Dear Member(s),
th
Your Directors have pleasure in presenting the 34 Annual Report and the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended March 31, 2024:
1. Financial Highlights
The Standalone and Consolidated performance for the Financial Year ended March 31, 2024 is as under:
2. State of the Company's Affairs
During the financial year 2023-2024, your Company recorded a turnover of Rs.22,391.75 Lakhs and earned a net profit of Rs.5,508.33 Lakhs on a standalone basis and a turnover of Rs.22,436.70 Lakhs and net profit was Rs.5,218.72 Lakhs on a consolidation basis.
3. Transfer of amount to Reserves
The Board of Directors do not propose to transfer any amount to the General Reserve for the Financial Year ended March 31, 2024.
4. Dividend
The Board of Directors has recommended a final dividend of Re.0.20/- per equity share of Rs.2/- (Two rupees) each fully paid-up of the Company for the financial year 2023-24. Dividend is subject to approval of members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source. The Dividend will be paid to members whose names appear in the register of members as on record date and in respect of shares held in dematerialized form, it will be paid to the members whose names are furnished by NSDL and CDSL as beneficial owners as on that date.
5. Listing of Equity Shares
The equity shares of the Company are listed on the trading platform of BSE Limited, a recognized stock exchange having a nationwide trading terminal.
6. Subsidiary Companies
M/s. Imeds Global Private Limited, a Wholly Owned Subsidiary Company. As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the Financial Statements of the Subsidiary Company in Form AOC-1 is enclosed as Annexure 1.
7. Performance and contribution of each of the Subsidiaries, Associates and Joint Ventures
As per Rule 8 of the Companies (Accounts) Rules, 2014, a Report on the financial performance of Subsidiaries, Associates and Joint Venture Companies along with their contribution to the overall performance of the Company during the Financial Year ended March 31, 2024, is annexed to this Board's Report as
Annexure 1.
8. Consolidated Financial Statements
The Consolidated Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013.
The Consolidated Financial Statements for the financial Year ended March 31, 2024, forms part of the Annual Report.
As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed the Audited Financial Statements of its Subsidiary Company on its website https://www.avantel.in/ and the same shall be provided to the shareholders upon their request.
9. Sub Division / Split of Equity Shares
During the Financial Year, the shareholders by means of Postal Ballot through electronic means, on July 31, 2023, approved sub-division of Companys' one (1) equity share of face value of Rs.10/- each into five (5) equity shares of face value of Rs.2/- each and consequent amendment in the existing Capital Clause V of the Memorandum of Association (MOA) of the Company.
Accordingly, the authorised share capital of the Company was altered as Rs.20,00,00,000/- divided into 10,00,00,000 equity shares of Rs.2/- each and the paid-up and subscribed share capital of the Company was altered as Rs.16,21,79,720/- divided into 8,10,89,860 equity shares of Rs.2/- each.
After the requisite approvals of the Stock Exchange (i.e., BSE) and Depositories (i.e., NSDL and CDSL), new ISIN i.e., INE005B01027 has been allotted to the Company. The effect of the change in face value of the share was reflected on the share price at the Stock Exchange where Company is listed (BSE) with effect from August 16, 2023 (i.e., Record Date).
10. Bonus Issue
During the Financial Year, the shareholders by means of Postal Ballot through electronic means, on November 11, 2023, approved for issue of Bonus Shares, wherein the Company had allotted 16,21,79,720 Equity Shares of Rs.2/- each as fully paid-up to the Members of the Company, whose names appear in the Register of Members as on the Record date November 24, 2023, in the proportion of 2 (Three) new fully paid-up equity shares of Rs.2/- each for every 1 (One) existing fully paid-up equity share of Rs.2/- each held by them (i.e., in the ratio of 2:1).
11. Share Capital
During the year under review, your Board of Directors approved split/sub-division of equity shares of the Company on June 23, 2023 and the same was approved by the shareholders by way of postal ballot on July 31, 2023, such that each equity share having face value of Rs.10/- (Rupees Ten only) fully paid-up, was subdivided into five (5) equity shares having face value of Rs.2/- (Rupees Two only) each, fully paid-up with effect from August 16, 2023 (Record Date).
Further, the Authorized Share Capital of the Company was increased from Rs.20,00,00,000/- (Rupees Twenty Crores Only) divided into 10,00,00,000 (Ten Crores) Equity Shares of Rs.2/- (Rupees Two Only) each to Rs.60,00,00,000/- (Rupees Sixty Crores only) divided into 30,00,00,000 (Thirty Crores) Equity Shares of Rs.2/- (Rupees Two Only) each and consequential alteration in the Memorandum of Association of the Company
As on March 31, 2024, the paid-up share capital of the Company stood at Rs.48,65,39,160/- divided into 24,32,69,580 equity shares of Rs.2/- each fully paid up
12. Variations in Net worth
The Standalone Net worth of the Company for the Financial Year ended March 31, 2024, is Rs.17,141.39 Lakhs as compared to Rs.11,188.03 Lakhs for the previous financial year ended March 31, 2023, and the Consolidated Net worth of the Company for the Financial Year ended March 31, 2024 is Rs.16,411.92 Lakhs as compared to Rs.10,748.17 Lakhs for the previous Financial year ended March 31, 2023.
13. Directors
During the year under review, Mr. EBV Ramana Gupta (DIN:07402341), has tendered his resignation as the Independent Director of the Company due to pre-occupation and other professional assignments, with effect from December 26, 2023.
Except the above, there has been no change in the Board of Directors during the Financial Year ended March 31, 2024.
14. Appointment/Re-appointment
Mrs. Abburi Sarada (DIN:00026543), Director of the Company who retires by rotation and being eligible, offers herself for re-appointment.
The Board of Directors of the Company at their meeting held on March 6, 2024, based on the recommendation of the Nomination & Remuneration Committee, had re-appointed Mr. Abburi Siddhartha Sagar
(DIN:02312563), as Whole-time Director of the Company with effect from March 8, 2024,and the same is being placed before the shareholders of the Company in this 34th Annual General Meeting for their approval.
The Board of Directors of the Company at their meeting held on March 6, 2024 based on the recommendation of the Nomination & Remuneration Committee, had appointed Dr. Ajit Tavanappa Kalghatgi (DIN: 05300252) and Ms. Harita Vasireddi (DIN: 00242512)as an Independent Directors of the Company for a term of 5 years i.e., from March 6, 2024 to March 5, 2029 and the same is being placed before the shareholders of the Company in this 34th Annual General Meeting for their approval.
15. Key Managerial Personnel
The following have been designated as the Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
16. Number of Meetings of the Board of Directors
During the financial year ended March 31, 2024, eight Board meetings were held on the following dates: April 13, 2023, May 17, 2023, June 23, 2023, July 13, 2023, July 31, 2023, October 9, 2023, January 19, 2024 and March 6, 2024.
The gap between two Meetings did not exceed 120 days and the Meetings were conducted in compliance with all applicable laws. The necessary quorum was present for all the Board Meetings.
The attendance of the Directors at the Board meetings held during the Year were as follows:
Note: * Mr. EBV Ramana Gupta, has tendered his resignation as the Independent Director of the Company, with effect from December 26, 2023.
**Dr. Ajit Tavanappa Kalghatgi and Ms. Harita Vasireddi were appointed as Independent Directors of the Company with effect from March 6, 2024.
17. Particulars of Loans, Guarantees, Securities or Investments under Section 186
The details of Loans, Guarantees, Investments and Security made during the Financial Year ended March 31,
2024, is given in compliance with the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 and the same is annexed to the Board's Report as
Annexure 2.
18. Particulars of Contracts or Arrangements with Related Parties
All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All the related party transactions are approved by the Audit Committee and Board of Directors.
The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions.
The particulars of contracts or arrangements with related parties referred to in sub section (1) of Section 188 entered by the Company during the Financial Year ended March 31, 2024, in prescribed Form AOC-2 is annexed to this Board's Report as Annexure 3.
The policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company and the web link is https://www.avantel.in/investors
19. Annual Return
Annual Return in Form MGT-7 is available on the Company's website, the web link for the same is https://www.avantel.in/investors.
20. The conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 (Act) read with the Companies (Accounts) Rules, 2014
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Act read with the Companies (Accounts) Rules, 2014 is annexed to this Board's Report as Annexure 4.
21. Audit Committee
During the financial year ended March 31, 2024, six Audit Committee meetings were held on the following dates: April 13, 2023, May 17, 2023, June 23, 2023, July 13, 2023, October 9, 2023, and January 19, 2024.
The maximum time gap between any two meetings was not more than one hundred and twenty days.
During the year, there has been no such incident where the Board has not accepted the recommendation of the Audit Committee during the year.
Composition, Name's of members & Chairperson and Attendance at Meetings
Number of Meetings
Note:* Mr. EBV Ramana Gupta, has tendered his resignation as the Independent Director of the Company, with effect from December 26, 2023.
**Dr. Ajit Tavanappa Kalghatgi was appointed as a member of Audit Committee with effect from March 6, 2024.
22. Nomination and Remuneration Committee
v Brief description of the terms of reference:
· formulation of the criteria for determining qualifications, positive attributes and independence of a director
and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;
· for every appointment of an Independent Director, the Nomination and Remuneration Committee shall
evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an Independent Director. The person recommended to the Board for appointment as an Independent Director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:
a) use the services of an external agencies, if required; b) consider candidates from a wide range of backgrounds, having due regard to diversity; and c) consider the time commitments of the candidates.
· formulation of criteria for evaluation of performance of Independent Directors and the board of directors;
· devising a policy on diversity of board of directors;
· identifying persons who are qualified to become directors and who may be appointed in senior
management in accordance with the criteria laid down and recommend to the board of directors their appointment and removal.
· whether to extend or continue the term of appointment of the independent director, on the basis of the report
of performance evaluation of independent directors.
· recommend to the board, all remuneration, in whatever form, payable to senior management.
Composition, name of members & Chairperson, meetings held during the year and attendance at meetings.
During the financial year ended March 31, 2024, five Nomination and Remuneration Committee meetings were held on the following dates: April 13, 2023, October 9, 2023, November 29, 2023, January 19, 2024, and March 6, 2024.
** Dr. Ajit Tavanappa Kalghatgi and Ms. Harita Vasireddi were appointed as members of the Nomination and Remuneration Committee with effect from March 6, 2024.
23. Corporate Social Responsibility (CSR)
Avantel is committed to improve the lives of the society in which it operates. The Company believes in "looking beyond business" and strives to create a positive impact on the communities it serves and on the environment. The Company is committed not just to profits, but also towards leaving a deeper imprint on the society as a whole. We understand that there is a need to strike a balance between the overall objectives of achieving corporate excellence visa-vis the company's responsibilities towards the community.
Pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013, CSR Committee of the Board of Directors had framed the policy on Corporate Social Responsibility and the Projects and Programmes undertaken by the Company during the year have been provided in Annexure-5 and forms part of this Report.
During the F.Y.2023-24 the Company was required to spend an amount of Rs.54,30,074/-for implementation of various CSR activities in terms of Section 135 of the Companies Act, 2013. In this regard the Company has spent an amount of Rs.54,40,000/- on CSR activities which is in excess of the minimum amount required to be spent by the Company.
During the financial year ended March 31, 2024, two Corporate Social Responsibility Committee meetings were held on the following dates: April13, 2023, and June 23, 2023.
Note: *Dr. Ajit Tavanappa Kalghatgi was appointed as a member of Corporate Social Responsibility Committee with effect from March 6, 2024.
24. Stakeholders Relationship Committee
During the year, one Meeting of the Stakeholders Relationship Committee was held on January 19, 2024.
Note: Mr. EBV Ramana Gupta, has tendered his resignation as the Independent Director of the Company, with effect from December 26, 2023.
* Ms. Harita Vasireddi was appointed as a member of the Stakeholders Relationship Committee with effect from March 6, 2024.
Terms of Reference
(I) Resolving the grievances of the security holders including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, non-receipt of new/duplicate certificates, etc.
(ii) Review of measures taken for effective exercise of voting rights by shareholders.
(iii) Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent.
(iv) Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company.
25. Share Allotment Committee
During the year, Two Meetings of the Share Allotment Committee were held on November 11, 2023, and November 25, 2023.
The Share Allotment Committee ('SAC') of the Company have allotted 16,21,79,720 equity shares of Rs.2/- each, by way of Bonus Issue, to such members whose names appeared in the Register of Members as on November 24, 2023, being the Record Date fixed for the said purpose, in the proportion of 2 (Two) new fully paid-up equity share of Rs.2/- each for every 1 (One) existing fully paid-up equity share of Rs.2/- each held by them (i.e., in the ratio of 2:1).
26. Risk Management Committee
The Risk Management Committee consists of the following members:
The Committee has formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day-to-day operations of the Company. The Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat risks. The Risk management procedures are reviewed by the Audit Committee and the Board of Directors on a quarterly basis at the time of review of the Quarterly Financial Results of the Company.
Brief description of terms of reference
1. To formulate a detailed Risk Management Policy which shall include:
a) A framework for identification of internal and external risks specifically faced by the Company, in particular including financial, operational, sectoral, sustainability (particularly, Environment, Social and Governance related risks), information, cyber security risks or any other risk as may be determined by the Committee.
b) Measures for risk mitigation including systems and processes for internal control of identified risks.
c) Business continuity plan.
2. To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company;
3. To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management systems;
4. To periodically review the risk management policy, at least once in two years, including by considering the changing industry dynamics and evolving complexity;
5. To keep the board of directors informed about the nature and content of its discussions, recommendations and actions to be taken;
6. The appointment, removal and terms of remuneration of the Chief Risk Officer (if any) shall be subject to review by the Risk Management Committee;
7. The Risk Management Committee shall coordinate its activities with other committees, in instances where there is any overlap with activities of such committees, as per the framework laid down by the board of directors.
27. Mechanism for Evaluation of the Board
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its committees as well as performance of the Directors individually. Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of speci c duties, obligations and governance and the evaluation was carried out based on responses received from the Directors.
The evaluation is performed by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.
In line with SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004, dated January 5, 2017, the Company has adopted the criteria recommended by the SEBI.
The Directors were given Five Forms for evaluation of the following:
(i) Evaluation of Board;
(ii) Evaluation of Committees of the Board;
(iii) Evaluation of Independent Directors;
(iv) Evaluation of Managing Director and Executive Directors; and
(v) Evaluation of Chairman.
The Directors were requested to give following ratings for each criterion:
1. Could do more to meet expectations;
2. Meets expectations; and
3. Exceeds expectations.
The Chairperson, based on the Evaluation done by the Directors, informed that the performance of the Directors is satisfactory, and they are recommended for continuation as Directors of the Company.
28. Management Discussion and Analysis
The Management Discussion and Analysis, as required under the Listing Regulations, forms an integral part of this Report.
29. Directors' Responsibility Statement as required under Section 134 of the Companies Act, 2013
Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms:
i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;
ii) that the Directors have 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 as on March 31, 2024, and of Profit and Loss Account of the Company for that period;
iii) that the Directors have 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;
iv) that the Directors have prepared the Annual Accounts for the Financial Year ended March 31, 2024, on a going concern basis;
v) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
30. Statement on Declaration given by Independent Directors under Section 149
The Independent Directors have submitted a declaration of independence, as required pursuant to sub-section (7) of Section 149 of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149.
31. Familiarization programmes imparted to Independent Directors
The Members of the Board of the Company have been provided with opportunities to familiarize themselves with the Company, its Management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.
All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.
Executive Directors and Senior Management provide an overview of the operations and familiarize the new Non-Executive Directors with matters related to the Company's values and commitments. They are also introduced to the organization structure, constitution of various committees, board procedures, risk management strategies, etc.
Strategic presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc.
Senior management personnel of the Company make presentations to the Board Members on a periodical basis, briefing them on the operations of the Company, plans, strategy, risks involved, new initiatives, etc., and seek their opinions and suggestions on the same. In addition, the Directors are briefed on their specific responsibilities and duties that may arise from time to time.
The Statutory Auditors and Internal Auditors of the Company make presentations to the Board of Directors on Financial Statements and Internal Controls. They will also make presentations on regulatory changes from time to time.
The details of the familiarisation programme are available on the website: https://www.avantel.in/investors
32. Meeting of Independent Directors
A separate meeting of the Independent Directors was held under the Chairmanship of Mr. Yalamanchili Kishore, Independent Director on January 19, 2024, inter-alia, to discuss evaluation of the performance of the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and the evaluation of the quality, content and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.
33. Registration of Independent Directors in Independent Directors Data bank
All the Independent Directors of your Company have been registered and are members of Independent Directors Data bank maintained by the Indian Institute of Corporate Affairs (IICA).
34. Online Proficiency Self-Assessment Test
All Independent Directors of the Company have passed the Online Proficiency Self-Assessment Test conducted by Indian Institute of Corporate Affair (IICA).
35. Confirmation and Opinion of the Board on Independent Directors
All the Independent Directors of the Company have given their respective declaration/ disclosures under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations and have confirmed that they fulfill the independence criteria as specified under section 149(6) of the Act and Regulation 16 of the Listing Regulations and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. Further, the Board after taking these declarations/disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management.
The Board opines that all the Independent Directors of the Company strictly adhere to corporate integrity, possesses requisite expertise, experience and qualifications to discharge the assigned duties and responsibilities as mandated by the Companies Act, 2013 and Listing Regulations diligently.
36. Board Diversity
The Company has over the years been fortunate to have eminent people from diverse fields to serve as Directors on its Board. Pursuant to the SEBI Listing Regulations, the Nomination & Remuneration Committee of the Board ensured diversity of the Board in terms of experience, knowledge, perspective, background, gender, age and culture.
37. Statement of particulars of appointment and remuneration of managerial personnel
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Board's Report as Annexure 6.
38. Directors and Officers Insurance ('D&O')
As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company has taken Directors and Officers Insurance ('D&O') for all its Directors and members of the Senior Management.
39. Code of Conduct
The Board of Directors has adopted and oversee the administration of the Avantel Limited Code of Business Conduct and Ethics (the 'Code of Conduct'), which applies to all Directors, Officers and Employees of Avantel Limited and its subsidiaries. The Code of Conduct reflects the Company's commitment to doing business with integrity and in full compliance with the law and provides a general roadmap for all the Directors, Officers and Employees to follow as they perform their day-to-day responsibilities with the highest ethical standards. The Code of Conduct also ensures that all members of Avantel Limited and its subsidiaries perform their duties in compliance with applicable laws and in a manner that is respectful of each other and the Company's relationships with its customers, suppliers and shareholders, as well as the communities and regulatory bodies where the Company does business.
40. Deposits
The Company has not accepted any deposits from the public in terms of Chapter V of the Companies Act, 2013. Hence, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
41. Statutory Auditors
M/s. Grandhy & Co., Chartered Accountants, (ICAI Firm Registration No. 001007S), were appointed as the Statutory Auditors of the Company for a period of 5 years at the 31st Annual General Meeting of the Company held on June 5, 2021, to hold office till the conclusion of the 36th Annual General Meeting of the Company to be held in the year 2026.
Accordingly, M/s. Grandhy & Co., Chartered Accountants, Statutory Auditors of the Company will continue as such till the conclusion of Annual General Meeting to be held in 2026. In this regard, the Company has received a Certificate from the Auditors to the effect that their continuation as Statutory Auditors would be in accordance with the provisions of Section 141 of the Companies Act, 2013.
42. Auditors Report
There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Grandhy & Co., Chartered Accountants (ICAI Firm Registration No. 001007S), Statutory Auditors in their report for the Financial Year ended March 31, 2024.
43. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed M/s. P. S. Rao & Associates, Practicing Company Secretaries as Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year ended March 31, 2024.
The Secretarial Audit Report issued by M/s. P. S. Rao &Associates; Practicing Company Secretaries in Form MR-3 is annexed to this Board's Report as Annexure 7. The said Secretarial Audit Report does not contain any observation or qualification or reservation or adverse mark or disclaimers.
44. Internal Auditors
The Board of Directors of the Company has appointed M/s. Ramesh & Co., Chartered Accountants (Firm Registration No. 002979S) as Internal Auditors to conduct Internal Audit of the Company for the Financial Year ended March 31, 2024.
45. Cost Audit and Maintenance of Cost Records specified by the Central Government under Section 148 of
the Companies Act, 2013
In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Board of Directors pursuant to the recommendation of the Audit Committee, had appointed M/s. MPR & Associates, Cost Accountants (Firm Registration No.000413), Hyderabad, as Cost Auditors of the Company, to carry out the audit of the cost records of the products manufactured by the Company during the financial year ending March 31, 2025 at a remuneration of Rs.1,00,000/-.
The remuneration payable to the cost auditor is required to be placed before the Members in the general meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s. MPR & Associates, Cost Accountants, is included in the Notice convening the Annual General Meeting. The Company is maintaining cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013.
A Certificate from M/s. MPR & Associates, Cost Accountants, has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Companies Act, 2013 and the Rules framed thereunder.
The Company will file the cost audit report for the Financial Year ended March 31, 2024, with the Central Government before the due date.
46. Board's response on Auditor's qualification, Reservation or adverse Remark or disclaimer made.
There are no qualifications, reservations or adverse remarks made by the statutory auditors in their report or by the Practicing Company Secretary in the Secretarial Audit Report for the year.
47. Reporting of Frauds by Auditors
During the year under review, the Statutory Auditors, Internal Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Directors or Of cers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
48. Corporate Governance
The Company has a rich legacy of ethical governance practices and is committed to implement sound corporate governance practices with a view to bring about transparency in its operations and maximize shareholder value.
A Report on Corporate Governance along with a Certi cate from the Independent Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.
49. Vigil Mechanism (Whistle Blower Policy)
The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Company's Whistle Blower Policy.
The Company has adopted a Whistle Blower Policy establishing a formal vigil mechanism for the Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct and Ethics. It also provides adequate safeguards against the victimization of employees who avail of the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The policy of vigil mechanism is available on the Company's website i.e., https://www.avantel.in/investors
The Whistle Blower Policy aims to conduct affairs in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior. All employees of the Company are covered under the Whistle Blower Policy.
50. Insurance
All properties and insurable interests of the Company have been fully insured.
51. Adequacy of Internal Financial Controls with reference to the Financial Statements
The Corporate Governance Policies guide the conduct of affairs of the Company and clearly delineate the roles, responsibilities and authorities at each level of its governance structure and key functionaries involved in governance. The Code of Conduct for Senior Management and Employees of the Company (the Code of Conduct) commits Management to nancial and accounting policies, systems and processes. The Corporate Governance Policies and the Code of Conduct are widely communicated across the Company at all times.
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (IND AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time notified under Section 133 of the Companies Act, 2013, (the 'Act') and other relevant provisions of the Act.
The Company maintains all its records in the ERP (SAP) System and the workflow and approvals are routed through ERP (SAP).
The Board of Directors of the Company have adopted various policies such as Related Party Transactions Policy, Whistle Blower Policy, Corporate Social Responsibility Policy, Dissemination of material events Policy, Documents preservation policy, Monitoring and Reporting of Trading by Insiders, Code of Internal Procedures and conduct for Regulating, monitoring and reporting of trading by Insiders, Code of Practices and Procedures for Fair Disclosures and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The Company recognizes Internal Financial Controls cannot provide absolute assurance of achieving nancial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
52. Names of Companies, which have become or ceased to be Company's Subsidiaries, Joint Ventures or
Associate Companies during the year
During the Financial Year, no Company has become or ceased to be Company's Subsidiary, Joint Venture or Associate Company.
53. Change in the nature of business
There has been no change in the nature of business of the Company.
54. The details of significant and material orders passed by the Regulators or Courts or Tribunals
impacting the going concern status and Company's operations in future
There have been no significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
55. Proceedings under the Insolvency and Bankruptcy Code, 2016 (31 of 2016)
During the Financial year, no application was made or any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.
56. Material changes and commitments
There are no material changes and commitments affecting the financial position of the Company which occurred between the Financial Year ended March 31, 2024, to which the Financial Statements relates and the date of signing of this report.
57. Employee Stock Options
During the Year, the Company has introduced the "Avantel Employees Stock Option Plan - 2023" ("ESOP
2023" or "Scheme"). The scheme has been approved by the Board of Directors at their meeting held on October 9, 2023, and the Shareholders of the Company on November 11, 2023.
The objective of the Scheme is to reward the Employees for association, dedication and contribution to the goals of the Company. The Company intends to use this Scheme to attract and retain key talents working with the Company by way of rewarding their performance and motivate them to contribute to the overall corporate growth and profitability. The Company prospects that Employee Stock Options as instruments that would enable the Employees to get a share in the value, they create for the Company in the years to come.
The Scheme would result in grant of options not exceeding 45,00,000 equity shares of the Company. Each option when exercised, would be converted in to one equity share of Rs.2/- each (Rupees Two Only) fully paid-up. The quantum of benefits underlying the stock options issued to an eligible employee shall depend upon the number of stock options held by the employee and the market price of the equity shares as on the date of sale.
During the year, 39,69,800 options have been granted to the employees of your Company.
During the year, a reserve was made towards outstanding of Employee Stock Options (ESOPs) and Employee Compensation Expenses (Share based payment expenses) for the year ended March 31, 2024, of Rs.607.20 lakhs, which includes Employee Benefit expenses detailed in Note No.28 for standalone financial statements and Note No.27 for consolidated financial statements.
The details of Employees Stock Option Scheme pursuant to Rule 12(9) of Companies (Share Capital and
Debentures) Rules, 2014 are provided as Annexure - 8 to this Report. Further, information pursuant to Section 62 of the Companies Act, 2013 read with Rules made thereunder and details of the Scheme as specified in Part F of Schedule I of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available on Company's website and may be accessed at https://www.avantel.in/
Further, it is confirmed that the Scheme is in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and during the year under review there were no material changes in the Scheme.
Certificate from M/s. P.S. Rao & Associates, Company Secretaries, Secretarial Auditors of your Company confirming that the scheme has been implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021,forms part of the Corporate Governance Report and is also placed on the website of your Company at https://www.avantel.in/investors.
58. Business Responsibility and Sustainability Report
As per Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the 'Business Responsibility and Sustainability Report' (BRSR) of your Company for the financial year ended March 31, 2023, forms part of this Annual Report and is annexed herewith as Annexure 9.
59. Environment, Health and Safety
The Company has certified with the following Environmental Management Systems (EMS) and Occupational Health and Safety (OH&S) Management System:
ISO 14001:2015 specifies the requirements for an environmental management system that an organization can use to enhance its environmental performance. ISO 14001:2015 is intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability.
ISO 45001:2018 specifies requirements for an occupational health and safety (OH&S) management system, and gives guidance for its use, to enable organizations to provide safe and healthy workplaces by preventing work-related injury and ill health, as well as by proactively improving its OH&S performance.
60. Credit Rating
Acuite Ratings & Research Limited ("Acuite") ("Credit Rating Agency") has upgraded its long-term rating to 'ACUITE A-' (read as ACUITE A minus) from 'ACUITE BBB+' (read as ACUITE triple B plus) and short-term rating to 'ACUITE A2+' (read as ACUITE A two plus) from 'ACUITE A2' (read as ACUITE A two) on Rs.69.50 Cr bank facilities of Avantel Limited. Outlook is 'Stable'.
The details of the Credit Ratings are available on the website of the Company at https://www.avantel.in/
61. Nomination and Remuneration Policy
In pursuance of the Company's policy to consider human resources as its invaluable assets, to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP) and Employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 as amended from time to time, the policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated.
Nomination and Remuneration policy of the Company forms part of this Annual Report as Annexure-10 and the policy is also available on the Company's website https://www.avantel.in/investors.
62. Dividend Distribution Policy
The Company has adopted the Dividend Distribution Policy to determine the distribution of dividend in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (the "Listing Regulations"). The Dividend Distribution Policy is available on the Company's website, at https://www.avantel.in/investors.
63. Risk Management Policy
The Company has developed and implementing a risk management policy which includes the identification therein of elements of risk, which in the opinion of the board may threaten the existence of the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Furthermore, your Company has set up a robust internal audit function which reviews and ensures the sustained effectiveness of internal financial controls by adopting a systematic approach to its work. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. The Risk Management Policy of your Company is posted on the website of your Company and the web link is https://www.avantel.in/investors.
64. Human Resources
The Company believes that the quality of its employees is the key to its success and is committed to providing necessary human resource development and training opportunities to equip employees with additional skills to enable them to adapt to contemporary technological advancements.
Industrial relations during the year continued to be cordial and the Company is committed to maintain good industrial relations through effective communication, meetings and negotiation.
65. Prevention of Sexual Harassment
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has not received any complaints during the year.
The Company regularly conducts awareness programs for its employees.
The following is a summary of sexual harassment complaints received and disposed off during the year:
66. Investor Education and Protection Fund (IEPF)
Pursuant to Section 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), dividend, if not claimed for a period of seven years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to IEPF. Members who have not encashed the dividend warrants / demand drafts so far in respect of the unclaimed and unpaid dividends declared by the Company for the Financial Year 2016-17 and thereafter, are requested to make their claim to M/s. KFIN Technologies Limited (Registrars & Share Transfer Agents) well in advance of the last dates for claiming such unclaimed and unpaid dividends as specified hereunder:
67. Constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has not received any complaints during the year.
68. Compliance with Secretarial Standards
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.
69. Prevention of Insider Trading Code
As per SEBI (Prohibition of Insider Trading) Regulation, 2015, the Company has adopted a Code of Conduct for Prevention of Insider Trading. During the year, the Company has complied with the said code.
70. Acknowledgments
We express our sincere appreciation and thank our valued Shareholders, Customers, Bankers, Business Partners/Associates, Financial Institutions, Insurance Companies, Central and State Government Departments for their continued support and encouragement to the Company. We are pleased to record our appreciation of the sincere and dedicated services of the employees and workmen at all levels.