Your Directors have pleasure in presenting the 25th Annual Report togetherwith the Audited Statement of Accounts for the year ended on 31st March2018.
The operating results of the Company for the year ended on 31st March 2018are briefly indicated below:
| || ||(Rs. in lacs) |
| ||Year ||Year |
| ||2017-2018 ||2016-2017 |
|Total Income ||8455.75 ||4885.28 |
|Operating Cost including Depreciation ||7036.63 ||3745.47 |
|Financial Expenses ||365.91 ||63.94 |
|Other Expenses ||1014.64 ||782.48 |
|Total Expenses ||(8417.18) || |
|Profit before Taxation || |
|Provision for taxation - For Current Tax ||- ||60.00 |
|Provision for taxation - For Deferred Tax ||(13.11) ||122.12 |
|MAT credit Entitlement ||- ||(60.00) |
|Profit after Taxation || |
DIVIDEND AND TRANSFER TO RESERVES:
In order to plough back resources your directors do not recommend any payment ofdividend for the financial year. Further the Company has not transferred any amount toreserves during the year.
PERFORMANCE OF THE COMPANY & FUTURE PROSPECTS:
During the year under review total revenue from operations was Rs. 8170.99 Lacs asagainst Rs. 4848.83 Lacs in previous year showing increase in sales by 68.51%
Due to Commencement of Bhavnagar unit and higher depreciation and amortization ascompared to previous year the net profit has reduced from Rs.171.27 Lacs (p.y.) toRs.51.68 Lacs during the year review.
The Company is confident to have better future performance.
Further details are given in management discussions and analysis report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY FROM THE CONCLUSION OF THE FINANCIAL YEAR TILL THE END OF THIS REPORT:
There were no other material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this report.
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:
A report on Management Discussion and Analysis (MDA) is annexed to this report asAnnexure II inter-alia deals adequately with the operations and also current and futureoutlook of the Company.
At the beginning of the Year Company's Fully paid-up capital was Rs.50211000divided into 5021100 equity shares of Rs.10 each and Partly paid-up capital was Rs.50211000 divided into 10042200 equity sharesof having face value of Rs.10 each andpaid up value of Rs 5 each.
During the year;
1. The Board has called up the first and final call money of Rs. 12.50 each (Rs. 5towards face value and Rs. 7.50 towards securities premium account). The Company hasreceived theamount towards first and final call money for 9999623 partly paid equityshares. The same has been converted into fully paid up and are listed and traded underISIN of fully paid up shares i.e. INE078I01011 on BSE Limited.
2. Balance 42577partly paid up equity shares on which the first and final call moneyhas not been received within one year from the date of allotment were forfeited by theBoard in due compliance of provision of Articles of Association of the Company and theCompanies Act 2013.
VARIATION IN UTILIZATION OF PROCEEDS OF RIGHTS ISSUE:
The statement showings variation in utilization of proceeds of Right issue as on 30thJune2018
|Sr. No. ||Particulars ||Projected ||Actual ||Deviation |
|1 ||Project-I (Amount to be utilised in FY: 2016-17) ||778.47 ||778.47 ||- |
|2 ||$Project-II (Amount to be utilised in FY: 2017-18) ||784.30 ||319.14 ||465.16 |
|2(a) ||Finance Technology upgradation and Capital expenses for MCA TCAC SBS CAC Unit ||165.16 ||165.16 || |
|2(b) ||Finance working capital needs for MCA TCAC SBS CAC Unit ||275.00 ||168.50 ||106.50 |
|2(c) ||Prepayment of Term Loan of Union Bank of India ||25.00 ||25.00 || |
|3 ||Repayment of unsecured loan (Amount to be utilised in FY: 2016-17) ||320.00 ||320.00 ||- |
|4 ||General Corporate Purpose (Amount to be utilised in FY: 2017-18) ||582.78 ||582.78 ||- |
$ Due to postponement of Project II i.e. PAC unit balance unutilized amount ofRs. 465.16 lacs after has been reallocated as referred in 2(a) 2(b) and 2(c) and saidvariation has been approved by members by way of passing of special resolution throughpostal ballot.
The Company has not accepted or renewed any deposits from public falling within thepurview of Section 73 of Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014.
CORPORATE SOCIAL RESPONSIBILITY:
The Company does not fall under the criteria mentioned in Section 135 of the CompaniesAct 2013 ("the Act") read with the Companies (Corporate Social Responsibility)Rules 2014 and accordingly the Company is not required to constitute CSR Committee andto spend any amount in CSR Activity.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152 and other applicable provisions if any ofthe Companies Act 2013 Smt.ArchanaAmin (DIN: 00038985) Whole Time Director of theCompany is liable to retire by rotationat the forthcoming Annual General Meeting and shebeing eligible offers herself for re-appointment. Your Directors recommend herreappointment.
Following changes in Director and KMP taken place during the year:
1. Shri Archit Amin has been appointed as an Additional Director and Whole timedirector of the Company w.e.f. 12th May 2017 and approval of the Members havebeen taken for the same in the 24th Annual General Meeting held on 23rdSeptember 2017.
2. Ms. Ami Suthar resigned as a Company Secretary and Compliance officer of the Companyw.e.f. 19th March 2018 and on the same day Mr. Darshan Kinkhabwala has beenappointed for the same post.
3. After closure of the year Shri Bharatkumar Shrimali resigned from the post of Chieffinancial officer (KMP) of the Company w.e.f. 24th April2018 and in his placeMr. Jilesh Gandhi was appointed. Further Mr. Gajendra Singh Rajput has been appointed asChief Financial Officer (KMP) in place of Mr. Jilesh Gandhi w.e.f. 11th July2018.
Re-appointment of Shri Bhupendra Mehta and Shri Haresh Shah has been proposed asIndependent Directors for further term of five years w.e.f. 1st April 2019.
Necessary resolutions for their re-appointment as Independent Directors are proposed atthe ensuing Annual General Meeting. The Board recommends passing the proposed resolutions.
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:
1. Shri Kandarp Amin-Whole Time Director
2. Mr. Gajendra Singh Rajput - Chief Financial Officer
3. Mr. Darshan Kinkhabwala Whole Time Company Secretary
MAINTENANCE OF COST RECORDS:
The Directors of the Company to the best of their knowledge and belief state thatcompany has maintained adequate cost records as required to be maintained by the Companyunder the provisions of Section 148 of the Companies Act 2013 read with the relevantrules made framed thereunder.
EXTRACT OF THE ANNUAL RETURN:
Extract of the Annual Return as on 31st March 2018 in the prescribed formMGT - 9 pursuant to provisions of Section 92(3) of the Companies Act 2013 and theCompanies (Management and Administration) Rules 2014 is annexed to this report as AnnexureIV.
CORPORATE GOVERNANCE REPORT:
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aReport on "Corporate Governance" is attached as an Annexure III and formspart of this report.
DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 with respect tothe Directors' responsibility Statement the Directors' confirms that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departures if any;
ii. they have selected such appropriate accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year on 31st March2018 and of the profit of the Company for the year underreview;
iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. they have prepared the accounts for the period ended on 31st March 2018 on agoing concern' basis.
v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and operating effectively; and
vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
NUMBER OF BOARD MEETINGS:
During the year the Board of Directors duly met Ten (10) times. The details of theBoard Meetings are provided in the Corporate Governance Report which is annexed to theReport.
The properties and assets of the Company are adequately insured.
DECLARATION BY INDEPENDENT DIRECTORS:
Pursuant to the provisions of Section 134 of the Companies Act 2013 with respect tothe declaration given by the Independent Directors of the Company under Section 149 (6) ofthe Companies Act 2013 the Board hereby confirms that all the Independent Directors havegiven declarations and further confirms that they meet the criteria of Independence as perthe provisions of Section 149(6).
PERFORMANCE EVALUATION OF THE BOARD COMMITTEES AND INDEPENDENT DIRECTORS:
Pursuant to the provisions of the Companies Act 2013 and Rules framed thereunder readwith the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formalannual evaluation is to be made by the Board of its own performance and that of itsCommittees and Individual Directors. The Board after taking into consideration thecriteria of evaluation laid down by the Nomination and Remuneration Committee in itspolicy such as Board Composition level of involvement performance of duties attendanceetc. had evaluated its own performance the performance of its committees and IndependentDirectors (excluding the Director being evaluated).
The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors at their separate meeting. The Directorsexpressed their satisfaction with the evaluation process.
POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION:
Pursuant to the requirements of the Companies Act 2013 the policy on appointment ofBoard Members and policy on remuneration of the Directors KMPs and other employees is asattached as Annexure V to this report.
SECRETARIAL AUDIT REPORT:
M/s. Parikh Dave & Associates. Practicing Company Secretaries was appointed asSecretarial Auditor of the Company for the financial year 2017-18 pursuant to theprovisions of Section 204 of the Companies Act 2013. The Secretarial Audit Reportsubmitted by them in prescribed form MR-3 is attached as Annexure VI to thisreport.
There are no qualifications or other observations or remarks of the SecretarialAuditors in the Report issued by them for the financial year 2017-18 which call for anyexplanation from the Board of Directors.
CONTRACTS OR AGREEMENTS WITH RELATED PARTIES:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 all the contracts and arrangements with relatedparties entered by the Company during the financial year were in ordinary course ofbusiness and on arms' length basis. Details of the transactions are as mentioned in AnnexureVIII.
During the year the Company has not entered into any materially significant relatedparty transactions which may have potential conflict with the interest of the Company atlarge. Suitable disclosures as required are provided in Ind AS-24 which is forming thepart of the notes to financial Statement.
The policy on Related Party Transactions has been uploaded on the website i.e.www.architorg.com.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014:
Details pertaining to remuneration and other details as required under Section 197(12)of the Companies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is attached as Annexure-VII to this report.
The statement containing particulars of employees as required under section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and accounts are being sent to the members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by members at the Registered office of the Company duringbusiness hours on working days of the Company upto the ensuing Annual General Meeting. Ifany member is interested in obtaining a copy thereof such member may write to the CompanySecretary in this regard.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:
The Company has adopted internal control system considering the nature of its businessand the size and complexity of operations. The Board has adopted the policies andprocedures for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial disclosures etc. The management is takingfurther steps to strengthen the internal control system.
RISK MANAGEMENT POLICY:
The Company has formulated the Risk Management Policy in order to safeguard theorganization from various risks through timely actions. It is designed to mitigate therisk in order to minimize the impact of the risk on the Business. The Management isregularly reviewing the risk and is taking appropriate steps to mitigate the risk.
In the opinion of the Board there has been no identification of element of risk thatmay threaten the existence of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT2013:
The Company has not made any Loans or provided any guarantee or has made anyinvestments falling under purview of Section 186 of the Companies Act 2013 during thefinancial year under review.
In view of the provisions of the Companies Act 2013 the Company had appointed M/s.Chirag R. Shah & Associates Chartered Accountants (Firm Registration Number- 118791W)as statutory auditor of the Company for the period of 5 (five) year in the 24thAnnual general Meeting.
In view of the amended provisions of section 139 of The Companies (Amendment) Act2017 the appointment of auditors is not required to be ratified every year at the AGM bythe members of the company and hence present statutory auditors of the company willcontinue to act as statutory auditor till the expiry of their present term.
With regard to the observation of auditors relating to: -
Non provision of the option loss including interest the management is of the opinionthat the saidliability is of contingent nature and for the same legal matter is pendingat DRT Mumbai. In view of the same it is not recognized as the liability and hence noprovision has been made for the option loss and interest thereon.
DISCLOSURE OF AUDIT COMMITTEE:
The Audit Committee of the Company as on 31st March 2018 consists offollowing Directors as its members:
1. Shri Haresh Shah Chairman
2. Shri Bhupendra Mehta Member
3. Shri Rajendra Shah - Member
VIGIL MECHANISM :
Pursuant to provisions of Section 177(9) of the Companies Act 2013 and Rule 7 of theCompanies (Meetings of Board and its Powers) Rules 2014 read with SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors hadapproved the Policy on Vigil Mechanism/ Whistle Blower Policy. Through this policyDirectors
Employees or business associates may report the unethical behavior malpracticeswrongful conductfrauds violations of the Company's code etc.to the Chairman of the AuditCommittee.
The vigil mechanism / whistle blower policy is also available on the website of theCompany www.architorg.com.
COMPOSITION OF INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
The Company has complied with the provision relating to constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Further no case has been received under the saidact during the year.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in AnnexureI which is attached to this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
The Company has not received any significant or material orders passed by anyregulatory authority court or tribunal which shall affect the going concern status of theCompany's operations as on date of this report.
The Company has maintained cordial relations with the employees of the Companythroughout the year. The Directors wishes to place on record sincere appreciation for theservices rendered by the employees of the Company during the year.
COMPLIANCE OF SECRETARIAL STANDARD:
The Company has complied with the applicable secretarial standards.
The Board is thankful to its bankers for their continued support and assistance whichhas played important role in progress of the Company.
Your Directors place on records the contribution of employees of the Company at alllevels and other business associates for their commitment dedication and respectivecontribution to the Company's operations during the year under review.
| ||BY ORDER OF THE BOARD |
| ||FOR ARCHIT ORGANOSYS LIMITED. |
|Place : Ahmedabad ||(KANDARP K. AMIN) |
|Date: August 13 2018 ||Chairman & Whole Time Director |
| ||DIN: 00038972 |