The Directors of your Company have pleasure in presenting Annual Report together withthe Audited Accounts and Auditors' Report for the year ended 31st March 2019.
1. Financial Performance:-
The financial performance of the Company for the Year ended 31st March 2019 is assummarized below:-
|Particulars ||Year ended 31.03.2019 ||Year ended 31.03.2018 |
|Gross Turnover ||164605615 ||306182430 |
|Profit/(loss) before Taxation ||3982773 ||5482046 |
|Less: Provision for Taxation ||1155102 ||1624820 |
|Add: Provision for Deferred Tax Assets ||17769 ||5960 |
|Profit/(loss) after Taxation ||2845440 ||3863186 |
|Less: Provision Against Standard Assets ||1077401 ||1166170 |
|Less : Transferred to Reserve Fund 45-1C ||569088 ||772637 |
|Add: Balance brought forward from previous year ||20785252 ||18860873 |
|Less: Proposed Dividend ||NIL ||NIL |
|Less: Dividend Tax ||NIL ||NIL |
|Balance carried to Balance Sheet ||21984203 ||20785252 |
2. Dividend :-
The Board of Directors do not recommend any dividend for the financial year 2018-19under report.
3. State of the Company's Affairs:-
The gross turnover for the financial year 2019 at Rs. 1646.06 Lakhs and last year 2018it was Rs. 3061.82 Lakhs.The Profit before tax for FY 2019 was Rs. 39.83 Lakhs against asRs. 54.82Lakhs in FY-2018. The Profit after tax for FY 2019 was Rs. 28.45 Lakhs comparedas Rs. 38.63Lakhs in FY-2018.This has come due to company's health interest marginsoperating efficiencies and prudent risk management.
The Company's current provisioning standards are more stringent than Reserve Bank ofIndia (RBI) prudential norms. In line with itsconservative approach the Company continuesto strengthen itsprovisioning norms beyond the RBI regulation by acceleratingtheprovisioning to an early stage of delinquencies based on the pastexperience andemerging trends.
4. First-time adoption of Ind AS:-
In accordance with the Companies (Indian AccountingStandards) Rules 2015 of theCompanies Act 2013 readwith Section 133 of the Companies Act 2013 (Act')theCompany has adopted the Indian Accounting Standards(Ind AS) for preparation of itsfinancial statements witheffect from April 1 2018 with comparative financials fortheearlier period beginning April 1 2017.For periods up to and including the year endedMarch31 2018 the Company prepared its financial statements in accordance with previousGAAP including accountingstandards notified under the Companies (AccountingStandards)Rules 2006 (as amended). The effective datefor Company's Ind AS opening balance sheet isApril 12017.
The company has made available a note explaining theareas of difference between IndianGAAP and Ind AS andexplained the reconciliation between the two GAAPs inthe notes formingpart of accounts.
5. Share Capital:-
During the year under review the Authorised Share Capital of the Company stood at Rs.50 Crores. The Issued Subscribed and Paid-up Share Capital of the Company as on March 312019 was 30.75 Crores consisting of 150375000 Equity Shares of Rs. 2 each. During theyear under review the Company has not issued shares.
6. Transfer to Reserves:-
As required under Section 45IC of the Reserve Bank ofIndia Act 1934 20% of theprofits are required to betransferred to a Special Reserve Account. The Companyproposes totransfer Rs. 5.69 lakhs (previous year Rs. 7.73 lakhs) to Statutory Reserve created and noamount is proposed to be transferred to General Reserve.
Mr. Mohandas Dasari retires by rotation at the ensuing Annual General Meeting andbeing eligible offer herself for re-appointment.
Mr. Rajkumar Goyal (DIN 08529131) was appointed as an Additional Director with effectfrom 13th August 2019. He holds the office of Additional Director upto the ensuing AnnualGeneral Meeting.The Board wants to appoint him as aNon-executive Independent director fromthe same date for a period of 5 years.He is a Graduate having 15 years of experience infinance. The Company will be benefitted from his great potential in the above field.
The resolution seeking approval of the members for the appointment of Mr. RajkumarGoyal have been incorporated in the notice of the forthcoming annual general meeting ofthe Company along with brief details about them.
Pursuant to Sections 149 of the Companies Act 2013 Mr. Sopan Vishwanathrao Kshirsagarhas been reappointed as IndependentDirectors for a period of five years till September 262024 at the annual general meeting held on 27th September 2019. And Mrs. Sarita Bhartiahas been appointed as Independent Director for a period of 3 Years till September 24thSeptember 2021 at the Annual General Meeting held on 25th September 2018.
The Company has familiarized the Independent Directors with the Company their rolesresponsibilities in the Company nature of industry in which the Company operatesbusiness model of the Company etc. The details of the familiarization programme areavailable on the website of the Company at http:// www.arnoldholdings.in. /investorrelations/ Familiarisation_Programme_for_Independent_Directors.pdf.
Mrs. Sarita Bhartia and Mr. SopanVishwanathrao Kshirsagar who are independentdirectors have submitted a declaration that each of them meets the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013 and Regulation 16(1) (b) of the Listing Regulations. Further all the Directors meet the Fit and Propercriteria as per the policy of the Company and as stipulated by RBI pursuant to the revisedregulatory framework notified during the year. The terms and conditions of appointment ofIndependent Director is also available on the website of the Company athttp://www.arnoldholdings.in./ Management/ Appointment of Independent Directors.pdf.
The Directors of the Company have affirmed compliance with the Code of Conduct of theCompany.
In the opinion of the Board the independent directors possess appropriate balance ofskills experience and knowledge as required.
The brief note on Director retiring by rotation and eligible for re- appointment aswell as Independent Directors and re-appointment of Whole Time Director is being furnishedin the Report on Corporate Governance.
8. Key Managerial Personnel
During the year under the report the Company has appointed following persons as KeyManagerial Personnel.
Mr. MahendraprasadMallawat Whole Time Director Mr. Mohandas Dasari- Whole TimeDirector
Mrs. SoniyaAgarwal Company Secretary and Compliance Officer.
9. Directors' Responsibility Statement:-
Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed:-
i) That in the preparation of the accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
ii) That the Directors have selected such 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 and of the profit of the Company for the year under review;
iii) That the Directors have 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) That the Directors have prepared the annual accounts for the financial year ended31st March 2019 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.
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.
10. Board Evaluation
Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out an annual evaluation of its own performance and of the individual Directors(including the Chairman) as well as an evaluation of the working of all the Committees ofthe Board. The Board of Directors was assisted by the Nomination & RemunerationCommittee. The performance evaluation was carried out by seeking inputs from all theDirectors / Members of the Committees as the case may be.
The criteria for evaluation of the Board as a whole inter-alia covered parameterssuch as structure of the Board meetings of the Board and functions of the Board. Thecriteria for evaluation of Individual Directors covered parameters such as details ofprofessional qualifications and prior experience relevant to the Company knowledge andcompetency fulfillment of functions ability to function as a team etc. The criteria forevaluation of the Board Committees covered areas related to mandate and compositioneffectiveness of the Committee structure of the Committee and meetings etc.
The feedback of the Independent Directors on their review of the performance ofNon-Independent Directors and the Board as a whole the performance of the Chairman of theCompany and the assessment of the quality quantity and timeliness of flow of informationbetween the Company Management and the Board was taken into consideration by the Board incarrying out the performance evaluation.
The Nomination and Remuneration Committees lays down the criteria for performanceevaluation of independent directors Board of Directors and Committees of the Board. Thecriteria for the performance evaluation is based on the various parameters like attendanceand participation at the meetings of the Board and Committees thereof contribution tostrategic decision making review of risk assessment and risk mitigation review offinancial statements business performance and contribution to the enhancement of brandimage of the Company.
The Board has carried out the evaluation of its own performance as well as that of theCommittees of the Board and all the Directors.
11. Subsidiary Company:
The Company does not have any subsidiaries during the year. 12. Meeting of the Boardand committees thereof: Board Meeting:
Four meetings of the Board were held during the year the details of which aredisclosed in the Report on Corporate Governance forming part of the Annual Report of theCompany.
The Company has constituted an Audit Committee comprising of Independent Directors. Thecomposition terms of reference and details of meeting held during the year are disclosedin the Report on Corporate Governance. Four meetings of the Audit Committee were heldduring the year.
Stakeholders Relationship Committee:
The Committee met four times during the year. The composition terms of reference anddetails of meeting held during the year are disclosed in the Report on CorporateGovernance.
Nomination and Remuneration Committee:
The Nomination and Remuneration Committee recommends to the Board the suitability ofcandidates for appointment as Director/Managing Director and Key Managerial Personnel andthe remuneration packages payable to them. The Nomination and Remuneration Committee mettwo times during the year. The composition terms of reference and detailsof meeting heldduring the year are disclosed in the Report on Corporate Governance.
13. Internal financial control systems and their adequacy:-
The Company has put in place adequate internal controls with reference to accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation commensurate with the size scale and complexity of operations and ensurescompliance with various policies and statutes in keeping with the organization's pace ofgrowth increasing complexity of operations prevention and detection of frauds anderrors.
The design and effectiveness of key controls were tested and no material weaknesseswere observed. The Audit Committee reviews and evaluates the adequacy of internalfinancialcontrol and risk management systems periodically. Efficacy of Internal control systemsare tested periodically by Internal Auditors and Internal Control over financial reportingis tested and certified by Statutory Auditors.
14. Auditors& Auditors Report
The Report given by M/S Amit Ray& CO (Firm Registration No. 000483C) CharteredAccountants on the financial statement of the Company for the financial year 2018-19 ispart of the Annual Report. The Notes on financial statements referred to in the AuditorsReport are selfexplanatory and do not call for any further comments. The Auditors'Report does not contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit& Auditors) Rules 2014 and the rules framed there under the Members at their thirtyfourth Annual General Meeting (AGM) held on September 16 2016 approved the appointment ofM/S Amit Ray & CO ( Firm Registration No. 000483C) Chartered Accountants as theStatutory Auditors of the Company for a period of five years to hold office from theconclusion of 34th AGM till the conclusion of 39th AGM of the Company.
15. Management's Discussion and Analysis Report:-
The Management Discussion and Analysis report (Annexure 1) for the year under review asrequired under Regulation 34(2) (e) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations')is provided as a separate section forming part of the Annual Report.
16. Corporate Governance:-
In terms of Regulation 34 of the Securities and Exchange Board of India (SEBI) (ListingObligations and Disclosure Requirements) Regulations 2015 a Report on CorporateGovernance (Annexure-2) for the year under review is forming part of the Annual Report.The certificate from the Secretarial Auditor of the Company confirming compliance with theconditions of Corporate Governance is annexed to the Report on Corporate Governance.
17. Secretarial Auditor report:
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Audit Committee recommended and theBoard of Directors of the Company appointed M/s. S Pardeshi & Associates CompanySecretaries in Practice to undertake the Secretarial Audit of the Company for thefinancial year 2018-19. Your Company has received their written consent that theappointment will be in accordance with the applicable provision of the Act and rulesframed thereunder.
The Secretarial Audit Report is annexed herewith marked as Annexure II to this Reportpursuant to Regulation24A of Listing Regulations. Secretarial Audit Report does notcontain any qualifications reservations or adverse remark on the Secretarial and otherrelated records of the Company for FY 2018-19.
Secretarial Audit report issued by M/s. S Pardeshi & Associates CompanySecretaries in Form MR-3 forms part of this report Annexure-III.
18. Particulars of Loans Guarantees and Investment.
The Company has not given any loans or guarantee or made any investments incontravention of the provisions of the Section 186 of the Companies Act 2013. The detailsof the loans and guarantees given and investments made by the Company are provided in thenotes to the financial statements.
19. Related Party Transactions.
All the related party transaction entered into during the financial year was not on thearm's length basis and were in the ordinary course of Company's business. The Company'shas not entered into any contracts arrangements or transaction with any related partywhich could be considered as material as defined under SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015.
The Board has approved a policy for related party transactions which has been uploadedon the website of the Company www.arnoldholdings.in.
All the related party transactions are placed before the Audit Committee as well as theBoard for approval on the quarterly basis. Omnibus approval was also obtained from theAudit Committee and the Board on an annual basis for repetitive transactions.
Related party transactions under Accounting Standards AS- 18 are disclosed in the notesto the financial statements. Prescribed Form No. AOC- 2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules2014 is furnished as Annexure IV to this report.
Disclosure of Related Party/ Related Party Transactions:
|a) Key Managerial Persons: |
|Mr. Mahendraprasad Mallawat |
|Mr. Mohandas Dasari |
|Mrs. Sarita Bhartia |
|Dr. Sopan Vishwanathrao Kshirsagar |
|Mrs. CA. Gazala Kolsawala |
|Ms. Soniya Agarwal |
|b) Details of transactions: || |
|Director's remuneration: - ||Mr. Mahendraprasad Mallawat Rs. 6 45004/- |
| ||Mr. Mohandas Dasari Rs. 60000/- |
| ||Mrs. CA. Gazala Kolsawala Rs.36000/- |
| ||Mrs. Sarita Bhartia Rs. 25000/- |
|Detail of Salary: ||Mrs. Soniya Agarwal Rs. 4 12400/- |
20. RBI guidelines:
The Company is registered as Non deposit taking Company systemically importantNon-Banking Finance Company with RBI. Accordingly during the year the Company has notaccepted any deposits from the public and there were no deposits which become due forrepayment or renewal. The Company has complied with and continues tocomply with allapplicable Laws Rules Circulars Regulations norms and standards laid down by theReserve Bank of India (RBI) during the Financial Year 2018-2019.
21. Dematerialization of Equity Shares: Equity Shares of the Company are compulsorilytradable in electronic form. As on March 31 2019 100% of the Equity Shares are held inelectronic form only.
22. Secretarial standards of ICSI:
During the financial year 2018-19 the Company has complied with the applicableprovisions of Secretarial Standards issued by The Institute of Company Secretaries ofIndia.
23. Extract of Annual Report:
In compliance with Section 134(3)(a) of the Act the extract of Annual Return in MGT-9as required under Section 92(3) of the Act and prescribed in Rule 12 of the Companies(Management and Administration) Rules 2014 may be accessed on the Company's website athttps://www. arnoldholdings.in/investor relations/ MGT-9/.
24. Particulars of Employees:-
None of the employees were in the category of the limits specified Section 197 of theAct read with Rule 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
25. Fixed Deposits:-
During the year under review the Company has not accepted any deposits as such noamount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet.
26. Vigil Mechanism/Whistle Blower Policy:-
The Company has formulated and established a Vigil Mechanism named Whistle BlowerPolicy to deal with instances of fraud and mismanagement and to enable Directors andEmployees to report genuine concerns about unethical behavior actual or suspected fraudor violation of Code of Conduct. The details of the same are explained in the Report onCorporate Governance. The Whistle Blower Policy may be accessed on the Company's websiteat http://www.arnoldholdings.in/investor relations/Policies/ Whistle_Blower_Policy.pdf.
27. Conservation of energy technology absorption and foreign exchange earnings andoutgo:-
The particulars relating to conservation of energy technology absorption and foreignexchange earnings and outgo required to be furnished pursuant to Section 134 of theCompanies Act 2013 read with Companies (Disclosures of Particulars in the Report ofBoard of Directors) Rules 1988 are as under:
(i) Part A and B of the Rules pertaining to conservation of energy and technologyabsorption are not applicable to the Company.
(ii) Foreign Exchange
Earnings and Outgo: Foreign Exchange Earned - Rs. Nil
Foreign Exchange Used - Rs. Nil
28. Appointment of Internal Auditor
Pursuant to the provisions of Section 138 read with Rule 13 of the Companies (Accounts)Rule 2014 Mrs. Soniya Agarwal who is the Company Secretary and compliance officer of theCompany has been appointed has the internal auditor of the Company for the financial year2019-2020 and she is being eligible for reappointment.
29. Human Resources:
The Company recognizes people as its most valuable asset and it has built an opentransparent and meritocratic culture to nurture this asset. The Company has a planningtool that provides an integrated means of identifying selecting developing and retainingtop talent within the organization. Focus on Behavioral and Leadership traits throughLearning & Development interventions job rotation is planned for the employees whoconstitute the Talent Pool.
30. Policy for Prevention Prohibition and Redressal of Sexual Harassment at Workplace:
The Company has in place a Policy for Prevention Prohibition and Redressal of SexualHarassment at Work Place. Appropriate reporting mechanisms are in place for ensuringprotection against Sexual Harassment and the right to work with dignity. During the yearunder review the Company has not received any complaints in this regard.
31. Business Development:
During the year the Business Development Group ("BDG") initiatedopportunities and harnessed its extensive relationship network within and outside theCompany to benefit the business.
32. Significant and Material Orders passed by the Regulators or Courts:-
During the year there were no significant and material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its futureoperations. Further no penalties have been levied by the RBI or any other regulatorduring the year under review.
33. Material Changes and Commitments:
There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year to which these financialstatements relate and the date of this Report.
The Directors express their sincere gratitude to the Reserve Bank of India Securitiesand Exchange Board of India BSE Limited Ministry of Finance Ministry of CorporateAffairs Registrar of Companies other government and regulatory authorities lendersfinancial institutions and the Company's bankers for the ongoing support extended by them.
The Directors also place on record their sincere appreciation for the continued supportextended by all the stakeholders and trust reposed by them in your Company. The Directorssincerely appreciate the commitment displayed by the employees of the Company andresulting in successful performance during the year.
|Registered Office: ||By Order of the Board of Directors |
|B-208 Ramji House 30 Jambulwadi || |
|J.S.S. Road Mumbai- 400002 ||Mr. Mahendraprasad Mallawat |
|CIN: L65993MH1981PLC282783 ||Whole Time Director |
|Dated: 13th August 2019 ||DIN: 00720282 |