DIRECTOR'S REPORT Dear Members, Your Directors are pleased to present the 31st Annual Report and the Company's Annual Financial statement for the financial year ended March 31, 2015. 2. Operations and Business Performance During the year under review, your company has been able to generate revenue from sale of Rs.107,58,75,545/- in FY 2014-15 as compared to previous year of Rs. 89,23,63,920/-. The operating loss of the company reduced from Rs.3,37,11,496/- in FY 20147-15 to Rs. 1,11,60,247/- in FY 2014-15. The increase in operational revenue is attributable mainly to due to increase in income from sale of IT products and Computer peripheral by 20.3% to Rs. 106,55,15,781 in FY 204-15 as against Rs.88,56,94,138 in FY 2013-14. 3. Dividend Your Directors after considering year's financial performance of the Company have not recommended any Dividend for the year under review. 4. Capital Structure Capital Structure of the Company as on 31st March, 2015 consisting followings: Authorized share Capital : Rs. 200,00,00,000/- (Rupees Two Hundred Crore only) divided in to 200,00,00,000 equity shares of Re. 1 /- each. Issued, Subscribed and : Rs. 1,981,917,430 divided in to 1,981,917,430 equity Paid-up Share Capital shares of Re. 1 /- each. During the year under review, Company has increased its Authorized share capital from Rs. 100,00,00,000 /- (Rupees One Hundred Crore only) divided into 100,00,00,000 equity shares of Re. 1 /- each to Rs. 200,00,00,000/- (Rupees Two Hundred Crore only) divided in to 200,00,00,000 equity shares of Re. 1 /- each. Further, during the year Company has also increased its Paid-up shares capital by issuing 134,15,29,930 Equity Shares of Face Value of Rs. 1/- each on preferential basis. 5. Auditors and Auditor's Report: > Statutory Auditor M/s. Tejas Nadkarni & Associates, Chartered Accountants, were appointed as statutory auditors of the Company in the Adjourned Annual General Meeting held on 4th October, 2014, to hold office for the term of three consecutive years, from conclusion of Annual General Meeting for the year 2014-15 till the conclusion of this Annual General Meeting for the year 2015-16. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Tejas Nadkarni & Associates, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has already received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. > Statutory Auditor's Report The Statutory Audit Report for FY 2014-15 issued by M/s. Tejas Nadkarni & Associates, Statutory Auditor of the Company forms part of the Annual report. The observation and comments furnished by the Auditors in his report read together with notes to Accounts are self-explanatory and hence do not call for any further comments. Secretarial Auditor M/s SG & Associates, Practicing Company Secretaries were appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there under. Secretarial Auditor's Report The Secretarial Audit Report for FY 2014-15 issued by M/s SG & Associates, Secretarial Auditor of the Company forms part of the Board's report as "Annexure 5". Pursuant to Section 138 of the Companies Act 2013, read with rule 13 of the Companies (Accounts) Rules 2014, the internal records maintained by the Company are required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Bipin B Shah & Co., Chartered Accountants (Firm Registration No.101511W) to audit the cost accounts of the Company for the year 2014-15. 6. Transfer of Unclaimed Dividend to Investor Education and Protection Fund The provision of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid during the year. 7. Management's Discussion and Analysis Report Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented in a separate section forming part of the Annual Report. 8. Subsidiaries, Joint Ventures and Associate Companies The Company does not have any Subsidiary Company, Form AOC-1 explaining financial position and performance of each of the associates and joint venture companies is forming part of this report as Annexure 1. 9. Directors Responsibility Statement In accordance with provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility statement: (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to this report as "Annexure 8". 11. Particulars of Contracts and Arrangements with Related Parties During the year, the Company had not entered into any contract / arrangement / transaction with related parties. Hence disclosure under Form AOC-2 pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 is not applicable. The policy on materiality of related party transaction and dealing with related party transactions approved by the Board may be accessed on the Company's website at the link : <http://www.avance.in/pdf/Policy%20on%20Related%20Party%20Transactions.pdf> Kindly refer the Note 26.3 to the financial statements which sets out related party disclosures. 12. Corporate Social Responsibility The conditions prescribed in the Section 135 of the Companies Act, 2013, which mandates the Company to constitute a Corporate Social Responsibility Committee are not applicable to our Company. Hence, the company has not developed and implemented any Corporate Social Responsibility initiatives during the year under review. 13. Directors and Key Managerial Personnel Presently board composition of the Company consist six directors, out of which 50% are executive director and remaining 50% are Non-Executive Independent Director. The board of the Company is headed by Mr. Srikrishna Bhamidipati, Chairman of the Company. Re-appointments In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Deepak Manki director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. Resignation of Director During the year 2014-15, Mr. Randhir Marwa resigned as Non-Executive Independent Director with effect from 22nd August, 2014. Mr. Deepak Goyal was Executive Director of company and liable to retire by rotation. Members of the Company in the last Annual General Meeting held on 4th October, 2014 expressed their unwillingness to re-appoint him. Declaration by Independent Directors of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. 14. Meetings of the Board Eight meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance forming part of this Annual Report. 15. Annual evaluation by the board of its own performance and that of its committees and individual directors: As required under section 178(2) of the Companies Act, 2013 and under Schedule IV to the Companies Act, 2013, a comprehensive exercise for evaluation of the performances of every individual director, of the Board as a whole and its Committees and of the Chairperson of the Company has been carried by your company during the year under review as per the evaluation criteria approved by the Board and based on guidelines given in Schedule IV to the Companies Act, 2013. For the purpose of carrying out performance evaluation exercise, four types of Evaluation forms were devised in which the evaluating authority has allotted to the individual Director, the Board as a whole, its Committees and the Chairperson appropriate rating as Excellent, Very Good, Good or Satisfactory depending upon the performance. Such evaluation exercise has been carried out (i) of Independent Directors by the Board (ii) of Non-Independent Directors by all the Independent Directors in separate meeting held for the purpose (iii) of the Board as a whole and its Committees by all the Independent Directors in separate meeting held for the purpose on 24th January, 2015, (iv) of the Chairperson of your Company by the Independent Directors in separate meeting held on 24th January, 2015 after taking into account the views of the Executive/Non-Executive Directors (v) of individual Directors by the Nomination and Remuneration Committee (vi) of the Board by itself Having regard to the industry, size and nature of business your company is engaged in, the evaluation methodology adopted is, in the opinion of the Board, sufficient, appropriate and is found to be serving the purpose. 16. Material Changes and Commitments No material and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of the report. 17. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo Your Company engaged in the business of trading of IT software products. Since this business does not involve any manufacturing activity, most of the Information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are Nil / Not applicable. Disclosure pursuant to section 134(m) of the Companies Act, 2013 is forms part of this report as "Annexure 3". 18. Particulars of Loans, Guarantees, security and acquisition under Section 186 of the Companies Act, 2013 Pursuant section 134(3)(g) of the Companies Act, 2015 details of Particulars of Loans, Guarantees, security and acquisition as per section 186 of the Companies Act, 2013 form part of financial statement provided in this report 19. Extract of Annual Return The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in "Annexure 7" and is attached to this Report. 20. Deposits The Company has neither accepted nor renewed any deposits during the year under review. 21. Particulars of Employees and related disclosures In terms of the provisions of Section 197(2) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there were no employees drawing remuneration in excess of the limits set out in the said rules. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to the report as "Annexure 6". 22. Disclosure of Composition of Audit Committee and providing Vigil Mechanism The Audit Committee comprises Directors namely Mr. Anand Choudhary (Chairman), Mr. Bimal Kamdar and Mr. Deepak Manki as other members. All the recommendations made by the Audit Committee were accepted by the Board. The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: http://avance.in/pdf/Whistle%20Blower%20Policy.pdf 23. Significant and Material Orders Passed By the Regulators or Courts There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 24. Acknowledgements Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. For Avance Technologies Limited Sd/- Srikrishna Bhamidipati Chairman & Managing Director (DIN: 02083384) Date : 4th September, 2015 Place : Mumbai, |