & ManagementServices Limited w.e.f. 06.07.2017.
Pursuant to sub-section (3) of section 129 of the Act the statement containing thesalient feature of the financial statement of a Company's Subsidiary or SubsidiariesAssociate Company or Companies in the prescribed format AOC-1 which form part of theAnnual Report as Annexure-I.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming part of the Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors
* In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Ms. Ashu Gupta is liable to retire by rotation at the ensuingAnnual General Meeting of your Company and being eligible have offered herself for herappointment. Your Board recommends her re-appointment.
* Pursuant to sub-section (6) of Section 149 of the Companies Act 2013 a declarationby Independent Director(s) that they meet the criteria of Independence as provided inSection 149 (6) of the Companies Act 2013 is received and taken on record.
An Independent Director shall hold office for a term up to five consecutive years onthe Board of a Company but shall be eligible for reappointment for next five years onpassing of a special resolution by the Company and disclosure of such appointment in theBoard's report.
Key Managerial Personnel
* Mr. Ashok Kumar Gupta: Managing Director.
* Mr. Sagar Gupta: Company Secretary and Compliance Officer with effect from May 022016.
* Ms. Shruti Aggarwal ceased to be Chief Financial Officer of the Company with effectfrom June 012016.
* Mr. Swapan Guha: Chief Financial Officer w.e.f. November 12 2016.
MEETINGS OF THE BOARD
During the year 5 (Five) meetings of the Board of Directors were held i.e. 28thMay 2016 12th August 2016 26th October 2016 12th November2016 and 14th February 2017. For further details please refer report onCorporate Governance forming part of Annual Report.
The Audit Committee comprises of three Independent Directors and one Non-ExecutiveDirector viz. Mr. Ajay Kumar (Chairman) Mr. Govind Prasad Agrawal Mr. Shyam Sunder LalGupta and Mr. Chand Krishan Tikku as other members.
All the recommendations made by the Audit Committee were accepted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 your Directors confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
The Company is listed with Bombay Stock Exchange Ltd.
The shares of the Company were listed on Delhi Stock Exchange Ltd. (DSE) DSE House3/1 Asaf Ali Road New Delhi 110 002. However SEBI vide its orderNo.WTM/PS/45/MRD/DSA/NOV/2014 dated 19 November 2014 withdrew the recognition granted tothe said stock exchange.
AUDITORS AND AUDITORS' REPORT STATUTORY AUDITORS
M/s H. K. Chhabra & Co. Chartered Accountants (New Delhi) (Firm RegistrationNo. 010917N) is holding the office of Statutory Auditors of our Company for more than 15years. In terms of their appointment made at the 23rd AGM held on 29 September2015 they are holding office of the auditors up to the conclusion of the 25thAGM and hence would retire at the conclusion of the forthcoming 25th AGM. Asper second proviso to Section 139(2) of the Companies Act 2013 (the Act') atransition period of three years from the commencement of the Act is provided to appoint anew auditor when the existing auditor's firm has completed two terms of five consecutiveyears. Accordingly as per the said requirements of the Act M/s. Mohan Gupta &Company Chartered Accountants are proposed to be appointed as auditors for a period of 5years commencing from the conclusion of 25th AGM till the conclusion of the 30thAGM subject to ratification by members every year as may be applicable. M/s. Mohan Gupta& Company Chartered Accountants have consented to the said appointment and confirmedthat their appointment if made would be within the limits specified under Section141(3)(g) of the Act. They have further confirmed that they are not disqualified to beappointed as statutory auditors in terms of the provisions of the proviso to Section139(1) Section 141(2) and Section 141(3) of the Act and the provisions of the Companies(Audit and Auditors) Rules 2014.
Further the report of the Statutory Auditors alongwith notes to Schedules for the yearended 31st March 2017 is enclosed to this report. The Auditors' Report isself-explanatory and therefore do not call for any further comments. The Auditors' Reportdoes not contain any qualification reservation or adverse remark.
The Board had appointed M/s C. B. Mishra & Associates Company Secretariesin Wholetime Practice to carry out Secretarial Audit under the provisions of Section 204of the Companies Act 2013 for the financial year 2016-17.
The Secretarial Audit report in the prescribed Form No MR-3 is annexed as Annexure-II.
There are no qualifications reservations or adverse remarks or disclaimers made by M/sC. B. Mishra & Associates Practicing Company Secretaries in their audit report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The provisions of Section 134(3) (m) of the Companies Act 2013 and the rules madethere under relating to conservation of energy technology absorption do not apply to yourcompany as it is not a manufacturing Company.
However your Company has been increasingly using information technology in itsoperations and promotes conservation of resources. There was no foreign exchange inflow orOutflow during the year under review.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in Annexure -III.
In terms of the provisions of Section 197 (12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployee have drawn remuneration in excess of the limits set out in the said rules.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by SEBI. The Company has alsoimplemented several best Corporate Governance practices as prevalent in the industry. Thereport on Corporate Governance as stipulated under the SEBI (LODR) Regulation 2015 formsan integral part of this Report. The requisite certificate from the Practicing CharteredAccountant confirming compliance with the conditions of Corporate Governance is attachedto the report on Corporate Governance.
GROUP COMING WITHIN THE DEFINITION OF GROUPS DEFINED IN THE MONOPOLIES AND RESTRICTIVETRADE PRACTICES ACT 1969 (54 of 1969)
The following persons constitute the Group coming within the definition of group asdefined in the Monopolies and Restrictive Practices Act 1969 (54 of 1969):
Mr. Navjeet Singh Sobti Ms. Gurpreet N S Sobti Innovative Money Matters Pvt. Ltd.
Almondz Global Securities Ltd.
Rakam Infrastructures Pvt. Ltd.
Or any other Company firm or trust promoted or controlled by the above. The abovedisclosure has been made; inter alia for the purpose of the Securities and Exchange Boardof India (Substantial Acquisition of Shares and Takeovers) Regulations 2011.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
Since there was no unpaid/unclaimed Dividend declared and paid last year theprovisions of Section 125 of the Companies Act 2013 do not apply.
EXTRACTS OF ANNUAL RETURN
An extracts of Annual Return as prescribed under Section 92 (3) of the Companies Act2013 (the Act') and rule 12 (1) of the Companies (Management and Administration)Rules 2014 in the prescribed Form No. MGT-9 is attached as Annexure-IV.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year under review were in ordinary course of business and on arm'slength basis. During the year 2016-17 pursuant to Section 177 of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 all RPTswere placed before Audit Committee for its prior/ omnibus approval. The Policy on RPTs asapproved by Board was uploaded on the Company's website.
During the year the Company has not entered into any transactions with Related Partieswhich are not on an arm's Length Basis and which require disclosure in this report interms of the provisions of Section 188(1) of the Act. Details of Material Contracts andarrangements or transactions with related party on an arm's length basis with respect totransactions covered under Section 188(1) of the Act in the prescribed Form No. AOC-2 isattached in Annexure - V. Further details of Related Party transactions as requiredto be disclosed by Accounting Standard-18 on "Related Party Disclosures"specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 are given in the Notes to the Financial Statements.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
A Risk Management Policy for the Company has been adopted by the Board. The Companymanages risk through a detailed Risk Management Policy framework which lays downguidelines in identifying assessing and managing risks that the businesses are exposedto. Risk is managed by the Board/Risk Management Committee of the Board throughappropriate structures that are in place at your Company including suitable reportingmechanisms.
POLICY ON INSIDER TRADING
Your Company formulated and implemented a Code of Conduct for Prevention of InsiderTrading (Code) in accordance with the guidelines specified under the Securities andExchange Board of India (Prohibition of Insider Trading) Regulations 1992. The Companyhas adopted code of Internal Procedures and Conduct for Regulating Monitoring andReporting of Trading by Insiders in terms of new Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015. The Board of Directors appointed theCompany Secretary as the Compliance Officer under the said Code responsible for complyingwith the procedures monitoring adherence to the Code for the preservation of pricesensitive information pre-clearance of trade monitoring of trades and implementation ofthe Code of Conduct under the overall supervision of the Board of Directors. The Code ofConduct is available on your Company's website www.avonmorecapital.in.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has not developed and implemented any Corporate Social Responsibilityinitiative under the provisions of Section 135 of the Companies Act 2013 read with Rule9 of Companies (Corporate
Social Responsibility Policy) Rules 2014 as the said provisions are not applicableduring the period under the report.
PARTCULARS OF LOANS GUARANTEE OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
Details of guarantees and/or security in connection with loans to other BodiesCorporate or persons as covered under the provisions of Section 186 of the Act are givenin the Standalone Financial Statements.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year under review there are no significant or material orders passed by anyregulator court or tribunal impacting the going concern status and Company's operationsin future.
EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 effective from 01.12.2015 the Board hascarried out an annual performance evaluation of its own performance the individualDirector's performance including Chairman and Independent Directors as well as anevaluation of the working of all Board Committees.
The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report. In compliance with the provisions of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 theIndependent Directors held a meeting on May 29 2017 and:
* Reviewed the performance of non-independent directors and the Board as a whole.
* Reviewed the performance of the Chairperson of the Company.
* Assessed the quality quantity and timeliness of flow of information between theCompany's management and the Board which is necessary for the Board to effectively andreasonably perform their duties.
Necessary implementations of their suggestions have been initiated.
Your Company treats its "human resources" as one of its most importantassets.
Your Company continuously invests in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act 2013read with SEBI (LODR) Regulations 2015 Company has established a Vigil Mechanism for itsDirectors and employees to report their genuine concerns or grievances actual orsuspected fraud or violation of the Codes of Conduct or policy. The said mechanismencompasses the Whistle Blower Policy and provides for adequate safeguards againstvictimization of persons who use such mechanism. It also provides direct access to theChairman of the Audit Committee. The Vigil Mechanism Policy has been uploaded on thewebsite of the Company at www.avonmorecapital.in under whistle blower Policy link.
INTERNAL CONTROL SYSTEMS
ACMS's internal control systems are designed to ensure operational efficiency accuracyand promptness in financial reporting and compliance with Laws and Regulations. Theinternal control system
is supported by an internal audit process for reviewing the adequacy and efficiency ofthe internal controls including its systems and processes and compliance with regulationsand procedures. Internal Audit Reports are discussed with the management and are reviewedby the Audit Committee of the Board which also reviews the adequacy and effectiveness ofthe internal controls. ACMS's internal control system is commensurate with its sizenature and operations.
NOMINATION AND REMUNERATION POLICY
In accordance with the provisions of Section 178 of the Companies Act 2013 the Boardof Directors have adopted a Policy on Directors appointment and remuneration includingthe criteria for determining qualification positive attributes independence of aDirector and other matters. The Remuneration policy for Directors Key ManagerialPersonnel and all other employees is aligned to the philosophy on the commitment offostering a culture of leadership with trust. The Remuneration policy aims to ensure thatthe level and composition of the remuneration of Directors Key Managerial Personnel andall other employees is reasonable and sufficient to attract retain and motivate them tosuccessfully run the Company.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2014
Your Company has a policy and framework for employees to report sexual harassment casesat workplace and the process ensures complete anonymity and confidentiality ofinformation. Adequate workshops and awareness programmes against sexual harassment areconducted across the organization.
The Company did not receive any complaints to report in the Board's Report.
As per the SEBI (LODR) Regulations corporate governance report with auditors'certificate thereon and management discussion and analysis are attached which form partof this report. Details of the familiarization programme of the Independent Directors areavailable on the website of the Company (www.avonmorecapital.in). Policy for determiningmaterial subsidiaries of the Company is available on the website of the Company(www.avonmorecapital.in). Policy on dealing with related party transactions is availableon the website of the Company (www.avonmorecapital.in). The Company has formulated andpublished a Whistle Blower Policy to provide Vigil Mechanism for employees includingDirectors of the Company to report genuine concerns. The provisions of this policy are inline with the provisions of the Section 177(9) of the Act and the SEBI (LODR) Regulations2015.
Your Directors would like to express their sincere appreciation of the co-operation andassistance received from shareholders bankers regulatory bodies and other businessconstituents during the year under review. Your Directors also wish to place on recordtheir appreciation for the commitment displayed by all the employees for their commitmentcommendable efforts team work and professionalism in the performance of the Companyduring the year.
| || |
For and on behalf of the Board of Directors
For Avonmore Capital & Management Services Limited
| ||Ashok Kumar Gupta ||Govind Prasad Agrawal |
|New Delhi ||Managing Director ||Director |
|28th August 2017 ||DIN: 02590928 ||DIN: 00008429 |