The Directors of Arrow Greentech Limited present the 26 Annual Report on the operationsof the Company together with the Audited Accounts for the year ended 31 March 2018.
| || ||(Rs in thousands) |
|Particulars ||2017-2018 ||2016-2017 |
|Total income ||491319 ||337265 |
|Profit (Loss) before finance cost Depreciation and Amortization expenses exceptional items & Tax ||221621 ||179989 |
|Less : Finance Cost ||- ||- |
|Less : Depreciation and Amortization expenses ||40314 ||12542 |
|Less: Exceptional items ||- ||- |
|Profit Before Tax ||181307 ||167447 |
|Less : Provision for Taxation || || |
|- Current Tax ||32276 ||22134 |
|- Deferred Tax ||(2442) ||5773 |
|- Earlier Year Adjustments ||- ||1588 |
|Profit for the year ||151473 ||137952 |
|Other Comprehensive Income ||266 ||21 |
|Profit for the year after other comprehensive income ||151207 ||137973 |
|Add : Balance brought forward ||259945 ||143167 |
|Less : Tax & Dividend Adjustment (related to previous year) ||65747 ||21195 |
|Balance carried to Balance Sheet ||345406 ||259945 |
Indian Accounting Standard
The Ministry of Corporate Affairs (MCA) on February 16 2015 notified that IndianAccounting Standard (Ind AS) are applicable to certain classes of companies from April 12016 with a transition date of April 1 2015 and certain classes of companies from April1 2017 with a transition date of April 1 2016. Ind AS has replaced the previous IndianGAAP prescribed under section 133 of the Companies Act 2013 ("the Act") readwith rule 7 of the Companies (Accounts) Rules 2014. Ind AS is applicable to the companyfrom April 1 2017.
The reconciliation and description of the effects of the transition from previous GAAPto Ind AS have been set out in Note No. 3 in the notes to accounts in Standalone FinancialStatement and Note No. 3 in the notes to accounts in the Consolidated Financial Statement.
The total income from operations including other income for the financial year underreview amounted to Rs 4913.19 Lacs as compared to Rs 3372.65 Lacs in the previous year.The Company has earned net profit of Rs1512.07 Lacs (including other comprehensive income)as compared to Rs 1379.73 Lacs in the previous year. After adjustment of brought forwardbalance of Rs 2599.45 Lacs from previous year and payment of dividend (including corporatedividend tax) of Rs 657.47 Lacs for previous yearRs3454.06 Lacs has been carried to theBalance Sheet.
Transfer to Reserves
The Board of Directors has not recommended transfer of any amount of profit to reservesduring the year under review. Hence the entire amount of profit for the year under reviewhas been carried to the Profit and Loss account.
Business outlook and future prospects
Business outlook and future prospects of the Company is discussed in detail inManagement Discussion and Analysis Report attached herewith.
Your Directors have recommended a Dividend of 20% on 11739948 Equity Shares of theface value of Rs10/- i.e. Rs 2/- per equity share for the financial year ended 31 March2018 subject to the approval of the shareholders at the ensuing Annual General Meeting ofthe Company. The dividend would be payable to all those Shareholders whose names appear inthe Register of Members as on the Book Closure Date.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
Conservation of Energy Technology absorption and Foreign Exchange earnings and outgo:
(a) Conservation of Energy and Technology Absorption
(i) The Company has paid special attention to the conservation of energy as a matter ofprincipal and policy. This has been reflected in the selection of equipment at the projectstage. The cost of power has kept to the minimum by optimum operation. Regular preventivemaintenance has helped to operate unit efficiently.
(ii) Additional investment and proposals if any are being implemented for reductionof Conservation of Energy.
(iii) Impact of the measures at (i) and (ii) above for reduction of energy consumptionand consequent impact on the cost of production of goods is not ascertainable.
(b) Foreign Exchange earnings and outgo
Foreign Exchange earnings Rs 3333.5Lacs (previous year Rs. 2308.3Lacs)
Foreign Exchange outgo Rs 514.4 Lacs (previous year Rs 220.8 Lacs)
Auditors and Auditors' Report
M/s. Haribhakti & Co. LLP the Statutory Auditors of the Company will hold officetill the ensuing Annual General Meeting. As per provisions of Section 139 of the CompaniesAct 2013 read with Companies (Audit and Auditors) Rules 2014 an audit firm can beappointed as Statutory Auditors of the Company only for two terms each term consisting offive consecutive years. Further the audit firm which has been occupying the office ofauditors of the Company for more than seven years prior to implementation of the CompaniesAct 2013 are eligible to hold office for additional three years only.
M/s. Haribhakti & Co. LLP the Statutory Auditors of the Company who hold officeuntil the conclusion of the ensuing Annual General Meeting is proposed to be re-appointedas Statutory Auditors of the Company for the financial year 2018-19. The said Auditor havegiven a written consent and also issued Certificate pursuant to Section 139 of theCompanies Act 2013.
The Notes on Financial Statement referred to in the Auditors Report's are self-explanatory and do not call for further comments. The Auditor's Report does not containany qualifications adverse remark.
The Board has appointed M/s Rajendra & Co. Practicing Company Secretary toconduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report forthe financial year ended March 31 2018 is annexed herewith marked as ANNEXURE I tothis Report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
The Company has appointed M/s. J.A. Rajani & Co. Chartered Accountants Mumbai asits Internal Auditor. The internal Auditor monitors and evaluates the effectiveness andadequacy of internal control system in the Company its compliances with operatingsystems accounting procedure and policies at all locations of the Company and reports thesame on quarterly basis to the Audit Committee.
Particulars of Loans Guarantees or Investments
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.
The details of the investments made by company is given in the notes to the financialstatements
As on March 31 2018 there were 4 subsidiaries and 1 step down subsidiary of theCompany:
Direct Indian subsidiary
Arrow Secure Technology Private Limited (WOS of the Company)
Avery Pharmaceuticals Private Limited (WOS of the Company)
LQ Arrow Security Products (India) Private Limited (WOS of the Company)
Direct Foreign subsidiary
Arrow Green Technologies (UK) Limited (WOS of the Company)
Step down subsidiary
Advance IP Technologies Limited (Subsidiary of Arrow Green Technologies (UK) Limited)
Pursuant to Section 129(3) of the Act a statement containing the salient features ofthe financial statements of each of the subsidiary in the prescribed form AOC-1 asANNEXURE II to this Report the financial statements of the subsidiaries are kept forinspection by the shareholders at the Registered Office of the Company. The said financialstatements of the subsidiaries are also available on the website of the Companywww.arrowgreentech.com under the Investors Section.
A report on the performance and financial position of the each of the subsidiaries inthe AOC-1 is annexed to the report and hence not repeated here for the sake of brevityunder Rule 8 of the Companies (Accounts) Rules 2014.
The Company has also formulated a Policy for determining material subsidiaries whichis uploaded on the website of the Company i.e. www.arrowgreentech.com and can be accessedat http://www.arrowgreentech.com/images/policies/ Policy_on_Material_ Subsidiaries.pdf
Consolidated Financial Statements
Your Directors have pleasure in attaching the Consolidated Financial Statementspursuant to Section 129(3) of the Act and SEBI Listing Regulations and prepared inaccordance with the Accounting Standards prescribed by the Institute of CharteredAccountants of India in this regard.
In accordance with the Section 129(3) of the Act and Accounting Standard (Ind AS 110)on Consolidated Financial Statements the audited Consolidated Financial Statements areprovided in this Annual Report.
Your Company is in compliance with the Corporate Governance guidelines as laid out inthe SEBI Listing Regulations.
As per Regulation 34 (3) read with Schedule V of the SEBI Listing Regulations aseparate section on corporate governance practices followed by the Company together witha certificate from M/s. Haribhakti & Co. LLP Chartered Accountants confirmingcompliance forms an integral part of this Report.
The annual report of the Company contains a certificate by the Chairman and ManagingDirector in terms of SEBI Listing Regulations on the compliance declarations received fromthe Directors and the Senior Management personnel and a Certificate by M/s. Haribhakti& Co. LLP Chartered Accountants who have examined the requirements of CorporateGovernance with reference to SEBI Listing Regulations and have certified the complianceas required under SEBI Listing Regulations.
Internal control systems and their adequacy
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board &to the Chairman & Managing Director.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and the auditor has notidentified any material weakness relating to financial reporting
Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as " ANNEXURE III".
The Paid up Share Capital as on 31.3.2018 was Rs11.74 crore. During the year underreview the Company has not issued any shares.
Directors and Key Managerial Personnel
Ms. Suneeta Thakur Woman Director has resigned from the Board of Directors of theCompany on 21 February 2018. The Board places on record her appreciation for thecontribution in the overall growth of the Company during her tenure as Director.
The Board upon the recommendations of the Nomination and Remuneration Committee atits Meeting held on 29 May 2018 appointed Ms. Aradhana Singh (DIN:08141485) as anAdditional (Independent) Woman Director. w.e.f. 29 May 2018. Necessary resolution forseeking approval of members for his appointment in the said office is included in theNotice of Annual General Meeting.
In accordance with the provisions of the Act none of the Independent Directors isliable to retire by rotation. Pursuant to the provisions of Section 152 of the CompaniesAct 2013 Mr. Neil Patel shall retire by rotation at the ensuing Annual General Meetingand being eligible offer himself for re-appointment. The Board recommends hisappointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of Independence as prescribed under Section149(6) of the Act and Regulation 16 (1) (b) of the SEBI Listing Regulations.
Details of the Director seeking appointment at the Annual General Meeting as requiredin terms of Regulation 36(3) of the SEBI Listing Regulations is provided in the Annexureto the Explanatory Statement to the Notice.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company are Mr. Shilpan Patel Chairman & Managing Director Mr. Neil Patel Jt.Managing Director Mr. Hitesh Punglia Chief Financial Officer and Ms. Poonam BansalCompany Secretary of the Company. The Remuneration and other details of Key ManagerialPersonnel for the financial year ended March 31 2018 are mentioned in the Extract of theAnnual Return which is attached to the Board's Report.
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulation 2015the Board has carried out an evaluation of its own performance the directors individuallyas well as the evaluation of the working of its Audit Appointment & RemunerationCommittees. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report.
During the year five Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
Further a separate Meeting of the Independent Directors of the Company was also heldon 13 February 2018 whereat the prescribed items enumerated under Schedule IV to theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 were discussed.
An Audit Committee is in existence in accordance with the provisions of Section 177 ofthe Companies Act 2013. Kindly refer to the section on Corporate Governance under thehead Audit Committee' for matters relating to constitution meetings and functionsof the Committee.
Vigil Mechanism / Whistle Blower Policy
In compliance with provisions of section 177(9) and (10) of the Companies Act 2013read with Regulation 22 of the Listing Regulations your Company has adopted whistleblower policy for Directors and employees to report genuine concerns to the management ofthe Company. The whistle blower policy of the Company is posted on the website of theCompany and may be accessed on the Company's website at the link:http://www.arrowgreentech.com/images/policies/Whistle%20Blower%20Policy.pdf
Nomination and Remuneration Committee
A Nomination and Remuneration Committee is in existence in accordance with theprovisions of subsection (3) of Section 178 of the Companies Act 2013. Kindly refer tothe section on Corporate Governance under the head Nomination and RemunerationCommittee' for matters relating to constitution meetings functions of the Committee.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy recommended by the Nomination and RemunerationCommittee is duly approved by the Board of Directors of the Company and the RemunerationPolicy of the Company may be accessed on the Company's website at the link:http://www.arrowgreentech.com/images/policies/nomination-remuneration-policy.pdf
Corporate Social Responsibility Initiatives
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company during the year are set out in ANNEXUREIV of this report as per the format prescribed in Companies (Corporate SocialResponsibility Policy) Rules 2014.
The CSR Policy may be accessed on the Company's website at the link:http://www.arrowgreentech.com/ images/policies/ CSR_Policy.pdf
Related Party Transactions
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large
Particulars of Employees and related disclosures
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Financial Statement are being sent to the Members and others entitled theretoexcluding the information on employees' particulars which is available for inspection bythe Members at the Registered Office of the Company during business hours on working daysof the Company up to the date of the ensuing Annual General Meeting. If any Member isinterested in obtaining a copy thereof such Member may write to the Company Secretary inthis regard.
Risk management policy
Pursuant to the requirement of Section 134 (3) (n) of the Act the Company has in placea structured risk management policy. The Risk management process is designed to safeguardthe organisation from various risks through adequate and timely actions. It is designed toanticipate evaluate and mitigate risks in order to minimize its impact on the business.
Directors' Responsibility Statement
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate 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 responsible and prudent so as to give a true andfair view of the state of affairs of the Company for the financial year ended on 31 March2018 and of the profit/loss of the Company for the period under review;
iii) the directors had taken proper and sufficient care of the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) the directors had prepared the 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.
vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.
2. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
3. Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors would like to express their grateful appreciation for the assistance andco-operation received from the Financial Institution Banks Government AuthoritiesVendors and Shareholders and all organizations connected with its business during the yearunder review. Your Directors also wish to place a record their deep sense of appreciationfor the committed services of Executives Staff and Workers of the Company.
| ||For and on behalf of the Board of Directors |
| ||Neil S. Patel |
|Place: Mumbai ||Jt.Managing Director |
|Date: May 29 2018 ||DIN:00607101 |