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AVTIL Enterprise Ltd.

BSE: 504390 Sector: Financials
NSE: N.A. ISIN Code: INE292N01018
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AVTIL Enterprise Ltd. (AVTILENTERP) - Director Report

Company director report

To Members

ARUN VARUN TRADE AND INVESTMENT LIMITED

Your Directors are pleased to present the 33rd Annual Report and AuditedFinancial Statements on the business and operations of your Company for the year endedMarch 31 2015. Your Company has achieved yet another year of satisfactory performance inturnover and profitability.

FINANCIAL RESULTS:

THE FINANCIAL RESULTS OF THE COMPANY FOR THE FINANCIAL YEAR UNDER REVIEW ARE SUMMARIZEDBELOW:

Year ended 31st March 2015 (Rs. in Lacs)

Year ended 31st March 2014 ( Rs.in Lacs)

INCOME
Turnover / Gross Income 195.23

189.49

EXPENDITURE
Purchases -

9.61

Changes in Inventories of Finished Goods 0.99

(9.51)

Employee Costs 0.76

1.21

Finance Charges 2.01

11.78

Depreciation 8.38

8.74

Other Expenses 16.42

4.62

Profit / ( Loss ) Before Tax 166.67

163.04

Less: Provision for Taxation
Current Year Tax 34.01

33.60

Deferred Tax Liability (1.15)

(1.13)

Profit / ( Loss ) After Tax 133.80

130.57

Add: Balance brought forward from previous year 1325.36

1194.79

Profit / ( Loss) available for appropriation 1459.16

1325.36

Appropriation:
Less : Transfer to General Reserve -

-

Prior Period Expenses - -
Interim Dividend - -
Proposed Dividend - -
Tax on Dividend
Balance carried to Balance Sheet 1459.16

1325.36

PERFORMANCE OF YOUR COMPANY

The financial highlights reflects a marginal higher turnover in the financial yearunder review. The turnover of your Company for the financial year under review is Rs.195.23 Lacs as against Rs. 189.49 Lacs in the previous year which is a result of a goodperformance of the Company. Net Profit after Tax stood at Rs. 133.80 Lacs as against Rs.130.57 Lacs in the previous financial year.

DIVIDEND:

Your Directors regret that the Board could not recommended any dividend for the yearended March 31 2015 in view of the cash requirement for establishing the Company in itsgrowth plan and challenging times.

TRANSFER TO RESERVE

Your Company proposes to retain Rs. 133.80 Lacs in the Profit & Loss Account(Surplus).

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Amit A. Bhagat (DIN: 02559273) resigned from the post of Independent Director ofyour Company w.e.f. February 12 2015. Your Board of Directors appreciated assistance andguidance provided by him during his tenure as Director.

The Board of Directors of your Company appointed Mr. Amit Shankerbhai Patel as anAdditional Non-Executive Independent Director w.e.f. February 12 2015 to hold the officetill ensuing Annual General Meeting in accordance to provisions of the Companies Act2013.

The Board of Directors of your Company has appointed Ms. Dharmistha J. Darji as anAdditional Non-Executive Director w.e.f March 20 2015 to hold the office till the ensuingAnnual General Meeting in accordance to provisions of the Companies Act 2013. Furtheryour Board of Directors has also appointed Ms. Dharmistha J. Darji as Company Secretary& Compliance Officer of the Company w.e.f. March 20 2015 pursuant to Section 203 ofthe Companies Act 2013 for complying with the requirements of Securities Laws and ListingAgreements with Stock Exchanges.

Subsequently your Board of Directors vide Circular Resolution dated March 30 2015redesignated Ms. Dharmistha J. Darji from Additional Non-Executive Director to AdditionalExecutive Director to hold the office till the ensuing Annual General Meeting inaccordance to provisions of the Companies Act 2013.

Pursuant to the provisions of Section 149 of the Companies Act which came into forcefrom April 1 2014 Mr. Amit M. Brahmbhatt (DIN: 05276051) was appointed as IndependentDirector at the Annual General Meeting of the Company held on September 25 2014. Theterms and conditions of appointment of Independent Director are as per Schedule IV of theAct. The Company has received declaration from the Independent Director of the Companyconfirming that he meets with the criteria of independence as prescribed under sub-section(6) of Section 149 of the Companies Act 2013 and there has been no change in thecircumstances which may affect their status as Independent Director during the year.

BOARD EVALUATION

The Board adopted a formal mechanism for evaluating its performance and as well as thatof its Committees and individual Directors including the Chairman of the Board. Theexercise was carried out through a structured evaluation process covering various aspectsof the Board functioning such as composition of the Board & committees experience& competencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.

COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES

The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in "Annexure B" and is attached to this report.

DIRECTOR'S RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) of the Companies Act 2013;

i. In the preparation of the Annual Accounts of the Company the applicable AccountingStandards had been followed;

ii. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year on 31stMarch 2015 and Profit or Loss for the year ended as on that date;

iii. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and preventing and detecting fraud and other irregularities;

iv. The Directors had prepared the Annual Accounts on a going concern basis;

v. The directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively;

vi. The directos had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY

The Company has in place a proper and adequate system of internal control and the sameis being reviewed commensurate with its size and nature of operations.

The Company has entrusted the internal & operational audit to M/s. Dixit Dattatray& Associates FRN - 102665W a reputed firm of Chartered Accountants. The main thrustof the internal audit process is test and review of controls independent appraisal risksbusiness processes and benchmarking internal controls with best practices.

The Audit Committee of the Board of Directors Statutory Auditors and Business Headsare periodically apprised of the internal audit findings and corrective actions taken.Audit plays a key role in providing assurance to the Board of Directors.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING NUMBEROF PEOPLE EMPLOYED.

The Company provide a workplace environment that is safe hygienic humane and whichupholds the dignity of the employees. The Company creates systems and practices to ensurea harassment free workplace where employees feel safe and secure in discharging theirresponsibilities.

They are 1 persons employed with your company.

CAUTIONARY STATEMENT

Statements made in this report in describing the Company's objectives projectionsestimates

expectations or predictions may be "forward-looking statements" within themeaning of applicable securities laws and regulations. Forward-looking statements arebased on certain assumptions and expectations of future events. The Company cannotguarantee that these assumptions and expectations are accurate or will be realized by theCompany. Actual results could differ materially from those expressed in the statement orimplied due to the influence of external and internal factors which are beyond thecontrol of the Company. The Company assumes no responsibility to publicly amend modify orrevise any forward-looking statements on the basis of any subsequent developmentsinformation or events.

PUBLIC DEPOSIT

During the year under review your Company has not accepted any deposits within themeaning of provisions of Chapter V - Acceptance of Deposits by Companies of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014 as amended fromtime to time.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchange Corporate Governanceis applicable to your Company from 31st March 2015. Your Company shall complywith the requirements of Clause 49 within six months from the date on which theprovisions became applicable to the Company i.e. within six months from 31stMarch 2015.

OPEN OFFER

Open offer for acquisition of 104000 (One Lac Four Thousand) fully paid up equityshares of Rs. 10/- each from the shareholders of Arun Varun Trade and Investment Limited("AVTIL") by Mr. Gautam Bhandari and Mr. Jayantilal Bhandari (hereinafter referto as "Acquirers") constituting 26.00% of the Issued Subscribed Paid - upEquity Share Capital having Voting Rights of the Target Company pursuant to and incompliance with regulations 3(1) & 4 of the Securities And Exchange Board Of India(Substantial Acquisition Of Shares And Takeovers) Regulations 2011 as amended ("SEBI(SAST) Regulations").

Tentatively date of opening of the offer is Monday October 19 2015 & Date ofclosing of the offer is Monday November 02 2015 which is subject to change as per SEBIcomments on open offer.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 with regard to Conservation of Energy & Technologyabsorption is not required to be given as the same is not applicable to the Company.

Foreign Exchange Earning NIL
Foreign Exchange Outgo NIL

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company's future operations.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013

Particulars of investments made by your Company are provided in the Audited financialstatement. (Please refer to Note 8 to the Audited Financial Statement).

Further there were no loans given guarantees and Securities provided by your Companyunder Section 186 of the Companies Act 2013 during the financial year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

There was no contract or arrangements made with related parties as defined underSection 188 of the Companies Act 2013 during the year under review. Accordingly thedisclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC 2 is not applicable.

AUDITORS AND AUDITORS REPORT

M/s. Ramanand Aiyar & Co. Chartered Accountants (FRN: 000990N) have expressedtheir unwillingness to continue as Statutory Auditors of the Company and do not offerthemselves for re-appointment.

M/s. BDMV & Co. Chartered Accountants (Firm Registration Number: 101256W) beingeligible have consented to act as Statutory Auditors of the Company to hold the officefrom the conclusion of 33rd Annual General Meeting till the conclusion of 38thAnnual General Meeting (subject to the approval of the members at the ensuing AnnualGeneral Meeting and ratification at every Annual General Meeting held thereafter).

The notes to the Financial Statements referred to in the Auditors Report areself-explanatory and do not call for any further comments under Section 134 of theCompanies Act 2013.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s. DMP & Associates Practicing Company Secretaries to undertake theSecretarial Audit of the Company for the financial year 2014-15. The Report of theSecretarial Audit Report is annexed herewith as "Annexure C.

EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

In regards to observations made on business activities of your Company we hereby statethat as per our view the business activities of your Company does not falls under thedefinition of NonBanking Finance Company as per provisions of Reserve Bank of India Act1934 and further the management have obtained a legal opinion from an expert to furthersupport our view.

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 (3) read withRule 12 of the Companies (Management and administration) Rules 2014 is furnished in"Annexure A" and is attached to this Report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Board of Directors of your Company met 6 (six) during the financial year underreview. The details of the same are under mentioned:

Date of Meeting Board Strength No. of Directors Present
30/05/2014 4 3
13/08/2014 4 3
27/08/2014 4 3
13/11/2014 4 3
08/12/2014 4 3
12/02/2015 4 4
20/03/2015 5 4

Further your Board of Directors passed a Circular Resolution dated March 30 2015 forredesignation of Ms. Dharmistha J. Darji as Additional Executive Director from AdditionalNonExecutive Director.

INDEPENDENT DIRECTORS MEETING

The Independent Directors met on March 20 2015 without the attendance ofNon-Independent Directors and members of the Management. The Independent Directorsreviewed the performance of non-independent Directors and the Board as a whole; theperformance of the Chairman of the Company taking into account the views of ExecutiveDirectors and NonExecutive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.

COMMITTEES OF BOARD

Audit Committee Stakeholders Relationship Committee and Nomination and RemunerationCommittee were constituted.

Details of various committees constituted by the Board of Directors as per theprovision of the Companies Act 2013 within six month form March 31 2015.

ESTABLISHMENT OF VIGIL MECHANISM

Your Company has laid down Whistle Blower Policy covering Vigil Mechanism withprotective Clauses for the Whistle Blowers. The Whistle Blower Policy is made available onthe website of the Company.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company does not have any Subsidiary Joint Venture or Associate Company withinthe meaning of the Companies Act 2013 as on March 31 2015

RISK MANAGEMENT

Your Board of Directors emphasis to oversee that all the risks that the organizationfaces such as strategic financial credit market liquidity security property legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management arrangement in place capable of addressing those risks. Furtherthe Audit Committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on continuing basis.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance on Sexual Harassment at workplace. During the year underreview there were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is furnished hereunder:

(A) Information pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1)of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

i. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2014-15 and the percentage increase inremuneration of each Director Chief Financial Officer Chief Executive Officer CompanySecretary in the financial year 2014-15:

Name of Director & KMP Ratio of Remuneration of each Director/to median remuneration of Employees % increase in remuneration in the financial year
Executive Directors Mr. Gautam R. Bhandari Nil Nil
Ms. Dharmistha J. Darji1 Nil Nil
Non-Executive Directors Mr. Amit Shankerbhai Patel 2 Nil Nil
Mr. Ameet Muljibhai Brahmbhatt Nil Nil
Key Managerial Personnel
Mr. Jayantilal R. Bhandari(MD) Nil Nil
Mr. Gautam R. Bhandari(CFO) Nil Nil
Ms. Dharmistha J. Darji (CS)3 11000/5000 = 2.2 Nil

1 Ms. Dharmistha J. Darji appointed as Additional Director w.e.f. 20thMarch 2015.

2 Mr. Amit Shankerbhai Patel appointed as an Independent Non-Executive Directorw.e.f. 12th February 2015.

3 Appointed as Company Secretary w.e.f. 20th March 2015.

ii. The median remuneration of employees of the Company during the financial year wasRs. 5000.

iii. The percentage increase in the median remuneration of employees in the financialyear: Nil

iv. The number of permanent employees on the rolls of Company: 1 (one) as on 31stMarch 2015.

v. The explanation on the relationship between average increase in remuneration andCompany performance: Nil

vi. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:

The total remuneration of key managerial personnel is Rs. 6800 in 2014-15 whereasduring the year under review the Company registered a profit after tax of Rs. 133.80 lacsas compared to profit after tax of Rs. 130.57 lacs in the previous year.

vii. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:

Particulars 31st March 2015 31st March 2014 % Change
Market Capitalization (in Rs.) 2520000 2520000 0
Price Earning Ratio 0.19 0.19 0

viii. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:

The Market Price of Company's share as on 31st March 2015 was Rs. 6.30/- onBSE.

The Company has not made any public offer in the recent past and accordinglycomparison of Public Offer Price and the current market price of the Company's shares arenot relevant.

ix. Average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2014-15 was Nil.

x. The key parameters for any variable component of remuneration availed by theDirectors: Nil

xi. The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year: N.A.

xii. Affirmation that the remuneration is as per the Remuneration Policy of the Company(Annexure B)

It is confirmed that the remuneration is as per the Remuneration Policy of the Company.

(B) The information pursuant to Section 197 of the Companies Act 2013 read with Rule5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is not applicable since during the year under review none of the employees of the Companywas in receipt of remuneration in excess of the limits specified whether employed for thewhole year or part thereof.

APPRECIATION:

Your Directors acknowledge with gratitude the co-operation and assistance given by theBankers Distributors Customers Investors BSE Ltd. National Securities DepositoryLtd. Central Depository Services (India) Ltd. and R & T Agent during the year underreview and are confident that your Company will continue to receive such support in theyears ahead. The Directors also wish to thank all the employees for their contributionhigh degree of commitment support and continued co-operation throughout the year.

- FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Place: Mumbai.
Date: 02nd September 2015
Jayantilal R. Bhandari Gautam R. Bhandari
Chairman & Managing Director CFO & Director
DIN :01897297 DIN:00427678

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31 2015 [Pursuant to section 204(1) of theCompanies Act 2013 and Rule No.9 of the Companies (Appointment and RemunerationPersonnel) Rules 2014]

To

The Members

ARUN VARUN TRADE AND INVESTMENT LIMITED

We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Arun Varun Trade andInvestment Limited (hereinafter called "the Company"). Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the Company's books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of Secretarial Audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on March 31 2015 complied withthe statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on March 31 2015 accordingto the provisions of:

1) The Companies Act 2013 ('the Act') and the rules made thereunder;

2) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;

3) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

4) Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment; - Not appiic^bleTo'Th.e Companv for thefinancial year under review;

5) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers)Regulations 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements)Regulations 2009; - Not applicable to the Company for the financial yearunder review;

d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; - Not applicable to the Company for thefinancial year under review;

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; - Not applicable to the Company for the financial year under review;

f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client -Not applicable to the Company;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009; - Not applicable to the Company for the financial year under review; and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; - Not applicable to the Company for the financial year under review.

I have also examined compliance with the applicable clauses of the following:

i) . Secretarial Standards issued by The Institute of Company Secretaries of India.(Not applicable for the financial year under review as the same were not notified).

ii) . The Listing Agreement entered into by the Company with the BSE Limited(hereinafter called as "Listing Agreement")

During the period under review and as per the explanations and representations made bythe management and subject to the clarifications given to us the Company has generallycomplied with the provisions of the Act Rules Regulations Guidelines Standards etc.mentioned above subject to our observation and interpretation that the business activitiescarried on by the Company may perhaps fall under Non-Banking Finance Company as perprovisions of Reserve Bank of India Act 1934;

I further report that:

As on March 31 2015 the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act and the Listingagreement.

Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through and there were no instances where dissentingmembers views were required to be captured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

I further report that during the audit period there were instances of:

i). Members authorizing the Board of Directors vide Special Resolution dated: September25 2014:

a) Section 180(l)(a) for Creation of Charges / Mortgages / Hypothecations on movableand immovable properties up to Rs. 100 Crores (Rupees One Hundred Crores only) or theaggregate of the paid up capital and free reserves of the Company whichever is higher.

b) Section 180(l)(c) for Borrowings up to Rs. 100 Crores (Rupees One Hundred Croresonly) irrespective of the fact that such aggregate amount of borrowings outstanding mayexceed the aggregate for the time being of the paid-up capital of the Company and its freereserves.

However during audit period there were no instances of:

i) . Public/Right/Preferential issue of shares / debentures / sweat equity.

ii) . Buy-back of securities

iii) . Merger / amalgamation / reconstruction etc.

iv) . Foreign technical collaborations

Place: Mumbai
Date: September 2 2015
Signature:
For DMP & ASSOCIATES
COMPANY SECRETARIES
MARMIK PATEL
PARTNER
ACS No. 35755 C P No.: 13205

This Report is to be read with our letter of even date which is annexed as Annexure -SA and forms an integral part of this report.

Annexure - SA

To

The Members

ARUN VARUN TRADE AND INVESTMENT LIMITED

Our report of even date is to be read along with this letter.

1. The Company's Management is responsible for preparation and maintenance ofsecretarial records and for devising proper systems to ensure compliance with theprovisions of applicable laws and regulations.

2. Our responsibility is to express an opinion on secretarial records standards andprocedures followed by the Company with respect to secretarial compliances. We believethat audit evidence and information obtained from the Company's management is adequate andappropriate for us to provide a basis for our opinion.

3. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected inSecretarial records. We believe that the process and practices we followed provide areasonable basis for our opinion.

4. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

5. Wherever required we have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.

6. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedure on test basis.

7. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficiency or effectiveness with which the management has conductedthe affairs of the Company.

Place: Mumbai For DMP& ASSOCIATES
Date: September 2 2015 COMPANY SECRETARIES
MARMIK PATEL
PARTNER
ACS No. 35755 CP No.: 13205

NOTE 21 : SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared on an accrual basis and under historicalcost convention and in compliance in all material aspects with the applicable accountingprinciples in india the applicable accounting standards notified in Section 133 of theCompanies Act 2013.

All the assets and liabilities have been classified as current and non-current as perthe company’s normal operating cycle and other criteria set out in schedule III tothe Companies Act 2013. Based on nature of products and the time between the acquisitionof assets processing and their realization in cash & cash equivalent the company hasascertain its operating cycle to be 12 months for the purpose of current-non currentclassification of assets and liabilities.

Previous year’s figures have regrouped & reclassifies wherever is necessary.

i) Accounting Policies

The financial statements are prepared under historical cost convention in accordancewith the generally accepted accounting principles in India and provision of the CompaniesAct 2013. The accounts are maintained on accrual basis as a going concern.

ii) Valuation of Inventories

Inventories are valued at cost or Market Value whichever is lower

The value of diminution in unquoted securities is unascertainable as the necessaryinformation is not available and is considered to be valued at market value as cost.

iii) Cash Flow Statement

Cash flow statement is prepared under "Indirect Method" and the same isannexed.

iv) Depreciation on Fixed Assets

Depreciation on fixed assets is provided on WDV method in accordance with the life ofthe assets specified in the Part C of the Schedule II of the Companies Act 2013 as perthe details below.

SI No Nature of the assets Estimated useful life in years
1 Motor Vehicles 8
2 Computers - End User Devices 3
3 Office Equipment’s 5

v) Revenue Recognition

The income of the company is derived from trading in shares and interest on loan givento companies & investments in properties.

Interest income is recognized on time proportion basis taking into account the amountoutstanding and rate applicable.

The revenue and expenditure are accounted on a going concern.

vi) Accounting for Fixed Assets

Fixed Assets are stated at the cost of acquisition less accumulated depreciation. Costincludes all identifiable expenditure incurred to bring the assets to its presentcondition and location. Any gains or losses on account of exchange difference either onsettlement or translation where they relate to the acquisition of fixed assets areadjusted to the carrying cost of such assets.

vii) Accounting for the effects of changes in Foreign exchange rates

The company has not incurred any transaction in foreign currencies. Therefore thisstandard is not applicable for the current reporting period.

viii) Accounting for Investments

The company has made investment in immovable properties.

a) Long-term Investments are valued at cost less provision for permanent diminution invalue of such investments.

b) Current Investments are valued at lower.of cost and market value.

During the F.Y. 2011-12 the company has made capital investments in the partnershipfirm - Green Investment Inc in which company is the partner.

ix) Accounting for Employee Benefits

a) Short Term Employees Benefits:

All employee benefits payable wholly within twelve months of rendering the services areclassified as short term employee benefit.

Benefits such as salaries wages short term compensated absences etc. and the expectedcost of bonus ex-gratia are recognized in the period in which the employee renders therelated services.

b) Post - employment benefit

(a) Defined Contribution plans:

State Governed provident fund cum employees pension scheme are defined contributionplans. The contribution paid / payable under the schemes is recognized during the periodin which the employees render the related services.

x) Related Party Disclosures

As per accounting standard 18 the disclosure of transactions with the related partiesare given below :-

List of related parties where control exists and related parties with whom transactionshave been taken place and relationships :-

Name of the related party Relationship
1 Jaynati R. Bhandari (Director) Key Management Personnel
2 Gautam R. Bhandari (Director)
3 Schwabe Incoat Enterprise over which Key Management Personnel are able execise significant influence. J
4 Solitaire Contractions
5 Green Investments Inc.
6 Guru Rajendra Trading Pvt. Ltd.

Transaction with Related party during the year

Name of the Related Party Transaction with Related Party F.Y.2014-15 F.Y. 2013-14
1 Schwabe Incoat Profit Share NIL 394424/-
2 Schwabe Incoat Interest Income NIL 201294/-
3 Green Investments Inc. Profit Share 1511 /- (4107/-)

xi) Earning Per Share

EPS is calculated in accordance with accounting standard prescribed.

Basic/Diluted earning per share are calculated by dividing Net profit for the periodattributable to the Equity shareholder (after deducting preference dividend andattributable taxes) by the weighted average number of equity shares outstanding during theperiod.

Particualrs ‘ F.Y. 2014-15 F.Y.2013-14
I Net Profit after tax as per statement of profit and loss attributable to Equity shareholders 13380065 13057219
Ii Weighted Average number of equity shares used as denominator for calculating EPS 400000 400000
Iii Basic and Diluted Earning per share 33.45 32.64
Iv Face Value per equity share 10 10

xii) Accounting for Taxes on Income

Income taxes are accounted for in accordance with Accounting Standard 22 on"Accounting for taxes on Income" (AS 22) issued by The Institute of CharteredAccountants of India. Tax comprises both current and deferred tax. Current tax is measuredat the amount expected to be paid to/recovered from the tax authorities using theapplicable tax rates. Deferred tax assets and liabilities are recognized for future taxconsequences attributable to timing differences between taxable income and accountingincome that are capable of reversal in one or more subsequent periods and are measuredusing relevant enacted tax rates.

The Company has brought forward losses available for set off under the Income Tax Act1961. However in view of the present uncertainty regarding generation of sufficient futureincome net deferred tax asset at the year end including related credit for the year hasnot been recognized in these accounts on prudent basis.

Provision for current taxation for the Company of Rs.3400550 /- represents the amountof tax payable on the taxable income for the year as determined in accordance with theprovisions of the Income Tax Act 1961.

Earlier the company was paying the taxes as per the provision of Minimum Alternate Taxpursuant to the provisions of Section 115JB of the Income Tax Act 1961 of India. TheFinance Act 2005 inserted sub section (1A) to section 115JAA to grant tax credit inrespect of MAT paid under section 115JB of the Act with effect from assessment year2006-07 and carry forward the credit for a period of 10 years. Accordingly the MAT Creditof Rs.5328757/-/fc. 1166738/- of A.Y.2010-11 and Rs.4162019/- of A.Y.2011-12] isavailable to be set off against tax liability.

During the current F.Y. MAT credit of Rs.2187345/- is utilized out of the total MATcredit of Rs.5328757/- from the current year tax liability. & balance MAT Credit ofRs Rs.3141412/-[ Rs.3141412/- of A.Y.2011-12] is available to be set off againstfuture tax liability.

xiii) Provision Contingent Liabilities and Contingent Assets

There are no Contingent Liabilities as Certified by Management.

Particulars

As at 31st March2015

As at 31st March2014

Contingent liabilities
• Claims against the company not acknowledged as debt NIL NIL
• Guarantees NIL NIL
• Other Money for which the company is contingently liable NIL NIL NIL NIL
Commitments
• estimated amount of contracts unexecuted on capital account NIL NIL
• Uncalled liability on shares and other investments partly paid NIL NIL
• Other commitments NIL NIL NIL NIL
Total NIL NIL

 

As per our report of even date
For S. Ramanand Aiyar & Co. For and on behalf of Board of Directors of
Chartered Accountants (Firm Reg. No. 000990 N) Arun Varun Trade & Investment Ltd
G. R. Bhandari J. R. Bhandari
(Partner) CFO & Director Chairman & Managing Director
Mem.No.056373 (DIN- 00427678) (DIN-01897297)
Place: Mumbai Dharmistha .J. Darji
Date: 29/05/2015 Company Secretary

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