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Arco Leasing Ltd.

BSE: 511038 Sector: Financials
NSE: N.A. ISIN Code: INE955S01019
BSE 05:30 | 01 Jan Arco Leasing Ltd
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Arco Leasing Ltd. (ARCOLEASING) - Director Report

Company director report

To

The Members

Your Directors present their 35th Annual Report on the business andoperations of the Company together with the Audited Financial Statements of Arco LeasingLimited ("the Company") for the financial year ended 31st March2019.

1. FINANCIAL RESULTS

The Company's financial performance for the year ended 31st March 2019 issummarized below:

(र in Lakhs

(Standalone)

Particulars Financial Results 31st March 2019 For the year ended as at 31st March 2018
Total Revenue 13.20 1.34
Total Expenses 9.38 21.92
Profit/(Loss) Before Tax 3.82 (20.58)
Tax Expense (Net) 3.58 0
Profit /(Loss) After Tax 0.24 (20.58)
Earnings Per Share (र) 0.10 (8.57)

2. PERFORMANCE OF THE COMPANY

The total revenue for the financial year under review was र 13.20 Lakhs as againstर 1.34 Lakhs in the previous financial year registering an increase of र 11.86 Lakhs.It is mainly due to income from other sources namely interest earned on deposits withBanks.

As compared to previous year's losses it was observed that these was profit before taxof र3.82 Lakhs.

The Profit After Tax for f.y. 2018-19 was र 0.24 Lakhs as against the losses ofर20.58 Lakhs in the previous year.

There were no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of the report.

3. DIVIDEND

To conserve the resources for future your Directors do not recommend any dividend forthe financial year under review.

4. TRANSFER TO RESERVES

The Directors do not propose to transfer any amount to the Reserves.

5. SHARE CAPITAL

The Authorized Share Capital of the Company was enhanced from र2500000/- (RupeesTwenty Five Lakhs) to र 60000000/- (Rupees Six Crores) divided into 3000000 (ThirtyLakhs) equity shares of र 10/- (Rupees Ten only) each and 300000 (Three Lakhs)Cumulative Redeemable Preference Shares of र100/- (Rupees One Hundred) each.

The Paid-up Equity Share Capital is र2400700/- (Rupees Twenty Four Lakhs SevenHundred) divided into 240070 (Two Lakh Forty Thousand and Seventy) equity shares ofर10/- (Rupees Ten) each as on March 31 2019.

During the year under review the Company has not issued shares or convertiblesecurities or shares with differential voting rights nor has granted any stock options orsweat equity or warrants as on March 31 2019. However the Company has issued 200000Cumulative Redeemable Preference Shares of र100/- each on July 12 2018 on privateplacement basis to Edwell Infrastructure Hazira Limited a Mumbai based Company. The saidshares were not listed on any Stock Exchange.

6. DEPOSITS

The Company has not accepted any deposits in terms of Chapter V of the Companies Act2013 and Rules framed thereunder from public during the year under review.

7. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required under the Listing Regulations formsan integral part of this report and is presented separately.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments

Mr. Rajendra Mahavirprasad Ruia (DIN 01300823) Director of the company is liable toretire by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment pursuant to Section 152 of the Act. Your Board of Directorsrecommend his re-appointment.

Further during the year under review the non-executive director of the company had notransactions with the company.

Independent Directors

Mr. Kaushik Shah (DIN 01396342) and Mr. Jayesh Joshi (DIN 08036558) have submitted adeclaration that each of them meet the criteria for independence as laid down underSection 149(6) of the Act read with Rules framed thereunder and Regulation 16 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.

9. CONSTITUTION OF COMMITTEES

AUDIT COMMITTEE

The Audit Committee assists the Board in its responsibility of overseeing the qualityand integrity of the accounting auditing and reporting practices of the Company and itscompliance with the legal and regulatory requirements. The terms of reference of AuditCommittee cover the areas mentioned under Section 177 of the Companies Act 2013.

The details of composition meetings and attendance of the Meetings of the AuditCommittee are as under:-.

S. No Name Designation

No. of Meetings

Held Attended
1 Mr. Narendra Ruia Member 4 4
2 Mr. Kaushik Shah Member from May 30 2018 4 4
3 Mr. Jayesh Joshi Chairman and Member from May 30 2018 4 4

There has been no instance where the Board of Directors had not accepted anyrecommendation of the Audit Committee.

NOMINATION & REMUNARATION COMMITTEE

The Committee formulates the criteria for evaluation of the performance of IndependentDirectors & the Board of Directors; identifying the persons who are qualified tobecome directors and who may be appointed in senior management and recommend to the Boardtheir appointment and removal. The terms of the reference of Nomination and RemunerationCommittee covers the areas mentioned under section 178 of the Companies Act 2013

The details of composition of the Nomination and Remuneration Committee are as under:

Sr. No. Name Designation

No of Meetings

Held Attended
1 Mr. Rajendra Ruia Member 2 2
2 Mr. Kaushik Shah Member from May 30 2018 2 2
3 Mr. Jayesh Joshi Chairman and Member from May 30 2018 2 2

10. DIRECTORS' RESPONSIBILITY STATEMENT

The Financial Statements are prepared in accordance with Indian Accounting Standards(Ind AS) under the historical cost convention on accrual basis except for certainfinancial instruments which are measured at fair values the provisions of the Act (tothe extent notified) and guidelines issued by the Securities and Exchange Board of India(SEBI). The Ind AS are prescribed under Section 133 of the Companies Act 2013 ('theAct') read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 andCompanies (Indian Accounting Standards) Amendment Rules 2016. The Company has adopted allInd AS Standards and the adoption was carried out in accordance with applicable transitionguidance. Accounting policies have been consistently applied except where a newly issuedaccounting standard is initially adopted or a revision to an existing accounting standardrequires a change in the accounting policy hitherto in use.

As required under clause (c) of sub-section (3) of Section 134 of Companies Act 2013Directors to the best of their knowledge and belief 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 the year ended on that period;

(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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.

11. REPORTING OF FRAUDS

There was no instance of fraud during the year under review which required thestatutory auditors to report to the Audit Committee and/or Board under section 143(12) ofthe Act and rules framed thereunder.

12. MATERIAL SUBSIDUARY

There is no material subsidiary of the Company as of March 31 2019. However theCompany has acquired 100% equity shares of Ansu Trade & Fiscals Private Limited andthereby it became the wholly owned subsidiary of Arco Leasing Limited w.e.f. July 312019.

13. DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS

During the financial year 2018-19 your Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India.

14. ACCOUNTING STANDARDS

The Company has prepared the Financial Statements for the year ended 31stMarch 2019 as per Section 133 of the Companies Act 2013 read with rule 7 of Companies(Accounts) Rules 2014.

15. PERFORMANCE EVALUATION OF THE DIRECTORS

Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of the Directors individually. The manner in which the evaluationhas been carried out is given below:-

The key areas of evaluation of individual directors including Independent Directorsare Knowledge of business Diligence and preparedness Effective interaction with othersConstructive contribution to discussion Concern for stakeholders attentive to theinternal controls mechanism and ethical conduct issues.

16. FAMILIARIZTION/ ORIENTATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Independent Directors attend a Familiarization/Orientation Program as beinginducted by the Board. The Company had devised the detailed framework for theFamiliarization Program and also approved the format of the formal letter of appointmentas required to be given to the Independent Directors outlining their role functionduties and responsibilities.

17. REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remuneration Committee frameda policy for selection appointment and remuneration of Directors and KMPs.

Policy for Remuneration to Directors/Key Managerial Personnel

i. Remuneration to Managing Director/Whole-time Directors:

(a) The Remuneration/Commission etc. to be paid to Managing Director/WholetimeDirectors etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force and the approvalsobtained from the Members of the Company.

(b) The Nomination & Remuneration Committee shall make such recommendations to theBoard of Directors as it may consider appropriate with regard to remuneration to ManagingDirector/Whole-time Directors.

ii. Remuneration to Non-Executive/Independent Directors:

(a) The Non-Executive/Independent Directors may receive sitting fees and such otherremuneration as permissible under the provisions of the Companies Act 2013.

(b) All remuneration of the Non-Executive/Independent Directors (excluding remunerationfor attending meetings as prescribed under Section 197(5) of the Companies Act 2013)shall be subject to ceiling/limits as provided under the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force. The amount of suchremuneration shall be such as may be recommended by the Nomination and RemunerationCommittee and approved by the Board of Directors or shareholders as the case may be.

(c) An Independent Director shall not be eligible to get Stock Options and shall alsonot be eligible to participate in any share based payment schemes of the Company.

(d) Any remuneration paid to Non-Executive/ Independent Directors for services renderedwhich are of professional nature shall not be considered as part of the remuneration forthe purposes of clause (b) above if the following conditions are satisfied:

• The Services are rendered by such Director in his capacity as the professional;and

• In the opinion of the Committee the Director possesses the requisitequalification for the practice of that profession.

iii. Remuneration to Key Managerial Personnel:

(a) The remuneration to Key Managerial Personnel shall consist of fixed pay incompliance with the provisions of the Companies Act 2013 and in accordance with theCompany's Policy.

(b) The Fixed pay shall include monthly remuneration employer's contribution toProvident Fund contribution to pension fund pension schemes etc. as decided from timeto time in accordance with the Company's Policy.

Remuneration paid to Non-Executive Directors and Executive Directors:

No sitting fees were paid to non-executive non-independent Directors or independentDirectors as they have waived their entitlement for the same.

Non-executive Directors of a company's Board of Directors add substantial value to theCompany through their contribution to the Management of the Company. In addition they alsoplay an appropriate control role. Even considering the valuable role of the IndependentDirectors of the Company your company is in the process to finalized the sitting feesstructure and shall update the members at large subject to regulatory approval andcompliance(s) if any.

18. EXTRACT OF ANNUAL RETURN

The extract of annual return as on March 31 2019 as provided under sub-section (3) ofSection 92 of the Companies Act 2013 in the prescribed Form MGT-9 is annexed to thisReport.

19. NUMBER OF MEETINGS OF THE BOARD

There were 5 (Five) meetings of the Board held during the year. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013.

Date of Board Meeting Number of Directors attended the meeting
April 20 2018 3
May 30 2018 3
August 14 2018 5
November 14 2018 5
February 14 2019 5

20. AUDIT COMMITTEE RECOMMENDATIONS

All the recommendations made by the Audit Committee were accepted by the Board.

21. CORPORATE GOVERNANCE

Corporate Governance stipulated in SEBI (LODR) Regulations 2015 is not applicable tothe Company as paid up Equity Share Capital of the Company is not exceeding rupees tencrore and net worth of the Company is not exceeding rupees twenty-five crore as on thelast date of the previous financial year.

22. AUDITORS

• STATUTORY AUDITORS

In accordance with the provisions of Section 139 of Companies Act 2013 M/s. N K R& Co. Chartered Accountants Mumbai (ICA Registration No.127820W) were appointed asStatutory Auditors on September 29 2018 for a period of 5 years commencing fromconclusion of 34th Annual General Meeting till the Conclusion of 39thAnnual General Meeting to be held in the year 2023.

The appointment of statutory auditors was earlier subject to ratification by Members atevery AGM. However the requirement to place the matter relating to appointment ofauditors for ratification by Members at every AGM has been done away by the Companies(Amendment) Act 2017 with effect from May 7 2018. Accordingly no resolution is beingproposed for ratification of appointment of statutory auditors at the 35th AGM.

There is no audit qualification reservation or adverse remark for the year underreview.

• SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company has appointed Mr. Bhadresh Shah of M/s. Bhadresh Shah andAssociates Practicing Company Secretaries bearing CP No. 15957 as secretarial auditor forthe Company. The secretarial audit report for the Financial Year ended 31stMarch 2019 is annexed.

The secretarial audit report contained few observations remarks pursuant to theprovisions of section 149 203 and also with the certain regulations of SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 w.r.t. filling of certaindocuments/reports and compliances thereon. The Company has noted the same and is in theprocess of complying with these statutory requirements.

23. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

Provisions of Section 22 of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with Rules made thereunder are not applicableto the Company since there are no employees and hence the Policy on prevention of SexualHarassment of Women at workplace is not formulated.

24. RISK MANAGEMENT POLICY

Business Risk Evaluation and Management is an ongoing process within the Organization.The Company has a robust risk management framework to identify monitor and minimize risksas also identify business opportunities. The Audit Committee and the Board periodicallyreview the risks and suggest steps to be taken to manage/ mitigate the risk through aproperly defined framework.

During the year no major risks were noticed which may threaten the existence of theCompany.

25. CORPORATE SOCIAL RESPONSIBILITY

The Company does not meet the criteria of Section 135 of Companies Act 2013 read withthe Companies (Corporate Social Responsibility Policy) Rules 2014. Hence there was norequirement to constitute Corporate Social Responsibility Committee in the Company.

26. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

There is no information regarding loans and guarantees as required under the provisionsof Section 186 of the Companies Act 2013 as the Company has not given any loans orprovided any guarantees or securities during the year under review.

The members at their Extraordinary General Meeting held on May 15 2018 had givenapproval under section 186 of the Companies Act 2013 for purchase of equity shares ofAnsu Trade & Fiscals Private Limited a non-banking financial company (NBFC) in oneor more tranches. Accordingly the Company has submitted an application with Reserve Bankof India (RBI) for getting an approval for purchase of an NBFC. The Company has receivedthe approval from RBI vide letter DNBS.RO.Kol.No.3052/08.02.400/2018-19 dated February 82019.

However the said purchase transaction was completed in the month of July 2019 therebythe Company has acquired 1859630 equity shares of र 10/- each of Ansu Trade &Fiscals Private Limited from the shareholders.

In view of the above Ansu Trade & Fiscals Private Limited has become the whollyowned subsidiary of Arco Leasing Limited w.e.f. July 31 2019.

27. RELATED PARTY TRANSACTIONS

There is no transaction with Related Party which requires disclosure under Section134(3) (h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules2014. Related Party Disclosures under Accounting Standards mentioned in Note-33 to theFinancial Statements.

28. CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and specified employees in the course of day to day businessoperations of the Company.

All the Board Members have confirmed compliance with the Code. A declaration to thiseffect signed by the Director of the Company appears elsewhere in this Annual Report.

29. PARTICULARS OF EMPLOYEES

The Company does not have any employee. Therefore the information required pursuant toSection 197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 in respect of employees of the Companyis not furnished.

30. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company promotes ethical behaviour in all its business activities. It hasestablished a system through which Directors employees and business associates may reportunethical behavior malpractices wrongful conduct fraud violation of Company's code ofconduct without fear of reprisal.

The Policy on Vigil Mechanism/Whistle Blower Mechanism may be accessed through websiteof the Company viz. www.arcoleasing.com.

31. PERFORMANCE OF JOINT VENTURE/CONSORTIUM

There are no Companies/LLPs which are Associates/Consortium of the Company.

32. STATUTORY DISCLOSURES

There are no associate companies as of March 31 2019 hence the prescribed Form AOC-1is not required to be attached to this Report. A Cash Flow Statement for the FinancialYear 2018-19 is attached to the Balance Sheet.

33. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of activities that are being carried on by your Company theparticulars required under Section 134 of the Companies Act 2013 and Rules madethereunder regarding conservation of energy and technology absorption are not applicableto your Company.

The Company had no foreign exchange earnings or outgo during the year under review.

34. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.

35. SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

During the year under review there are no significant or material orders passed by anyRegulator Court or Tribunal against the Company which could impact its going concernstatus or operations.

36. ACKNOWLEDGEMENT

Your Directors wish to thank all Shareholders Clients Government and Regulatoryauthorities and Stock Exchanges financial authorities customers dealers agentssuppliers investors and bankers for their continued support and faith reposed in theCompany.

Your Directors also thank the Ministry of Corporate Affairs stakeholders advocatessolicitors and business associates for their continuous support.

BY AND ON BEHALF OF THE BOARD OF DIRECTORS
FOR ARCO LEASING LIMITED
RAJENDRA RUIA NARENDRA RUIA
DIRECTOR DIRECTOR
DIN:01300823 DIN: 01228312
Place: Mumbai
Date: August 30 2019

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