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Alphageo (India) Ltd.

BSE: 526397 Sector: Oil & Gas
NSE: ALPHAGEO ISIN Code: INE137C01018
BSE 00:00 | 27 Feb 204.70 6.60
(3.33%)
OPEN

195.30

HIGH

237.70

LOW

191.80

NSE 00:00 | 27 Feb 203.90 6.05
(3.06%)
OPEN

203.00

HIGH

237.40

LOW

192.10

OPEN 195.30
PREVIOUS CLOSE 198.10
VOLUME 89497
52-Week high 547.50
52-Week low 153.10
P/E 4.99
Mkt Cap.(Rs cr) 130
Buy Price 204.70
Buy Qty 50.00
Sell Price 206.25
Sell Qty 1.00
OPEN 195.30
CLOSE 198.10
VOLUME 89497
52-Week high 547.50
52-Week low 153.10
P/E 4.99
Mkt Cap.(Rs cr) 130
Buy Price 204.70
Buy Qty 50.00
Sell Price 206.25
Sell Qty 1.00

Alphageo (India) Ltd. (ALPHAGEO) - Director Report

Company director report

To

The Members

Your Directors take pleasure in presenting the 32nd Annual Report on business andoperations of the Company along with its Audited Financial Statements both standalone andconsolidated for the financial year ended March 312019.

Financial Highlights

The financial results of the Company for the year ended March 312019 are summarizedbelow:

(' in lakhs)

Particulars

Company Group

2018-19 2017-18 2018-19 2017-18
Revenue from Operations 40508 42944 40508 42944
Other Income 507 168 508 194
Total Revenue 41015 43112 41016 43138
Profit Before Finance costs and Depreciation 10664 12026 10745 12475
Finance Cost 297 555 298 556
Depreciation and Amortisation 2682 2802 3201 3393
Profit Before Tax 7685 8669 7246 8526
Tax Expenses 2695 3046 2705 3078
Profit After Tax 4990 5623 4541 5448
Earnings Per Share of ? 10/- each
Basic (?) 78.40 88.80 71.35 86.05
Diluted (?) 78.40 88.80 71.35 86.05

Standalone and Consolidated Financial Statements

The Standalone and Consolidated Financial Statements of the Company have been preparedin accordance with Indian Accounting Standards ('Ind AS') notified under Section 133 ofthe Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015.

Operational and Financial Performance

Standalone Operations

The seamless efforts expertise and efficiencies garnered over the years made itpossible in operating highest number of crews simultaneously in providing seismic dataacquisition services during the year. However the effect of events that took place beyondthe management control in having lesser operational days during the current financial yearresulted in income from operations for 2018-19 of '40508 lakhs marginally lower than thatof '42944 lakhs for 2017-18; the profit before tax as '7685 lakhs and the profit after taxof '4990 lakhs for 2018-19. The Equity of the Shareholders on standalone basis hasenhanced from '20587 lakhs as on March 2018 to '24962 lakhs as on March 31 2019.

The Company has been awarded during the year besides orders worth of '4471 lakhs (netof taxes) for providing geophysical services for hydrocarbon exploration the contractsworth '5037 lakhs (net of taxes) for providing geophysical services in the form ofairborne magnetic and gravity for mineral exploration.

Your directors are of opinion that having sizeable executable orders on hand thecompany will continue to achieve the operational and financial performance resulting inenhanced equity to the shareholders in the forthcoming financial years.

Group Operations

The operational income on consolidated basis for 201819 is '40508 lakhs against 42944lakhs for the previous year. The Profit before tax for 2018-19 is '7246 lakhs against'8526 lakhs in the previous year. The Profit after tax for 2018-19 is '4541 lakhs against'5448 lakhs in the previous year. The Equity attributable to equity holders of the parentas on March 31 2018 of '23333 lakhs is enhanced to '27514 lakhs as on March 31 2019.Irrespective of sincere efforts in obtaining viable contracts by subsidiaries thelacklustre performance due to lack of contracts of subsidiaries resulted in lower globalfinancial performance for the current year.

Your directors believe that the endeavours in diversifying into geophysical servicesfor mineral explorations besides hydrocarbon exploration the improved

hydrocarbon exploration scenario in and outside India will result favourably inforthcoming financial years.

Share Capital

During the year under review the Company has not issued or allotted any shares of theCompany. The number of Equity Shares of '10/- fully paid up as on March 31 2019 is6364767. The Company does not have any outstanding warrants or any convertibleinstruments as on March 31 2019.

Transfer to Reserves

The Company has not transferred/ appropriated any amount to the General Reserveretaining the entire surplus for the year ended March 312019 as Balance in Profit andLoss Account.

Dividend

Your Directors are pleased to recommend a dividend of '8/- per Equity share of '10/-each for the financial year ended March 31 2019. The dividend pay-out is subject to theapproval of Members at ensuing Annual General Meeting of the Company.

Material changes and commitment if any affecting financial position of the Companyfrom the end of the financial year till the date of this Report

No material changes and commitments affecting the financial performance of the Companyhave occurred between the end of the financial year of the Company to which the financialstatements relate and the date of this Report.

Unclaimed Dividend

Section 124 of the Companies Act 2013 read with Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') mandates theCompanies to transfer dividend that has remained unpaid/unclaimed for a period of sevenyears from the unpaid dividend account to the Investor Education and Protection Fund(IEPF).

The details of the unclaimed dividend lying with the Company are available on thewebsite of the Company at the web link: http://alphageoindia.com/Unclaimed%20Dividends.htm

Transfer of Unpaid and Unclaimed Amounts to Investor Education and Protection Fund("IEPF")

a) Transfer of Unclaimed Dividend to IEPF

Pursuant to the provisions of Section 124 of Companies Act 2013 read with IEPF(Accounting Audit Transfer and Refund) Rules 2016 dividends which remain unpaid orunclaimed for a period of seven years from the date of its transfer to unpaid dividendaccount are required to be transferred by the Company to Investor Education and ProtectionFund ("IEPF") established by the Government of India under the provisions ofSection 125 of the Companies Act 2013.

During the year under review there is no unclaimed divided required to be transferredto the Account of IEPF.

b) Transfer of Shares to IEPF

Section 124(6) of Companies Act 2013 read with IEPF (Accounting Audit Transfer andRefund) Rules 2016 mandates transfer of underlying shares in respect of which dividendhas not been paid or claimed for seven consecutive years or more in the name of InvestorEducation and Protection Fund.

During the year under review the Company is not required to transfer shares to theIEPF Authority pursuant to the aforesaid rule.

The details of shares transferred to IEPF during the previous years are displayed onthe website of the Company. The shareholders whose shares have been transferred to theIEPF Authority can claim their shares from the Authority by following the Refund Procedureas detailed on the website of IEPF Authority http://iepf.gov. in/IEPFA/refund.html.

Management Discussion and Analysis Report

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Management Discussion and Analysis Report forthe year under review is set out in this Annual Report.

Subsidiaries

The Company has formulated a policy for determining "Material Subsidiary" interms of Regulation 16(c) of

SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The saidPolicy is available on the Company's website at the web link: http://www.alphageoindia.com/Policies.htm. The Company has no material subsidiary in accordance withthe above referred regulations as on March 31 2019.

Foreign Subsidiaries

The Company has one 100% owned foreign Subsidiary Alphageo International Limitedincorporated in Jebel Ali Free Zone Area in Dubai and one 100% owned First Level Step DownSubsidiary Alphageo DMCC incorporated under Dubai Multi Commodities Center (DMCC)Regulations.

Indian Subsidiaries

An Indian subsidiary named "Alphageo Marine Services Private Ltd" wasincorporated during the year 2017-18 for providing marine survey services and aerialgeophysical services. JSC SMNG-Centre Moscow a shareholder holding 26% of the shares inthe subsidiary company has filed bankruptcy before the regulatory authorities of RussianFederation. No business operation has been carried on by the subsidiary company during theyear 2018-19.

Another Indian Subsidiary named "Alphageo Offshore Services Private Ltd" hasbeen incorporated on April 26 2018 primarily for undertaking commercial activitiesrelating to geophysical services for offshore and transition zones and general offshorerelated services for mining and hydrography. This subsidiary did not have any commercialoperations till March 31 2019.

A statement containing salient feature of the financial performance of the Subsidiariesis provided in Form AOC-1 as Annexure-I to this report.

In compliance with section 136 of the Companies Act 2013 the Financial Statements ofthe Subsidiaries are available on the website of the Company and also will be madeavailable upon the request by any member of the Company.

The consolidated financial statements presented by the Company include the financialresults of all the subsidiary companies.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its Subsidiaries for thefinancial year ended March 31 2019 prepared in compliance with the Indian AccountingStandards notified under Section 133 the Companies Act 2013 Section 129(3) of CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015together with Auditors' Report thereon form part of this Annual Report.

Change in the nature of business

Your Company continues to be in the business of providing Geophysical Data AcquisitionProcessing and Interpretation services and there has been no change in the nature ofbusiness of the Company or any of its subsidiaries during the year under review.

Credit Ratings

CRISIL has reaffirmed its Long Term Rating 'CRISIL BBB+/Stable' and Short Term Rating'CRISIL A2' on the bank loan facilities of the Company.

Cost Records

The Central Government has not prescribed the maintenance of cost records undersub-section (1) of section 148 of the Companies Act 2013 for the services rendered by theCompany.

Statutory Auditors

In terms of the provisions of section 139 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 M/s Majeti & Co. Chartered AccountantsHyderabad (ICAI Registration No. 015975S) have been appointed as Statutory Auditors of theCompany to hold office from the conclusion of 30th Annual General meeting till theconclusion of 35th Annual General Meeting of the Company to be held in the calendar year2022.

In accordance with the amendment to the provisions of Section 139 by the CompaniesAmendment Act 2017 notified on May 7 2018 by the Ministry of Corporate Affairs theappointment of Statutory Auditors is not required to be ratified by the Members at everyAnnual General Meeting.

Audit Report on Financial Statements

The Auditors' Report on the Financial Statements of the Company standalone andconsolidated for the year ended March 31 2019 is unmodified i.e. it does not contain anyqualification reservation or adverse remark which call for any further explanation.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rulesthereunder M/s. D. Hanumanta Raju & Co. Practicing Company Secretaries Hyderabadwere appointed to conduct the secretarial audit of the Company for the year 2018-19. TheSecretarial Audit Report issued by them is appended herewith as Annexure-II to thisReport. The Secretarial Audit Report does not contain any reservation qualification oradverse remark which calls for any further explanation.

Directors and Key Managerial Personnel

Appointments and Re-appointments of Directors

During the year Mrs. Savita Alla was re-appointed as Joint Managing Director of theCompany with the approval of the Board of Directors for a term of 3 (Three) yearseffective from May 25 2018 to May 24 2021. Her reappointment was further approved by themembers of the Company in the 31st Annual General Meeting held on September 14 2018.

The appointment of Mr. Raju Mandapalli as an Independent Director of the Company for aterm of 5 (Five) years effective from December 4 2017 has been approved by the membersin the 31st Annual General Meeting held on September 14 2018.

Resignation

Mr. Z. P Marshall associated with the Company as nonexecutive director and asindependent director since September 4 1992 due to his advancing age had vacated hisoffice as Director by resignation on May 18 2018. He was equipped with vast experiencedeep knowledge and insights of the industry and operations of the Company. The Boardplaces on record its appreciation for the valuable contribution made by Mr. Z. P Marshallduring his association with the company.

Retirement by Rotation

Mr. Rajesh Alla Non-Executive Director retired by rotation has been re-appointed asDirector of the Company at the 31st Annual General Meeting held on September 14 2018.

Further as per the provisions of Section 152(6) of Companies Act 2013 and in terms ofthe Articles of Association of the Company Mr. Rajesh Alla retires by rotation at theensuing Annual General Meeting and being eligible seeks re-appointment. The Boardrecommends his re-appointment for the approval of the Members.

Particulars of Remuneration to Directors and Key Managerial Personnel

Particulars of Remuneration to Directors and Key Managerial Personnel as required undersection 197(12) of the Act read with Rule 5(1) of Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 as amended are given in Annexure-III and forms partof this Report.

Changes in Key Managerial Personnel

During the year there is no change in the Key Managerial Personnel of the Company.

Number of Meetings of the Board of Directors

The Board during the financial year 2018-19 met four times viz. 18th May 2018 6thAugust 2018 12th November 2018 and 9th February 2019. The maximum interval between anytwo meetings did not exceed 120 days as prescribed in the Companies Act 2013. Detailedinformation regarding the meetings of the Board and various Committees of the Board areincluded in the report on Corporate Governance which forms part of this Report

Audit Committee

The Audit Committee of the Board currently headed by an Independent Director asChairperson meets at regular intervals 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. A detailed note on the composition roleand functions of the Audit Committee are disclosed in the Report on Corporate Governancewhich forms part of this Report.

Directors Responsibility Statements under Section 134 of the Companies Act 2013

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 preparation of the Annual Accounts of the Company both standalone andconsolidated for the year ended March 31 2019 the applicable accounting standards readwith requirements set out under Schedule III to the Companies Act 2013 have been followedand that there are no material departures from the same.

ii. the Directors have selected such accounting policies and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 312019 and of the profit for the year ended on thatdate;

iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv. the Annual Accounts for the year ended March 31 2019 have been prepared on a goingconcern basis;

v. adequate internal financial controls have been laid down and such controls areoperating effectively;

vi. proper and adequate systems to ensure compliance with the provisions of allapplicable laws have been devised and such systems are operating efficiently; and

vii. there are no instances of frauds involving the officers or employees of theCompany reported by the Auditor under section 143(12) of the Act during the year endedMarch 31 2019.

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-IV and form part of this Report.

Board Performance Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 19 of SEBI (LODR)Regulations 2015 annual evaluation of the performance of the Board the Directorsindividually as well as the evaluation of the working of its various committees has beencarried out through a structured questionnaire covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations independencegovernance ethics and values adherence to corporate governance norms interpersonalrelationships attendance and contribution at meetings etc. The evaluation process hasbeen explained in the Corporate Governance Report which forms part of this report.

Declaration by Independent Directors

The Company has received necessary declaration from all the Independent Directors ofthe Company under the provisions of the Companies Act 2013 that they meet the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSEBI (LODR) Regulations 2015.

Remuneration Policy

The Company has a well defined policy on Nomination and Remuneration of Directors KeyManagerial Personnel and other employees of the Company in line with the provisions ofsection 178 of the Companies Act 2013 and Part D of Schedule II of SEBI (LODR)Regulations 2015. The Policy is available on the website at:http://alphageoindia.com/Policies.htm.

It is affirmed that the appointment and remuneration of Directors Key ManagerialPersonnel and all other employees during the year ended March 31 2019 is in accordancewith the Remuneration Policy of the Company.

Particulars of Loans Guarantees or Investments

The Company has made an Investment of '100000/- in Equity Share Capital of its 100%Subsidiary "Alphageo Offshore Services Private Ltd" during the year underreview.

The details of loans extended to the subsidiaries are

given at Note No. 32 of Standalone Financial Statements for the year ended March 312019.

The Company has not extended any loans guarantees or investments to any other personor body corporate during the year under review.

Particulars of Contracts or Arrangements with Related Parties

The Company has formulated a Policy for dealing with the transactions with relatedparties which is in line with the provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015. The same is also available on the Company's website at web-link:http://alphageoindia. com/Policies.htm.

All contract and transactions entered into with related parties as defined underCompanies Act 2013 during the year were in the ordinary course of business and on anarm's length basis. The approval of Audit Committee has been obtained for suchtransactions and the same were in compliances with applicable provisions of the Act andthe SEBI (LODR) Regulations 2015. The particulars of such transactions with relatedparties have been disclosed at note no. 36 in the standalone financial statements asrequired under Ind AS 24- Related Party Disclosures and as specified under section 133 ofthe Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.

There are no materially significant related party transactions made by the company withthe Promoters Directors and Key Managerial Personnel and other designated persons whichmay have a potential conflict with the interests of the Company during the financial year.

During the year there were no contracts or arrangements or transactions entered intowith the related parties other than at arm's length price. Accordingly there were notransactions during the year ended March 31 2019 required to be reported in Form AOC-2 ofthe Companies (Accounts) Rules 2014.

Corporate Social Responsibility (CSR)

In compliance with the provisions of Section 135 of the Companies Act 2013 the Boardhas formed a CSR Committee which monitors and oversees various CSR

initiatives and activities of the Company. The Board has formulated a Corporate SocialResponsibility (CSR) Policy which is in force and is subject to monitoring by the CSRCommittee from time to time.

The detailed report on CSR initiatives undertaken during the financial year 2018-19together with the annual report on CSR activities as required by the Companies (CorporateSocial Responsibility Policy) Rules 2014 are set out in Annexure-V to this Report.

Reasons for not spending the amount earmarked for CSR Activities:

During the year 2018-19 the Company allocated an amount of '1 55.68 Lakhs to be spenton corporate social responsibility (CSR) activities which included the unspent amount of'42.40 Lakhs of 2017-18 carried forward for spending in forthcoming years. Out of thisthe Company spent '23.05 Lakhs during the year under review. The unspent amount of '132.63Lakhs has been carried forwarded for spending in the forthcoming years. The Companybelieves as a part of CSR Activities in spending on such activities which really benefitthe targeted beneficiaries.

During the year under review the Company while continuing to support its ongoingprojects has associated itself with few new projects to expand its CSR initiatives in asystematic manner. The Company is continuously extending its effort for makingcontributions to various socially useful projects and is confident of meeting thestatutory requirement during the financial year 2019-20. The detailed report on CSRActivities is set out in Annexure-V to this Report.

Corporate Governance and Shareholders' Information

Pursuant to Regulation 34 of the SEBI Regulations the Report on Corporate Governancefor the financial year 2018-19 along with a Certificate issued by a Practising CompanySecretaries confirming compliance with the mandatory requirements relating to CorporateGovernance as stipulated under Chapter IV of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is presented as a separate section forming part of theAnnual Report forms an integral part of this report.

Risk Management

The Company continuously identifies the risks assess and evaluate the same in linewith overall business objectives functioning and growth of the Company and defineadequate mitigation strategy for various risks associated with the company.

The details of the risk management framework and issues related thereto have beenexplained in the Management Discussion and Analysis Report which is provided as anannexure to this report.

Internal Financial Controls

The Company has in all material respects an adequate internal financial controlsystem with reference to financial statements and such internal financial controls areoperating effectively and no deficiencies have been observed during the year under review.

Whistle Blower/Vigil Mechanism

The Company has formulated a vigil mechanism as envisaged in the Companies Act 2013the Rules prescribed thereunder and SEBI (LODR) Regulations 2015 which is implementedthrough the Company's Whistle Blower Policy to deal with instances of unethical behaviouractual or suspected fraud or violation of Company's Code of Conduct or Ethics Policy toprovide for adequate safeguards against victimisation of persons who use such mechanismand make provision for direct access to the Chairman of Audit Committee of the Board.

The Audit Committee of the Board periodically reviews the Whistle Blower Policy. It ishereby affirmed that no personnel of the Company have been denied access to the Chairmanof the Audit Committee of the Board and that the Policy contains adequate provisions forprotecting whistle blowers from unfair termination and other unfair prejudicial employmentpractices.

The Whistle Blower Policy is available on the company's website and can be accessed atthe web link: http:// www.alphageoindia.com/Policies.htm

Policy on Prevention Prohibition and Redressal of Sexual Harassment at Work place

The Company has in place a Policy on prevention prohibition and redressal of sexualharassment at

workplace in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. Internal Complaints Committee havingdesignated members has been set up to redress complaints regarding sexual harassment.During the year under review no complaint of sexual harassment has been reported.

The Policy is available on the Company's website at: http://www.alphageoindia.com/Policies.htm.

Extract of Annual Return

Pursuant to the provisions of Section 36 of the Companies (Amendment) Act 2017notified effective from July 31 2018 read with Section 92(3) of the Companies Act 2013the prescribed return is placed on the Company's website at: http://www.alphageoindia.com/ Other_Information.htm.

Deposits

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.

Compliance with Secretarial Standards

During the year under review the Company has complied with all the applicableSecretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

Employees Stock Option Scheme

Stock options to Employees is being administered under the scheme titled "AlphageoESOS 2008". Under this scheme 235067 stock options are available for granting toEmployees. There are no enforceable stock options outstanding as on March 31 2019.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134(3)(m)

of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 are:

a. Conservation of Energy: Not Applicable
b. Technology Absorption: Nil
c. Foreign Exchange Earnings and Outgo:
2018-19 2017-18
'in lakhs 'in lakhs
Foreign Exchange Earnings Nil Nil
Foreign Exchange Outgo:
CIF Value of Imports 653 573
Expenditure in Foreign 797 1355
Currency

Significant and Material Orders passed by the Courts / Regulators

There are no significant and material orders passed during the year by the regulatorscourts or tribunals impacting the going concern status of the Company and Company'soperations in the future.

Acknowledgment

Your Directors place on record their sincere appreciation for the committed servicesrendered by every employee of Alphageo family across the country whose contribution issignificant to the growth and success of the Company.

Your Directors would also like to express their appreciation for assistance andco-operation received from the clients vendors investors members bankers and otherbusiness associates during the year.

For Alphageo (India) Limited
Hyderabad Dinesh Alla
May 22 2019 Chairman and Managing Director