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Aarnav Fashions Ltd.

BSE: 539562 Sector: Others
NSE: N.A. ISIN Code: INE750R01016
BSE 00:00 | 18 May 55.70 -3.20
(-5.43%)
OPEN

61.90

HIGH

62.50

LOW

55.30

NSE 05:30 | 01 Jan Aarnav Fashions Ltd
OPEN 61.90
PREVIOUS CLOSE 58.90
VOLUME 161424
52-Week high 202.25
52-Week low 43.00
P/E 25.32
Mkt Cap.(Rs cr) 84
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 61.90
CLOSE 58.90
VOLUME 161424
52-Week high 202.25
52-Week low 43.00
P/E 25.32
Mkt Cap.(Rs cr) 84
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aarnav Fashions Ltd. (AARNAVFASHIONS) - Director Report

Company director report

To

The Members

AARNAV FASHIONS LIMITED

The Board of Directors hereby submits the report of the business and operations of yourCompany (‘the Company') along with the audited financial statements for thefinancial year ended March 31 2020.

1. FINANCIAL RESULTS:

(Amount in Rs)
PARTICULARS 2019-2020 2018-2019
Revenue from Operations 354237389 15802009
Other Income - -
Total Income 354237389 15802009
Profit/(Loss) before Depreciation Finance Costs Exceptional items and Tax 30583316 2591398
Expense
Less: Depreciation /Amortisation/Impairment - -
Profit/(Loss) before Finance Costs Exceptional items and Tax Expense 30537750 2591398
Less: Finance Costs - 125176
Profit/(Loss) Exceptional items and Tax Expense 30537750 2466222
Add/(Less): Exceptional items - -
Profit/(Loss) before Tax 30537750 2466222
Provision for Taxation - Current Tax 7563998 550085
Deferred Tax (227093) 107013
Excess provision for Tax expense for earlier years - -
Profit for the year 23200845 1809124
Total Comprehensive Income/Loss (2) 23200845 1809124

2. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:

During the year there were new growths happened in the company by which the company mayreach to a new height soon.

During the year under review Company has earned total income of Rs. 3542.37 Lakh asagainst the total income of Rs. 158.02 Lakh of previous year. The total income of thecompany was up by 2141.72s% over previous year. Further Profit before Tax in thefinancial year 2019-20 stood at Rs.305.38 Lakh as compared to Rs 24.66 Lakh of last yearand Net Profit after Tax stood at Rs.232.01 Lakh compared to profit of Rs. 18.09 Lakhs forprevious year. The Profit before tax and Net profit After Tax was increased by 1138.24%and 1182.44% respectively over previous year.

As we are aware due to Covid-19 pandemic the Company's operations were closed due tonationwide lockdown from March 22 2020. During the lockdown economic activities acrossall sectors were adversely affected. Gradually all activities are resuming however it isvery much uncertain to assume the time by which the same will return to normalcy. Thiswill certainly affect the operations including revenue and profitability and liquidity ofthe Company.

3. CHANGE IN NATURE OF BUSINESS:

During the year Company has passed special resolution for alteration of object clauseof the Company and also commence new business activities regarding manufacturing andTrading of Textile products.

4. AMNOUNT TRANSFERRED TO RESERVES:

During the year Company has not transferred any amount to reserves.

5. DIVIDEND:

The Board of Directors recommended a dividend of Rs. 0.50 per equity share (5%) for theyear 2019-2020 subject to the approval at the Annual General Meeting.

The dividend if approved will result in a cash outflow of Rs. 75 lakhs.

In view of the changes made under the Income-tax Act 1961 by the Finance Act 2020dividends paid or distributed by the Company shall be taxable in the hands of theShareholders. Your Company shall accordingly make the payment of the Final Dividendafter deduction of tax at source

The Record Date for the payment of final dividend is Tuesday December 22 2020 fordetermining the entitlement of the members to the final dividend for the financial year2019-20.

6. BOARD MEETING

The meetings of the Board are scheduled at regular intervals at least once in aquarter to decide and discuss on business performance polices strategies and othermatter of significance. The schedules of meeting are circulated in advance to ensureproper planning and effective participation in meetings. Additional Board meetings areconvened as and when required.

During the year under review Board of Directors of the Company met 8 (Eight) times.The dates of the meetings of the Board and attendance of Directors are mentioned in theCorporate Governance Report as enclosed with this report.

7. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Articles of Association and Section 152 of theCompanies Act 2013 Ms. Nidhi Sanjaykumar Agarwal (DIN: 08364168)Directorof the Companyretires by rotation at the ensuing annual general meeting and offers herself forreappointment.

There was no change in the Directors or KMP during the year under review.

8. DECLARATION FROM INDEPENDENT DIRECTORS

The Company has obtained necessary declaration from each independent director underSection 149 (7) of the Act that they meet the criteria of independence laid down inSection 149 (6) of the act and there has been no change in the circumstances which mayaffect their status as independent director during the year.

9. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Listing Regulations the Company has put inplace a familiarization program for the Independent Directors to familiarize them withtheir role rights and responsibilities as Directors the working of the Company natureof the industry in which the Company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso available on the website of the company www.aarnavgroup.com.

10. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND CRITERIA FOR INDEPENDENTDIRECTORS

The Remuneration Policy for directors and senior management and the Criteria forselection of candidates for appointment as directors independent directors and seniormanagement are placed on the website of the Company. There has been no change in thepolicies since the last fiscal year. We affirm that the remuneration paid to the directorsis as per the terms laid out in the remuneration policy of the Company.

11. VIGIL MECHANISM:

The Company has established a vigil mechanism and accordingly framed a Whistle BlowerPolicy. The policy enables the employees to report to the management instances ofunethical behaviour actual or suspected fraud or violation of Company's Code of Conduct.Further the mechanism adopted by the Company encourages the Whistle Blower to reportgenuine concerns or grievances and provide for adequate safe guards against victimizationof the Whistle Blower who avails of such mechanism and also provides for direct access tothe Chairman of the Audit Committee in exceptional cases. The functioning of vigilmechanism is reviewed by the Audit Committee from time to time. None of the Whistleblowers has been denied access to the Audit Committee of the Board. The Whistle BlowerPolicy of the Company is available on the website of the Company

12. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(3)(c ) of the Companies Act 2013 the Boardof Directors to the best of their knowledge and ability confirm and state that

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

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 and ofthe profit of the company for that period;

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 for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts on a ‘going concern' basis;

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

vi. the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

13. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The company has laid down certain guidelines process and structure which enablesimplementation of appropriate internal financial controls across the organisation. Suchinternal financial controls encompass policies and procedures adopted by the Company forensuring the orderly and efficient conduct of business including adherence to itspolicies safeguarding of its assets prevention and detection of frauds and errors theaccuracy and completeness of accounting records and the timely preparation of reliablefinancial information. Appropriate review and control mechanisms are built in place toensure that such control systems are adequate and are operating effectively.

The Company has in all material respects an adequate internal financial controlssystem and such internal financial controls were operating effectively based on theinternal control criteria established by the Company considering the essential componentsof internal control stated in the Guidance Note on Audit of Internal Controls overFinancial Reporting issued by The Institute of Chartered Accountants of India.

The Audit Committee reviews the reports submitted by the Internal Auditors and monitorsfollow-up and corrective action by management.

14. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 is annexedto this Report as "Annexure A"and is also available on the website of theCompanywww.aarnavgroup.com.

15. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES / JOINT VENTURE:

Since the company does not have any Subsidiary / Joint Ventures / Associate Concernsno financial position of such concern(s) are required to be included in the financialstatement.

16. AUDITORS:

As per the provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 M/s. Nahta Jain & Associates Chartered Accountants Ahmedabad(ICAI Registration No. 106801W) were appointed as Statutory Auditors of the Company for aperiod of five years from the conclusion of the 36thAGM to the conclusion ofthe 41stAGM to be held in 2024. However in terms of the Notification issued bythe Ministry of Corporate Affairs dated May 7 2018 the proviso requiring ratification ofthe Auditors appointment by the shareholders at each AGM has been omitted. Accordinglythe ratification of appointment of Statutory Auditors would not be required at the AGM andM/s. Nahta Jain & Associates Chartered Accountants Ahmedabad (ICAI Registration No.106801W) would continue to act as the statutory auditors of the Company for five yearsupto the conclusion of the 41stAGM to be held in 2024.

The Auditors Report does not contain any qualification observation or adverse remarks.

17. 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 hasappointed M/S Ravi Kapoor & Associates a firm of Company Secretaries in practice toconduct the Secretarial Audit of the Company for the financial year 2019-20.

The Secretarial Audit Report for the financial year ended 31st March 2020 pursuant toSection 204 of the Companies Act 2013 and Rule 9 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and the Regulation 24A of the SEBI(LODR) Regulations 2015 is annexed herewith as "Annexure - B". TheSecretarial Audit Report does not contain any qualifications reservation or adverseremarks.

18. COST AUDITORS

The provisions of section 148 (2) for appointment of Cost Auditors are not applicableto the Company The Company has maintained the cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the companies act 2013

19. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

During the financial year under review there were no manufacturing activitiesundertaken by the company. In view of the aforesaid fact there was no scope for yourcompany to make any efforts for energy conservation research and development andtechnology absorption. Hence the particulars required to be furnished in respect of thesame are not given.

The particulars of foreign exchange earnings and outgoes: Foreign Exchange Earnings:NIL Foreign Exchange Outgoes: NIL

20. PUBLIC DEPOSIT

The company has not accepted any deposits from the public. Hence the directives issuedby the Reserve Bank of India & the Provision of Section 73 to 76 of the Company Act2013 or any other relevant provisions of the Act and the Rules there under are notapplicable

21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The particulars of loans Guarantees and investments in terms of Section 186 of theCompanies Act 2013 for the financial year under review have been provided in the Notes toFinancial Statement which forms part of this Annual Report

22. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

OCCURRED BETWEEN THE ENDS OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT

No material changes and commitment has occurred subsequent to the close of thefinancial year of the Company and the date of the report which could affect financialposition of the Company.

23. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS

IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no material orders passed by the Regulators Courts and tribunals impactinggoing concern status

Company's operation in future

24. SHARE CAPITAL:

During the year Company has issued 1 20 and 00000 equity shares on June 20 2019 onpreferential basis and the permission for listing of the said shares were received fromBSE Ltd. on July 23 2019

25. RISK MANAGEMENT:

The Management has evaluated various risks like market risk credit risk liquidity risketc. The management is however of the view that none of the above risks may threaten theexistence of the Company as robust Risk mitigation mechanism is put in place to ensurethat there is nil or minimum impact on the Company in case any of these risks materialize.

26. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the provisions of section 135 of Companies Act 2013 are not applicable.

27. RELATED PARTY TRANSACTIONS:

During the year ended 31st March 2020 Company has entered into anycontracts and/or arrangements with related parties covered under section 188 of theCompanies Act 2013.AOC-2 is annexed to this Report as "Annexure E"

28. FORMAL ANNUAL EVALUATION:

An annual evaluation of the Board's own performance Board committees and individualdirectors was carried out pursuant to the provisions of the Act.

Evaluation of the Board and its Committees is based on various aspects of theirfunctioning such as adequacy of the constitution and composition of the Board and itsCommittees matters addressed in the meetings processes followed at the meeting Board'sfocus regulatory compliances Corporate Governance etc. Similarly for evaluation ofindividual Director's performance various parameters like Director's profilecontribution in Board and Committee meetings execution and performance of specificduties obligations regulatory compliances governance etc. are considered.

Further the performance of Chairman Non-Executive Directors Executive Directors andIndependent Directors are evaluated on certain additional parameters depending upon theirroles and responsibilities. For the Chairman the criteria includes demonstration ofeffective leadership contribution to the Board's work communication with the Board useof time and overall efficiency of Board meetings quality of discussions at the Boardmeetings process for setting Board agenda etc. For the Executive and IndependentDirectors preparedness at the Board meetings attendance at the Board meetings devotionof time and efforts to understand the Company and its business quality of contribution atthe Board meetings application of knowledge and experience while considering thestrategy effectiveness of follow-up in the areas of concern communication with BoardMembers Senior Management and Key Managerial Personnel etc.

Accordingly the annual performance evaluation of the Board its Committees and eachDirector including Independent Director was carried out for the financial year 2019-20by the Board through a standard set of questionnaires and personal interaction. TheDirector being evaluated was not present during the discussion.

29. PARTICULARS OF EMPLOYEES

Pursuant to Section 197 of the Act read with rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the particulars of employees areannexed as Annexure- C to this Report

30. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND

REDRESSAL) ACT 2013:

The company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 and rules made there under. All employees (permanent contractual temporarytrainees) are covered under this policy. The Company has complied with provisions relatingto the constitution of Internal Complaints Committee under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and has not received anycomplaint of sexual harassment during the financial year 2019-20.

31. LISTING WITH STOCK EXCHANGE:

The Company confirms that it has paid the Annual Listing Fees for the year 2020-2021 toBSE where the Company's Shares are listed.

32. INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE

The Board of Directors has adopted the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Code of Internal Procedures andConduct for Regulating Monitoring and Reporting of Trading by Insiders in accordance withthe requirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and isavailable on our website

33. DETAILS OF COMPOSITION OF AUDIT COMMITTEE AND NOMINATION AND REMUNERATIONCOMMITTEE:

Details of Composition of various Committees including Audit Committee Nomination andRemuneration Committee and Stakeholders Relationship Committee and attendance of membersare mentioned in Corporate Governance Report and the same is attached with this report:

34. CORPORATE GOVERNANCE:

As per Listing Regulations a separate section on Corporate Governance forms part ofthis report. A Certificate from M/s Ravi Kapoor & Associates Practicing CompanySecretary confirming compliance of Corporate Governance forms part of this Report.Certificate of the CEO/CFO confirming the correctness of the financial statementscompliance with the Company's Code of Conduct and the Audit Committee in terms ofRegulation 17 of the Listing Regulations is attached in the Corporate Governance reportand forms part of this report as Annexure-D

35. MANAGEMENT DISCUSSION ANALYSIS

In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and

Disclosure Requirements) Regulations 2018 the Management's discussion and analysis isset out in this Annual Report as Annexure F.

36. SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.

37. APPRECIATION:

Your Directors wish to place on record their sincere appreciation for significantcontributions made by the employees at all levels through their dedication hard work andcommitment enabling the Company to achieve good performance during the year under review.

Your Directors also take this opportunity to place on record the valuable co-operationand support extended by the banks government business associates and the shareholdersfor their continued confidence reposed in the Company and look forward to having the samesupport in all future endeavours.

AND ON BEHALF OF THE BOARD OF DIRECTORS OF AARNAV FASHIONS LIMITED

MR. SUMIT CHAMPALALAGARWAL

MANAGING DIRECTOR

DIN: 00356863

MR. CHAMPALAL GOPIRAM AGARWAL

CHAIRMAN & DIRECTOR

DIN: 01716421

PLACE: AHMEDABAD

DATE:

05/12/2020

.