Your Directors have pleasure in presenting the 24th Annual Report together with theAudited Statement of Accounts for the year ended on 31st March 2017.
The operating results of the Company for the year ended on 31st March 2017 are brieflyindicated below:
| || ||(Rs. in lacs) |
| ||Year 2016-2017 ||Year 2015-2016 |
|Profit Before Depreciation and Taxation ||333.51 ||271.91 |
|Depreciation ||52.92 ||39.79 |
|Profit before Taxation || |
|Provision for taxation - For Current Tax ||60.00 ||83.00 |
|Provision for taxation - For Deferred Tax ||124.67 ||2.54 |
|MAT credit Entitlement ||(60.00) ||0.00 |
|Profit after Taxation || |
DIVIDEND AND TRANSFER TO RESERVES:
In order to plough back resources your directors do not recommend any payment ofdividend for the financial year. Further the Company has not transferred any amount toreserves during the year.
PERFORMANCE OF THE COMPANY & FUTURE PROSPECTS:
During the year under review total revenue from operations was Rs. 4848.83 Lacs asagainst Rs. 5204.62 Lacs in previous year.
Profits before Tax for the year has increased to Rs. 280.58 Lacs from Rs. 232.12 Lacsin previous year indicating the growth of about 20.88% in comparison to prior year. Profitafter tax has increased to Rs. 155.91 Lacs from Rs. 146.59 Lacs in the previous yearindicating the growth of about 6.36% in comparison to prior year. Further details aregiven in management discussions and analysis report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY FROM THE CONCLUSION OF THE FINANCIAL YEAR TILL THE END OF THIS REPORT:
There were no other material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this report.
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:
A report on Management Discussion and Analysis (MDA) is annexed to this report as AnnexureII inter-alia deals adequately with the operations and also current and futureoutlook of the Company.
ALLOTMENT OF SHARES:
During the year under review the Board of Directors of the Company at its meeting heldon 24.03.2017 has allotted 10042200 partly paid Equity Shares having face value of Rs.10/- each at a price of Rs. 25/- per share (including premium of Rs. 15/-). Rs. 12.50 (Rs.5/- per share towards face value and Rs. 7.50 per share towards share premium) has beenreceived by the Company on application and the remaining amount be payable on first andfinal call as and when the same is made.
The Company has received the listing and trading approval for said shares from BSELimited and the shares of the Company are traded on stock exchange from 05.04.2017.
The Company has not accepted or renewed any deposits from public falling within thepurview of Section 73 of Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014.
CORPORATE SOCIAL RESPONSIBILITY:
The Company does not fall under the criteria mentioned in Section 135 of the CompaniesAct 2013 ("the Act") read with the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 and accordingly the Company is not required to constitute CSRCommittee and is not required to spend any amount in CSR Activity.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152 and other applicable provisions if any ofthe Companies Act 2013 Shri Kandarp K Amin (DIN: 00038972) Whole Time Director of theCompany is liable to retire by rotation at the forthcoming Annual General Meeting and hebeing eligible offers himself for re-appointment. Your Directors recommends hisreappointment.
During the year under review Shri Dipesh Kotak (DIN: 02531949) Director and Shri AjayPatel Chief Financial Officer has resigned from their respective positions w.e.f. 1stOctober 2016. Ms. Neeti Patel Company Secretary has resigned w.e.f. 13th August 2016.
The Board placed on records its appreciation for the services rendered by them duringtheir association with the Company.
With effect from 1st October 2016 Ms. Ami Suthar has been appointed as Whole TimeCompany Secretary (Key Managerial Personnel) and Compliance Officer of the Company and Mr.Bharatkumar Shrimali has been appointed as Chief Financial officer and Key ManagerialPersonnel of the Company.
As the term of office of Shri Kandarp Amin (DIN: 00038972) and Smt. Archana Amin (DIN:00038985) as a Whole Time Director was upto 31st March 2017 the Board of Directorssubject to approval of members had re-appointed them for further term of 3 years w.e.f.1st April 2017. Considering the remarkable contributions given by both of them in thegrowth of the Company the Board recommends passing of resolutions.
After closure of the year Shri Archit Amin (DIN 01681638) was appointed asAdditional Director (Categorized as Whole Time Director) of the Company. He holds officeup to the date of ensuing Annual General Meeting. Necessary resolution has been proposedfor his appointment as a Director (Categorized as Whole Time Director) of the Company forapproval of members of the Company.
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:
1. Shri Kandarp Amin - Whole Time Director
2. Shri Bharatkumar Shrimali - Chief Financial Officer
3. Ms. Ami Suthar- Whole Time Company Secretary
EXTRACT OF THE ANNUAL RETURN:
Extract of the Annual Return as on 31st March 2017 in the prescribed form MGT - 9pursuant to provisions of Section 92(3) of the Companies Act 2013 and the Companies(Management and Administration) Rules 2014 is annexed to this report as Annexure IV.
CORPORATE GOVERNANCE REPORT:
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aReport on "Corporate Governance" is attached as an Annexure III and formspart of this report.
DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 with respect tothe Directors responsibility Statement the Directors confirms that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departures if any;
ii. they have selected such appropriate accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year on 31st March 2017 and of the profit of the Company for the year underreview;
iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; iv. they have prepared the accounts for the period ended on 31st March2017 on a going concern basis.
v. they have laid down laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively;and
vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
NUMBER OF BOARD MEETINGS:
During the year the Board of Directors duly met fourteen (14) times. The details of theBoard Meetings are provided in the Corporate Governance Report which is annexed to theReport.
The properties and assets of the Company are adequately insured.
DECLARATION BY INDEPENDENT DIRECTORS:
Pursuant to the provisions of Section 134 of the Companies Act 2013 with respect tothe declaration given by the Independent Directors of the Company under Section 149 (6) ofthe Companies Act 2013 the Board hereby confirms that all the Independent Directors havegiven declarations and further confirms that they meet the criteria of Independence as perthe provisions of Section 149 (6).
PERFORMANCE EVALUATION OF THE BOARD COMMITTEES AND INDEPENDENT DIRECTORS:
Pursuant to the provisions of the Companies Act 2013 and Rules framed thereunder readwith the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formalannual evaluation is to be made by the Board of its own performance and that of itsCommittees and Individual Directors. The Board after taking into consideration thecriteria of evaluation laid down by the Nomination and Remuneration Committee in itspolicy such as Board Composition level of involvement performance of duties attendanceetc. had evaluated its own performance the performance of its committees and IndependentDirectors (excluding the Director being evaluated).
The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors at their separate meeting. The Directorsexpressed their satisfaction with the evaluation process.
POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION:
Pursuant to the requirements of the Companies Act 2013 the policy on appointment ofBoard Members and policy on remuneration of the Directors KMPs and other employees is asattached as Annexure V to this report.
SECRETARIAL AUDIT REPORT:
M/s. M.P. Mehta & Co. Practicing Company Secretaries were appointed asSecretarial Auditors of the Company for the financial year 2016-17 pursuant to theprovisions of Section 204 of the Companies Act 2013. The Secretarial Audit Reportsubmitted by them in prescribed form MR-3 is attached as Annexure VI to thisreport.
There are no qualifications or other observations or remarks of the SecretarialAuditors in the Report issued by them for the financial year 2016-17 which call for anyexplanation from the Board of Directors.
CONTRACTS OR AGREEMENTS WITH RELATED PARTIES:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2013 all the contracts and arrangements with relatedparties entered by the Company during the financial year were in ordinary course ofBusiness and on arms length basis. Details of the transactions are as mentioned in
During the year the Company has not entered into any materially significant relatedparty transactions which may have potential conflict with the interest of the Company atlarge. Suitable disclosures as required are provided in AS-18 which is forming the part ofthe notes to financial Statement.
The policy on Related Party Transactions has been uploaded on the website i.e.www.architorg.com.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014:
Details pertaining to remuneration and other details as required under Section 197 (12)of the Companies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is attached as Annexure VII to this report.
The statement containing particulars of employees as required under section 197 of theCompanies Act 2013 read with Rule 5(2) of the companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and accounts are being sent to the members andothers entitled thereto excluding the information on employees particulars which isavailable for inspection by members at the Registered office of the Company duringbusiness hours on working days of the Company upto the ensuing Annual General Meeting. Ifany member is interested in obtaining a copy thereof such member may write to the CompanySecretary in this regard.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:
The Company has adopted internal control system considering the nature of its businessand the size and complexity of operations. The Board has adopted the policies andprocedures for ensuring the orderly and efficient conduct of its business includingadherence to the Companys policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial disclosures etc. The managementis taking further steps to strengthen the internal control system.
RISK MANAGEMENT POLICY:
The Company has formulated the Risk Management Policy in order to safeguard theorganization from various risks through timely actions. It is designed to mitigate therisk in order to minimize the impact of the risk on the Business. The Management isregularly reviewing the risk and is taking appropriate steps to mitigate the risk.
In the opinion of the Board there has been no identification of element of risk thatmay threaten the existence of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013:
The Company has not made any Loans or provided any guarantee or has made anyinvestments falling under purview of Section 186 of the Companies Act 2013 during thefinancial year under review.
Pursuant to the provisions of Section 139 (2) of the Companies Act 2013 the existingStatutory Auditors M/s. G. K. Choksi & Co. Chartered Accountants (FRN: 101895W) whohave been acting as statutory auditors of the Company since more than ten years cannot bere-appointed as the Statutory Auditors for the year 2017-18.
In view of the said provisions of the Companies Act 2013 the Company has approachedM/s. Chirag R. Shah & Associates Chartered Accountants (Firm Registration Number-118791W) for their appointment as Statutory Auditors of the Company. They have consentedto act as the Statutory Auditors of the Company and have also given the confirmation tothe effect that their appointment if made by the Company would be within the limitsprescribed under Section 139 of the Companies Act 2013.
Accordingly a resolution seeking members approval for their appointment asStatutory Auditors of the Company for the period of 5 consecutive years from theconclusion of this Annual General Meeting till the conclusion of Annual General Meeting tobe held in the financial year 2022 is proposed. The Board recommends passing of theproposed resolution.
With regard to the observation of auditors relating to:-
Non provision of the option loss including interest the management is of the opinionthat the said liability is of contingent nature and for the same legal matter is pendingat DRT Mumbai. In view of the same it is not recognized as the liability and hence noprovision has been made for the option loss and interest thereon.
DISCLOSURE OF AUDIT COMMITTEE:
The Audit Committee of the Company as on 31st March 2017 consists of followingDirectors as its members:
1. Shri Haresh Shah Chairman
2. Shri Bhupendra Mehta Member
3. Shri Rajendra Shah - Member
VIGIL MECHANISM :
Pursuant to provisions of Section 177(9) of the Companies Act 2013 and Rule 7 of theCompanies (Meetings of Board and its Powers) Rules 2014 read with SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors hadapproved the Policy on Vigil Mechanism/ Whistle Blower Policy. Through this policyDirectors
Employees or business associates may report the unethical behavior malpracticeswrongful conduct frauds violations of the Companys code etc. to the Chairman ofthe Audit Committee.
The vigil mechanism / whistle blower policy is also available on the website of theCompany www.architorg.com.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in AnnexureI which is attached to this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
The Company has not received any significant or material orders passed by anyregulatory authority court or tribunal which shall affect the going concern status of theCompanys operations as on date of this report.
The Company has maintained cordial relations with the employees of the Companythroughout the year. The Directors wishes to place on record sincere appreciation for theservices rendered by the employees of the Company during the year.
The Company has not received any complaint under the Sexual Harassment of women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
The Board is thankful to its bankers for their continued support and assistance whichhas played important role in progress of the Company.
Your Directors places on records the contribution of employees of the Company at alllevels and other business associates for their commitment dedication and respectivecontribution to the Companys operations during the year under review.
| ||BY ORDER OF THE BOARD |
| ||FOR ARCHIT ORGANOSYS LIMITED. |
|PLACE : Ahmedabad ||(KANDARP K. AMIN) |
|DATE: August 12 2017 ||Chairman & Whole Time Director |
| ||DIN: 00038972 |