Your directors have pleasure in presenting the 29th Annual Report on the business ofyour Company together with the Audited Statements of Accounts for the financial year ended31st March 2019.
1. COMPANY PERFORMANCE:
Your Company's performance during the year ended 31st March 2019 as compared to theprevious financial year is summarized as below: (Rs. In Lakhs)
|PARTICULARS ||Financial Year ||Financial Year |
| ||2018-19 ||2017-18 |
|Revenue from Operations ||5051.12 ||5197.23 |
|Other Income ||91.12 ||1543.92 |
|Total Revenue ||5142.24 ||6741.15 |
|Expenses ||3645.97 ||4071.77 |
|Operating Profit ||1496.27 ||2669.38 |
|Depreciation ||204.72 ||163.63 |
|Finance Charges ||57.98 ||86.54 |
|Net Profit / Loss Before Tax (PBT) ||1233.57 ||2419.21 |
|Provision for Tax || || |
|Current Tax ||295.23 ||516.30 |
|Deferred tax ||(12.45) ||172.49 |
|Net Profit (PAT) ||950.79 ||1730.42 |
During the financial year 2018-19 the company has recorded a Profit Before Tax ofRs.12.34 Crores as against Rs.9.13 Crores (other than sale of land & buildings ofRs.15.06 crores) in the previous year with an increase in profit by 35% as compared toprevious financial year.
2. TRANSFER TO RESERVES
The Board of Directors of the Company have not recommended for transfer of any amountto the General Reserve for the Financial Year ended March 31 2019.
Your Directors recommended a final dividend of Rs. 2/- per share for the financial year2018-19. The dividend payout is subject to the approval of the members at the ensuingAnnual General Meeting.
During the Financial Year 2018-19 the company has declared an interim dividend ofRs.3/- per equity share to the members of the company. A table containing the details ofthe dividend is mentioned below:
|Particulars ||Dividend (in Rs.) |
|Interim Dividend ||3.00 |
|*Final Dividend ||2.00 |
|TOTAL ||5.00 |
* Recommended by the Board of Directors at the meeting held on 07th May 2019. Thepayment is subject to the approval of the Shareholders at the ensuing Annual GeneralMeeting scheduled to be held on 12th July 2019.
The Dividend will be paid to members whose names appear in the register of members ason Friday the 5th day of July 2019 and in respect of shares held in dematerialized formit will be paid to the members whose names are furnished by NSDL and CDSL as beneficialowners as on that date.
4. DIRECTORS & KEY MANAGERIAL PERSONAL:
In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the company Shri. Raghu Prasad Pidikiti (DIN: 01660157)Director retires by rotation at the forthcoming Annual General Meeting and being eligibleoffers himself for re-appointment. The Board recommends his reappointment for theconsideration of the members of the company at the forthcoming annual general meeting.Brief details of Shri. Raghu Prasad Pidikiti (DIN: 01660157) has been mentioned in thenotice convening the Annual General Meeting at "Information pursuant to the ListingRegulations and Secretarial Standards in respect of Appointment/ Re-appointment ofDirectors". The tenure of Dr. A Vidyasagar Managing Director expired on 31st March2019. Taking in to consideration of his rich experience and contribution to the Companyand pursuant to the recommendation of the Nomination and Remuneration Committee the Boardof Directors of the Company subject to the approval of the members at the ensuing AGMpassed a resolution on 28th January 2019 approving the reappointment of Dr. A.Vidyasagar as Managing Director of the Company for a further period of three years witheffect from 01st April 2019 to 31st March 2022.
Shri. Naveen Nandigam and Shri. Yalamanchili Kishore who were appointed as theindependent directors of the company at the 24th Annual General Meeting of the company fora period of five years i.e. up to 29th Annual General Meeting of the company havecompleted their term of appointment. Further pursuant to the provisions of Section 149 ofthe Companies Act 2013 the recommendations of the Nomination and Remuneration Committeethe Board of Directors of the Company hereby recommends the appointment of Shri. NaveenNandigam and Shri. Yalamanchili Kishore as the Independent Directors of the company foranother period of 5 years.
5. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent director under149(7) of the Companies Act 2013 that he/she meets the criteria of Independence laiddown under section 149(6) of the Companies Act 2013.
6. MEETINGS OF THE BOARD
The Board met Four times during the financial year 2018-19 viz. on 25.05.201802.08.2018 25.10.2018 and 28.01.2019. The maximum interval between any two meetings didnot exceed 120 days.
7. STATUTORY AUDITORS:
M/s. Ramanatham & Rao Chartered Accountants who were appointed as the statutoryauditors of the company at the 24th Annual General Meeting (AGM) held on September 252014 to hold office as such till the conclusion of the ensuing 29th AGM (subject toratification of the appointment by the members at every AGM held after that AGM). The termof the said Statutory Auditors shall expire at the ensuing 29th Annual General Meeting ofthe company. Further pursuant to Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. Ramanatham & Rao CharteredAccountants being eligible offer themselves for re-appointment for a term of 2 (Two)years subject to the ratification by the members at every AGM in accordance with theprovisions of Sec. 139 of the Companies Act 2013 and the rules made there under. TheCompany has also received written consent from the Auditors and a confirmation to theeffect that their re-appointment if made would be within the limits prescribed under theSection 141 of the Companies Act 2013 and the rules made there under.
Accordingly the appointment of M/s. Ramanatham & Rao Chartered Accountants asthe statutory auditors of the Company is hereby placed before the shareholders for theirapproval.
8. 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 2019. The Statutory Auditors have not reported anyincident of fraud to the Audit Committee of the Company under subsection (12) of section143 of the Companies Act 2013 during the year under review.
9. 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.
10. SECRETARIAL AUDITORS:
M/s. P. S. Rao & Associates Practising Company Secretaries were appointed toconduct the Secretarial Audit of the Company for the financial year 2018-19 as requiredunder Section 204 of the Companies Act 2013 and Rule 9 there-under. The secretarial auditreport for F.Y. 2018-19 forms part of this Report as Annexure- I.
11. SECRETARIAL AUDIT REPORT
There are no qualifications reservations or adverse remarks made by M/s. P. S. Rao& Associates Practising Company Secretaries in their report for the Financial Yearended 31st March 2019.
12. RISK MANAGEMENT POLICY
The Company has developed and implementing a risk management policy which includes theidentification therein of elements of risk which in the opinion of the board may threatenthe existence of the Company.
13. CORPORATE SOCIAL RESPONSIBILITY (CSR):
As part of the Corporate Social Responsibility initiative the Company has spent anamount of Rs. Rs. 1063983/- (Rupees Ten Lakhs Sixty Three Thousand Nine Hundred andEighty Three Only ) towards the various CSR activities in the financial year 2018-19. Areport 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 ||- Chairperson |
|Shri. N Naveen ||- Member |
|Shri. Y Kishore ||- Member |
|Shri. B V K Durga Prasad ||- Non-Board Member |
14. 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.
15. 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.
16. 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 Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Secretarial Department. The Directors expressed theirsatisfaction with the evaluation process.
17. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:The Company has in place an Internal Control System commensurate with the size scale andcomplexity of its operations. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.
18. SUBSIDIARIES/ ASSOCIATE COMPANIES/ JOINT VENTURES:
The Company has no subsidiaries/ associate companies/ joint ventures as on 31stMarch 2019.
19. 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.
20. 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.
21. 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.
22. 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 2019 the company has not received anycomplaints pertaining to sexual harassment.
23. 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 March2019 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 2019 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.
24. 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
25. RELATED PARTY TRANSACTIONS:
Related party transactions entered during the financial year under review are disclosedin Note No. 34 of the Financial Statements of the Company for the financial year ended 31stMarch 2019. These transactions entered were at an arm's length basis and in the ordinarycourse of business. There were no materially significant related party transactions withthe Company's Promoters Directors Management or their relatives which could have had apotential conflict with the interests of the Company. Form AOC-2 containing the note onthe aforesaid related party transactions is enclosed herewith as Annexure IV.
The Policy on the Related Party Transactions as approved by the Board is uploaded onthe website of the Company.
26. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure V.
Further pursuant to the provisions of Section 92 (3) of the Companies Act 2013 theAnnual Return of the company is placed on the website of the Company www.avantel.in on thefollowing link http://www.avantel.in/inversteinfo.php.
27. 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.
28. 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.
29. CORPORATE GOVERNANCE REPORT:
Pursuant to Regulation 34 read with Schedule V of SEBI (LODR) Regulations 2015 areport on Corporate Governance is herewith annexed as Annexure-VII.
30. 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
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 orpart thereof 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.
31. 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.
32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators /Courts/ Tribunalswhich would impact the going concern status of the Company and its future operations.
33. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no Material Changes and Commitments Affecting the Financial Position of theCompany.
34. 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 ongoingco-operation and support provided by the Central and State Governments Stock ExchangesSEBI RBI and other Regulatory Bodies.
By order of the Board of Directors For Avantel Limited
Sd/-Place: Hyderabad A Vidyasagar Date: 07th May 2019 Chairman &Managing Director DIN: 00026524