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|
Your Directors' are pleased to present the 38th Annual Report on thebusiness and operations of the Company along with the audited Financial Statements(Standalone & Consolidated) for the financial year ended March 31 2022.
The Company's financial performance for the year ended 31st March 2022 issummarized below:
(Rs. In Lakhs)
PERFORMANCE OF THE COMPANY
Similarly on Consolidated basis total income for the financial year under review wasRs. 0.95 Lakhs (Previous Year: Rs. 0.68 Lakhs). As there was no much increase in the TotalIncome as compared to previous year ended March 31 2021 since there was no operationalincome earned during the year under review.
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.
To conserve resources for future your Directors' do not recommend any dividend for thefinancial year under review.
TRANSFER TO RESERVES
The Directors do not propose to transfer any amount to Reserve.
The Authorized Share Capital of the Company is Rs.60000000/- (Rupees Six crores)which comprises of 3000000 (Thirty Lakhs) 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 2022. 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 2022.
The Company has not accepted any deposits during the year.
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. It gives details of theoverall industry structure economic developments performance and state of affairs ofyour Company's and their adequacy risk management systems and other materialdevelopments during the Financial Year 2021-22.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on March 31 2022 the Board is comprised of One Executive Director Two NonExecutive Directors and Two Non-Executive Independent Directors. The Board is welldiversified and consists of one Women Director as well. Hence the composition of theBoard is in accordance with the provisions of Section 149 of the Act and Regulation 17 ofthe SEBI Listing Regulations with an appropriate combination of Non-Executive Directorsand Independent Directors.
Appointment and Re-appointment of Directors
Section 152 of the Act provides that unless the Articles of Association provide forretirement of all directors at every Annual General Meeting ("AGM") not lessthan two-third of the total number of directors of a public company (excluding theIndependent Directors) shall be persons whose period of office is liable to determinationby retirement of directors by rotation of which one-third are liable to retire byrotation.
Accordingly Mr. Rajendra Mahavirprasad Ruia (DIN 01300823) Director of the company isliable to retire by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for re-appointment pursuant to Section 152 of the Act. Your Boardof Directors recommend her re-appointment.
A Profile of Mr. Ruia as required by Regulation 36(3) of the LODR is given in theNotice convening the forthcoming AGM.
Mr. Narendra Mahavir Ruia was appointed as the Chief Financial Officer of the Companyw.e.f. February 11 2022.
Further during the year under review the non-executive director of the company had notransactions with the company even the payment of sitting fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theBoard/Committee of the Company.
The complete list of Directors along with the KMPs of the Company has been provided aspart of the Annual Report.
During the year there were no changes in the Directors/Key Managerial Personnel of theCompany other than reported above.
Declaration by Independent Directors
All Independent Directors have submitted the declaration of independence pursuant tothe provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI ListingRegulations stating that they meet the criteria of independence as provided in Section149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations and they arenot aware of any circumstance or situation which exist or may be reasonably anticipatedthat could impair or impact his/her ability to discharge his/ her duties with an objectiveindependent judgment and without any external influence.
In compliance with Rule 6 of Companies (Appointment and Qualification of Directors)Rules 2014 all the Independent Directors ("IDD") of the Company is being inthe process to register themselves with the India Institute of Corporate Affairs (IICA)Manesar to include their names in the databank of Independent Directors within thestatutory timeline. They have also confirmed that they will appear for the onlineproficiency test within a period of one year wherever applicable. (if required/if any)
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.
MANAGING DIRECTOR/DIRECTOR AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATE
In terms of the SEBI LODR Regulations the certificate as prescribed in Part B ofSchedule II of the said Regulations has been obtained from Managing Director & ChiefFinancial Officer for the Financial Year 2021-22 with regard to the Financial Statementsand other matters. The said Certificate forms part of this Report.
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 Audit Committee was re-constituted by the Board on August 10 2021 due toresignation of Mr. Jayesh Joshi.
The details of composition meetings and attendance of the Meetings of the AuditCommittee are as under:-.
*Resigned on August 10 2021. #Appointed on August 10 2021
There has been no instance where the Board of Directors had not accepted anyrecommendation of the Audit Committee.
NOMINATION & REMUNARATION COMMITTEE
The Board has a Nomination and Remuneration policy which is generally in line with theexisting industry practice and applicable laws. The policy has been displayed on theCompany's website viz. www.arcoleasing.com
The Nomination and Remuneration Committee assist the Board in overseeing the methodcriteria and quantum of compensation for directors and senior management based on theirperformance and defined assessment criteria. The Committee formulates the criteria forevaluation of the performance of Independent Directors & the Board of Directors;identifying the persons who are qualified to become directors and who may be appointed insenior management and recommend to the Board their appointment and removal. The terms ofthe reference of Nomination and Remuneration Committee covers the areas mentioned undersection 178 of the Companies Act 2013
Due to resignation of Mr. Jayesh Joshi the Nomination and Remuneration Committee wasre-constituted by the Board on August 10 2021.
The details of composition of the Nomination and Remuneration Committee are as under:
*Resigned on August 10 2021. #Appointed on August 10 2021
STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee is not constituted by the Company as there areless than One Thousand stakeholders of the Company and the provisions of section 178 ofthe Act and SEBI (Listing Obligations and Disclosure) Regulations 2015 are not applicableto the Company.
The Company has duly appointed Share Transfer Agent (R&T Agent) for servicing theshareholders holding shares in physical or dematerialised form. All requests fordematerialisation of shares are likewise processed and confirmations thereof arecommunicated to the investors within the prescribed time.
During the year under review no Investor complaints were pending.
DIRECTORS' RESPONSIBILITY STATEMENT
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 thepreparation of the annual accounts the applicable Accounting Standards had been followedalong with proper explanation relating to material departures; (ii) the directorshad selected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit of theCompany for the year ended on that period; (iii) the directors had taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; (iv) the directors hadprepared the annual accounts on a going concern basis; (v) the directors had laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively; and (vi) thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
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.
Ansu Trade & Fiscals Private Limited continue to be the wholly owned subsidiary ofArco Leasing Limited.
DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors' confirm that the Secretarial Standards issued by the Institute ofCompany Secretaries of India have been complied with.
The Company has prepared the Financial Statements for the year ended 31stMarch 2022 as per Section 133 of the Companies Act 2013 read with rule 7 of Companies(Accounts) Rules 2014.
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 its own performance as well as of its Committees thereof and ofthe Directors individually. The manner in which the evaluation has been carried out hasbeen covered in the Corporate Governance Report.
MAJOR EVENTS OCCURRED DURING THE YEAR
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.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the year there are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and the Company's operations.
Equity Shares of your Company are listed on BSE Limited. Your Company has paid therequired listing fees to Stock Exchange.
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 appointment as required tobe given to the Independent Directors outlining their role function duties andresponsibilities.
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 suchother remuneration 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 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'scontribution to Provident Fund contribution to pension fund pension schemes etc. asdecided from time to 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.
NUMBER OF MEETINGS OF THE BOARD
There were 4 (Four) meetings of the Board held during the year specifically on June29 2021 August 10 2021 November 10 2021 and February 11 2022. The maximum time gapbetween any two meetings did not exceed prescribed period of one hundred twenty days. Theparticulars of directors present at various Board and Committee meetings are given in thesaid Report.
COMPLIANCE WITH SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively. During the year under review theCompany was in compliance with the Secretarial Standards (SS) i.e. SS-1 and SS- 2relating to "Meetings of the Board of Directors" and "GeneralMeetings" respectively.
Implementation of corporate action:
During the year under review the Company has not failed to implement any CorporateActions within the specified time limit.
AUDIT COMMITTEE RECOMMENDATIONS
All the recommendations made by the Audit Committee were accepted by the Board.
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 and the specific certificate to this effect hasbeen obtained by the Company & kept on its records.
Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunderthe Members at the 36th Annual General Meeting of the Company held on September28 2020 had appointed M. C. Jain & Co. Chartered Accountants Mumbai having FRN.:304012E as the Statutory Auditors of the Company to hold office for a period of fiveyears from the conclusion of the 36th Annual General Meeting till theconclusion of 41st Annual General Meeting of the Company to be held in the year2025.
Pursuant to the amendment to Section 139 of the Act effective from May 07 2018ratification by shareholders every year for the appointment of Statutory Auditors is nolonger required and accordingly the Notice of ensuing 37th AGM does notinclude the proposal for seeking shareholders' approval for ratification of StatutoryAuditors appointment.
There is no audit qualification reservation or adverse remark for the year underreview.
The Auditors' Report to the Members for the year under review is unmodified and doesnot contain any qualification. The Notes to the Accounts referred to in the Auditors'Report are self-explanatory and therefore do not call for any further clarifications underSection 134(3)(f) of the Act.
Internal Audit for the year ended March 31 2022 was carried out and Internal Auditreport at periodic intervals as statutorily required were placed before the AuditCommittee.
COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Act are not applicable for the business activitiescarried out by the Company.
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 2022 is annexed.
There were no qualifications reservation or adverse remarks or observations made inthe secretarial audit report.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
Pursuant to the provisions of Section 22 of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules made thereunder theCompany had formulated and adopted a Policy on Prevention of Sexual Harassment atWorkplace. The Company has not received any complaint of sexual harassment during the yearunder review.
RISK MANAGEMENT POLICY
Your Company has implemented mechanism to identify assess monitor and mitigatevarious risks and has formulated a Risk Management Policy. The Audit Committee and theBoard of Directors are informed of the Risk assessment and minimization procedures.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of the Companies Act 2013 the brief outline of the CSR Policyof your Company composition of the Committee and report on initiatives undertaken by yourCompany on CSR activities during the year are set out in Report annexed in the format asprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. YourCompany has made the contribution towards CSR activities as per the Policy.
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.
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-18 to theFinancial Statements.
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. The Company believes in "Zero Tolerance" againstbribery corruption and unethical dealings / behavior in any form and the Board has laiddown certain directives to counter such acts. Such code of conduct has also been placed onthe Company's website. The Code lays down the standard procedure of business conduct whichis expected to be followed by the Directors and the designated employees in their businessdealings and in particular on matters relating to integrity in the work place in businesspractices and in dealing with stakeholders. The Code gives guidance through examples onthe expected behavior from an employee in a given situation and the reporting structure.All the Board Members and the Senior Management personnel have confirmed compliance withthe Code. A declaration to this effect signed by the Managing Director of the Companyappears elsewhere in this annual report.
PARTICULARS OF EMPLOYEES
The Company does not have any employee except KMP. Therefore the information requiredpursuant to Section 197 of the Companies Act 2013 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is not furnished.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism Policy/ Whistle Blower Policy to dealwith instances of fraud and mismanagement if any which provides formal mechanism to thedirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or Ethics Policy. Stayingtrue to our core values of Strength Performance and Passion and in line with our visionof being one of the most respected companies in India the Company is committed to thehigh standards of Corporate Governance and Stakeholder Responsibility. The said Policyensures that strict confidentiality is maintained in respect of whistle blowers whilstdealing with concerns and also specified that no discrimination will be meted out to anyperson for a genuinely raised concern. The Policy on Vigil Mechanism/Whistle BlowerMechanism may be accessed through website of the Company viz. www.arcoleasing.com
PERFORMANCE OF JOINT VENTURE/CONSORTIUM
There are no Companies/LLPs which are Associates/Consortium of the Company.
There are no associate companies but there is subsidiary company as of March 31 2022hence the prescribed Form AOC-1 is required to be attached to this Report. A Cash FlowStatement for the Financial Year 2021-22 is also attached to the Balance Sheet.
Pursuant to Sections 134(3)(a) and 92(3) of the Act read with Rule 12 of the Companies(Management and Administration) Rules 2014 the Annual Return in e-form MGT-7 may beaccessed on the Company's website at the web link www.arcoleasing.com
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company as not involved in any industrial or manufacturing activities the Companyhas no particulars to report regarding conservation of energy and technology absorption asrequired under Section 134 of the Companies Act 2013 and Rules made thereunder.
During the year under review the Company did not have any foreign exchange earningsor the foreign exchange outgo towards Business promotion Advertisement expenses Legalconsultancy and Professional fees.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company has an effective internal financial control and risk-mitigation systemwhich are constantly assessed and strengthened with new/revised standard operatingprocedures which also covers adherence to the Company's Policies for safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof accounting records and timely preparation of reliable financial disclosures. TheCompany's internal financial control system is commensurate with its size scale andcomplexities of its operations.
PREVENTION OF INSIDER TRADING
The Company has also adopted a code of conduct for prevention of insider trading. Allthe Directors Senior Management employees and other employees who have access to theunpublished price sensitive information of the Company are governed by this code. Duringthe year under report there has been due compliance with the said code of conduct forprevention of insider trading based on the SEBI (Prohibition of Insider Trading)Regulations 2015.
SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTINGTHE 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.
Statements in this Directors' Report and Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may be"forward-looking statements" within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that could make difference to the Company's operations include changesin the government regulations developments in the infrastructure segment tax regimes andeconomic developments within India or abroad.
ACKNOWLEDGEMENT & APPRECIATION
The Board sincerely thanks the Ministry of Corporate Affairs BSE Limited Securitiesand Exchange Board of India and various government agencies for their continued supportcooperation and advice.
The Board expresses sincere thanks to all its consultants bankers vendors auditorslawyers for their continued partnership and confidence in the Company.
The Board members also wish to place on record their appreciation for the dedicationand contribution made by the KMP's and look forward for their support in future as well.The Board members are also deeply touched by the efforts sincerity and loyalty displayedby the Directors and KMPs during the COVID-19 pandemic and without whom the sustainabilityor growth of the Company is unattainable.
Further the Board expresses its gratitude to you as Shareholders for the confidencereposed in the management of the Company.
BY AND ON BEHALF OF THE BOARD OF DIRECTORS FOR ARCO LEASING LIMITED