Arco Leasing Ltd.
|BSE: 511038||Sector: Financials|
|NSE: N.A.||ISIN Code: INE955S01019|
|BSE 05:30 | 01 Jan||Arco Leasing Ltd|
|NSE 05:30 | 01 Jan||Arco Leasing Ltd|
|BSE: 511038||Sector: Financials|
|NSE: N.A.||ISIN Code: INE955S01019|
|BSE 05:30 | 01 Jan||Arco Leasing Ltd|
|NSE 05:30 | 01 Jan||Arco Leasing Ltd|
To The Members
Your Directors present their 36th Annual Report on the business andoperations of the Company together with the Audited Standalone and Consolidate FinancialStatements of Arco Leasing Limited (the Company) for the financial year ended31st March 2020.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended 31st March 2020 issummarized below:
2. PERFORMANCE OF THE COMPANY
The total revenue for the financial year under review was Rs. 3.12 Lakhs as against Rs.13.20 Lakhs in the previous financial year registering a decrease of Rs. 10.08 Lakhs. Itis mainly due to decline in income from other sources namely interest earned on depositswith Banks.
As compared to previous year's profits it was observed that these was loss before taxof Rs.8.77 Lakhs.
The Loss After Tax for f.y. 2019-20 was Rs. 9.46 Lakhs as against the profits ofRs.0.24 Lakhs in the previous year.
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 Rs.2500000/- (RupeesTwenty Five Lakhs) to Rs. 60000000/- (Rupees Six Crores) divided into 3000000 (ThirtyLakhs) equity shares of Rs. 10/- (Rupees Ten only) each and 300000 (Three Lakhs)Cumulative Redeemable Preference Shares of Rs.100/- (Rupees One Hundred) each.
The Paid-up Equity Share Capital is Rs.2400700/- (Rupees Twenty Four Lakhs SevenHundred) divided into 240070 (Two Lakh Forty Thousand and Seventy) equity shares ofRs.10/- (Rupees Ten) each and Paid-up Preference Share Capital is Rs.20000000/- (RupeesTwo Crores only) as on March 31 2020. However the said Preference Shares were not listedon any Stock Exchange.
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 2020.
6. LISTING FEES
Equity Shares of your Company are listed on BSE Limited. Your Company has paid therequired listing fees to Stock Exchange for f.y. 2020-21.
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.
8. 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.
MAJOR EVENTS OCCURRED DURING THE YEAR
There are no such major events occurred during the financial year 2019-20.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT
There are no material changes and commitments 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 this report.
CHANGE IN NATURE OF BUSINESS
The Company has not undergone any change in the nature of business during the year.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Narendra Mahavir Ruia (DIN 01228312) Director of the company is liable to retireby rotation at the forthcoming Annual General Meeting and being eligible offers himselffor re-appointment pursuant to Section 152 of the Act. Your Board of Directors recommendhis re-appointment.
Further during the year under review the non-executive director of the company had notransactions with the company.
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. In compliance with Rule 6 of Companies (Appointment and Qualificationof Directors) Rules 2014 all the Independent Directors (IDD) of the Companyare in process of registering themselves with the India Institute of Corporate Affairs(IICA) Manesar and their names will get included in the databank of Independent Directorswithin the statutory timeline given by the Notification dated June 23 2020 .
Further there has been no change in the circumstances affecting their status as IDDsof the Company.
Declaration by the Company:
None of the Directors of the Company are disqualified from being appointed as Directorsas specified in Section 164(2) of the Act read with Rule 14 of Companies (Appointment andQualifications of Directors) Rules 2014.
10. CONSTITUTION OF COMMITTEES
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:-.
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:
11. 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) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the year ended on that period; (iii) the directors had takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; (iv) thedirectors 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 withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
12. 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)of the Act and rules framed thereunder.
13. SUBSIDUARY/JOINT VENTURE/ CONSORTIUM
Ansu Trade & Fiscals Private Limited has become the wholly owned subsidiary of ArcoLeasing Limited w.e.f. July 31 2019.
14. DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS
During the financial year 2019-20 your Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India.
15. ACCOUNTING STANDARDS
The Company has prepared the Financial Statements for the year ended 31stMarch 2020 as per Section 133 of the Companies Act 2013 read with rule 7 of Companies(Accounts) Rules 2014.
16. 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.
17. 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.
18. 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) Allremuneration of the Non-Executive/Independent Directors (excluding remuneration forattending meetings as prescribed under Section 197(5) of the Companies Act 2013) shall besubject to ceiling/limits as provided under the Companies Act 2013 and rules made thereunder or any other enactment for the time being in force. The amount of such remunerationshall be such as may be recommended by the Nomination and Remuneration Committee andapproved 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 Servicesare rendered by such Director in his capacity as the professional; and In the opinion ofthe Committee the Director possesses the requisite qualification for the practice of thatprofession.
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.
19. EXTRACT OF ANNUAL RETURN
The extract of annual return as on March 31 2020 as provided under sub-section (3) ofSection 92 of the Companies Act 2013 in the prescribed Form MGT-9 is annexed to thisReport.
20. 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.
21. AUDIT COMMITTEE RECOMMENDATIONS
All the recommendations made by the Audit Committee were accepted by the Board.
22. 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.
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.
However N K R & Co. Chartered Accountants have tendered resignation expressingtheir inability to continue as the auditors of the Company as the Board of Directors ofthe Company shows incapability to increase the audit fees resulting in a casual vacancyin the office of the Auditors of the Company w.e.f. September 2 2020 as per receipt ofthe letter from the auditors as per section 139(8) of the Companies Act 2013. Inaccordance with aforesaid provisions of the Act the casual vacancy caused by theresignation of the Statutory Auditors shall be filled by the Board within a period ofthirty days and such appointment shall also be approved by the members of the Companywithin three months of the recommendation of the Board.
Accordingly based on the recommendation of the Audit Committee and confirmationreceived from M/s. M. C. Jain & Co. Chartered Accountants Mumbai having FRN.:304012E on their eligibility the Board recommends to the members for the appointment ofM/s. M. C. Jain & Co. Chartered Accountants Mumbai as the Statutory Auditors of theCompany:
a) to fill the casual vacancy caused by the resignation of M/s. M. C. Jain & Co.Chartered Accountants Mumbai and to hold the office of the Statutory Auditors upto theconclusion of this Annual General Meeting and b) for a period of five years from theconclusion of the 36th Annual General Meeting till the conclusion of 41stAnnual General Meeting of the Company to be held in the year 2025.
M/s. M. C. Jain & Co. Chartered Accountants Mumbai has confirmed theireligibility to act as the Statutory Auditors of the Company.
N K R & Co. Chartered Accountants Mumbai have completed the Statutory Audit forperiod 2019-20 and submitted their Auditors Report to the Shareholder which does notcontain any qualification reservation adverse remark or disclaimer.
The observations made in the Auditors Report read together with relevant notes thereonare self-explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.
The Company has engaged a reputable external firm namely M/s. Sushil Vyas &Associates Chartered Accountants Mumbai (FRN 110725W) to carry out the Internal Audit ofyour Company. Reviews are conducted on an on-going basis based on a comprehensive riskbased audit plan which is approved by the Audit Committee at the beginning of each year.
The Company was not required to maintain cost records pursuant sub-section (1) ofSection 148 of the Companies Act 2013 and rules made thereunder. Therefore the Companyhas not appointed auditor in this respect.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company has appointed Ms. Priyanka Oka of M/s. PRIYANKA OKA &ASSOCIATES Practicing Company Secretaries bearing CP No. 22164 as secretarial auditor forthe Company. The secretarial audit report for the Financial Year ended 31stMarch 2020 is annexed.
The secretarial audit report contained few observations remarks pursuant to theprovisions of section 203. The Company has noted the same and is in the process ofcomplying with these statutory requirements.
24. 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.
25. 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.
26. 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.
27. 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 of
Ansu Trade & Fiscals Private Limited a non-banking financial company (NBFC) inone or more tranches. Accordingly the Company has submitted an application with ReserveBank of India (RBI) for getting an approval for purchase of an NBFC. The Company hasreceived the approval from RBI vide letter DNBS.RO.Kol.No.3052/08.02.400/2018-19 datedFebruary 8 2019.
However the said purchase transaction was completed in the month of July 2019 therebythe Company has acquired 1859630 equity shares of Rs. 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.
28. 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.
29. 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.
30. 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.
31. 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.
32. PERFORMANCE OF JOINT VENTURE/CONSORTIUM
There are no Companies/LLPs which are Associates/Consortium of the Company.
33. STATUTORY DISCLOSURES
There are no associate companies as of March 31 2020 hence the prescribed Form AOC-1is not required to be attached to this Report. A Cash Flow Statement for the FinancialYear 2019-20 is attached to the Balance Sheet.
34. 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.
35. 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.
36. SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR
TRIBUNALS IMPACTING 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.
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
Date: September 2 2020
ANNEXED TO THIS REPORT
To The Members
Arco Leasing Limited (CIN L65910MH1984PLC031957) Plot No. 123 Street No. 17 MIDCMarol Andheri (E) Mumbai 400 093
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management ofthe Company. Our responsibility is to express an opinion on these secretarial recordsbased on our audit.
2. We have followed the audit practices and processes as were appropriate toobtain reasonable assurance about the correctness of the contents of the secretarialrecords. The verification was done on test basis to ensure that correct facts arereflected in secretarial records. We believe that the processes and practices we followedprovide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial recordsand Books of Accounts of the Company.
4. Wherever required we have obtained the management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable lawsrules regulations standards is the responsibility of management. Our examination waslimited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the futureviability of the Company nor of the efficiency or effectiveness with which the managementhas conducted the affairs of the Company.
7. Due to COVID-19 outbreak and Lockdown situation this Report has been issuedrelying on the certificate information details data documents and explanation providedby the Company and its officers agents and authorized representatives and Registrar andTransfer Agent in electronic form without physically verifying at their office.
Name of Company Secretary in practice / Firm: PRIYANKA OKA & ASSOCIATES
ACS/FCS No.: 10084 CP No. 22164
Address: 9 Dhanashree CHS M. G. Road Naupada Thane (W) 400 602 Maharashtra India.