Annual Report 2013 - Avanceon
Transcript of Annual Report 2013 - Avanceon
Tomorrow’s solutions, today.
Middle East | South Asia | Nor th America
Annual Report 2013
TOMORROW’S SOLUTIONS, TODAY
At Avanceon, we are dedicated to help our clients reach
the pinnacle of their productivity through state-of-the-art
automation systems and cutting-edge technology.
Our value-driven approach and strict compliance with
the highest standards of competence and efficiency have
earned us the profound trust of our stakeholders. We seek
to continue to foster valuable relationships with our clients
by providing them outstanding expertise and sustainable
strategies to manage complex challenges.
With our dynamic and ingenious workforce, we aspire to
always stay one step ahead of the game by providing our
clients Tomorrow’s Solutions,Today.
Dear Shareholders,
I feel honored with the opportunity to address our shareholders
in the first Annual Report of now a public limited Avanceon that
found its very humble beginning 24 years ago. Going public last
November, marked a great milestone in our Company history
and our goal is to continue to achieve significant milestones to
increase value for our shareholders. I still hear the Karachi Stock
Exchange gong ringing in my ears from the first day of trading, a
reminder of the promises we made as part of Highway 50 and
our commitments to investors. Hence, a mental note is made to
continue to uphold Avanceon’s values.
We have made it this far in our history because we stood firm in
placing our customers and our people first, so it is not surprising
when I commit to continue this habit while moving forward. We
shall continue to invest in our human resource to keep our teams
happy and enable them to achieve the very best that they are
capable of. I proudly stand at the head of a collection of very gifted
individuals who, as a daily ritual, shine for Avanceon. We can already
sense the collateral weight of responsibilities stepping up within
Avanceon compelled by the confidence financial markets have
placed. I am very confident that the team will rise to this challenge
to further enhance investors’ trust and belief in us.
Please join me and the whole of Avanceon as we continue our
upward growth trajectory towards becoming the world’s leading
automation company through our inspiring collective team spirit
and seamless solutioneering.
Bakthiar H. WainFounder and Chief Executive Officer
LETTERFROM THE FOUNDER
A. ORDINARY BUSINESS1. To receive and consider the Audited Accounts for the year
ended 31 December 2013 and the Directors’ and Auditors’
Reports thereon.
2. To appoint Auditors and fix their remuneration. The retiring
auditors Ernst & Young, Ford Rhodes Sidat Hyder, Chartered
Accountants, being eligible, have offered themselves for re-
appointment.
3. To declare a final dividend at the rate of Rs 2.00 per share
i.e. 20% for the year ended 31 Dec 2013.
4. To elect (7) Directors of the Company, as fixed by the Board
of Directors, for the next term of three years, in accordance
with the provisions of Section 178 of the Companies
Ordinance, 1984, in place of the following Directors who
are eligible to offer themselves for re-election:
1. Mr. Bakhtiar Hameed Wain 2. Mr.Khalid Hameed Wain 3. Mr. Amir Waheed Wain 4. Mr. Tanveer Karamat 5. Mr. Tajammal Hussain 6. Mr.Umer Ahsan Khan 7. Mr. Naveed Ali Baig
B. SPECIAL BUSINESS5. To authorize the issuance of Bonus Shares in proportion of
01 Share for every 20 Shares held, i.e. at the rate of 5% and
if thought fit pass the following Special Resolution;
“RESOLVED that Ordinary Shares of Rs. 10/- each be issued
as Bonus Shares and that the said shares be allotted as fully
paid Ordinary Shares to the Members of the Company
whose names appear on the Register of Members as at the
close of the business on 14 April 2014 the Company in the
proportion of 01 Bonus Share for every 20 Shares held, that
is at the rate of 5%, and that such Bonus Shares shall rank
pari pasuu as regards dividend and in all other respects with
the existing Ordinary Shares of the Company.
FURTHER RESOLVED that fractional entitlements of the
members shall be consolidated into whole shares and sold
in the stock market and the sale proceeds shall be donated
to a charitable institution.
6. To Consider and if thought fit pass the following Ordinary Resolution;
“RESOLVED that placing of the Company’s quarterly
NOTICE OFTHE MEETING
NOTICE OF 11TH ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the 11th Annual General Meeting of Avanceon Limited will be held at Avari Towers, Fatima Jinnah Road,
Karachi, on Tuesday, 22 April, 2014 at 2.30 p.m. to transact the following business:
By Order of the Board
Lahore, Ahsan Khalil Dated: 01 April 2014 Company Secretary
accounts on its website instead of transmitting the same to its shareholders by post, be and is hereby approved.”
(2) A member entitled to attend and vote at this Meeting shall
be entitled to appoint another person, as his/ her proxy to
attend, speak and vote instead of him / her, and a proxy
so appointed shall have such rights, as respects attending,
speaking and voting at the Meeting as are available to a
member. Proxies in order to be effective, must be received
by the Company not less than 48 hours before the meeting.
A proxy need not be a member of the Company.
STATEMENT UNDER SEC 160 (1) (B) OF THE COMPANIES ORDINANCE, 1984.This Statement is annexed to the Notice of the 11th Annual General Meeting of Avanceon Limited to be held on Tuesday 22 April 2014 at which
certain Special Business is to be transacted. The purpose of this Statement is to set forth the material facts concerning such special business;
ITEM (5) OF THE AGENDAThe Directors of the Company are of the view that the Company’s
profitability, financial position and its reserves justify the issuance
of Bonus Shares in the proportion of 01 share for every 20 shares
held, that is at the rate of 5%, to those Shareholders whose names
appear in the Register of Members at the close of Business on
Monday 14 April 2014.
Pursuant to rule 6 (iii) of the Companies (Issue of Capital) Rules
1996, a Certificate of free reserves has been issued by the Auditors.
ITEM (6) OF THE AGENDAThe Securities and Exchange Commission of Pakistan vide its
circular No.19 dated 14 April, 2014 has allowed listed companies to
place their quarterly accounts on their website instead of sending
the same to each shareholder by post, subject to fulfilment of a few
conditions including seeking of the consent of the members.
This will be a convenient and cost effective way for the Company
to transmit its quarterly accounts and ensure quick and easy access
for the members to such accounts of the Company.
N.B(1) The share transfer book of the Company will be closed and no
transfer of shares will be accepted for registration from Tuesday
15 April 2014 to Tuesday 22 April 2014 (both days inclusive).
Transfer received in order at the office of our Registrar, M/s THK
Associates (Pvt) Limited, 2nd Floor, State Life Building No.3, Dr.
Ziauddin Ahmed Road, Karachi by the close of business (5.00
p.m.) on Monday 14 April 2014 will be treated to have been in
time for the purpose of attending the meeting.
Section I - Corporate Profile Company Information 2 About Avanceon 4 Philosophy 7 Business Conduct Core Values 8 Portfolio 10 Statement of Compliance 14Section II - Corporate Governance and Management Directors’ Profile 18 Corporate Governance Policy 20 Business Governing Principles & Values 22 Committees 23 Service to Society 24 Holding Structure 25 Corporate Strategy 25 Core Management 26 Chief Executive Officer 27 Chief Operating Officer 28 Director’s Report 30 Annex To The Report 35 Letter From The Chief Operating Officer 43Section III – Business Overview Value Driven 45 Unique Value Proposition 45 Growth Management 46 Impacting Technology 46 Enroute To Highway 50’s 47
Stakeholder 50
Section IV – Stand Alone Financial Statements Auditor’s Report 55 Statement of Financial Position 56 Profit & Loss Accounts 58 Statement of Comprehensive Income 59 Statement of Cash Flows 60 Statement of Changes in Equity 61 Notes to the Financial Statements 62Section V – Consolidated Financial Statements Auditor’s Report 93 Statement of Financial Position 94 Profit & Loss Accounts 96 Statement of Comprehensive Income 97 Statement of Cash Flows 98 Statement of Changes in Equity 99 Notes to the Financial Statements 100 Pattern of Shareholding 134 Proxy Form 135
TABLEOF CONTENTS
CORPORATE PROFILE
SECTION I
Management Report 2013 1|
Trade Mark
Web Presence: www.avanceon.com
COMPANYINFORMATION
Tomorrow’s solutions, today.
Directors Mr. Khalid H Wain Director/Chairman
Mr. Bakhtiar H Wain Director/Chief Executive Officer
Mr. Tanveer Karamat Director/Chief Operating Officer
Mr. Amir W Wain Director
Mr. Naveed A Baig Director
Mr. Tajammal Hussain Director
Mr. Umar Ahsan Khan Director
Mr. Saeed Ullah Khan Niazi Chief Financial Officer
Mr. Ahsan Khalil Company Secretary
Bankers Faysal Bank LimitedHabib Bank LimitedMCB Bank LimitedUnited Bank LimitedNational Bank of Pakistan LimitedStandard Chartered Bank LimitedDeutsche Bank LimitedJS Bank LimitedKASB Bank LimitedNIB Bank Limited
AuditorsErnst & Young Ford Rhodes Sidat Hyder Chartered Accountants.
Legal Advisor Chima & Ibrahim Advocates and Corporate Council
Share Registrar THK Associated (Private) Limited
2nd Floor, State Life Building-3, Dr. Ziauddin Ahmed Road,
Karachi, 75530, Sindh, Pakistan.
Phone: +92(21)111 000 322
Fax : +92 (21) 356 555 95
Email : [email protected]
Registered Office
19-Km , Main Multan Road,
Lahore, 54660 Punjab Pakistan
Phone No : + 92 (42) 111 940 940
Fax No: + 92 (42) 375 151 28
Email : [email protected]
Avanceon 2 |
Corporate Headquarters180 Sheree Blvd., Suite 1400 Exton, 19341, PA, United States of America, Phone: +1 610 – 458 – 8700Fax: +1 610 – 458 – 0606US Technical Support: 800 – 331 – 8994SE Asia Technical Support: 0800 11194
Regional Operational Centers Lahore (North Region) – Pakistan
19-km, Main Multan Road,
Lahore, 54660, Punjab, Pakistan
Phone: +92 42 – 111 940 940
Fax: +92 42 – 37515128
Karachi (South Region) – Pakistan
D-16/1, Block 3, Lane 5,
Clifton, Karachi 75600, Pakistan
Phone: +92 21 – 111 940 940
Fax: +92 21 – 35376573
Islamabad – Pakistan
299, Safari-3, Phansi Road
Bahria Town, Islamabad, Pakistan
Phone: +92 51 – 5733031
Fax: +92 51 – 5733032
United States of America – Eastern Region
Mr. Matt Ruth
180 Sheree Blvd., Suite 1400
Exton, PA, United States of America,
Phone: +1 610 – 458 – 8700
Fax: +1 610 – 458 – 0606
Dubai – United Arab Emirates
Office No: FZS IBDO 4
Jebel Ali Free Zone, 18590,
Dubai, United Arab Emirates
Phone: +971 – 4 – 8860277
Fax: +971 4 8860288
Abu Dhabi – United Arab Emirates
Mr. Tanveer Pasha
P.O. Box: 4118, Abu Dhabi, United Arab Emirates
Emdad LLC.
Phone: +971 – 2 – 634 – 999
Fax: +971 – 2 – 631 – 8181
Doha – Qatar & Al Khobar – Saudi Arabia
Mr. Sarmad M Qureshi
P.O. Box 5285, Office No-3, 15Th Floor
Burj Al-Gassar, West Bay, Doha, State Of Qatar
Phone: +974 – 440 – 85213
Ahmadi – Kuwait
Mr. Abdulkarim El-Mahmoud
P.O. Box: 9309, Ahmadi, Kuwait 61004
Imco Engineering & Construction Co.
Email: [email protected]
Phone: +965 – 23981661
Management Report 2013 3|
THE COMPANYAvanceon [“AVN”/the “Company”] is the leading provider of automation, control systems integration, proprietary energy management
solutions and support services. It has a strong market footprint through its offices in Dubai - UAE (covering Middle East), Lahore - Pakistan
(covering South Asia) and Exton, Pennsylvania - United States of America (covering North America). AVN is also among the select group
of ‘certified members’ of Control System Integrators Association (‘CSIA’) and is also listed on the Control Engineering Magazine’s System
Integrator Hall of Fame.
AVN has been in the automation business for the last 24 years and has transformed into a 360 degree solution provider for automation,
energy management, service and maintenance. Servicing clients over a span of two decades, AVN has completed several projects for major
blue chip companies enabling it to earn strong credentials, move up the learning curve and develop a diverse client base. Going forward,
it intends to capitalize on its CORE strengths to expand its footprint in the Middle East by setting up offices in Qatar, Kingdom of Saudi
Arabia (KSA) and Oman.
ABOUT
World Headquarters 640 Rice Boulevard Exton, PA 19043 p: (610) 458-8700 f: (610) 458-0606 www.avanceon.com
HIGHWAY 50’sHighway 50 is our CORE commitment to Avanceon’s shareholders.
Highway 50 also builds towards its successful realization via its
Critical Goals:
• Live Our Brand
• Increase/ Retain highly trained Human Capital
• Reduce Variability in Our Execution of Our Processes
• Relationship and responsiveness for client success
• Drive after project sales & services
This involves increasing revenues to USD 50 million by 2018 and
implementing our critical goals including the creation of cross-functional
marketing and business development departments in Pakistan as well
as a focus on expanding business in the Middle East region – including
adding an office each in Qatar and the Kingdom of Saudi Arabia.
IN NUMBERSAchieving and sustaining USD 50 million of revenue will allow
us to be better positioned to gain more leverage and bargaining
power when winning bids with multi-national clients, and this will
provide for a more sustainable business. According to the ARC
Advisory Group, USD 50 million companies have more potential in
participating in larger projects such as Public Private Partnerships.
Highway 50’s takes into consideration the organic and geographical
growth of regional partnerships, not only by physical presence but
also by allowing proprietary products offered through Avanceon’s
Specialized Services team, which have been much successful in
Southern Asia.
Avanceon 4 |
GOAL 1 – LIVE OUR BRANDHighway 50’s commitment is also about focusing on driving the
organization towards market-based management, also defined
as service-centric marketing, to ensure customer satisfaction. The
same spirit has been encapsulated in the Customer Bill of Rights
and made possible via the V-Lifecycle process that Avanceon
implements seamlessly.
The Avanceon Brand Value statement differentiates itself through
total customer satisfaction by:
1. Focusing on the business value of improving quality as well
as productivity
2. Understanding that how we achieve our project is as
important as the actual achievement of the project
3. Offering customers a complete system of life cycle support,
training, valued engineering, thereby investing in the value of
partnership
Staying true to these across the Company’s value chain provides the
basis of Avanceon’s Brand.
• Value Engineering with creativity and innovation
• Project Management with teamwork and integrity
• Innovative application of technology and standards
• Agile use of resources with optimum capacity
• Quality and sustainable systems
GOAL 2 – INCREASE AND RETAIN HUMAN CAPITALThe second critical goal is based on Avanceon’s everlasting
commitment to Value its People. This translates as continuous
investment in enhancing and expanding their skills and expertise as
well as training in technology. At Avanceon, we believe that Human
Capital Knowledge is the basis of co-creating value. Key words
towards retention have always been: opportunity, security, ever-
improving work environment and now, to top-it-all, world-class
Employee Stock Option Plan.
GOAL 3 – REDUCE VARIABILITY IN PROCESSEXECUTIONThe third critical goal stems from the variability in execution.
This goal is to implement proper KPIs to continuously eliminate
process deviation. These measurements can then serve as base
for continuous process improvement. This is a key goal in reaching
customer delight in an efficient and agile way.
GOAL 4 – RELATIONSHIPS & RESPONSIVENESS FOR CLIENT SUCCESSClients’ delight is at the core of Highway 50. Contributing to our
Clients’ success is key to Avanceon’s own success.
Drivers have been summarized as follows:
• Having proactive and frank conversations
• Responding to clients’ needs
• Getting involved early in the process
• Addressing surprises
• Realizing opportunities
• Managing expectations
• Managing misperceptions
GOAL 5 – DRIVING AFTER PROJECT SALES & SERVICESAfter Project Sales and Services is one of the critical goals, which will
ensure that Avanceon reaches Highway 50 by 2018. Ultimately, all
the other goals build towards the accomplishment of this particular
one. For Avanceon, the end of the project is the start of a long-
term relationship because the best opportunities are with existing
customers. This in turn provides for continuous value-creation upon
completion of a project.
To secure this, recurring business has to consistently cover
Avanceon’s fixed costs. ‘Recurring business’ refers to repeated new
business and maintenance contracts for the same client from the
After Marketing Sales department. Most critical to all the initiative is
maintaining over 70% Employee Productivity of Billability.
Management Report 2013 5|
INTEGRITY CANDOR
TEAM WORKAGILITY
CREATIVITYQUALITY
SUSTAINABILITY
Avanceon 6 |
MISSIONOur mission is to passionately grow to be the leader of
engineered solutions through inspired development of our teams
and providing the best value to our customers.
MANTRA‘Tomorrow’s Solutions Today’, our mantra is our everlasting
commitment to always move forward and ensure that we always
co-create value with each and every one of our stakeholders.
VALUESOur values are deeply rooted within Avanceon and act as
guide in building Value with both our internal and external
stakeholders. These are the beliefs, which drive our conduct
and serves as base of our business.
PHILOSOPHY
Management Report 2013 7|
Our core values represent who we are and define how we work together towards meeting common goals and achieving success.
Integrity, Candor, Teamwork, Agility, Creativity, Quality and Sustainability
Being ethically unyielding and honest in the way we carry out business in a pro-active and sustainable
way without needing third party monitoring. The TRACE certificate is an example of our integrity.
BUSINESSCONDUCTCORE VALUES
OWNERSHIPOwnership is acting with stewardship to build a better, stronger
and more dynamic anticipated visionary organization.
CUSTOMER FOCUS WITH CUSTOMER DELIGHTKnowing our customers and believing in customer delight, always
anticipating their needs, and being responsive to deliver the best
value internally and externally with innovation.
CONTINUOUS IMPROVEMENTWe foster collaboration, innovation and creativity. We have a
passion for challenges as highly trained individuals and as well-
coordinated teams.
COMMUNITY CAREMaking a positive difference in the lives of the people within the
society we work with and within the communities we operate in,
through sound and impactful investments.
Avanceon 8 |
TRACE CERTIFICATION As at October 1, 2013, Avanceon has been TRACE certified.
“TRACE CERTIFICATION is the comprehensive due diligence
review and approval process that eliminates screening costs
for multinationals and provides certified entities with portable
compliance information. It is the only due diligence review, analysis
and approval process available that allows third parties to own
their verified due diligence reports. The candidate is required
to complete a mandatory anti-bribery training course, adopt
an anti-bribery code of conduct and update their due diligence
information annually. A review that reaches completion will result
in the certification of the third party by TRACE. Certification by
TRACE signifies that the candidate has completed internationally
accepted due diligence procedures and has been forthcoming
and cooperative during the review process. TRACE Certified
companies are ‘pre-vetted’ partners for multinational companies
seeking to do business with suppliers who share their commitment
to transparent business practices.”
CUSTOMER BILL OF RIGHTSAvanceon’s Customer Bill of Rights encapsulates the Company’s
commitment towards its valued customer.
CUSTOMER RELATIONSHIP BILL OF RIGHTS• A harmonious and professional business relationship
• A prompt and honest response to all questions
• Superior product and solution performance
• Superior service and support excellence
• Quality supplies and materials
• Professional innovative and expert guidance
• Every Avanceon Associate will manage the customer’s
money as they would their own
• Courteous treatment from every Avanceon employee and partner
• To be heard
CUSTOMER PROJECT BILL OF RIGHTS• To set specific objectives for the project and have them followed
• To know how long the project will take and how much it will cost
• To decide which features are in and which are out
• To make reasonable changes to the requirements throughout
the course of the project and to know, up front, the cost of
making those changes
• To know the project’s status clearly, timely and confidently
• To be apprised regularly of risks that could affect cost,
schedule and quality, as well as to be provided options for
addressing potential risks
• To have access to project deliverables throughout the project
• To address system acceptance and the human side of change
adoption that every project brings prior to implementation
• To have a plan and option for post project support
Management Report 2013 9|
CORE SERVICES AUTOMATION – The Company provides a wide range of
automation solutions. We have an extensive track record of
execution in diverse application environments combined with
an understanding of technology trends and industry standards.
Our automation solutions address client requirements such as
complexity in handling multiple products, regulatory requirements
and the need for safety, productivity and improved throughput.
AVN’s automation solutions span across several industries including:
• Oil & Gas: Assist companies in implementation of Supervisory,
Control and Data Acquisition [SCADA] solutions
• Food and Beverages: Assist companies to standardize
products and meet precise recipe formulas.
• Power : Enable companies to achieve energy efficiencies
and improve utilization.
• Chemicals: Assist companies in design, development and
improvement of process flows allowing them to increase
profitability and to ensure sustainability during periods of
low economic growth.
• Cement: Assist companies in reducing energy costs and in
achieving energy optimization.
In order to successfully deliver a compelling value proposition,
Avanceon has developed a set of pre-designed and pre-tested
process standards, software codes and supporting documentation
designed to address the client’s technical requirements.
PROCESS CONTROL – Process Control services include
consulting for automation planning and specification development,
process equipment selection and Original Equipment Manufacturer
[OEM] management, electrical and mechanical systems engineering
as well as design and long-term factory support. AVN provides the
following services:
• Batch Engineering: Assist clients in application of the
S88.01 standards which provide a template for meeting
the standard of “best practices” based on their internal
processes.
• Distributed Control System: Provide turnkey
instrumentation and control solutions for a manufacturing
or process facility using Distributed Control Systems [DCS]
or Programmable Logic Controller [PLC] systems with field
integration on multiple protocols
SYSTEM INTEGRATION – The Company offers a full service
platform, independent systems integration offering. We also have
extensive experience in designing, developing and executing
both process and manufacturing controls as well as automation
solutions, which include enterprise level integration. Our solutions
are designed to meet the specific manufacturing requirements
of clients using a choice of “Best in Class” technology platforms
such as Allen Bradley PLC, Honeywell DCS, Invensys Archestra,
Schneider and Microsoft technologies.
PORTFOLIOAvanceon 10 |
SPECIALIZED SOLUTIONSMANUFACTURING EXECUTION – The Company offers
extensive experience in designing, developing and implementing
Manufacturing Execution Systems [MES] that provide real-time
monitoring of quality and productivity to operators, supervisors,
managers and executives. MES solutions apply data collection and
management capabilities to manufacturing processes which aid in
improving productivity, quality and process visibility. MES solutions
facilitate clients to unlock the potential for efficiency savings in
areas such as scheduling, inventory control, product traceability,
downtime, uptime, product specification management and key
performance tracking. Key solutions offered under MES include:
• Overall Equipment Effectiveness [OEE]: AVN assists clients in
closing the technology gap that exists between an enterprise’s
manufacturing floor and its Information and Enterprise
Resource Planning (ERP) systems. These solutions span
strategic technology planning, the establishment of internal
practices & standards, and managing and executing IT projects.
• Mobile Solutions: Mobile computing solutions allows clients
to create, access, process, store and communicate information
without being constrained to a single location.
• Hazard Analysis Critical Control Point [HACCP]: HACCP is
a food industry safety program developed to help prevent
food contamination and enable more efficient government
oversight of the food production process.
The following solutions are widely demanded in Oil & Gas
(both upstream and downstream), Petrochemicals, Chemicals,
Pharmaceuticals, Pulp, Paper and Printing, Metals, Cement and Power.
To ensure increased revenues, reduced operating costs and improved
efficiencies for manufacturers, Avanceon provides solutions in:
• Manufacturing Execution Systems
• Plant Information Management Systems
• Real-time process optimization through Advanced Process
Control technologies
• Customized Software Development services for process and
manufacturing industries
AVN supports manufacturers in the complete lifecycle
implementation of an MES application from systems and
requirements definition to technology selection, pilot phase,
implementation and rollout. AVN supports all phases of the MES
implementation. As such, we utilise superior project and change
management methodology in line with the initial MES vision and
the existing context. It has the ability to help manufacturers define
MES standards and practices that provide the overall structure and
strategy for company-wide rollout and adoption.
PLANT INFORMATION MANAGEMENT SYSTEM –Avanceon offers scalable and extensible software information
management to decision makers to visualize and analyse their
processes faster and more effectively, which:
• Collects real-time data from multiple process control
systems
• Archives data for longer term
• Delivers secure and reliable plant floor information
Management Report 2013 11|
Our information management tools create custom displays for
process and operations data, including schematics, animations, trends,
alerts, notifications and custom reports.
ADVANCED PROCESS CONTROL – The key challenge
for operators of refining, chemical and petrochemical plants is
to maintain processes at their optimal operating point while
simultaneously maintaining multiple safety margins at acceptable
levels. Our solutions helped customers achieve:
• Improved product yield
• Reduced specific energy consumption
• Increased throughput capacity
• Improved product quality and consistency
• Reduced environmental emissions
By implementing advanced process control, benefits ranging from
1-2 years of return on investments can be achieved. These benefits
are clearly enormous allowing plants to be operated to their
designed capacity and increasing customer bottom line.
ENERGY MANAGEMENT SOLUTION [EMS] – EMS consists
of turnkey energy management and optimization solutions.
These are robust and certified solutions developed using best
practices and enable significant improvements in monitoring
controls and management of existing utility and process control
systems; providing saving opportunities in steam, pneumatics, fluid
movement, chilling and heating to reduce losses in production and
carbon emission. The Company has developed proprietary EMS
suites such as:
• Energy Dashboard: A complete service offering platform for
the monitoring of energy consumption in different business
units of a plant remotely from anywhere in the world
• iWater: Water is a big energy cost-center in most industries.
Through iWater, AVN offers a proprietary solution, which
reduces energy consumption.
• iBoiler : Helps clients optimize their boiler performance. It
measures and reduces fuel usage of boilers through optimized
load sharing and reduced emission and steam distribution
losses.
• iAir : Measures and reduces electricity usage of air compressors
through optimized load sharing, reduced header pressure,
elimination of leaks and pressure drops and heat recovery.
• iDC: An energy management package for District
Cooling Systems.
Avanceon 12 |
AFTER MARKET SOLUTIONSAfter Market Solutions [AMS] provide complete lifecycle support services including: manufacturing technical support, maintenance
management, control system oversight and remote diagnostic services to maximize plant uptime performance, support efficiency and
technology effectiveness. AVN delivers its AMS services through a combination of call centers which enable the problem to be identified
and resolved either through on-site maintenance or remotely. These solutions are offered with 24/7 support and guaranteed response
time allowing AVN to stay ahead of its competitors.
SERVICE LEVEL AGREEMENTS [SLA] – SLAs allow AVN to
offer after market support solutions on a contractual basis and
enables it to generate recurring revenues following completion
of CORE services. Technical teams schedule an assessment of the
facility to determine service needs, conduct an in-depth interview
and then submit a service proposal. The proposal provides specific
SLAs and prices that are tailored to the customer. These SLAs are
offered with the option to maintain an inventory of spares i.e.
Gold contracts or as plain vanilla services i.e. Silver Contracts.
STRATEGIC SITE IMPROVEMENT PROGRAMS – AMS
team prepares ‘readiness for disaster recovery’ by maintaining
up-to-date systems documentation and control & system
software archives. The team also implements ‘Best Practices’
by maintaining instrumentation maintenance schedules and
calibration procedures.
TRAINING SOLUTIONS FOR MANUFACTURING – Quality
training addresses early assessment, information development,
delivery and results verification. AVN’s training, adapted to
address the client’s business needs, is based on the client’s overall
business goals and serves as an inexpensive alternative to address
many quality and inefficiency issues.
EMERGENCY RESPONSE SUPPORT – Designated team of
expert(s) reach on site within an agreed time frame to address
an emergency. It also includes Crises Management service which
is developed for risk mitigation and disaster recovery plans for
manufacturing control base.
Management Report 2013 13|
Name of the company Avanceon LimitedYear of Compliance From January 1, 2013 to December 31, 2013
This statement is being presented to comply with the Code of Corporate Governance contained for the purpose of establishing a framework
of good governance, whereby a public limited company is managed in compliance with the best practices of corporate governance.
The Company has applied the principles contained in the Code in the following manner:
1. The Company encourages representation of independent non-executive directors and directors representing minority interests on its
Board of Directors. At present the Board has following structure:
Sr. No. Name of Director Category of Directors Independent Non-Executive Executive
(3) (5) (2)
1 Mr. Bakhtiar H Wain n/a n/a Yes
2 Mr. Kahlid H Wain n/a Yes n/a
3 Mr. Amir W Wain n/a Yes n/a
4 Mr. Tanveer Karamat n/a n/a Yes
5 Mr. Tajammul Hussain Yes Yes n/a
6 Mr. Umar Ahsan Khan Yes Yes n/a
7 Mr. Naveed A Baig Yes Yes n/a
2. The directors have confirmed that none of them is serving as a director in more than ten listed companies, including this Company.
3. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a
banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange.
4. The Company has prepared a ‘Statement of Ethics and Business Practices’, which has been signed by seven out of nine directors and
majority of the employees of the Company.
5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the Company. A complete
record of particulars of significant policies along with the dates on which they were approved or amended has been maintained.
6. All the powers of the Board have been duly exercised and decisions on material transactions, including appointment and determination
of remuneration and terms and conditions of employment of the CEO have been taken by the Board.
7. The meetings of the Board were presided over by the Chairman and, in his absence, by one of the directors present elected by the
Board for this purpose and the Board met at least once in every quarter. Written notices of the Board meetings, along with agenda
and working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded
and circulated.
STATEMENTOF COMPLIANCE
WITH THE CODE OF CORPORATE GOVERNANCE
Avanceon 14 |
8. The appointments of CFO, Company Secretary and Internal Audit (Outsourced), including their remuneration and terms and conditions
of employment & contract have been duly approved by the Board. The positions of the CFO and Company Secretary were held by
the same person during compliance period.
9. The Directors’ Report for this year has been voluntarily prepared in compliance with the requirements of the Code and filed with
SECP.
10. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the Board.
11. The directors, CEO and executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of
shareholding.
12. The Company has complied with all the corporate and financial reporting requirements of the Code.
13. The related party transactions have been placed before the audit committee and approved by the board of directors with necessary
justifications for non-arm’s length transactions and pricing methods for transactions that were made on terms equivalent to those that
prevail in the arm’s length transactions that were made on terms equivalent to those that prevail in the arm’s length transactions only
if such terms can be substantiated.
14. The Board has formed an audit committee. It comprises four members, all of whom are non-executive directors including the
Chairman of the committee.
15. The meetings of the audit committee were held at least once every quarter prior to approval of interim and final results of the
Company and as required by the Code. The terms of reference of the committee have been formed and advised to the committee
for compliance.
16. The Board has set-up an effective internal audit function who are considered suitably qualified and experienced for the purpose and
are conversant with the policies and procedures of the Company and they are involved in the internal audit function on a full time
basis.
17. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control
Review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses
and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International
Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan.
18. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance
with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard.
Chairman Chief Executive
Mr. Khalid Hameed Wain Mr. Bakthiar Hameed Wain
Management Report 2013 15|
Avanceon 16 |
CORPORATE GOVERNANCE
ANDMANAGEMENT
SECTION II
Management Report 2013 17|
Khalid H. Wain Chairman
Khalid brings over 38 years of international sound expertise in
electrical engineering, cost engineering, project management and
business strategy to the Avanceon board of directors. Khalid
currently holds the position of VP at H&G Control, which he owns
and operates in Canada. H&G Control designs and manufactures
customized electrical control panels. He is also the co-founding
partner and director of Innovative Pvt. Ltd in Pakistan. Khalid
graduated in electrical engineering from University of Engineering,
Lahore, in 1976. His entrepreneurial acumen led him to drive
business in South Asia, the Middle East, the United States and now
Canada. Khalid Wain was selected as Chairman of the Board for
his international business knowledge and extensive experience of
companies in the technological sphere.
Bakhtiar H. WainFounder and Chief Executive Officer
Brings over 28 years of exemplary leadership. An engineer with
experience within leading global companies such as Exxon
Chemicals, Fauji Fertilizer and ICI Ltd. He founded Avanceon in
1984 and holds the position of Chief Executive Officer today.
His entrepreneurial drive found its roots in his faith towards the
educated and technically qualified human resources of Pakistan.
At the onset, he wanted to build a company that could capitalize
and promote this conviction globally, which he has implemented
successfully ever since. Appointed CEO by the Board of Directors,
he has spearheaded Avanceon towards market leadership in
Pakistan and beyond.
DIRECTORS’PROFILE
Tanveer Karamat Chief Operating Officer
Brings a wealth of international business experience to
Avanceon. 20 out of 28 years were spent in selling automation
solutions to the oil and gas sector. After receiving a Bachelor’s
degree in Chemical Engineering from the University of Punjab
he embarked on his career as an Application Engineer at Zelin
PVT Ltd in 1986. Developing his sales, management and business
skills at key industry companies such as Wartsila NSD as well as
Honeywell where he held the position of Country Head, Tanveer
joined Avanceon in 2003 as Regional Manager. He transformed
the South Region revenues in less than three years with wise
strategic counsel, capitalising on a dormant customer base and
an internal reshuffle. He was promoted to GM Operations in
2006 before becoming COO in 2011. Over the past decade,
Tanveer’s leadership has been a major contribution towards
building company value. He was included as member of the
Board of Directors to help the board make informed decisions.
Amir W. WainDirector
Brings over 25 years of international expertise within the information
technology and payments industries. Amir is founder and CEO of i2c,
a global provider of payment processing and emerging commerce
solutions, where he is responsible for defining the company’s vision
and strategic direction. After graduating from the University of
Texas with a Computer Science and Engineering degree, Amir
founded Innovative Private Limited in 1987. Propelled by the success
of Innovative, he founded i2c in 2001 to bring next-generation
processing solutions to the payments industry. Under Amir’s guidance,
i2c has expanded dramatically and brought a number of industry
firsts to market, including card-linked offers, event-driven account
holder communications and gift card voice personalization. Today, as
market opportunities for payments & emerging commerce expand
at a dramatic rate, Amir is leading i2c’s continued push to innovate
the enabling infrastructure and solutions that transform commerce.
He was appointed to the Avanceon Board of Directors to advise on
innovation and business strategy..
Avanceon 18 |
Tajammal HussainDirector
Brings 25 years of international accounting and finance acumen
to the Avanceon Board of Directors. Practicing as a Chartered
Accountant with Fakharuddin Yousafali & Co since 1989, Tajammal
oversees and maintains high quality outsourcing, financial and
accounting services to a wide variety of global and local commercial
enterprises. Tajammal Hussain comes with a broad spectrum of
expertise and, besides Avanceon, he also sits on the boards of
Xavor Pakistan and Kashf Foundation. He also holds an MPhil from
the University of Cambridge and BSc from the London School
of Economics & Political Science both in Economics and qualified
as a Chartered Accountant in 1988 from the UK. Tajammal was
selected as director because of his integrity and the values that
he shares with the Company. He advises on risk management and
financial strategy, which are amongst the strengths he brings to the
Avanceon Board.
Naveed Ali Baig Director
Brings over 28 years of international business acumen to the
Avanceon board of directors. Having 11 years of achievements as
Chief Operating officer, Naveed was appointed Chief Executive
Officer at Innovative Pvt in 2011, where he spearheads the success
of his company through sound employee-centric management.
Prior to joining Innovative, he worked for multi-nationals such
as Gallup International and Ferguson Associates, affiliate of
PriceWaterhouseCoopers. He did his post-graduate studies in
Systems Analysis and Design from IBA. Naveed was selected as
director because of his constructive and inspiring leadership, which
are amongst the strengths he shares with the Avanceon Board.
Umar Ahsan KhanDirector
Brings over 24 years of strategic accounting, finance and business
management experience to the Avanceon Board of Directors.
He currently holds the position of Chief Financial Officer of the
Dawlance Group, which is the leading home appliances company
in Pakistan. Umar oversees and supports all aspects of the group,
which has a direct impact on its financial performance. Umar has
been the key catalyst as advisor for business process reengineering
and group restructuring over the past 4 years. Prior to joining
Dawlance, he had worked his way up from trainee to corporate
finance manager at ICI Pakistan Limited, which was then a part
of the Fortune 500 company, Akzo Nobel. He holds a BSc and
an MSc in Accounting and Finance from the London School of
Economics & Political Science. Umar was appointed as a director
because of his strategic and hands-on perspective of business and
financial management, which are amongst the strengths he brings
to the Avanceon Board.
Management Report 2013 19|
CORPORATE GOVERNANCE POLICY
Corporate governance is a system of structures and processes for the direction and control of organizations. It is a process through which balance of duties and responsibilities between shareholders, management and the board are defined, enabling an organization to maintain the right balance of power and accountability while striving to achieve its objective of enhancing shareholder value.
COMPOSITION OF BOARD AND DIRECTORS’ INDEPENDENCEIn line with good governance practice, the Chairman of the Board is
a non-executive director representing minority interest. The Board
comprises of 7 directors out of which 5 are non-executive directors,
including 3 representing minority interests. The roles of The
Chairman and the CEO have been clearly defined and segregated.
The CEO is responsible for operations of the Company whereas
the board under the Chairman performs oversight responsibilities.
PERFORMANCE EVALUATION OF THE BOARDThe Board has set the following broad criteria for evaluation of its
performance being the trustee of the shareholders:
• Review of the business risks, strategic plans, significant policies,
financial structure, monitoring and approval
• Monitor Company’s performance against the planned
objectives and advise the management on strategic initiatives
• Ensuring maximum attendance at board meetings to enhance
the quality of decision making as well as effective discharge of
its roles & responsibilities
• Compliance with the applicable laws & regulations including
the Memorandum and Articles of Association of the Company
• Ensuring orientation of the Board of directors including new
appointments so that each member is fully aware of his roles
& responsibilities
• Establishing adequate internal control system in the Company
and it’s regular assessment through internal audit activities
MANAGEMENT INITIATIVES ON CORPORATE GOVERNANCEIn order to orient the key management personnel of the corporate
governance concepts and best practices, the Company conducted
two workshops where different moderators covered varied topics
on corporate governance: the role, importance & structure of
the Board; strategic planning through various models and analysis
matrices; succession planning; risk management and internal controls.
ETHICSEthics are an integral part of the culture at Avanceon & guide the
behavior and conduct of all employees enabling them to meet
objectives efficiently, transparently and fairly. There is a comprehensive,
well-structured ethics program, based on a code of conduct, which
has been approved by the Board and is applicable to all employees.
The ethics program includes:
• Code of ethics
• Training for employees
• Means of communicating
• Mechanism to report wrongdoing
• System for detection and conducting inquiries
• Taking corrective action
The code of ethics is supplemented by various function specific
codes, which include:
Avanceon 20 |
We have a comprehensive,
well-structured ethics p
rogram, based on a
code of conduct.
Financial code of ethics –This code defines the acts and omissions
to be followed by senior executives, especially those responsible for
public disclosure and financial information.
Early warning procedure – The Company has an elaborate
whistle blowing policy, relative to financial, accounting, internal
control and anticorruption matters. Global as well as local channels
are defined for employees to communicate their concerns.
Principles of good promotional practices – Defines the
fundamental promotional rules recommended by the consulting firms.
Personal data protection charter – This charter outlines
Avanceon corporate rules for the collection, processing, use
dissemination, transfer, and storage of personal data in order to
secure an adequate level of protection within the Avanceon group.
Code for prevention on insider trading – Defines rules for
prevention of insider trading with Avanceon.
Ethical charter for clients – This document defines the rules
applicable to and the behaviour required from all Avanceon
employees who are involved in the business process with clients.
Management Report 2013 21|
INTEGRITYAvanceon does not use bribe as an instrument for any business or
financial gain. Employees are not authorized to give or receive any
gift or payment which may be construed as such. Employees are also
required to avoid engaging in any personal activity or financial interests/
gains which would conflict with their responsibility to the Company.
ROLE OF THE BOARD OF DIRECTORSThe Board has a fiduciary responsibility for the proper direction and
control of the activities of the Company. This responsibility includes
such areas of stewardship as the identification and control of the
Company’s business risks, the integrity of management information
systems and clear, transparent reporting to shareholders. The Board
accepts its primary responsibility for the overall control architecture of
the Company. However, it recognizes that the internal control system
has to be cost effective and that no cost effective system will preclude
all errors or irregularities. The system is based upon written procedures,
policies, guidelines, an organogram that provides an appropriate
division of responsibility, a program of internal audit, manning of all key
functions by qualified personnel and constant training.
BOARD OF DIRECTORS REMUNERATIONMajority of directors of the Company are Non-Executive except
for the Chief Executive Officer (CEO) and Chief Operating
officer (COO). The CEO and COO are paid fixed salaries as per
Company’s HR policies and salary levels; performance of CEO
& COO are evaluated against approved criteria by the Human
Resource and Remuneration Committee and recommended to the
Board for approval. No other directors are being paid for attending
board meetings.
CODE OF CONDUCTThe Board has adopted a code of conduct for its members,
executives and staff, specifying the business standards and ethical
considerations in conducting its business. The code includes:
• Corporate governance
• Relationship with employees, customers and regulators
• Confidentiality of information
• Trading in Company’s shares
• Environmental responsibilities
BUSINESS GOVERNING PRINCIPLES & VALUES
Avanceon [AVN] conducts its business in a responsible manner and with honesty, and integrity. We also have the same expectations from all those with whom we have relationships. We insist on doing what is right which sets the tone of our actions and underpins the functioning of our employees. We also insist that all transactions be open, transparent and within the legal framework culminating in responsible and accurate financial reporting.
Avanceon 22 |
COMMITTEESThe Board has constituted the following committees:
• Audit Committee
• Human Resource and Remuneration Committee
• Governance and Evaluation Committee
Through its committees, the Board provides proactive oversight in some of the key areas of business and the performance of CEO. The
Board regularly reviews the respective charters of these committees.
AUDIT COMMITTEEThe Audit Committee operates under a charter approved by the
Board. The governing charter of the Audit Committee addresses
the requirement of the code of corporate governance issued by
the SECP and includes the requirements of best practices. The
Committee is accountable to the Board for the recommendation
of appointment of external auditors, directing and monitoring
the audit function and reviewing the adequacy and quality of the
audit process. The CEO and CFO are responsible for the accuracy
of financial information for inclusion in the annual report; the
Committee provides the Board with additional assurance.
The Committee also ensures that the Company has an effective
internal control framework. These controls include safe-guarding of
assets, maintaining of proper accounting records complying with
legislation and ensuring the reliability of financial information.
HUMAN RESOURCE AND REMUNERATION COMMITTEE (HR & R)The HR & R Committee reviews the human resource architecture
of the Company and addresses the requirement of the Code of
Corporate Governance. The Committee has been constituted
to address and improve the crucial area of human resource
development. Its aim is to assist the Board and guide the
management in the formulation of the market driven HR policies
regarding performance management, HR staffing, compensation
and benefits. The expanded role of the Committee is to review
CEO performance and recommend CEO compensation for
the approval of the Board. Further, the selection, evaluation and
compensation of COO, CFO, Company Secretary and Internal
Audit function is also reviewed and recommended to the Board
by the Committee.
GOVERNANCE AND EVALUATION COMMITTEEThe role of Governance and Evaluation Committee is to assist the
Board in the discharge of its function as well as compliance with the
Company’s governing principles. The Committee takes a leadership
role in shaping the code of business conduct (governing principles)
in order to keep them in line with International best practices.
The committee will also monitor compliance with the Code of
Corporate Governance other than those areas which fall under the
oversight of the Audit Committee. The Committee also reviews
from time to time, the adequacy of succession and alignment of
key factors with the Company strategy. Further, the Committee
evaluates the Board’s Performance in line with the methodology
approved by the Board and recommends the same to the Board
for their review and approval.
BUSINESS STRATEGY COMMITTEE(As disclosed in corporate strategy section)
Management Report 2013 23|
RESPONSIBILITY TO STAKEHOLDERSOur primary purpose is to run our business efficiently and profitably to enhance shareholders’ value but we do it with responsibility to all
stakeholders. Profitability is essential to discharge this responsibility and the corporate resources are primarily deployed in the achievement
of this end. However, the Company does not operate in isolation with its environment and accordingly feels responsible to all stakeholders
which are:
• Our Shareholders: To protect shareholders’ investments and provide an acceptable return to them
• Our Customers: To win and maintain customers by developing and providing products and services, which offer value in terms of price,
quality, safety and environmental impact supported by requisite technological expertise
• Our People: To respect the human and legal rights of its employees with good and safe conditions of work and competitive terms of
service
• Our Business Partners: To seek mutually beneficial relationships with contractors and suppliers of goods and services to the Company
• Our Society: To conduct business as a responsible member of society, to observe laws, express support for basic human rights and give
proper regard to health, safety and environment not only at our various campuses but also beyond, extending it to society at large
SERVICE TO SOCIETYWe are committed to be active as responsible corporate citizens. We believe in “giving something back” by helping address issues such
as education, healthcare, public safety, environmental health etc. This is also arising from our belief that individual entities when they work
together can create powerful synergies and help to improve the conditions of the society in which they are operating.
HEALTH, SAFETY AND ENVIRONMENTAt AVN, we take maintenance of health and safety standards at our
working sites and offices seriously. We are committed to actively
managing health and safety risks associated with our business
and are actively working towards improving our procedures to
reduce, remove or control the risk of fire, accidents or injuries to
employees and visitors.
We ensure that our equipments and engineering solutions are
shipped in a safe manner complying with the safety standards and
legal requirements.
ROLE OF SHAREHOLDERSThe Board aims to ensure that shareholders are informed of all
major developments affecting the Company’s state of affairs.
Information is communicated to the shareholders in the annual
report, interim quarterly reports and through information portal of
Karachi Stock Exchange and Lahore Stock Exchange as and when
required. The Board encourages the shareholders’ participation at
the Annual General Meetings to ensure a high level of accountability
and participation. This is why we are arranging our AGM in Karachi
instead of Lahore, since majority of our retail investors belong to
Karachi. The Company’s financial statements are available on the
Company’s website and an officer is designated to answer all
shareholder enquiries.
Avanceon 24 |
CORPORATE STRATEGYOur strategy setting and reviews are conducted annually by a
designated Business Strategy Committee that drives and channels
the process.
The Committee, comprising of our executive team, conducts an
extensive ‘SWOT analysis’ regarding the business, by assessing
internal and external issues and dependencies, counter measures,
new opportunities and strengths. Using Balanced Scorecard
approach, the Committee agrees on a strategic direction and
objectives under the four defined perspectives:
1. Financial & Customer Perspective
2. Internal / Operational Perspective, and
3. Innovation / Learning Perspective
At the core of strategy review and development process is
alignment with our mission, vision and values. The process of
translating the vision helps the leadership team build a consensus
around the organization’s vision and strategy that helps to align
operational terms that provide useful guides to action at the local
and unit levels.
To enable our people to act on the vision and strategy, we close in
on integrated set of objectives and measures, agreed upon by all
senior executives, which describe the long-term drivers of success
for our business. The Business Strategy Committee ensures that
everyone understands the long term goal of the Company and
that departmental and individual goals are aligned with them. We
measure and realign performance at the individual, departmental
and entity level through regular feedback enabling real time learning
and calibration.
Enhancing shareholder value through cost and quality leadership
lies at the core of our corporate strategic objectives. We do this by
ensuring that we hold strong to our mission and values by acting
responsibly, maintaining cost and quality leadership and seeking
to attract, develop and retain talent. Our operational strategy is
centred on:
• Customer Focus
• Strong capital and financial position
• Conservative, sound risk management
• Operational agility: people development and process
improvement to enhance quality and productivity
• Ethical behavior, observing the letter and the spirit of rules and
regulations
• Leveraging our human capital alongside information systems
infrastructure
HOLDING STRUCTURE
AVANCEONLIMITED
PAKISTAN
AVANCEON FZE 100%
UNITED ARAB EMIRATES
AVANCEONLP 26%
UNITED STATES
AVANCEONGP 26%
UNITED STATES
Management Report 2013 25|
COREMANAGEMENT
CEO
GM QatarCountry Manager(UAE)
Project Manager(UAE)
BusinessManagerSoftware
Development
ManagerIX
Team Leads IX
ProjectManagers
North
EngineeringTeam on
InternationalAssignments
SoftwareDevelopment
Pool
IXDevelopment
PoolTeam Lead
TraineeEngineers
ApplicationEngineers
Pool
Manager Engineering
Manager International
Projects
Marketing Head
BusinessDevelopment
Lead
UAE Business Support Staff
COO
Avanceon 26 |
CHIEF EXECUTIVE OFFICERBakhtiar H. WainFounder and Chief Executive Officer
Brings over 28 years of exemplary leadership. An engineer with experience within leading global companies such as Exxon Chemicals, Fauji
Fertilizer and ICI Ltd. He founded Avanceon in 1984 and holds position of Chief Executive Officer today. His entrepreneurial drive found its
roots in his faith towards the educated and technically qualified human resources of Pakistan. At the onset, he wanted to build a company
that could capitalize and promote this conviction globally, which he has implemented successfully ever since. Appointed CEO by the Board
of Directors, he has spearheaded Avanceon towards market leadership in Pakistan and beyond.
InformationTechnology
RecruitmentTraining
&Development
Comp & Ben Travelling
Administration
Admin Lead Infrastructure
Admin Pool Support
HumanResources
Financial Controller
Manager ERPCorporate
Manager HR
Engineering and Support Hiearchy
Management Report 2013 27|
CHIEF OPERATING OFFICERTanveer KaramatChief Operating Office
Brings a wealth of international business experience to Avanceon. 20 out of 28 years were spent in selling automation solutions to the oil
and gas sector. After receiving a Bachelor’s degree in Chemical Engineering from the University of Punjab he embarked on his career as
an Application Engineer at Zelin Pvt. Ltd in 1986. Developing his sales, management and business skills at key industry companies such as
Wartsila NSD as well as Honeywell where he held the position of Country Head, Tanveer joined Avanceon in 2003 as Regional Manager.
He transformed the South Region revenues in less than three years with wise strategic counsel, capitalising on a dormant customer base
and an internal reshuffle. He was promoted to GM Operations in 2006 before becoming COO in 2011. Over the past decade, Tanveer’s
leadership has been a major contribution towards building company value. He was included as member of the Board of Directors to help
the board make informed decisions.
Core Services - Sales Hierarchy
COO
General ManagerSales & Marketing
ABSBusiness Manager
Sales Team Sales Team RemoteProposal Team
Sales Team Sales Team
Systems ABS/Products
ProductsManager
SystemManager
RegionalManager - South
North South
Avanceon 28 |
Specialized Services - Sales Hierarchy
COO
HES North SouthBusiness Manager
EMS North SouthBusiness Manager
AMSManager
EnergyEngineer
ManagerEMS
AMSTeam
AMSTeam
AMSNorth
AMSSouth
Management Report 2013 29|
2013 2012 ------ (Rupees in ,000) ------Operating results (standalone)
Profit before tax 463,467 538,075*
Provision for taxation (24,949) (28,764)
Profit after taxation 438,518 509,312
*Rs. 190m restructuring gain is included
Subsequent AppropriationsThe Directors have recommended a cash dividend of Rs. 151 million (2012: Rs. Nil) per share along with a 5% bonus issue (2012: 88.75%).
According to the following appropriations have been made:
Profit available for Appropriation 453,974 414,646
Appropriation:
Proposed dividend @ 20% (2012: Nil) (151,000) Nil
Reserve for issuance of Bonus Share @ 5% (2012; Nil) ( 37.750) (355,000)
Unappropriated profits carried forward 265,224 59,646
Operating results (consolidated)
Profit before tax 436,242 791,356*
Provision for taxation (24,949) (28,764)
Profit after taxation 411,293 762,592
*Rs. 190m restructuring gain is included
DIRECTORS’REPORT
THE REPORT
The Directors of the Company take pleasure in presenting their report together with the Company’s audited annual financial statements for the year ended December 31, 2013. The Directors’ Report, prepared under section 236 of the Companies Ordinance, 1984 will be put forward to the members at the 11th Annual General Meeting of the Company to be held on April 22, 2014.
Avanceon 30 |
EARNINGS PER SHARE (STANDALONE)The basic earnings per share after tax is Rs. 5.81(2012: Rs. 6.75)
EARNINGS PER SHARE (CONSOLIDATED)The basic earnings per share after tax is Rs. 5.45(2012: Rs. 10.10)
IPO AND EMPLOYEE SHARE OPTION SCHEME (ESOS) During the year, the company offered 25.166 million ordinary
shares in order to achieve business objectives of profile
uplifting, employee retention through Employee Share Option
Scheme (ESOS) and business expansion & capacity building.
Out of these, 18.875 million shares were subscribed through
Book Building process at a price of Rs. 14 per share and the
remaining share of 6.292 million were offered to the general
public at the same price. Book Building and the public issue
were both over-subscribed respectively which reflects the
investors’ confidence in the Company’s future. Before IPO, the
Company offered 4.2 million shares options under Avanceon
Employee Share Options Scheme of the Company at minimum
of Rs. 1 (with 90% discount to the face value).
BOARD OF DIRECTORS The Board comprises of two executive and five non-executive
directors including three independent directors. All the
directors keenly take interest in the proper stewardship
of the Company’s affairs. The non-executive directors are
independent of management of the Company.
STATEMENT OF DIRECTORS’ RESPONSIBILITIESThe Board regularly reviews the Company’s strategic direction.
Annual plans and performance targets for business are set by
the Chief Executive and are reviewed in total by the Board
in the light of the Company’s overall objectives. The Board is
committed to maintain the high standard of good corporate
governance. The Company has been in compliance with the
provisions set out by the Securities and Exchange Commission
of Pakistan and accordingly amended listing rules of the stock
exchanges.
Following are the Statements on Corporate and Financial
Repor ting Framework:
a) The financial statements, prepared by the management of the
Company, present its state of affairs fairly, the results of its
operations, cash flows and changes in equity.
b) Proper books of accounts have been maintained by the Company
c) Appropriate accounting policies have been consistently
applied in preparation of financial statements and accounting
estimates are based on reasonable and prudent judgment.
d) International Financial Reporting Standards, as applicable in Pakistan,
have been followed in preparation of financial statements.
e) The system of internal control is sound in design and has been
effectively implemented and monitored.
f) There are no doubts upon the Company’s ability to continue
as going concern.
g) There has been no material departure from the best practices of
the Corporate Governance, as detailed in the listing regulations.
Management Report 2013 31|
THE CORPORATE GOVERNANCE PRACTICESThe Board of Directors of Avanceon is committed to the principles
of good Corporate Governance. The stakeholders expect that
the Company is managed and supervised responsibly and proper
internal controls and risk management policy and procedures are
in place for efficient and effective operations of the Company,
safeguarding of assets, compliance with the laws and regulations
and proper financial reporting in accordance with the International
Financial Reporting Standards.
DONATIONThe Company has a policy to donate maximum up-to 1% of it’s prior
year’s profit before tax to a charitable institution.
CONTRIBUTION TO NATIONAL EXCHEQUERDuring the year under review, the Company contributed Rs.104
million towards the National Exchequer on account of various
government levies, taxes and import duties. Payment of these
taxes which is 2% higher than previous year shows the Company’s
positive attitude towards development of economy and fulfilling its
responsibility as a good corporate citizen.
SAFETY, HEALTH AND ENVIRONMENTBeing a responsible corporate citizen, we are actually aware of
our responsibility to provide a safe and healthy work environment
to our associates. We make every effort to eliminate workplace
hazards and provide safe, healthy and comfortable working
conditions for our employees. Our safety culture is founded on
the premise that all injuries are preventable. To this end, we have
established “zero accidents and zero injuries” as our goal. We
pursue this goal through a culture of continuous improvement
in which all incidents are reported and investigated, and the root
causes are resolved. We believe that safety and health is a journey
of continuous improvement and eternal diligence. We will continue
to take steps to improve the safety and health of all our associates.
CODE OF CONDUCTThe Company has prepared a ‘Code of Conduct’, which has been
disseminated throughout the Company.
The basic philosophy underlying this Code is to conduct business
operations with honesty, integrity and openness, and with respect
for human rights and interest of the employees. The Company
respects the legitimate interest of all those with whom it has
relationships - Government, Employees, Shareholders, Business
Partners and the Society and Communities in which it operates.
These business principals cover the areas like Public Activities,
Environment, Innovation, Competition, Business Integrity and
Conflict of Interest.
Compliance with this Code is an essential element in business success.
Avanceon 32 |
The Board of Directors is responsible for ensuring that this code is
communicated to and understood and observed by all employees.
Day-to-day responsibility is delegated to the senior management.
They are responsible for implementing this Code, If necessary,
through more detailed guidance tailored to business needs.
AUDIT COMMITTEEAudit Committee was established by the Board to assist the directors
in discharging their responsibilities for Corporate Governance,
Financial Reporting and Corporate Control. The committee consists
of three members. Majority of members including the Chairman of
the Committee are non-executive and independant directors.
This Committee reviews the financial and internal reporting process,
the system of internal controls, management of risks and the internal
and external audit processes. An independent internal audit function
reports to the committee regarding risks and internal controls across
the organization. The Audit Committee receives reports from the
external auditors on any accounting matter that might be regarded
as critical. The detailed Charter of the Audit Committee developed
in accordance with the Code of Corporate Governance is contained
in the listing regulations of the stock exchanges.
The Audit Committee has reviewed the quarterly, half yearly
and annual financial statements along with consolidated financial
statements, besides the internal audit plan, material audit findings
and recommendations to the internal auditor.
HUMAN RESOURCE AND REMUNERATION COMMITTEEHuman Resource and Remuneration Committee was established by
the Board to assist the directors in discharging their responsibilities
with regard to selection, evaluation, compensation and succession
planning of key management personnel. It is also involved in
recommending improvements in Company’s human resource
policies and procedures and their periodic review. The Committee
consists of three members. Majority of members including the
Chairman of the Committee are non-executive directors.
During this year, no Human Resource Committee meeting was held.
MANAGEMENT COMMITTEEThe Management Committee ensures that a proper system is
developed and working that enables swift and appropriate decision
making. It acts in an advisory capacity to the Chief Executive at
the operating level, providing recommendations relating to
business and other corporate affairs. It is responsible for reviewing
and forwarding long-term plans, capital and expense budget
development and stewardship of business plans. The Committee is
organized on a functional basis and meets regularly to review the
performance of each function against set targets.
Management Report 2013 33|
EMPLOYEES’ RETIREMENT BENEFITSThe Company operates defined contribution plan for its permanent employees through a recognized provident fund trust.
The break-up of investment in terms of investment and percentage of the size of the provident fund are as follows:
Government Securities
Scheduled Banks
Other Mutual Funds
Listed Securities
2013(unaudited)
2012(audited)
Investement asInvestments % of size of the (Rupees) fund
32,225,850 67%
5,503,952 11%
6,769,132 14%
3,940,195 8%
48,439,129
Investement asInvestments % of size of the (Rupees) fund
18,000,000 46%
2,211,365 6%
14,568,179 37%
4,282,586 11%
39,062,130
Investments out of provident fund have been made in accordance with the provisions of the section 227 of the Companies Ordinance, 1984
and the rules formulated for this purpose.
OPERATING & FINANCIAL DATAOperating and financial data and key ratios of the Company for the
last six years are annexed.
PATTERN OF SHAREHOLDINGThe pattern of shareholding as at December 31, 2013 is annexed.
The Directors, Chief Executive, Chief Financial Officer, Company
Secretary and their spouse and minor children have made no
transactions of the Company’s shares during the year, except those
reported in pattern of shareholding.
STATUTORY AUDITOR OF THE COMPANYThe present Auditors, M/s. Ernst & Young Ford Rhodes Sidat
Hyder & Co. Chartered Accountants, retire and being eligible,
offer themselves for re-appointment. The Audit Committee of
the Company has been recommended their re-appointment as
Auditors of the Company for the year ending December 31, 2014.
COMMUNICATIONCommunication with the shareholders is given a high priority.
Annual reports are distributed to them within the time specified in
the Companies Ordinance, 1984. The Company also has a website,
www.avanceon.com, which contains up to date information on
Company’s activities and financial reports.
For and on behalf of the BOARD OF DIRECTORS
Mr. Bakthiar H WainDirector, Chief Executive Officer
Avanceon 34 |
ANALYSIS OF FINANCIAL STATEMENTS (Consolidated) Balance Sheet (Rupees in million) Particulars 2013 2012 2011 2010 2009 2008
Non-Current Assets
Property plan and Equipment 195 169 159 137 148 152
Intangible assets 0 0 14 4 3 0
GoodWill - - 428 410 403 292
Long term investments 571 527 - - - -
Capital Work in Progress - - - - - 2
Long term deposits 20 17 14 4 3 1
Deferred taxation - - 20 12 - -
Deferred employee Compensation - - - - - 2
Total Non-Current Assets 787 713 636 567 557 449
Current Assets Stock in trade 56 57 62 53 58 70
Current portion of deferred employee Compesnation - - - 1 6 2
Trade debts 904 942 174 362 543 457
Short term investments 140 3 - - - -
Advances, deposits, prepayments and other receivables 123 140 58 75 93 97
Cash and bank balances 407 245 9 111 35 19
Non Current assets attributable to discontinued operations 0
Total Current Assets 1,630 1,387 302 602 735 646
Total Assets 2,417 2,099 937 1,169 1,291 1,095
Equity and Liabilities Share Capital and reserves Issued, subscribed and paid up capital 755 400 400 400 400 400
Employees’ share compensation reserve 45 - 11 12 12 3
Exchange revaluation reserve 211 153 47 46 41 (50)
Un-appropriated profit 397 385 (615) (446) (250) (274)
1,408 938 (158) 12 204 79
Non controlling interest - - (31) (1) - -
1,408 938 (189) 11 204 79
Surplus On Revaluation Of Property, Plant and Equipment 84 69 41 33 33 31
Non-Current Liabilities Long term finances 7 19 36 188 358 137
Liabilities against assets subject to finance lease 33 31 23 14 14 14
Deferred Liabilities 31 21 16 7 9 8
Total Non-Current Liabilities 71 71 75 209 381 159
Current Liabilities Current portion of long-term liabilities 18 66 348 192 70 71
Finances under mark up arrangements and other credit
facilities - secured 50 1 247 295 324 414
Short term loan from directors - unsecured 55 48 19 - - -
Cash received against IPO 264 - - - - -
Creditors, accrued and other liabilities 467 907 397 427 280 342
Liabilities directly associated with assets classified as Disc. Operations - - 0 - - -
Total Current Liabilities 854 1,022 1,010 914 673 826
Total Equity and Liabilities 2,417 2,099 937 1,169 1,291 1,095
ANNEX TO THE REPORT
Management Report 2013 35|
0
500
1,000
1,500
2,000
2,500
2008
Sales Revenue(Rs. In million)
2009 2010 2011 2012 2013
* Rs. 190million restructuring gain was included in 2012 revenues
-200
-100
0
100
200
300
400
500
600
700
800
2008
Profit after Tax(Rs. In million)
2009 2010 2011 2012 2013
Profit and Loss Account (Rupees in million) Particulars 2013 2012 2011 2010 2009 2008
Sales 1,818 2,122 1,268 1,828 1,616 1,635
Cost Of Sales (1,125) (1,255) (920) (1,295) (990) (1,245)
Gross Profit 694 867 348 533 625 390
Administrative and Selling Expenses (254) (271) (503) (631) (498) (496)
Other Charges (0) (0) (0) (2) (2) (0)
Other Operating Income 32 240 87 27 25 59
(222) (31) (416) (605) (474) (437)
Profit/(Loss) from operations 471 836 (68) (72) 151 (47)
Finance Cost (35) (44) (130) (126) (116) (84)
Profit/(Loss) Before Tax 436 791 (198) (198) 35 (131)
Taxation (25) (29) (2) 3 11 (8)
Profit/(loss) after Tax 411 763 (200) (195) 24 (139)
Loss For the year from disc. Operations - - (0) - - -
Profit/(loss) after disc. Operations 411 763 (200) (195) 24 (139)
Combined earnings/(loss) per Share
Basic in Rs. 5.45 10.10 (4.23) (4.88) 0.60 (3.47)
Diluted in Rs. 5.11 10.10 (4.23) (4.88) 0.59 (3.47)
Cash Flow Statement (Rupees in million)
Particulars 2013 2012 2011 2010 2009 2008
Cash Flow From Operating activities 62 501 (23) 171 (95) (126)
Cash Flow From Investing activities (140) (131) (36) (7) (18) (26)
Cash Flow From Financing activities 191 90 6 (60) 219 55
Increase/(Decrease) in Cash & Cash equilant 113 459 (54) 104 107 (98)
Avanceon 36 |
SIX YEARS AT A GLANCE (Consolidated)
Balance Sheet Particulars 2013 2012 2011 2010 2009 2008
Profitability Ratios Gross Profit ratio 38% 41% 27% 29% 39% 24%
Profit Before Tax 24% 37% (16)% (11)% 2% (8)%
Profit After Tax 23% 36% (16)% (11)% 1% (8)%
Return On Capital Employed 33% 89% 43% (593)% 74% (59)%
Interest Coverage Ratio (Times) 13.5 18.8 (0.5) (0.6) 1.3 (0.6)
EBITDA (Rs. In million) (Rs. In million) 452 817 (98) (96) 120 (79)
EBITDA Margin 25% 39% (8)% (5)% 7% (5)%
Return to Shareholders Return on Equity-Before Tax 31% 84% 126% (1625)% 17% (165)%
Return on Equity-After Tax 29% 81% 127% (1601)% 12% (175)%
Earning per Share (Basic) (Rs.) 5.45 10.10 (4.23) (4.88) 0.60 (3.47)
Earning per Share (Diluted) (Rs.) 5.11 10.10 (4.23) (4.88) 0.59 (3.47)
Break Up value per share without surplus on revaluation (Rs.) 18.65 23.44 (4.72) 0.28 5.09 1.98
Break Up value per share with surplus on revaluation (Rs.) 37.30 25.17 (3.70) 1.11 5.92 2.74
Asset Utilization Total Asset Turnover (Times) 0.75 1.01 1.35 1.56 1.25 1.49
Fixed Asset Turnover (Times) 9.30 12.58 7.34 12.91 10.70 10.75
Inventory Turnover (Times) 32.70 37.43 20.58 34.49 27.90 23.35
Trade Debts Turnover (Times) 2.01 2.25 7.30 5.05 2.98 3.58
Trade Creditors Turnover (Times) 3.89 2.34 3.20 4.28 5.77 4.79
Capital Employed Turnover (Times) 1.16 1.97 (17.39) 7.21 2.61 6.08
Operating Cycle Inventory Holding Period (No. of days) 9 17 23 16 24 21
Trade Debt collection period (No. of days) 185 96 77 90 113 102
Trade Creditors payment period (No. of days) 223 190 163 100 115 100
Liquidity/Leverage Current ratio (Times) 1.91 1.36 0.30 0.66 1.09 0.78
Quick ratio (Times) 1.84 1.30 0.24 0.60 1.01 0.70
Cash to current liabilities (Times) 0.64 0.24 0.01 0.12 0.05 0.02
Financial leverage ratio (Times) 0.05 0.08 (0.40) 18.69 1.87 2.01
Total liabilities to equity (Times) 0.66 1.17 (5.75) 100.25 5.18 12.46
0
5
10
15
20
25
2008
Book value per share(Rupees)
2009 2010 2011 2012 2013-5
0
5
10
15
20
2008
Earning per share(Rupees)
2009 2010 2011 2012 2013
Management Report 2013 37|
Balance Sheet Vertical Analysis Horizantal Analysis 2013/ 2012/ 2011/ 2010/ 2009/Particulars 2013 2012 2011 2010 2009 2008 2012 2011 2010 2009 2008 (In % age) (In % age)
Non-Current Assets
Property plan and Equipment 8% 8% 17% 12% 11% 14% 16% 6% 15% (7)% (3)%
Intangible assets - - 2% 0% 0% - (84)% (99)% 249% 37% 44676%
GoodWill - - 46% 35% 31% 27% - (100)% 4% 2% 38%
Long term investments 24% 25% - - - - 8% - - - -
Capital Work in Progress - - - - - 0% - - - - (100)%
Long term deposits 1% 1% 1% 0% 0% 0% 21% 22% 297% 26% 248%
Deferred taxation - - 2% 1% - - - (100)% 76% - -
Deferred employee Compensation - - - - - 0% - - - - (100)%
Total Non-Current Assets 33% 34% 68% 48% 43% 41% 10% 12% 12% 2% 24%
Current Assets
Stock in trade 2% 3% 7% 5% 4% 6% (2)% (8)% 16% (8)% (17)%
Current portion of deferred employee Compensation - - - 0% 0% 0% - - (100)% (85)% 300%
Trade debts 37% 45% 19% 31% 42% 42% (4)% 442% (52)% (33)% 19%
Short term investments 6% - - - - 0% 3958% - - - -
“Advances, deposits, prepayments and other receivables “ 5% 7% 6% 6% 7% 9% (12)% 141% (23)% (19)% (4)%
Cash and bank balances 17% 12% 1% 9% 3% 2% 66% 2721% (92)% 212% 87%
Non Current assets attributable to discontinued operations - - 0% - - - - (100)% - - -
Total Current Assets 67% 66% 32% 52% 57% 59% 18% 359% (50)% (18)% 14%
Total Assets 100% 100% 100% 100% 100% 100% 15% 124% (20)% (9)% 18%
Equity and Liabilities
Share Capital and reserves
Issued, subscribed and paid up capital 31% 19% 43% 34% 31% 37% 89% 0% 0% 0% 0%
Employees’ share compensation reserve 2% 0% 1% 1% 1% 0% 0% (100)% (12)% 3% 272%
Exchange revaluation reserve 9% 7% 5% 4% 3% (5)% 38% 226% 2% 11% (182)%
Un-appropriated profit 16% 18% (66)% (38)% (19)% (25)% 3% (163)% 38% 79% (9)%
58% 45% (17)% 1% 16% 7% 50% (695)% (1393)% (94)% 157%
Non controlling interest - - (3)% 0% - - - (100)% 3000% - -
“Surplus On Revaluation Of Property, Plant And Equipment“ 3% 3% 4% 3% 3% 3% 22% 69% 23% 0% 9%
Non-Current Liabilities
Long term finances 0% 1% 4% 16% 28% 13% (63)% (47)% (81)% (48)% 161%
Liabilities against assets subject to finance lease 1% 1% 2% 1% 1% 1% 8% 34% 62% (1)% 2%
Deferred Liabilities 1% 1% 2% 1% 1% 1% 50% 27% 126% (16)% 9%
Total Non-Current Liabilities 3% 3% 8% 18% 30% 15% 1% (6)% (64)% (45)% 140%
Current Liabilities
Current portion of long-term liabilities 1% 3% 37% 16% 5% 6% (73)% (81)% 81% 174% (1)%
“Finances under mark up arrangements and other credit facilities - secured“ 2% 0% 26% 25% 25% 38% 8167% (100)% (16)% (9)% (22)%
Short term loan from directors - unsecured 2% 2% 2% - - - 14% 160% - - -
Cash received against IPO 11% - - - - - - - - - -
Creditors, accrued and other liabilities 19% 43% 42% 36% 22% 31% (49)% 129% (7)% 53% (18)%
Liabilities directly associated with assets classified as Disc. Operations - - 0% - - - - (100)% - - -
Total Current Liabilities 35% 49% 108% 78% 52% 75% (17)% 1% 11% 36% (19)%
Total Equity and Liabilities 100% 100% 100% 100% 100% 100% 15% 124% (20)% (9)% 18%
Avanceon 38 |
Balance Sheet Vertical Analysis Horizantal Analysis 2013/ 2012/ 2011/ 2010/ 2009/Particulars 2013 2012 2011 2010 2009 2008 2012 2011 2010 2009 2008 (In % age) (In % age)
Non-Current Assets
Property plan and Equipment 8% 8% 17% 12% 11% 14% 16% 6% 15% (7)% (3)%
Intangible assets - - 2% 0% 0% - (84)% (99)% 249% 37% 44676%
GoodWill - - 46% 35% 31% 27% - (100)% 4% 2% 38%
Long term investments 24% 25% - - - - 8% - - - -
Capital Work in Progress - - - - - 0% - - - - (100)%
Long term deposits 1% 1% 1% 0% 0% 0% 21% 22% 297% 26% 248%
Deferred taxation - - 2% 1% - - - (100)% 76% - -
Deferred employee Compensation - - - - - 0% - - - - (100)%
Total Non-Current Assets 33% 34% 68% 48% 43% 41% 10% 12% 12% 2% 24%
Current Assets
Stock in trade 2% 3% 7% 5% 4% 6% (2)% (8)% 16% (8)% (17)%
Current portion of deferred employee Compensation - - - 0% 0% 0% - - (100)% (85)% 300%
Trade debts 37% 45% 19% 31% 42% 42% (4)% 442% (52)% (33)% 19%
Short term investments 6% - - - - 0% 3958% - - - -
“Advances, deposits, prepayments and other receivables “ 5% 7% 6% 6% 7% 9% (12)% 141% (23)% (19)% (4)%
Cash and bank balances 17% 12% 1% 9% 3% 2% 66% 2721% (92)% 212% 87%
Non Current assets attributable to discontinued operations - - 0% - - - - (100)% - - -
Total Current Assets 67% 66% 32% 52% 57% 59% 18% 359% (50)% (18)% 14%
Total Assets 100% 100% 100% 100% 100% 100% 15% 124% (20)% (9)% 18%
Equity and Liabilities
Share Capital and reserves
Issued, subscribed and paid up capital 31% 19% 43% 34% 31% 37% 89% 0% 0% 0% 0%
Employees’ share compensation reserve 2% 0% 1% 1% 1% 0% 0% (100)% (12)% 3% 272%
Exchange revaluation reserve 9% 7% 5% 4% 3% (5)% 38% 226% 2% 11% (182)%
Un-appropriated profit 16% 18% (66)% (38)% (19)% (25)% 3% (163)% 38% 79% (9)%
58% 45% (17)% 1% 16% 7% 50% (695)% (1393)% (94)% 157%
Non controlling interest - - (3)% 0% - - - (100)% 3000% - -
“Surplus On Revaluation Of Property, Plant And Equipment“ 3% 3% 4% 3% 3% 3% 22% 69% 23% 0% 9%
Non-Current Liabilities
Long term finances 0% 1% 4% 16% 28% 13% (63)% (47)% (81)% (48)% 161%
Liabilities against assets subject to finance lease 1% 1% 2% 1% 1% 1% 8% 34% 62% (1)% 2%
Deferred Liabilities 1% 1% 2% 1% 1% 1% 50% 27% 126% (16)% 9%
Total Non-Current Liabilities 3% 3% 8% 18% 30% 15% 1% (6)% (64)% (45)% 140%
Current Liabilities
Current portion of long-term liabilities 1% 3% 37% 16% 5% 6% (73)% (81)% 81% 174% (1)%
“Finances under mark up arrangements and other credit facilities - secured“ 2% 0% 26% 25% 25% 38% 8167% (100)% (16)% (9)% (22)%
Short term loan from directors - unsecured 2% 2% 2% - - - 14% 160% - - -
Cash received against IPO 11% - - - - - - - - - -
Creditors, accrued and other liabilities 19% 43% 42% 36% 22% 31% (49)% 129% (7)% 53% (18)%
Liabilities directly associated with assets classified as Disc. Operations - - 0% - - - - (100)% - - -
Total Current Liabilities 35% 49% 108% 78% 52% 75% (17)% 1% 11% 36% (19)%
Total Equity and Liabilities 100% 100% 100% 100% 100% 100% 15% 124% (20)% (9)% 18%
Management Report 2013 39|
Profit and Loss Account Vertical Analysis Horizantal Analysis 2013/ 2012/ 2011/ 2010/ 2009/Particulars 2013 2012 2011 2010 2009 2008 2012 2011 2010 2009 2008 (In % age) (In % age)
Sales 100% 100% 100% 100% 100% 100% (14)% 67% (31)% 13% (1)%
Cost Of Sales (62)% (59)% (73)% (71)% (61)% (76)% (10)% 36% (29)% 31% (20)%
Gross Profit 38 % 41% 27% 29% 39% 24% (20)% 149% (35)% (15)% 60%
Administrative and Selling Expenses (14)% (13)% (40)% (34)% (31)% (30)% (6)% (46)% (20)% 27% 0%
Other Charges (0)% (0)% (0)% (0)% (0)% (0)% (13)% 1,282% (99)% (12)% 1,208%
Other Operating Income 2% 11% 7% 1% 2% 4% (87)% 176% 225% 7% (58)%
(12)% (1)% (33)% (33)% (29)% (27)% 613% (93)% (31)% 28% 9%
Profit/(Loss) from operations 26% 39% (5)% (4)% 9% (3)% (44)% (1,328)% (6)% (148)% (422)%
Finance Cost (2)% (2)% (10)% (7)% (7)% (5)% (21)% (66)% 3% 9% 38%
Profit/(Loss) Before Tax 24 % 37% (16)% (11)% 2% (8)% (45)% (500)% (0)% (663)% (127)%
Taxation (1)% (1)% (0)% 0% (1)% (0)% (13)% 1,592 % (43)% (74)% 36%
Profit/(Loss) for the year 23% 36% (16)% (11)% 1% (8)% (46)% (482)% 2% (919)% (117)%
Loss For the year from disc. Operations - - (0)% - - - - (100)% - - -
23% 36% (16)% (11)% 1% (8)% (46)% (482)% 2% (919)% (117)%
Combined earnings/(loss) per Share
Basic 0.3% 0.5% (0.3)% (0.3)% 0.0% (0.2)% (46)% (339)% (13)% (913)% (117)%
Diluted 0.3% 0.5% (0.3)% (0.3)% 0.0% (0.2)% (49)% (339)% (13)% (913)% (117)%
Cash Flow Statement Vertical Analysis Horizantal Analysis
2013 2012 2011 2010 2009Particulars 2013 2012 2011 2010 2009 2008 2012 2011 2010 2009 2008 (In % age) (In % age)
Cash Flow From Operating activities 55% 109% 43% 164% (89%) 129% (88)% (2278)% (113)% (280)% (25)%
Cash Flow From Investing activities (124%) (29%) (67%) (7%) (17%) (27%) 7% 264% 414% (61)% (31)%
Cash Flow From Financing activities 169% 20% (11%) (58%) 205% (56%) 112% 1400% (110)% (127)% 298%
Increase/(Decrease) in Cash & Cash equilant 100% 100% 100% 100% 100% 100% (75)% (950)% (152)% (3)% (209)%
Avanceon 40 |
Profit and Loss Account Vertical Analysis Horizantal Analysis 2013/ 2012/ 2011/ 2010/ 2009/Particulars 2013 2012 2011 2010 2009 2008 2012 2011 2010 2009 2008 (In % age) (In % age)
Sales 100% 100% 100% 100% 100% 100% (14)% 67% (31)% 13% (1)%
Cost Of Sales (62)% (59)% (73)% (71)% (61)% (76)% (10)% 36% (29)% 31% (20)%
Gross Profit 38 % 41% 27% 29% 39% 24% (20)% 149% (35)% (15)% 60%
Administrative and Selling Expenses (14)% (13)% (40)% (34)% (31)% (30)% (6)% (46)% (20)% 27% 0%
Other Charges (0)% (0)% (0)% (0)% (0)% (0)% (13)% 1,282% (99)% (12)% 1,208%
Other Operating Income 2% 11% 7% 1% 2% 4% (87)% 176% 225% 7% (58)%
(12)% (1)% (33)% (33)% (29)% (27)% 613% (93)% (31)% 28% 9%
Profit/(Loss) from operations 26% 39% (5)% (4)% 9% (3)% (44)% (1,328)% (6)% (148)% (422)%
Finance Cost (2)% (2)% (10)% (7)% (7)% (5)% (21)% (66)% 3% 9% 38%
Profit/(Loss) Before Tax 24 % 37% (16)% (11)% 2% (8)% (45)% (500)% (0)% (663)% (127)%
Taxation (1)% (1)% (0)% 0% (1)% (0)% (13)% 1,592 % (43)% (74)% 36%
Profit/(Loss) for the year 23% 36% (16)% (11)% 1% (8)% (46)% (482)% 2% (919)% (117)%
Loss For the year from disc. Operations - - (0)% - - - - (100)% - - -
23% 36% (16)% (11)% 1% (8)% (46)% (482)% 2% (919)% (117)%
Combined earnings/(loss) per Share
Basic 0.3% 0.5% (0.3)% (0.3)% 0.0% (0.2)% (46)% (339)% (13)% (913)% (117)%
Diluted 0.3% 0.5% (0.3)% (0.3)% 0.0% (0.2)% (49)% (339)% (13)% (913)% (117)%
Cash Flow Statement Vertical Analysis Horizantal Analysis
2013 2012 2011 2010 2009Particulars 2013 2012 2011 2010 2009 2008 2012 2011 2010 2009 2008 (In % age) (In % age)
Cash Flow From Operating activities 55% 109% 43% 164% (89%) 129% (88)% (2278)% (113)% (280)% (25)%
Cash Flow From Investing activities (124%) (29%) (67%) (7%) (17%) (27%) 7% 264% 414% (61)% (31)%
Cash Flow From Financing activities 169% 20% (11%) (58%) 205% (56%) 112% 1400% (110)% (127)% 298%
Increase/(Decrease) in Cash & Cash equilant 100% 100% 100% 100% 100% 100% (75)% (950)% (152)% (3)% (209)%
Management Report 2013 41|
STATEMENT OF VALUE ADDITION (Consolidated)
For the Year ended December 31,
2013 2012 (Rs. In ,000) %age (Rs. In ,000) %age
Wealth generated
Sales included Sales Tax 1,891,884 98% 2,165,313 90%Other operating income 32,227 2% 240,070 10%
1,924,111 2,405,384 Wealth distributed
Cost of material and services 1,137,552 59% 1,280,166 53% To Employees
Salaries and other related cost 301,094 16% 319,344 13% To Government
Taxes 74,000 4% 43,271 2% To Society
Donation 172 0.01% 10 0.0004% Retained in the business
To provide for growth: Retained profits 411,293 21% 762,592 32% 1,924,111 2,405,384
2012
Wealth Distributed (53%)
To Employee (13%)
To Government (2%)
To Society (0.0004%)
Retained in the business (32%)
2013
Wealth Distributed (59%)
To Employee (16%)
To Government (3.85%)
To Society (0.01%)
Retained in the business (21%)
Avanceon 42 |
Dear Shareholders,
Back in November 2013, Avanceon Ltd joined the selected few
public companies of Pakistan, and it is both my honour and pleasure
to share the ever-renewed commitments of our Company’s
business towards customer- and employee-centricity. Another year
has passed and we have a lingering feeling that it was more exciting
than the one before and the one ahead will be even better. This is
not for only the results achieved and the prospects ahead, but for
the ever-evolving Avanceon. Our capable teams are always ready to
meet the exacting challenges of the dynamic environment in which
we operate to understand, plan, design and deliver state-of-the-art
solutions to meet our client’s business objectives.
Our mainstay CORE business showed increased activity in the
Application-based solutions, generating more orders, but the
overall generation of the CORE remains somewhat subdued
because in 2012 we had USAID funded energy projects, which
resulted in a spike. However, the revenue performance was much
stronger due to a healthy backlog of orders. Specialized business
is our high margin business and the epitome of a “blue ocean
strategy” example, which comes with its expected challenges. One
is its long gestation period and the other is internationalizing the
model, which we have so successfully demonstrated in Pakistan.
Our specialized business, Energy Management Solutions [EMS],
offers a unique energy savings proposition, based on “pay as you
save,” which essentially means guaranteed savings and which is
unique in the sense that no other company in the region, to the
best of our knowledge, offers that. It has saved our customers
millions and the investment made in such projects is not only
risk free, but also beats any risk free investment’s internal rate of
return [IRR]. Our initiative of providing industry IT solutions and
Advance Process Control has come of age with some very exciting
projects being implemented; this could open a whole new world of
opportunities for us. Our team is extremely excited in anticipation of
this impending challenge. After Market Sales [AMS] is our booming
business area and is growing leaps and bounds. From 2012, it showed
33 % increase in order generation and 28% in revenue.
We are always striving for a more effective utilization of our
engineering resources, we call it Effective Productivity Report [EPR]
of the engineers, and our minimum benchmark is 70%, which we
achieved in 2013. Going forward it is quintessential for our growth
and profitability that we maintain and improve upon it.
In-line with our Mission and our commitment in Highway 50, we
invested heavily in developing our team across various technical
skillsets, both on-the-job and classroom-based international training
for extended periods. More than 35% of our engineering workforce
was sent on various international training and certification courses
in 2013 and the entire engineering team went through about 5
internal trainings on various technology platforms. This underpins
our commitment and belief in building human capital as the ultimate
fuel for our growth and as a means to retain our workforce. I
believe that our Human Capital is the real biggest differentiator that
has catapulted us into the future and we shall continue to invest in
it. In return, this commitment has resulted in building a solid team of
seasoned managers averaging 13.9 years of experience, and more
specifically 11.8 years spent at Avanceon.
The Company has made strides in growing its footprint in the
Middle East, the flow of regular business is encouraging enough
to decide and consolidate our position by opening offices in key
geographies of the region. We bring a lot of energy, rigor, creativity
and agility into our daily routine while staying focused and true to
our mission, realizing our responsibility toward our customers and
shareholders. I am proud that we are highly ethical and transparent
in our dealings and reporting.
There are visible signs of uptick and vibrancy in the economy of
Pakistan; together with our geographic expansion strategy I feel we
are uniquely positioned to capitalize any upturn. I am ecstatic about
the prospects the future holds.
Stay tuned! There will be a lot to talk about in 2014.
Tanveer KaramatChief Operating Officer
LETTER FROM THE CHIEF OPERATING OFFICER
Management Report 2013 43|
BUSINESSOVERVIEW
SECTION: III
Avanceon 44 |
VALUE DRIVENDIVERSIFIED REVENUE BASE AND STRONG MARKET POSITIONING The Company has a strong presence in Pakistan and the Middle East. This not only enables cross border revenue streams but also provides a
hedge against regional economic turmoil. AVN is the market leader in Pakistan. Competing international companies are reluctant to operate
in Pakistan due to impending economic crises. Therefore AVN has become positioned as the unrivalled service provider in the industry. In
the Middle East, AVN has gained dominance through its unique international execution model, which provides it with a competitive edge in
terms of pricing, quality and most importantly scalability.
DIVERSE PRODUCT OFFERING WITH AN EXTENSIVELY DEVELOPED KNOWLEDGE BASEThe Company has developed an extensive product portfolio of broad based solutions for all major sectors in the Middle East and Pakistan
through research & development. This enables it to replicate the already established portfolio to address similar needs of enterprises within
a sector in difference geographies. Replication not only provides cost advantage to the Company but also assists in increasing market
penetration due to its extensive knowledge base. AVN has also successfully set up After Market Solutions segment which not only allows it
to capture repeat business from existing clients but also enables it to enjoy stable recurring revenues.
UNIQUE VALUE PROPOSITIONOUTSOURCING MODEL’S COMPETITIVE COST ADVANTAGEThe Company has developed a unique outsourcing model i.e.
International Execution (“IX”) which is utilized to execute projects
across the globe while adhering to the highest quality standards.
This model helps the Company take advantage of lower cost in
Pakistan and deliver high end services seamlessly at international
prices and thus maintain high gross margins.
Under IX model, the Company leverages its pool of certified and
highly trained engineers based in Pakistan to execute a significant
portion of international projects.
IX also allows the Company to overcome cyclicality of the
automation industry as it can maintain the ‘bench strength’ of
engineers during downturn at Pakistan cost. This also later helps
it to scale up operations quickly to align with regional economic
expansion or increased project pipeline. The process dramatically
reduces the cost of hiring, training and attrition which all other
system integrators face.
At present, the Company can sustain a decline in revenue by 40%
without having to adjust the number of engineers in its pool. This
model is difficult to replicate as it requires extensive experience to
come at par with International Standards and can therefore not be
replicated easily in the short term by competitors.
Management Report 2013 45|
V LIFECYCLEThe V Lifecycle Process is the way Avanceon manages projects. Avanceon has mastered this complex project management process to such
a level that it has become part of our value proposition to our customers. From the beginning of a project bid through to fulfilment we
remain true to the process and this aids greatly our traceability with our client base. Implemented seamlessly, it is perhaps the secret to our
industry success.
DIVERSE PRODUCT OFFERING WITH AN EXTENSIVELY DEVELOPED KNOWLEDGE BASEThe Company has developed an extensive product portfolio of
broad based solutions for all major sectors in the Middle East
and Pakistan through research & development. This enables it to
replicate the already established portfolio to address similar needs
of enterprises within a sector in difference geographies. Replication
not only provides cost advantage to the Company but also assists in
increasing market penetration due to its extensive knowledge base.
AVN has also successfully set up After Market Solutions segment
which not only allows it to capture repeat business from existing
clients but also enables it to enjoy stable recurring revenues.
GROWTH MANAGEMENTPROFICIENT AND EXPERIENCED MANAGEMENT TEAM WITH PROVEN TRACK RECORDThe Company has developed a strong team of professionals, who
have the requisite industry experience. The team has executed
several on-shore and off-shore projects with outstanding client
testimonials and the Company is considered as clear market leader
in Pakistan. Keeping in view the role of human resource in the
Company’s success, it has introduced several employee retention
schemes including initiation of Employee Stock Option Scheme.
Additionally, the Company has invested heavily in the development
of its staff including establishment of training centers in Karachi and
Lahore to enable them to deliver superior performance.
Left side: Developmenta ctivities Rights ide: Verification activities
Proposal process Support Services
URS to SAT
FRS to FAT
DDS to FAT
Real-time Traceability
User Requirements Review (URS)
System Design Process Preliminary Design Review (PDR)
Detailed Design Review (CDRs) DDS
Unit /M odule Tests
Buy / Build / Reuse / CodeConfiguration Items (CI)
Source:M anagement
IX RWCF
Factory Acceptance Tests (FAT)
Site Acceptance Tests (SAT)
PROMISING FUTURE AND STRONG GROWTH PROSPECTSThe Company has moved on from the gestation stage and is now up
the learning curve by developing superior expertise to implement
complex solutions for its clients. The Company continuously
searches for options to explore new business segments such as
metals and mining, oil and gas, utilities, chemicals, food & beverages,
life sciences and health care segments, especially within the Middle
Eastern and South Asian markets. The Company is confident that
its strong focus on brand and skills development over the past few
years will enable it to reap the benefits of established brand equity
and domain knowledge.
IMPACTING TECHNOLOGYROBUST IT SYSTEMS AND TECHNOLOGY PLATFORMSThe Company has invested in state of the art IT systems including
“cloud computing” infrastructure and project management tools.
The Company has gained experience in deploying a wide array of
technology platforms and applications to deliver optimal solutions to
its clients. Over the years, the Company has established entrenched
relationship with OEMs, technology companies and application
providers which proves to be a huge marketing asset.
STRONG CONTROLS AND CORPORATE GOVERNANCEThe Company has implemented a robust information system
to monitor productivity of its engineers, ensure adherence to
Avanceon 46 |
LIVED OUR BRANDHighway 50’s commitment is to ensure that we do understand “Live
Our Brand” as superseding a simple branding exercise. It is about
living our values and translating them across departments, which
we have done over the past two decades. Up to recently, managers
were in charge of transmitting our real brand equity, the one that we
cannot translate in number because it is intrinsic to the Company.
2013 saw the implementation of Avanceon Employee Orientation,
which inducts new recruits in a way that they are familiar with their
work environment and with the different stakeholders who will be
co-building with them. Orientation allows managers, engineers and
administrators to share how they live the Avanceon brand on a
daily basis, also properly introducing them to the Company.
Orientation facilitates how the new recruits approach their work
because it gives them a much broader perspective of the business
than solely dealing with their manager. This is also a way to introduce
how different colleagues live the Avanceon Values within the
Company. 2100 hours have been spent on orientation in 2013 alone.
INCREASED AND RETAINED HUMAN CAPITALThe Avanceon business capitalizes on the quality of its human assets
and considers it a key differentiator worldwide. To make it a sustainable
competitive advantage, the management’s prime focus is on talent
acquisition, development, retention and alignment with corporate goals.
This year, Avanceon is proud to have increased its employee
base by 14.5%. Talent acquisition is mainly done at university level.
EN ROUTE TO
2013 IN A SNAPSHOT
Our recruitment drive targets graduates from top engineering
universities such as UET, NUST, GIKI, NED and LUMS and further
afield. Above and beyond academic credentials, each employee is
handpicked to ensure that our values and scope of work match
their personal drive and beliefs. At Avanceon, we believe that
choosing the right employee goes beyond the right skillset.
While hiring, our key focus when screening a candidate is on
their learning potential, experience and top notch communication
skills, bearing in mind our international operations. We never
compromise while hiring talent and keep positions open until
all criteria is fully met. Even at entry level, the COO personally
conducts interviews, which shows the commitment of leadership
towards talent acquisition.
Our rigorous and extensive in-house training programs transform
a capable university graduate into a world-class engineer. Our
seamless operational excellence is a result of our seasoned
technical guru’s commitment toward grooming engineers. Every
Engineer goes through 9 months extensive training on domain
knowledge, products and project management. This process is
continuous until the engineer becomes a subject matter expert.
International training courses is another area where large
investments are made in our people. This translated into 8,568
hours in international training only to leverage international
competition and to grow employee self-realisation.
The retention of resources is a challenge considering their world-
class quality of skillset. Threat of losing our talent either overseas
or by locally operating MNCs is real. To counter this challenge,
we are continuously evaluating our compensation structures and
participate in Pakistan’s most reliable salary survey conducted by
Mercer to remain competitive in the market. Our variable pay
plan is directly linked with individual sales for sales team, project
management for engineering teams and PAT targets for support
teams and management. We also spend a considerable amount of
time training both internally and externally our employee.
quality standards and to monitor costs and project financials. The
Company ensures implementation of best corporate governance
practices in order to promote transparency, including setting up
of an independent Board of Directors consisting of 3 independent
directors and follows standard financial reporting practices to
provide a realistic view of its business to relevant stakeholders.
Management Report 2013 47|
REDUCED VARIABILITY IN PROCESS EXECUTIONThis year again, we have been better at reducing variability in our
process execution, on our way towards seamless execution of our
solutions. This goal’s achievement is two-fold. Aside from our training,
our human capital and the implementation of proper KPIs towards
deviation elimination ensure that we meet this engagement year
after year. Sustainability is ensured by a seasoned team of managers
who average 13.9 years in the Automation industry. Management
experience at Avanceon approximates 11.8 years. 68.8% of our
managers joined Avanceon as junior before they levelled up, out of
which 37.5% joined as trainee. This continuity is definitely an asset
when it comes to ensuring seamlessness in our process execution.
This is part of our key goal in reaching customer delight in an
efficient and agile way.
STRENGTHENED RELATIONSHIPS & RESPONSIVENESS FOR CLIENT SUCCESSAbove and beyond being customer-centric, Avanceon is people-
centric. Each and every stakeholder is addressed according to our
values and our standards. The key drivers towards customer delight
also apply in our partnerships. Over the decades, this focus on
partner delight has earned us the respect and the trust of major
global key players within the automation sphere, such as Rockwell
Automation. Our entire value chain is driven towards delighting all
the participants of our value chain both internally and externally,
and this applies globally.
The resulting success stories are shared and signed-off by our client.
2013 was a witness of great projects’ achievements across borders,
which adds value and brings a sense of realization to each and
every one of us at Avanceon. Here are some of the projects where
our solutions and our seamless integration got validated by our
valued customers:
- LOI-ESD Systems project for the Oil and Gas industry in Pakistan
- JNGLF Saudi Aramco for the Oil and Gas industry in KSA
- JNGLF Islanding and load shedding project for the Oil and Gas
in KSA
- GM Buffalo project for the Food and Beverage Industry in the
United States
- MPCL – Turnkey E&I services for Zarghun gas field project for
the Oil and Gas industry in Pakistan
- Integrated Control System for MOL Makori GPF project-PDL
for the Oil and Gas in Pakistan
- Lalpir project for the Water Industry in Pakistan
We have also an employee stock option scheme [ESOS] for our
key people to align their interest with the Company’s and one of
the reasons for going public was to encourage people to contribute
maximum effort towards making Avanceon profits. Initially, 5%
shares have been allocated for ESOS and 5% more will be launched
in separate scheme this year.
Avanceon 48 |
DROVE AFTER PROJECT SALES & SERVICESAfter Project Sales and Services is one of the critical goals that
ensure reaching Highway 50 by 2018. Ultimately all the other
goals are involved in the realization of this particular one. As such
recurring business is always a good measure of customer delight. In
2013, customer delight was translated in 33% increase in recurring
business from the previous year. In 2013, production from our
CORE services reached a sustainable 70% Effective Productivity
Report [EPR] of the engineers; our minimum benchmark is 70%.
CORPORATE SOCIAL RESPONSIBILITIESWe believe that our primary social responsibility is in education, mainly in the universities of engineering, which is the reason why we exist
today. In 2013, we targeted UET final year students and with the help of UET faculty we identified around 20 students that required financial
assistance in their final year project. We helped these students by enabling them to purchase the licenses and hardware for their projects. We
not only supported them financially but also our engineers helped them to gain technical knowledge and assisted in project management.
As a result, all 20 students completed their final project with flying colours. We intend to keep assisting such students every year and helping
them to achieve their potential.
Today as much as in the past, Avanceon as well as our employees have been investing their time in providing direction to such students
as volunteers. At Avanceon, we do encourage our employees to participate in such noble pursuits and we have been supporting them in
this activity. Other than our on-going CSR activities, Avanceon dedicated time and funds towards amazing institutions such as The Citizens
Foundation. We were also involved in various charitable causes. In 2009 we helped the Internally Displaced Persons of Swat where
Avanceon contributed cash, one day salary of each employee, which the Company matched. Following the earthquake of 2005, which hit
Pakistan, the whole of Avanceon sent trucks full of basic necessities such as tents, blankets, water bottles and groceries. More than Rs. 1.2
million were invested to help the effectees. If such an unfortunate incident were to occur in the future, the whole of Avanceon will team up
again to help. Our CSR committee has Rs. 600, 000 in hand, contributed by the Company and its employees, which will be used in future.
Management Report 2013 49|
STAKEHOLDER
STRONG CLIENT BASE WITH ESTABLISHED CREDENTIALSThe Company has served major blue chip companies across a diverse range of sectors including oil and gas, food and beverages, sugar,
cement, textile, transport and infrastructure across Middle East and Pakistan. An established client base acquired through a history of
successful execution enables the Company to win new contracts, both through strong credentials as well as referrals and it is expected that
these referrals will continue to remain the driving force in the future.
The Company has established credibility with leading institutions across the globe including blue chip multinational companies. Key clientele
include:
Avanceon 50 |
SECTOROil & Gas
Utilities & power
Infrastructure
OVERVIEWAbu Dhabi National Oil Company, UAE
Mole Pakistan Limited, Pakistan
Pakistan Oilfieldes Limited, Pakistan
Prescon Descon Industries Limited, Pakistan
United Energy Limited, Pakistan
Kuwait National Petroleum Company, Kuwait
Oil & Gas Development Company , Pakistan
Pakistan Refinery Limited, Pakistan
Pak Arab Refinery Limited, Pakistan
Pakistan Petroleum Limited, Pakistan
Qatar Petroleum, Qatar
Saudi Aramco, Kingdom of Saudi Arabia
Schlumberger, Pakistan & UAE
International power GDF Suez
Lalpir Power, Pakistan
Babcock & Wilcox, USA
EMICOOL, UAE
EMPOWER, UAE
Hub Power Company Limited, Pakistan
Kot Addu Power Company Limited, Pakistan
Liberty Power Tech, Pakistan
PAL Technologies, UAE
Sinohydro, Qatar
Palm Utilities, UAE
Dubai Metro, UAE
State of Qatar, Qatar
Best Way Cement Pakistan
Cherat Cement Limited, Pakistan
Food & Beverage
Chemicals
Pharmaceutical
Pepsico
Engro Foods Limited, Pakistan
Unilever Limited, Pakistan
Coca Cola, USA & UAE
General Mills, USA
Kraft Foods, USA
Kellogg’s, USA
Nabisco Brands, USA
Nestle, USA, Netherland & Pakistan
Proctor & Gamble, USA & Pakistan
Sara Lee, USA
Ciba, USA
Clorox, USA
DuPont, UAE & USA
Engro Fertilizers Limited, Pakistan
Engro Polymer & Chemicals Limited, Pakistan
Fauji Fertilizers Company Limited, Pakistan
Exxon Mobil, USA
Gatron, USA
Lotte, USA
Saudi Basic Industries Company, Kingdom of Saudi Arabia
Sherwin Williams, USA
Akzo Nobel, Pakistan
Astra Zeneca, USA
Bayer Pharma, USA & Pakistan
Boehringer Ingelheim, USA
Johnson & Johnson, USA
Merck, USA
Pfizer, USS
Management Report 2013 51|
FOOD&
BAVERAGES
PHARMACEUTICAL&
LIFE SCIENCE
CHEMICALS&
SPECIALITYCHEMICALS
METALS&
MINING
PUBLICUTILITIES
OIL&
GAS
TRANSPORTATION &
INFRASTRUCTURE
Maroon:Pantone 222cCMYK (%) C0 - M100 - Y15 - K60
PARTNERSAvanceon partners with multiple vendors in order to offer best in class solution for each client; as such it has developed significant
partnerships with a number of top software and hardware providers in the industry.
Relationship OverviewWonderware/Invensys Endorsed Systems Integrator Avanceon is within the highest tier of system integrators in the Wonderware
community for North Americas. Wonderware takes exhaustive steps to
ensure that their Endorsed System Integrators are comprehensively trained
and certified in multiple areas.
Microsoft Gold Certificed Partner Avanceon is a Gold Certified Partner of Microsoft – the highest level of
competence and expertise with Microsoft technologies
Rockwell Automation Avanceon is a Rockwell Certified System Integrator (RSCI). This allows to
benefit from Rockwell’s global capabilities that extend across 80 countries
and includes partner network of more than 5,600 regional and global
specialists in distribution, system integration and product referencing
Schneider Avanceon is the Authorized System Integrator for Schneider and have
worked in partnership with them on several UAE based projects
Avanceon also has a wide array of platforms and technologies to deliver its solutions, including the following.
Avanceon 52 |
avanceon.com
19 – KM, Multan Road, Lahore 54660, PakistanPhone: +92 42-111 940 940Fax: +92 42-37515128