AVTIL ENTERPRISE LIMITED
(Formerly Known as "ARUN VARUN TRADE AND INVESTMENT LIMITED")
Your Directors are pleased to present the 35th Annual Report and AuditedFinancial Statements on the business and operations of your Company for the year ended 31stMarch 2017.
The Results of the Company for the Financial Year under review are summarized below:
(Rs. in Lacs)
| ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|INCOME || || |
|Turnover / Gross Income ||91.77 ||190.10 |
| || || |
|EXPENDITURE || || |
|Purchases ||-- ||6.91 |
|Changes in Inventories of Finished Goods ||4.62 ||0.27 |
|Employee Costs ||4.19 ||2.79 |
|Finance Charges ||0.67 ||1.38 |
|Depreciation ||7.56 ||6.36 |
|Other Expenses ||17.82 ||15.77 |
| || || |
|Profit Before Tax ||56.91 ||156.63 |
|Less: Provision for Taxation || || |
|Current Year Tax ||11.02 ||32.01 |
|Deferred Tax Liability ||0.32 ||1.83 |
|Profit After Tax ||46.21 ||122.80 |
|Add: Balance brought forward from previous year ||1581.96 ||1459.16 |
|Profit available for appropriation ||1628.17 ||1581.96 |
|Appropriation: || || |
|Less : Transfer to General Reserve ||-- ||-- |
|Prior Period Expenses ||-- ||-- |
|Interim Dividend ||-- ||-- |
|Proposed Dividend ||-- ||-- |
|Tax on Dividend ||-- ||-- |
|Balance carried to Balance Sheet ||1628.17 ||1581.96 |
PERFORMANCE OF YOUR COMPANY
The turnover of your Company for the financial year under review is Rs. 91.77 Lacs asagainst Rs. 190.10 Lacs in the previous year. Net Profit after Tax stood at Rs. 46.21 Lacsas against Rs. 122.80 Lacs in the previous financial year. The marginal fall in the incomehas resulted in fall in net profit.
CHANGE OF OBJECT
During the year under review your Company with the necessary approval from all theappropriate authorities has changed its Main Object by inserting the new line of businessof Construction and Real Estate vide Special Resolution passed at 34th AnnualGeneral Meeting dated: 30th September 2016.
Your Directors regret that the Board could not recommended any dividend for the yearended March 31 2017 in view of the cash requirement for establishing the Company in itsgrowth plan and challenging times.
TRANSFER TO RESERVE
Your Company proposes to retain Rs. 46.21 Lacs in the Profit & Loss Account(Surplus).
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
(i) Company's Performance:
Your Company has created separate business verticals for Real Estate.This allows eachvertical to focus its core business.
Your Company is currently in the business of Real Estate Activity. In Financial Year2016-17 your Company has had decrease in turnover and profitability as compared to theFinancial Year 2015-16. This is primarily due to the adverse market condition. YourCompany however looks forward for better performance during the current year.
(ii) Industry Structure and developments:
India witnessed historic changes in terms of the passage of the Goods and Services Tax(GST) Bill and demonetisation during the year which altered the landscape of the industryand outlook for the economy. Alongwith the Government's focus on digitisation and thethrust on housing as a sector to revive the economy the long term outlook looks positivethough the year gone by was adversely impacted.
Against the medium term and long term inflation expectation of below 5% the inflationhovered marginally above 5% during the year. However inherent inflationary pressurescontinued due to which the RBI could reduce the Repo rate by 50bps only during the yearover two tranches.
The slew of budgetary announcements aimed at Affordable Housing sector and particularlythe infrastructure status for developers operating in the Affordable Housing sector andparticularly the infrastructure status for developers operating in the Affordable Housingspace are likely to improve the supply whereas the Credit Linked Subsidy Scheme (CLSS) islikely to push the demand.
The Real Estate sector continued to witness the strain of low demand and high inventoryfor the fourth year in a row but still no price correction was witnessed during the year.The industry also experienced a fall in property registrations for new projects dampeningthe sentiments.
(iii) Opportunities and Threats:
These are momentous times with many structural changes happening in legislationeconomy and business environment. After witnessing demonetization in FY 2016 - 2017 theIndian economy is going to see another major reform in the form of implementation of GSTin FY 2017 - 2018 and other step being taken to bring unorganized sector into the formaleconomy will benefit the organized sector as it will be able to navigate the transitionbetter and re-invest itself more quickly in the new environment. The enactment of the GSTlegislation has been a milestone reform that will create a win-win environment for allstakeholders and is expected to further boost economic growth.
The Central Statistics office also revised its GDP growth estimates downwards to 7.1%in the financial year 2016-17 as compared to 7.6% in the previous year. The fundamentalsof the Indian economy continue to be good and there is sufficient reason to believe in thegrowth potential. However execution of the reforms agenda and kick starting theinvestment cycle will have a major bearing on India's economic performance.
In the coming year your Company will continue to explore opportunities in real estateacross the country will further develop and grow its current real estate investmentsexplore portfolio management services and deploy surplus funds in various other avenues.Your Company always looks for opportunities to exploit any advantages the market wouldoffer to improve the shareholders' wealth.
(v) Risks Concerns and its Management:
Risk Management has always been an integral part of the corporate strategy whichcomplements organizational capabilities with business opportunities. A detailed exerciseis being carried out to identify evaluate manage and monitor both business andnon-business risks.
With notification of the Real Estate (Regulation and Development) Act 2016 (RERA) itis expected to bring in transparency in the real estate transactions and reduce theinstances of fraud as well.
The Company has a vigil mechanism to report concerns about unethical behaviouractual/suspected frauds and violation of the Company's Code of Conduct. Protecteddisclosures can be made by a whistle blower through several channels with the surety thatno discrimination will be meted out to any person for a genuinely raised concern.
(vi) Internal Controls Systems and their Adequacy
The Company has in place a proper and adequate system of internal control and the sameis being reviewed commensurate with its size and nature of operations.
The Company has entrusted the internal & operational audit to M/s. Dixit Dattatray& Associates FRN - 102665W a reputed firm of Chartered Accountants. The main thrustof the internal audit process is test and review of controls independent appraisal risksbusiness processes and benchmarking internal controls with best practices.
The Audit Committee of the Board of Directors Statutory Auditors and Business Headsare periodically apprised of the internal audit findings and corrective actions taken.Audit plays a key role in providing assurance to the Board of Directors.
(vii) Material developments in human resources / industrial relations front includingnumber of people employed.
The Company provide a workplace environment that is safe hygienic humane and createssystems and practices to ensure a harassment free workplace.
Your Company is managed by the Promoter Directors and there are three persons employedwith your Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of your Company is duly constituted with proper balance of ExecutiveDirectors Non-Executive Directors and Independent Directors.
In accordance with Articles of Association of the Company and the provisions of theCompanies Act 2013 Mr. Jayantilal R. Bhandari (Din No. 01897297) Managing Director isliable to retire by rotation at the ensuing AGM and is eligible for reappointment.
Necessary resolution for the re-appointment of the aforesaid Director have beenincluded in the notice convening the ensuing AGM.
Brief resume of the Director proposed to be reappointed nature of their experience inspecific functional areas disclosure of relationships between Directors inter-se;Directorship held on other Companies and number of Companies in which they holdmembership/chairmanship of Board Committees as stipulated regulation 36(3) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 are provided at theend of the the notice.
TERMS AND CONDITIONS FOR APPOINTMENT:
The terms and conditions of appointment of Independent Director are as per Schedule IVof the Act.
The Terms & Conditions of appointment of Independent Director can be accessed at http://avtradeinvest.com/pdf/code_of_conduct/terms-conditions-of-appointment-of-independent-director.pdf
The Company has received declaration from the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. There has been nochange in the circumstances which may affect their status as Independent Directors duringthe year.
In compliance with the requirements of the Regulation 25(7) of the Listing Regulations2015 the Company has put in place a Familiarization Programme for the IndependentDirectors to familiarize them with the Company their roles rights responsibilities inthe Company nature of the industry in which the Company operates business model etc.
The Policy on the Company's Familiarization Programme can be accessed at http://avtradeinvest.com/pdf/codeof conduct/directors-familiarisation-programme.pdf
CODE OF CONDUCT:
Code of Conduct for Independent Directors can be accessed at http://avtradeinvest.com/code ofconduct.html
The Board adopted a formal mechanism for evaluating its performance and as well as thatof its Committees and Individual Directors including Independent Directors and includingthe Chairman of the Board. The exercise was carried out through a structured evaluationprocess covering various aspects of the Board functioning such as composition of the Board& committees experience & competencies performance of specific duties &obligations contribution at the meetings and otherwise independent judgment governanceissues etc. In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman was alsoevaluated.
COMPANY'S POLICY RELATING TO DIRECTORS' APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company's Policy relating to appointment of Directors payment of managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isprovided on Company's website at http://avtradeinvest.com/code of conduct.html.
DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) of the Companies Act 2013;
i. In the preparation of the Annual Accounts of the Company the applicable AccountingStandards had been followed;
ii. 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 on 31stMarch 2017 and Profit or Loss for the year ended as on that date;
iii. 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 preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the Annual Accounts on a going concern basis;
v. The Directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively;
vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
INTERNAL FINANCIAL CONTROL
The Directors had laid down internal financial controls to be followed by the companyand such policies and procedures adopted by the company for ensuring the orderly andefficient conduct of its business including adherence to Company's policies theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. TheAudit Committee evaluates the internal financial control system periodically.
Statements made in this report in describing the Company's objectives projectionsestimates expectations or predictions may be forward-looking statements within themeaning of applicable securities laws and regulations. Forward-looking statements arebased on certain assumptions and expectations of future events. The Company cannotguarantee that these assumptions and expectations are accurate or will be realized by theCompany.
Actual results could differ materially from those expressed in the statement or implieddue to the influence of external and internal factors that are beyond the control of theCompany. The Company assumes no responsibility to publicly amend modify or revise anyforwardlooking statements on the basis of any subsequent developments information orevents.
During the year under review your Company has not accepted any deposits within themeaning of provisions of Chapter V - Acceptance of Deposits by Companies of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014 as amended fromtime to time.
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTFLOW
The information required under Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 with regard to Conservation of Energy & Technologyabsorption is not required to be given as the same is not applicable to the Company.
|Foreign Exchange Earning ||: NIL |
|Foreign Exchange Outflow ||: NIL |
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company's future operations.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
Your Company has not made any investments falling under purview of Section 186 of theCompanies Act 2013 during the financial year under review. The particulars of investmentsof your Company as on 31st March 2017 are provided in the Audited financialstatement. (Please refer to Note 8 to the Audited Financial Statement).
Further there were no loans given guarantees and Securities provided by your Companyunder Section 186 of the Companies Act 2013 during the financial year under review.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
There was no contract or arrangements made with related parties as defined underSection 188 of the Companies Act 2013 during the year under review. Accordingly thedisclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC 2 is not applicable.
As required under Regulation 23 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated policy on dealing with RelatedParty Transactions. The Policy is available on the website of the Company and we blink ofthe same is:http://avtradeinvest.com/pdf/code of conduct/related-party-transactions-policy.pdf
PARTICULARS OF EMPLOYEES
During the period none of the employee(s) of the Company whether employed for thewhole year or part thereof was in receipt of remuneration aggregating to or in excess oflimits specified under Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and hence noparticulars are required to be furnished in connection with the same.
AUDITORS AND AUDITORS REPORT
M/s. BDMV & Co. Chartered Accountants (Firm Registration Number: 101256W)Statutory Auditors of the Company hold office till the conclusion of the Annual GeneralMeeting to be held for the financial year ended 31st March 2020 (subject tothe ratification of the appointment by the members at every Annual General Meeting). Theyhave confirmed their eligibility to the effect that their ratification for F.Y. 2017-18if ratified would be within the prescribed limits under the Act and that they are notdisqualified for re-appointment / ratification.
The notes to the Financial Statements referred to in the Auditors Report areself-explanatory and do not call for any further comments under Section 134 of theCompanies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s. DMP & Associates Practicing Company Secretaries to undertake theSecretarial Audit of the Company for the financial year 2016-17. The Report of theSecretarial Audit Report is annexed herewith as "Annexure B".
The Auditor's report and the Secretarial Audit report for the financial year endedMarch 31 2017 do not contain any qualifications or reservations.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 (3) read withRule 12 of the Companies (Management and administration) Rules 2014 is furnished in"Annexure A" and is attached to this Report.
NUMBER OF BOARD MEETINGS AND EXTRAORDINARY GENERAL MEETING CONDUCTED DURING THE YEARUNDER REVIEW
The Company had Six (6) Board meetings and One (1) Extra Ordinary General Meeting (EGM)during the financial year under review. The details of the meetings of the Board and EGMheld during the financial year form a part of Corporate Governance Report.
INDEPENDENT DIRECTORS MEETING
The Independent Directors met on February 13 2017 without the attendance ofNonIndependent Directors and other members of the Board and Management. The IndependentDirectors reviewed the performance of non-independent Directors and the Board as a whole;the performance of the Chairman of the Company taking into account the views of ExecutiveDirectors and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.
COMMITTEES OF THE BOARD
Details of the various committees constituted by the Board of Directors as per theprovisions of Schedule II of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Companies Act 2013 are given in the Corporate Governance Reportwhich forms a part of this report.
ESTABLISHMENT OF VIGIL MECHANISM
Your Company has laid down Whistle Blower Policy covering Vigil Mechanism withprotective Clauses for the Whistle Blowers. The Whistle Blower Policy is made available onthe website of the Company athttp://avtradeinvest.com/pdf/code of conduct/whistle-blower-policy.pdf .
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company does not have any Subsidiary Joint Venture or Associate Company withinthe meaning of the Companies Act 2013 as on March 31 2017.
The policy for determining Material Subsidiaries is made available on the website ofthe Company at http://avtradeinvest.com/pdf/code ofconduct/policy-for-determining-material- subsidiaries.pdf .
Your Board of Directors emphasis to oversee that all the risks that the organizationfaces such as strategic financial credit market liquidity security property legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management arrangement in place capable of addressing those risks. Furtherthe Audit Committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on continuing basis.
PREVENTION OF SEXUAL HARASSMENT IN THE WORKPLACE
Your Company has zero tolerance on sexual harassment in the workplace. During the yearunder review there were no cases filed pursuant to the Sexual Harassment of Women at theWorkplace (Prevention Prohibition and Redressal) Act 2013.
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is furnished hereunder:
(A) Information pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1)of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014:
i. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-17 and the percentage increase inremuneration of each Director Chief Financial Officer Company Secretary in the financialyear 2016-17:
|Name of Director & KMP ||Ratio of Remuneration of each Director/to median remuneration of Employees ||% increase in remuneration in the financial year |
|Executive Directors || || |
|Mr. Jayantilal R. Bhandari ||Nil ||Nil |
|Mr. Gautam R. Bhandari ||Nil ||Nil |
|Ms. Dharmistha J. Darji ||Nil ||Nil |
|Non-Executive Directors || || |
|Mr. Amit Shankerbhai Patel ||Nil ||Nil |
|Mr. Ameet Muljibhai Brahmbhatt ||Nil ||Nil |
|Mr. Sureshkumar M. Mehta ||Nil ||Nil |
|Key Managerial Personnel || || |
|Mr. Jayantilal R. Bhandari(MD) ||Nil ||Nil |
|Mr. Gautam R. Bhandari(CFO) ||Nil ||Nil |
|Ms. Dharmistha J. Darji (CS) ||204000/15000=13.60 ||Nil |
ii. The median remuneration of employees of the Company during the financial year wasRs. 15000/-.
iii. The percentage increase in the median remuneration of employees in the financialyear: Nil.
iv. The number of permanent employees on the rolls of Company: 3 (Three) as on 31stMarch 2017.
v. Average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2016-17 was Nil whereas increase inthe managerial remuneration for the same financial year was Nil.
vi. Affirmation that the remuneration is as per the Remuneration Policy of the Company.
It is confirmed that the remuneration is as per the Remuneration Policy of the Company.
(B) The information pursuant to Section 197 of the Companies Act 2013 read with Rule5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is not applicable since during the year under review none of the employees of the Companywas in receipt of remuneration in excess of the limits specified whether employed for thewhole year or part thereof.
INSIDER TRADING REGULATIONS
Based on the requirements under the SEBI (Prohibition of Insider Trading) Regulations2015 as amended from time to time the code of conduct for prevention of insider tradingand the code for corporate disclosures ("Code") as approved by the Board fromtime to time are in force by the Company. The objective of this Code is to protect theinterest of shareholders at large to prevent misuse of any price sensitive informationand to prevent any insider trading activity by dealing in shares of the Company by itsDirectors designated employees and other employees.
The Company also adopts the concept of Trading Window Closure to prevent itsDirectors Officers designated employees and other employees from trading in thesecurities of AVTIL Enterprise Limited at the time when there is unpublished pricesensitive information
The Managing Director and Chief Financial Officer of the Company have issued acertificate pursuant to the provisions SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 certifying that the financial statements do not containany untrue statement and these statements represent a true and fair view of the Company'saffairs. The said certificate is annexed and forms part of the Annual Report.
CODE OF BUSINESS CONDUCT AND ETHICS
As provided under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board Members and the Senior Management Personnel have confirmed compliance withthe Code of Conduct for the year ended March 31 2017 a declaration to this effect signedby Chairman & Managing Director has been annexed to the Corporate Governance Report.
Your Directors acknowledge with gratitude the co-operation and assistance given by theBankers Distributors Customers Investors BSE Ltd. National Securities DepositoryLtd. Central Depository Services (India) Ltd. and R & T Agent during the year underreview and are confident that your Company will continue to receive such support in theyears ahead. The Directors also wish to thank all the employees for their contributionhigh degree of commitment support and continued co-operation throughout the year.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
|Place: Mumbai. || || |
|Date: September 1 2017 ||Sd/- ||Sd/- |
|CHAIRMAN & MANAGING DIRECTOR ||Jayantilal R. Bhandari ||Gautam R. Bhandari |
| ||CFO & DIRECTOR || |
| ||DIN : 01897297 ||DIN:00427678 |