AAR Commercial Company Ltd.
|BSE: 539632||Sector: Others|
|NSE: N.A.||ISIN Code: INE184K01013|
|BSE 00:00 | 31 Aug||AAR Commercial Company Ltd|
|NSE 05:30 | 01 Jan||AAR Commercial Company Ltd|
|BSE: 539632||Sector: Others|
|NSE: N.A.||ISIN Code: INE184K01013|
|BSE 00:00 | 31 Aug||AAR Commercial Company Ltd|
|NSE 05:30 | 01 Jan||AAR Commercial Company Ltd|
Your Directors have pleasure in submitting 37th Annual Report of the Company togetherwith the Audited Statements of Accounts for the year ended 31st March 2019.
The summarized financial performance of the Company for the year under review ascompared with previous year's 3gures are given hereunder :
Gross revenues for this financial year stood at Rs. 12737423.00 as against Rs.2918063.50 in the previous year. Profit before depreciation and taxation was Rs.10082715.20 as against Rs. 1789115.35 in the previous year. After providing fordepreciation and taxation the net profit of the Company for the year under review wasplaced at Rs. 8064452.20 as compared to Rs. 1725330.35 in the previous year.
FINANCIAL ACCOUNTING AND ADAOPTION OF IND-AS
The Financial Statements for the FY 2018-19 are prepared under Ind-AS. Pursuant toSection 129(3) of the Companies Act 2013 the Financial Statements of the Company areprepared in accordance with the Section 133 of the Companies Act 2013 read with Rule 7 ofthe Companies (Accounts) Rules 2014 and Indian Accounting Standard on FinancialStatements is provided in the Annual Report.
No Dividend was declared for the current financial year due to conservation of Profitsincurred by the Company.
The provisions of Section 125(2) of the Companies Act 2013 relating to transfer ofUnclaimed Dividend to Investor Education and Protection Fund do not apply as there was nodividend declared and paid by the Company.
DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors confirm that Company has complied with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013. The details of the investments made by company aregiven in the notes to the financial statements.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
The paid-up equity capital as on March 31 2019 was Rs. 100140000. No Bonus Shareswere issued neither company bought back any of its securities during the year underreview. The company has not issued any shares with di3erential voting rights nor grantedstock options nor sweat equity shares. As on March 31 2019 none of the Directors of theCompany hold instruments convertible into equity shares of the Company. The Company haspaid Listing Fees for the financial year 2019-20 to each of the Stock Exchanges where itsequity shares are listed. During the year Camellia Tradelink Private Limited a WhollyOwned Subsidiary amalgamated with the Company. Since the entire shareholding of thisWholly Owned Subsidiary was held by the Company no shares were allotted. Hence there wasno impact on the total issued and paid up share capital. However pursuant to the Schemeof Amalgamation as approved by the Central Government (Regional Director- ER) theAuthorised Share Capital of the Wholly Owned Subsidiary Company clubbed/ merged with theAuthorised Share Capital of the Company. Hence post Merger the Authorised Share Capitalof the Company stood at Rs. 124500000/-
LISTING OF SHARES
The Equity Shares of the Company are listed on the Bombay Stock Exchange LimitedMumbai and Calcutta Stock Exchange Limited Kolkata.
The Listing Fee has been paid to the Stock Exchanges for the FY 2019-20. The ISIN No.of the Company is INE184K01013.
EXTRACTS 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 in prescribed Form MGT 9 is furnished in Annexure A and is attached to this Report.
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.
However the Board has adopted this Policy in terms of Regulation 23 of the SEBI(Listing Obligations and Disclosure Regulations) to ensure that all Related PartyTransactions shall be subject to this policy and approval or rati3cation in accordancewith Applicable Law. This Policy contains the policies and procedures governing thereview determination of materiality approval and reporting of such Related PartyTransactions. The Policy on Related Party Transactions is uploaded in the Company'swebsite www.aarccl.in under the linkhttps://www.aarccl.in/images/pdf-reports/other-corporate-announcements/policy-on-related-party-transactions.pdf
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
Management and Business Risk Evaluation is an ongoing process within the Organization.Pursuant to Section 134(3)(n) of the Companies Act 2013 the Board has framed a RiskManagement Policy for the Company. The Company has in place a mechanism to identifyassess monitor and mitigate various risks to key business objectives. Major risksidentified by the business and functions are systematically addressed through mitigatingactions on a continuing basis. At present the Company has not identified any element ofrisk which may threaten the business or existence of the Company.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviors of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "Code ofConduct for Board of Directors & Senior Management Personnel". The Code has beenposted on the Company's website www.aarccl.in under the linkhttps://www.aarccl.in/images/pdf-reports/other-corporate-announcements/code-of-onduct-for-board-of-directors-and-senior-management-personnel.pdfThe Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. All the Board Members and the Senior Management personnelhave confirmed compliance with the Code. All Management Sta3 were given appropriatetraining in this regard.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The provisions of Section 134(m) of the Companies Act 2013 do not apply to ourCompany. There was no foreign exchange inflow or outflow during the year under review.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
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.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES AND EQUITY SHARES WITH DIFFERENTIALRIGHTS
The Company has not issued any Sweat Equity Shares or Equity Shares with Di3erentialRights during the financial year.
INTERNAL COMPLAINT REGARDING SEXUAL HARRASSMENT
There were no cases of sexual harassment of woman at work place. Also there are noinstances of child labour/ forced labour/ involuntary labour and discriminatory employmentduring the year.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its Responsibility Statement:-a) In the preparation of the annualaccounts the applicable accounting standards had been followed and there are no materialdepartures; b) The directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are 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 and of the profit and loss of the company for that period; c) The directorshad taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities; d) The directors had preparedthe annual accounts on a going concern basis; e) The directors had laid down internalfinancial controls to be followed by the company and that such internal financial controlsare adequate and operating effciently.
Internal financial control means the policies and procedures adopted by the Company forensuring the orderly and effcient conduct of its business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information. f) The directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems are adequateand operating effectively.
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.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company held 9 Board Meetings during the financial year under review.Detailed information is given in the Corporate Governance Report.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. The Code has been posted on the Company's websitewww.aarccl.in under the linkhttps://www.aarccl.in/images/pdf-reports/other-corporate-announcements/code-of-conduct-for-prevention-of-insider-trading.pdfAll Board of Directors and the designated employees have confirmed compliance with theCode.
Your Company follows a structured familiarization programme through variousreports/codes/internal policies for all the Directors with a view to update them on theCompany's policies and procedures on a regular basis.
Periodic presentations are made at the Board Meetings on business and performance longterm strategy initiatives and risks involved. The details of familiarisation programmehave been posted in the website of the Company www.aarccl.in under the link https://www.aarccl.in/images/pdf-reports/other-corporate-announcements/AAR_COMM_FAMILARISATION_PROGRAMME_OF_INDIPENDENT_DIRECTORS.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to provisions of Section 152(6) of the Companies Act 2013 and Articles ofAssociation of the Company Mrs. Uma Sharma (DIN: 06862354) will retire by rotation at theensuing AGM of the Company and being eligible offers herself for re-appointment. In termsof the provisions of Section 149 152 of the Companies Act 2013 which came into effectfrom 1st April 2014 Schedule IV and other applicable provisions if any read withCompanies (Appointment and Qualification of Directors) Rules 2014 the IndependentDirectors can hold office for a term of up to five (5) consecutive years on the Board ofDirectors of the Company and are not liable to retire by rotation. All IndependentDirectors of the Company have submitted a declaration that each of them meets the criteriaof Independence as provided in Section 149(6) of the Act and there has been no change inthe circumstances which may affect their status as Independent Director during the year.Pursuant to the provisions of Sections 149 and 152 and other applicable provisions ifany of the Companies Act 2013 framed thereunder read with Schedule IV of the CompaniesAct 2013 and the Companies (Appointment and Qualification of Directors) Rules 2014 andthe applicable provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended from time to time Mr. Udit Agarwal (DIN: 07036864) who wasappointed as an Independent Director and who holds the office of Independent Director upto December 5 2019 and who meets the criteria for Independence being eligible forre-appointment be and is hereby re-appointed as a non-retiring Independent Director on theBoard of the Company for Second Term of 5 (Five) consecutive years w.e.f. December 62019." The following are the Key Managerial Personnel of the Company:
None of the Directors of your Company is disqualified under the provisions of Section164(2)(a) & (b) of the Companies Act 2013and a certificate dated 13th August 2019received from Company Secretary in Practice certifying that none of the directors on theboard of the company have been debarred or disqualified from being appointed or continuingas directors of the Company by SEBI/Ministry of Corporate Affairs or any such statutoryauthority is annexed to the Corporate Governance Report.
PARTICULARS OF MANAGERIAL REMUNERATION
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
I. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:
* Except sitting fees no remuneration is paid to the Non-Executive IndependentDirectors.
II. Percentage increase in remuneration of directors chief financial officer companysecretary if any in the financial year
IV. Number of permanent employees on the rolls of Company: 5
V. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justi3cation thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Managerial Personnel Salary of Mr. Arvind Kumar Modi increased to ` 2.64 Lacs inthe Financial Year 2018-19. Non-Managerial Personnel 0.00 %
VI. The key parameters for any variable component of remuneration availed by thedirectors: N.A. VII. Afirmation that the remuneration is as per the remunerationpolicy of the company:
The Company afirms remuneration is as per the remuneration policy of the Company.
VIII. There is no employee whose remuneration exceeds the limits prescribed underSection 197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
REMUNERATION OF DIRECTORS
The details regarding remuneration to Directors are shown separately in MGT-9 attachedas Annexure A which forms part of the Directors Report.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
DISCLOSURE OF COMPOSITION VIGIL MECHANISM POLICY
The Company has established a vigil mechanism and oversees through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co-employees and the Company.
The policy on vigil mechanism is attached with this report as Annexure C and isalso available on the website of the company i.e. www.aarccl.in under the linkhttps://www.aarccl.in/images/pdf-reports/other-corporate-announcements/whistle-blower-policy.pdf
DETAILS OF COMPOSITION OF COMMITTEES (i) Audit Committee
The Audit Committee of the Company as on the date of this report is constituted offollowing Directors:
Mr. Rajendra Yadav and Mr. Kumar Deepak Independent Directors were holding theposition of members of the Audit Committee.
Both the Directors have tendered their resignation from the Directorship of the Companyeffective from April 25 2019 and consequently they also relinquished the positions inAudit Committee also. Further Mrs. Nishi Agrawal was appointed as an Independent Directoron June 19 2019. Audit Committee has been reconstituted by the Board of Directors of theCompany on June 19 2019 by appointment of Mr. Nishi Agrawal as a Chairperson Mrs. UmaSharma and Mr. Udit Agarwal as Members of the Audit Committee.
(ii) Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Company as on the date of this reportis constituted of following Directors:
Mr. Rajendra Yadav and Mr. Kumar Deepak Independent Directors were holding theposition of members of the Nomination and Remuneration Committee. Both the Directors havetendered their resignation from the Directorship of the Company effective from April 252019 and consequently they also relinquished the positions in Nomination and RemunerationCommittee also. Further Mrs. Nishi Agrawal was appointed as an Independent Director onJune 19 2019. Nomination and Remuneration Committee has been reconstituted by the Boardof Directors of the Company on June 19 2019 by appointment of Mr. Udit Agarwal as aChairperson Mrs. Nishi Agrawal and Mrs. Uma Sharma as Members of the Nomination andRemuneration Committee.
(iii) Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Company as on the date of this report isconstituted of following Directors:
Mr. Rajendra Yadav and Mr. Kumar Deepak Independent Directors were holding theposition of members of the Stakeholders Relationship Committee. Both the Directors havetendered their resignation from the Directorship of the Company effective from April 252019 and consequently they also relinquished the positions in Stakeholders RelationshipCommittee also. Further Mrs. Nishi Agrawal was appointed as an Independent Director onJune 19 2019. Stakeholders Relationship Committee has been reconstituted by the Board ofDirectors of the Company on June 19 2019 by appointment of Mr. Udit Agarwal as aChairperson Mrs. Nishi Agrawal and Mrs. Uma Sharma as Members of the StakeholdersRelationship Committee.
Pursuant to the provisions of Section 134(3)(p) of the Companies Act 2013 andRegulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board of Directors at its meeting held on 13th February 2019 hascarried out an annual performance evaluation of its own performance the individualdirectors' performance including that of independent directors.
The parameters based on which the evaluation process is being carried out is fixed bythe Board in terms of the provisions of Companies Act 2013.
In a separate meeting of Independent Directors held on 29th March 2019 performance ofnon-independent directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors.
DISASSOCIATION OF SUBSIDIARIES AND DISPOSAL OF STAKE IN SUBSIDIARIES
The Honourable Regional Director (ER) Ministry of Corporate Affairs vide its orderdated October 31 2018 has approved and sanctioned the Scheme of Amalgamation of CamelliaTradelink Private Limited (Transferor and Wholly Owned Subsidiary Company) with AARCommercial Company Limited (Transferee Company. Consequent upon amalgamation theTransferor Company ceased to exist as a Subsidiary. Amalgamation Order of HonorableRegional Director as received were 3led with the Registrar of Companies West Bengal onNovember 13 2018.
AMALGAMATION OF WHOLLY OWNED SUBSIDIARIES
At their meeting held on 13th February 2018 Board of Directors of the Company hasapproved the Scheme of Amalgamation of M/s. Camellia Tradelink Private Limited being aWholly Owned Subsidiary (TRANSFEROR COMPANY) with AAR Commercial Company Limited(TRANSFEREE COMPANY). Hence as per the provisions of Section 233 of the Companies Act2013 read with the Companies (Compromises Arrangements and Amalgamations) Rules 2016Company has 3led Scheme of Amalgamation with the Registrar of Companies West Bengal andOffice of the O3cial Liquidator Calcutta High Court for their Observation on the same.
Vide its Letter bearing reference no. ROC/LEGAL/233/2018/50 dated 10.04.2018 theoffice of Registrar of Companies West Bengal has issued its observation with thefollowing suggestions:
1. The share capital clause of the scheme shall include the class and categoryof company which enters into the scheme of amalgamation i.e. holding company and itswholly owned subsidiary company.
2. The Scheme shall include the clause related to providing "purchase ofshare held by the descending shareholders/debtors Creditors" "cancellation orextinguish of shares on demerger" if applicable.
3. This Office has scrutinised the scheme of Amalgamation for its limitedinternal purpose/in-principle approval for deciding on the matter of Amalgamation of thetransferor and transferee companies and it should not for any reason affects the interestof public.
Further the Office of the O3cial Liquidator High Court Calcutta vide its letterbearing reference no. OL-Misc./Amalg/S233/62/6905/G dated 21.02.2018 has given thefollowing suggestions:
1. This Office has scrutinised the scheme of Amalgamation for its limitedinternal purpose / in-principle approval for deciding on the matter of Amalgamation ofcompanies and it should not for any reason affects the interest of public.
The said suggestions were duly incorporated in the Scheme of Amalgamation.
Vide its Order dated October 31 2018 Central Government (Regional Director-ER) hasapproved the Scheme of Amalgamation of M/s. Camellia Tradelink Private Limited (being aWholly Owned Subsidiary of the Company) with the Company. Consequent upon amalgamationM/s. Camellia Tradelink Private Limited ceased to exist as a Subsidiary of AAR CommercialCompany Limited. Amalgamation Order of Honorable Regional Director as received were 3ledwith the Registrar of Companies West Bengal on November 13 2018.
SHIFTING OF REGISTERED OFFICE FROM KOLKATA (WEST BENGAL) TO NEW DELHI (NATIONAL CAPITALTERRITORY OF DELHI)
Board of Directors of the Company has vide its resolution dated January 21 2019proposed the shifting of the Registered Office of the Company from Kolkata to New Delhi(from the jurisdiction of Registrar of Companies West Bengal to the jurisdiction ofRegistrar of Companies Delhi and Haryana). The proposal of the Board of Directors asabove has been approved by the Shareholders at the Extra-ordinary General Meeting held onMonday 25th February 2019.
The Regional Director (ER) Ministry of Corporate Affairs vide its order dated 19thJune 2019 approved shifting of Registered Office from the state of West Bengal to theNational Capital Territory of Delhi. Order of the Regional Director (ER) Ministry ofCorporate Affairs passed as above has been 3led in E-form INC-28 with the Registrar ofCompanies West Bengal on 1st July 2019. Further pursuant to the provisions of Section12(2) & (4) of the Companies Act 2013 and Rule 25 and 27 of The Companies(Incorporation) Rules 2014 the Company is in the process of 3ling E-Form INC-22 with theRegistrar of Companies West Bengal intimating the shifting of the Registered Office ofthe Company from 1 British India Street (Old Complex) Mezzanine Floor Room Nos. 20Kolkata 700 069 (from the jurisdiction of Registrar of Companies West Bengal) toFlat No - 22 Second Floor Right Side Bazar Lane Bhogal Jangpura New Delhi 110014 (to the jurisdiction of Registrar of Companies Delhi and Haryana).
Following are the Corporate Details of the Company after shifting of Registered Office:
Pursuant to Section 139 of the Companies Act 2013 and Rules made thereunder M/s R.K.Tapadia & Co. Chartered Accountants (ICAI Firm Registration No. 318166E) wereappointed as Statutory Auditors at the 35th Annual General Meeting held on September 222017 to hold office until the conclusion of the 40th Annual General Meeting subject torati3cation by shareholders at each Annual General Meeting.
SECRETARIAL AUDIT REPORT
Mr. Anurag Fatehpuria Practicing Company Secretary having office at 23/1 Sita NathBose Lane Salkia Howrah 711 101 has been appointed as Secretarial Auditors of theCompany for financial year ended 31st March 2019. The Secretarial Audit Report receivedfrom the Secretarial Auditor is annexed to this report marked as Annexure Dand forms part of this report.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
Certain observations made in the Secretarial Audit Report with regard to few lapsesunder the Companies Act 2013 relating to maintenance of statutory registers were mainlydue to ambiguity and uncertainty of the applicability. However the company would ensurein future that all the provisions are complied to the fullest extent.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There is no change in the nature of the business of the Company.
The Company is committed to maintain transparency in its operations & hence itcomplies with the Corporate Governance requirements.
The Corporate Governance Report as per Schedule V(C) of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 and requisite Certificate of Compliancefrom Statutory Auditor regarding compliance of conditions of Corporate Governance areannexed and forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report of the Company comprising of managementperception risks and concerns internal control systems are annexed and forms part of theAnnual report.
Your Directors take this opportunity to express their gratitude for the assistance andsupport extended by its bankers business associates stakeholders and various GovernmentAuthorities during the year under review.
Your Directors thank the esteemed shareholders for their continued support andencouragement and also appreciates the dedicated services rendered by the employees at alllevels for the growth of the Company.