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Aarcon Facilities Ltd.

BSE: 532024 Sector: Infrastructure
NSE: N.A. ISIN Code: INE056J01015
BSE 05:30 | 01 Jan Aarcon Facilities Ltd
NSE 05:30 | 01 Jan Aarcon Facilities Ltd

Aarcon Facilities Ltd. (AARCONFACILIT) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 25th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended on 31 st March2018.

1. Financial summary or highlights/Performance of the Company

The financial results for the year as under:

Particular Year ended 31.03.2018 Year ended 31.03.2017
Sales & Other Income 0.72 39.93
Profit before Depreciation (21.05) 01.30
Less: Depreciation 12.56 12.76
Profit/Loss of the year (33.61) (11.46)
Less: Provision for Taxation 0.00 0.00
Provision for Deferred Tax (0.24) (0.06)
Profit/Loss After Tax (33.37) (11.40)

2. Dividend

Your Board does not recommend any dividend for the financial year 2017-18.

3. Reserves

Your Board does not propose to carry to any reserves for the financial year 2017-18.

4. Brief description of the Company's working during the year/State of Company's affair

There was no revenue from operation during the FY 2017-18 as compared to Rs. 33.30 lacsduring previous FY 2016-17 and there is loss of Rs. 33.37 during the FY 2017-18 ascompared to loss of Rs. 11.40 lacs during the previous FY2016-17.

5. Change in the nature of business if any

The Company has commenced new business of managing theatres as mentioned in Clause III(C) 103 in Memorandum of Association during the financial year 2014-15 and continued torun that business till the financial year 2016-17. The Company has discontinued the saidbusiness in the financial year 2017-18.

6. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report

The Company has discontinued the current business of Entertainment during the yearunder review and therefore there was no revenue from operation during the year. No othermaterial changes occurred subsequent to the close of the financial year of the Company towhich the balance sheet relates and the date of the report.

7. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future

No significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future during the financialyear and or subsequent to the close of the financial year of the Company to which thebalance sheet relates and the date of the report except the Company was undergoing forcriminal case under Chapter XXII of the Code of Criminal Procedure (Act X of 1882) whichwas adjudicated and the Company and Mr. Bharat Gupta Managing Director was imposedpenalty by Additional Metropolitan Magistrate of Ahmedabad for late filing of Balancesheet and Annual return of the financial year ended on 31/03/2008 during the year underreview as per the order dated 08/07/2017.

8. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements.

The management of the Company has taken adequate steps for internal financial controlswith reference to Financial statements.

9. Details of Subsidiary/Joint Ventures/Associate Companies

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

10. Performance and financial position of each of the subsidiaries associates andjoint venture companies included in the consolidated financial statement

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

11. DEPOSITS

Your Company has not accepted any deposit during the year and there was no deposit atthe beginning of the year. Therefore the details relating to deposits covered underChapter V of the Act is not applicable.

12. STATUTORY AUDITORS

The present statutory auditors M/s Ashish Mehta & Associates Chartered Accountantshas been appointed for a period five years pursuant to the provisions of section 139 ofthe Companies Act 2013 and will continue to act as statutory auditor of the Company.

13. AUDITORS'REPORT

The observations of the Auditors are explained wherever necessary in an appropriatenotes to the Audited Statement of Accounts.

14. SHARE CAPITAL

During the year under review the Company has not issued any securities nor has grantedany stock option or sweat equity.

15. EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9 forming part of the Board's reportis attached herewith as (Annexure-E)

16. Conservation of energy technology absorption and foreign exchange earnings andoutgo

The details of conservation of energy technology absorption foreign exchange earningsand outgo are attached herewith (Annexure-A)

17. Corporate Social Responsibility (CSR)

As your Company does not fall under the class of Companies specified under section 135of the Companies Act 2013 for spending any sum towards Corporate Social Responsibility asNet worth of the Company is below Indian Rupees 500 croreorTurnoveris below Indian Rupees1000 crore or a Net Profit is below Indian Rupees 5 crore during the preceding financialyear ended on 31st March 2017 and therefore the Company has not spent any sum towardsCorporate Social Responsibility during the financial year 2017-18.

18. Directors

A) Changes in Directors and Key Managerial Personnel

There was an appointment of Director and Key Managerial Personnel during the FinancialYear as follows:

Mr. Bharat Ramchandra Gupat Managing Director of the Company has re-appointed asManaging Director at the board meeting held on 17th March 2017 for a period of 3 yearswith effect from 1st April 2017 (for which consent of the members has been accorded atthe Annual General Meeting held on 30th September 2016).

Mr. Narendrakumar Chandubhai Patel was appointed as an Independent Directors of theCompany for a period of five consecutive years with effect from 2nd October 2017 at theAnnual General Meeting held on 25th September 2017.

Mrs. Anupama Bharat Gupta Director of the Company retires by rotation at the ensuingannual general meeting and being eligible offers herself for re-appointment as Director.

B) Declaration by an Independent Director(s) and re-appointment if any

Ddeclarations by Mr. Kamal Bachubhai Pandya and Mr. Narendrakumar Chandubhai PatelIndependent Directors that they meet the criteria of independence as provided insub-section (6) of Section 149 of the Companies Act 2013 have been received.

Mrs. Anupama Bharat Gupta Director of the Company retiring by rotation and eligiblefor re-appointment has given her consent and declaration under form DIR-8 pursuant toSection 164(2) read with Rule 14(1) of Companies (Appointment and Qualification ofDirectors) Rules 2014.

Details of director seeking re-appointment as per regulation 36 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulation 2015with the Bombay stock exchange is attached herewith. (Annexure- F).

C) Formal Annual Evaluation

The Company has devised a policy for performance evaluation of Independent DirectorsBoard Committees and individual Directors which includes criteria for performanceevaluation of executive directors and nonexecutive directors.

In evaluating the suitability of individual Board members the Committee may take intoaccount factors such as:

i. General understanding of the Company's business;

ii. Educational background and experience:

iii. Personal and professional ethics integrity and values;

iv. Willingness to devote sufficient time and energy in carrying out their duties andresponsibilities effectively.

19. Number of meetings of the Board of Directors

During the year from 1st April 2017 to 31st March 2018 the Board of Directors met sixtimes on the following dates:

Sr. No. Date Board Strength No. of Directors Present
1 17/04/2017 3 3
2 30/05/2017 3 3
3 05/08/2017 3 3
4 15/09/2017 3 3
5 14/11/2017 4 4
6 13/02/2018 4 4

20. Audit Committee

Due to resignation of Mr. Ramesh Chauhan and Mr. Narendra Patel the Audit Committee wasreconstituted and comprising of the following Directors of the Board:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mrs. Anupama Bharat Gupta Executive Director
3 Mr. Bharat Ramchandra Gupta Executive Director

Mr. Narendrakumar Chandubhai Patel was appointed as an Independent Directors of theCompany for a period of five consecutive years with effect from 2nd October 2017 at theAnnual General Meeting held on 25th September 2017. After such appointment the AuditCommittee was reconstituted and comprising of the following Directors of the Board:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mr. Narendrakumar Chandubhai Patel Non-Executive Independent Director
3 Mr. Bharat Ramchandra Gupta Executive Director

There was no occasion regarding non acceptance of any recommendation of the AuditCommittee during the year.

Audit Committee meetings were held on 30/05/2017 05/08/2017 15/09/2017 14/11/2017& 13/02/2018 during the year.

21. Details of establishment of vigil mechanism for directors and employees

Your Board has established vigil mechanism pursuant to rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014. Due to resignation of Mr. Ramesh Chauhanand Mr. Narendra Patel from the directorship of the Company the Board has nominated Mr.Kamal Bachubhai Pandya director of the Company to oversee the efficient working of thevigil mechanism.

The Company has framed a whistle blower policy in terms of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulation 2015.

22. Nomination and Remuneration Committee

Due to resignation of Mr. Ramesh Chauhan and Mr. Narendra Patel the Nomination andRemuneration Committee was reconstituted and comprising of the following Directors of theBoard:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mrs. Anupama Bharat Gupta Executive Director
3 Mr. Bharat Ramchandra Gupta Executive Director

Mr. Narendrakumar Chandubhai Patel was appointed as an Independent Directors of theCompany for a period of five consecutive years with effect from 2nd October 2017 at theAnnual General Meeting held on 25th September 2017. After such appointment the Nominationand Remuneration Committee was reconstituted and comprising of the following Directors ofthe Board:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mr. Narendrakumar Chandubhai Patel Non-Executive Independent Director
3 Mr. Bharat Ramchandra Gupta Executive Director

The policy formulated by Nomination And Remuneration Committee:

The terms of reference of the committee inter alia include succession planning forBoard of Directors and Senior Management Employees identifying and selection ofcandidates for appointment of Directors/lndependent

Directors based on certain laid down criteria identifying potential individuals forappointment of Key Managerial personnel and other senior managerial position and reviewthe performance of the Board of Directors and Senior Management personnel including Keymanagerial personnel based on certain criteria approved by the Board. While reviewing theperformance the committee ensures that the remuneration is reasonable and sufficient toattract retain and motivate the best managerial talents remuneration commensurate withthe performance of individual and group and also maintains a balance between both shortand long term objectives of the company.

The meeting of Nomination and Remuneration committee was held on 30/05/2017 during thefinancial year under review.

23. Stakeholders Relationship Committee

Due to resignation of Mr. Ramesh Chauhan and Mr. Narendra Patel the StakeholdersRelationship Committee was reconstituted and comprising of the following Directors of theBoard

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mrs. Anupama Bharat Gupta Executive Director
3 Mr. Bharat Ramchandra Gupta Executive Director

Mr. Narendrakumar Chandubhai Patel was appointed as an Independent Directors of theCompany for a period of five consecutive years with effect from 2nd October 2017 at theAnnual General Meeting held on 25th September 2017. After such appointment theStakeholders Relationship Committee was reconstituted and comprising of the followingDirectors of the Board:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mr. Narendrakumar Chandubhai Patel Non-Executive Independent Director
3 Mr. Bharat Ramchandra Gupta Executive Director

The committee has meetings on 30/05/2016 and 09/02/2017 during the year under review.

24. Particulars of loans guarantees or investments under section 186

The Company has not given any loan guarantees or investments under section 186 to anyperson or body corporate except loan to employees of the Company as per Company's policyfor employees.

25. Particulars of contracts or arrangements with related parties:

The Company has not entered into any contract or arrangement with related partyreferred to in sub-section (1) of section 188 of the Companies Act 2013. Form No. AOC -2regarding transactions under section 188 of the Companies Act 2013 is enclosed herewith(Annexure-B).

26. Managerial Remuneration:

Disclosures pursuant to section 197(12) of the Companies Act 2013 read with Rule 5(1)5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are enclosed herewith (Annexure-C).

27. Secretarial Audit Report

The Secretarial Audit Report pursuant to section 204(1) of the Companies Act2013 givenby M/s. Dinesh Mehta & Co. a Company Secretary in practice enclosed herewith(Annexure-D).

The Secretarial Audit Report does not contain any qualification reservation or adverseremark except:

a) The Company has not appointed chief financial officer and company secretary asrequired under section 203 of the Companies Act 2013.

b) The Company has not appointed Internal Auditor as required under Section 138 of theCompanies Act 2013.

c) The Company has not paid annual listing fees to BSE for the financial year 2017-18.

d) The Company was undergoing for criminal case under Chapter XXII of the Code ofCriminal Procedure (Act X of 1882) which was adjudicated and the Company and Mr. BharatGupta Managing Director was imposed penalty by Additional Metropolitan Magistrate ofAhmedabad for late filing of Balance sheet and Annual return of the financial year endedon 31/03/2008 during the year under review as per the order dated 08/07/2017.

e) The Company has not filled in the intermittent vacancy of Independent Directorsarose due to resignation Mr. Narendrakumar Chandubhai Patel and Mr. Ramesh ChauhanIndependent Directors of the Company with effect from 17th March 2017 till 2nd October2017 i.e. within the time as specified in second proviso of the Rule 4(1) of the Companies(Appointment and qualification of Directors) Rules 2014.

f) The Company has not published quarterly / annual financial result in any newspaperduring the year under review as required under Regulation 33 and 47 of SEBI (ListingObligations and Disclosure Requirements) Regulation 2015.

Explanation:

a) Due to financial loss increased during the financial year 2017-18 and the Company isfinancially not strong enough that can bear expenses of salary of chief financial officerand company secretary and therefore not appointed key managerial personnel. As soon as theCompany's financial position improves the company will appoint key managerial personnel.

b) As the financial position of the Company is not sound and continue to loss duringthe financial year 2017-18 (period under review) the Company has not appointed internalauditor. As soon as the Company's financial position improves the company will appointinternal auditor.

c) Due to fund problem the Company could not pay the annual listing fees for the FY2018-19.

d) The Company has appeared through its Advocate Mr. Rakesh Sharma and representedbefore Additional Metropolitan Magistrate of Ahmedabad and paid the penalty which wasimposed on the Company and its officers in default.

e) The Company was in search of the proper candidate for the position of an IndependentDirector and could not find proper person to fill in vacancy of an Independent Director.The Company has appointed Mr. Narendra Patel as an Independent Director at the AnnualGeneral Meeting held on 25th September 2017 with effect from 2nd October 2017.

f) As the financial position of the Company is not sound and continue to loss duringthe financial year 2017-18 (period under review) the Company has not published quarterly/ annual financial result in any newspaper during the year under review.

28. Corporate Governance Certificate

As stipulated in the Regulation 72 of Securities and Exchange Board of India (ListingObligations and

Disclosure Requirements) Regulation 2015 the Company does not require to comply withRegulation 17 to Regulation 27 of the said regulation as Paid-up Capital does not exceedRs. 10 Crores or Net worth does not exceed Rs. 25 Crores which is specified in Regulation15 and hence did not need to obtain Corporate Governance Certificate.

29. Code of Conduct

The Company has adopted a code of conduct for its directors and designated seniormanagement personnel. All the Board members and senior management personnel followcompliance of code of conduct.

30. Risk management policy

In today's economic environment Risk Management is a very important part of business.The main aim of risk management is to identify monitor and take precautionary measures inrespect of the events that may pose risks for the business. Your Company's risk managementis embedded in the business processes. Your company has identified the following risks:

Key Risk Impact to Aarcon Facilities Limited Mitigation Plans
Recession in reality market. Risk of recession in reality affects the function of the Company. The Company does not launch any new project during recession period.
Interest Rate Risk Any increase in interest rate can affect the finance cost Company has enough fund to meet the need arises.
Competition Risk Every company is always exposed to competition risk. By continuous efforts to enhance the brand image of the Company.
Compliance Risk Increasing regulatory Requirements. Any default can attract penal provisions By regularly monitoring and review of changes in regulatory framework.

31. Directors' Responsibility Statement

Your Directors state that—

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. 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 and ofthe profit and loss of the company for that period;

c. 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 for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis; and

e. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

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

32. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

The Company has framed an anti-harassment policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaint Committee has been set up to redress complaints received regularly. Allemployees (permanent contractual temporary trainees) are covered under the policy.There was no compliant received from any employee during the financial year 2017-18 andhence no complaint is outstanding as on 31.03.2018 for redressal.

33. Compliance with Secretarial Standards and SEBI (Listing Obligation and DisclosureRequirement) Regulations.2015:

The Company has complied with secretarial standards issued by the Institute of CompanySecretaries of India and SEBI (Listing Obligation and Disclosure Requirement) Regulations2015 from time to time.

34. Acknowledgements

The Board of Directors gratefully acknowledge the assistance and co-operation receivedfrom the Bank of India Indusind Bankand all other statutory and non-statutory agenciesfor their co-operation.

The Board of Directors also wish to place on record their gratitude and appreciation tothe members for their trust and confidence shown in the Company.

The Board of Directors would like to especially thank all the employees of the Companyfor their dedication and loyalty.

Dated: 28th June 2018 By Order of the Board of Directors
Regd. Office:
401402 Earth Complex
Opp. Vaccine Institute Bharat Ramchandra Gupta Anupama Bharat Gupta
Old Padra Road Managing Director Director
Vadodara Gujarat 390015 DIN:00547897 DIN:02221605