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AVSL Industries Ltd.

BSE: 538373 Sector: Industrials
NSE: AVSL ISIN Code: INE522V01011
BSE 05:30 | 01 Jan AVSL Industries Ltd
NSE 05:30 | 01 Jan AVSL Industries Ltd

AVSL Industries Ltd. (AVSL) - Director Report

Company director report

Your Directors are pleased to present the 14thAnnual Report on the businessand operations together with the Company's audited financial statements and the auditors'report thereon for the financial year ended March 31 2017. The financial highlights forthe year are given below:

1. FINANCIAL RESULTS:

(Figure in Rs.)
Particulars Year Ended 31st March2017 Year Ended 31st March2016
Total Revenue 804126444.00 685953668.00
Total Revenue Expenses 792120194.00 683149664.00
Profit before Exceptional & Extra Ordinary Items & Taxation 12006250 2804004
Less: Exceptional & Extra Ordinary Items 578060 -
Profit/(Loss) before taxation 11428190.00 2804004.00
Less: Tax Expense
5004870.00 989832.00
(i) Provision for Taxation
907159.00 103577.00
(ii) Deferred tax Liability
138391.00 10100.00
(iii) Income Tax
Profit/(Loss) after tax 71920 88.00 1907649.00

2. DIVIDEND

The Company plough back the profit for the growth they did not declared any dividendfor the financial year 2016-17.

3. OPERATING HIGHLIGHTS

During the year under review the Company has earned an income before tax Rs.11428190/-as compared to Profit of Rs. 2804004/-during the previous year.Development of the Company is in progress and the Company expects to increase its businesssignificantly in the following year and expects to earn handsome returns.

4. TRANSFER TO RESERVES

The Board of Company has decided/proposed to carry Rs 7192087/- from Surplus inProfit and Loss Account.

5. COMPANY'S AFFAIRS

AVSL Industries Limited engaged mainly in the business of manufacturing of PVCCompound HDPE/LDPE Compound PVC Filler and HDPE/LDPE Tape etc. and Export and Import ofAgro based commodities such as Rice Wheat Flour Pulses Spices Food Grains and DryFruits.

6. INITIAL PUBLIC OFFERING & SHARE CAPITAL:

During the year under review your company came up with an IPO of 1440000 Equityshares of

Rs.36/- each at a premium of Rs. 26/- per share with Total Issue size of Rs. 518.40Lacs. Your Board is really thankful for the trust posed in the Company. Subsequently theshares of the company have been listed on SME Platform of NSE since October 2016.

At present the Company has only one class of share Equity shares of per value Rs. 10each. The authorized share capital of the company is Rs. 60000000/- divided into6000000 equity shares of Rs. 10 each. The paid up share capital of the company is Rs.53311200/- divided into 5331120 equity shares of Rs. 10 each. The Company has raisedthe fund through Public Issue of shares and the equity shares of the Company got listed onSME platform of NSE Limited.

IPO FUNDUTILISATION:

The Company has raised the fund to meet the working capital requirement and issueexpenses purpose. As the Company has raised the fund in the month of October 2016 duringthe year 2016-17 these funds were fully utilized for the said purpose only.

7. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYWHICH HAVE OCCURRED BETWEEN MARCH 31 2017 AND DATE OF THE REPORT

Except as disclosed elsewhere in this Annual Report there have been no materialchanges and commitments which can affect the financial position of the Company between theend of the financial year of the Company 31st March 2017 till the date of this report.

As required under Section 134(3) of the Act the Board of Directors inform the membersthat during the financial year there have been no material changes except as disclosedelsewhere in the Annual Report.

8. CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of the Business during the Financial Year ended 31stMarch 2017.

9. SHARE CAPITAL

There was certain change in the Share Capital of the company during the year:

Authorised Capital- During the year under review there is no change in theauthorised capital of the Company.

Paid Up Share Capital- The Company issued shares through Initial Public Offerdated 03.10.2016 of 1440000 equity shares of Rs 36/- (Including premium of Rs 26/-)ofsum of Rupees Five Crore Eighteen Lakhs and Fourty Thousand Only.

The paid-up share capital of the Company as on March 31 2017 is Rs. 53311200/-

Disclosure regarding issues of equity shares with differential rights:

The Company has not issues any equity shares with differential rights during the yearunder review.

Disclosure regarding issues of employee stock options:

The Company has not provided any Stock Option Scheme to the employees during the yearunder review.

Disclosure regarding the issues of sweat equity shares:

The Company has not issued any Sweat Equity Shares during the year under review.

10. PUBLIC DEPOSITS

The Company has not accepted any Public deposit during the year under review fallingwithin the purview of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014.

11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013

There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the furnishing aboveinformation is not applicable.

12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an internal control system commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficancy and adequacy ofinternal control systems in the Company. Based on the report of internal audit functionprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.

13. AUDITORS

STATUTORY AUDITORS:

M/s. Gupta Jalan & Associates Chartered Accountants (FRN: 003721N)were appointed as Statutory Auditors for a period of 5 years in the 12thAnnualGeneral Meeting held on 30.09.2015 subject to the ratification in every AnnualGeneral Meeting in terms of section 139(1) of the Companies Act 2013. Their continuanceof appointment and payment of remuneration are to be confirmed and approved in the ensuingAnnual General Meeting. The Company has received a certificate from the above Auditors tothe effect that if their appointment is ratified it would be in accordance with theprovisions of Section 141 of the Companies Act 2013.

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments.

There were no qualifications reservation or adverse remark or disclaimer as reportedby the statutory auditor of the Company

SECRETARIAL AUDITORS

Section 204 of the Companies Act 2013 inter-alia requires every listed company toannex with its Board's report a Secretarial Audit Report given by a Company Secretary inpractice in the prescribed form.

The Board of Directors appointed M/s U.S & Associates Company Secretaries throughMr. Akshit Gupta Practicing Company Secretary as the Secretarial Auditor to conductSecretarial Audit of the Company for Financial Year 2016-17 and their report is annexed tothis Board report. The Board has also re-appointed M/s U.S & Associates CompanySecretaries as Secretarial Auditor to conduct Secretarial Audit of the Company forFinancial Year 2017-18. In Connection with the auditors observation in the report it isclarified that there is no non-compliance in the year.

The Secretarial Auditor's Report in the prescribed format for the period ended March31 2017 is annexed to this Directors' Report and forms part of the Annual Report.

INTERNAL AUDITORS

M/s V K Kataria& Associates Chartered Accountants performs the duties of internalauditors of the Company and their report is reviewed by the audit committee from time totime

14. EXTRACT OF THE ANNUAL RETURN

The extract of Annual Return in Form No. MGT 9 as per section 134(3)(a) of theCompanies Act2013 read with Rule 8 of Companies Act(Accounts) Rules 2014 and Rule12 ofCompanies (Management & Administration) Rules 2014 as on the financial year ended on31.03.2017 is annexed herewith.

15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134(3) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished

(A) Conservation of energy:

Steps taken / impact on conservation of energy with special reference to thefollowing:

(i) steps taken by the company for utilizing alternate sources of energy includingwaste generated :NIL

(B) Technology absorption:

1. Efforts in brief made towards technology absorption. Benefits derived as a resultof the above efforts e.g. product improvement cost reduction product developmentimport substitution etc.

The Company has not taken any technical know how from anyone and hence not applicable.However the company were applied for Six Trademark in which only two were registered andfour is in further process.

2. In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year) following information may be furnished:

The Company has not imported any technology and hence not applicable.

3. Expenditure incurred on Research and Development :

The Company has not incurred any expenditure on research and development

( c) Foreign Exchange Earnings/ Outgo:

Foreign Exchange Earnings and Outgoings 31st March 2017 31st March 2016
Earnings in Foreign Currency (FOB Value of Exports) 193379411 151403801
Expenditure in Foreign Currency 179406036 161567502

16. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.

17. DIRECTORS

A) Changes in Directors and Key Managerial Personnel

In accordance with Section 152 of the Companies Act 2013 Mr. Ashish Garg (DIN:07486222) directors of the Company is liable to retire by rotation. Being eligible he hasoffered themselves for re-appointment as director at the ensuing AGM.

During the year following changes occurred in the Board of Directors and Key ManagerialPersonnel during the year:

Sr. No. Name of the person Date of Event
1. Mr. Ashish Garg was appointed as Non-Executive Director 22.04.2016
2. Ms. Rishika was appointed as Company Secretary 17.06.2016
3. Mr. Sugreev Singh was appointed as an Independent Director. 17.06.2016
4. Mr. Dhirendra Sangal was appointed as an Independent Director. 17.06.2016
5. Mr. Ramesh Chander was appointed as Chief Financial Officer 17.06.2016

18.BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Audit Nomination & Remuneration andStakeholder Relationship Committees.

19. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year eighteen Board Meetings Four Audit Committee Meetings One StakeholderRelationship Committee Meeting Two Nomination and Remuneration Committee Meeting and one

Independent Director Meeting were convened and held. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.

20. AUDIT COMMITTEE

The Audit committee comprises of three members out of whom two are Non-Executive andIndependent Director and one is Managing director. During the year under review theCommittee met 4 (Four) times were held on 12th July 2016 23rdSeptember 2016 23rd December 2016 and 17th January 2017 duringthe year.

The terms of reference of the Committee is in accordance with that specified inRegulation 18 of the SEBI(LODR) regulation 2015 and also confirms to the requirements ofprovision of Section 177 of the Companies Act 2013.

21. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

In compliance with the requirements of Section 177 of the Companies Act 2013 andregulation 22 of SEBI (LODR) Regulation 2015 Company has established a vigil mechanismfor the Directors and Employees of the Company through which genuine concerns regardingvarious issues can be communicated. The Company had adopted a Code of conduct forDirectors and Senior Management

Executives ("the Code") which lays down the principles and standards thatshould govern their actions. Any actual or potential violation of the code howsoeverinsignificant or perceived as such is a matter of serious concern for the company andshould be brought to the attention of the concerned.

22. NOMINATION AND REMUNERATION COMMITTEE

The objective of Nomination and Remuneration Committee is to assess the remunerationpayable to our Director; sitting fee payable to our Non Executive Directors; remunerationpolicy covering policies on remuneration payable to our senior executives. The IndependentDirectors and Non-Executive Directors of the Company were not paid any sitting fee or anyother remuneration or commission. During the financial year 2016-17 remuneration has beenpaid to Mr. Sanjay Bansal(Managing Director) and Mrs. Priti Bansal (Director) of theCompany.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

This policy specifically deals with the review and approval of material related partytransactions keeping in mind the potential or actual conflicts of interest that may arisebecause of entering into these transactions. All related party transactions are placedbefore the Audit Committee for review and approval. Wherever applicable prior approval isobtained for related party transactions for a transactions which are of repetitive natureand / or entered in the ordinary course of business and are at arm's length basis.

During the year all the related party transactions entered into were on an arm'slength basis. The

Company has not entered into any material related party transactions i.e. transactionsexceeding 10% of the annual consolidated turnover as per the last audited financialstatements. Suitable disclosure are required under Accounting Standard AS-18 have beenmade in the notes to the Financial Statements forming part of the Annual Report.Information on transactions with related parties pursuant to Section 188 of the Act readwith Rule are given in the prescribed Form AOC-2 and the same forms part of this Report.

24. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 shall state that - a) in the preparation of theannual accounts the applicable accounting standards had been followed along with properexplanation relating to material departures; b) the directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financial year and of the profit and loss of the company forthat period; c) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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) thedirectors had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively; and f) thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

25. PARTICULARS OF EMPLOYEES:

Disclosure under the provisions of Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014:

Particulars Name of the Employee: Mr Sanjay Bansal Name of the Employee:
Mrs. Priti Bansal
Designation of the Employee Managing Director Director
Remuneration Received 540000 108000
Permanent
Nature of Employment whether contractual / otherwise Permanent
10 years
Qualification and experience of the Employee 20 years
Date of commencement of employment 2008 2015
The age of the employee 40 Years 38 years
NA
The last employment held by such employee before joining the Company NA
0.06%
The percentage of equity shares held by the employee in the company within the meaning of clause (iii) of sub - rule (2) of Rule 5 33.44%
Whether any such employee is a relative of any director or manager of the company and if so name of such director or manager Mrs. Priti Bansal( Spouse of Mr. Sanjay Bansal) Mr. Sanjay Bansal
(Spouse of Mrs. Priti Bansal)

The information required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of managerial personnel) Rules2014 as amended has been furnished herein below.

The percentage increase in remuneration of each Director Chief Financial Officer andCompany Secretary during the financial year 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2016-17 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:

Sr. No. Name of Director/ KMP and Designation % increase/decrease (-)in Remuneration in the Financial Year 2016-17 Ratio of remuneration of each Director / to median remuneration of employees
1. Mr. Sanjay Bansal Managing Director Nil Nil
2. Mrs. Priti Bansal Director Nil Nil
3. Mr. Ramesh Chander Chief Financial Officer 25% Nil
4. Ms. Rishika Company Secretary Nil Nil

Note: No sitting fees paid to Independent Directors and hence not included in the abovetable.

i) The median remuneration of employees of the Company during the financial year was Rs83549/-.

ii) There were 45 permanent employees on the rolls of Company as on March 31 2017

iv) As our Company got listed on National Stock Exchange- Emerge Platform on 06thday of October 2016. The Median Remuneration is not applicable.

v) Remuneration paid is as per the Remuneration Policy for Directors Key ManagerialPersonnel and other Employees.

26. ACKNOWLEDGEMENTS

An acknowledgement to all with whose help cooperation and hard work the Company isable to achieve the results.

By order of the Board
For AVSL Industries Limited
Sd/-
Place : Delhi Sanjay Bansal
Date: 29th May 2017 Managing Director
DIN: 01467290