Art Nirman Ltd.
|BSE: 538384||Sector: Infrastructure|
|NSE: ARTNIRMAN||ISIN Code: INE738V01013|
|BSE 05:30 | 01 Jan||Art Nirman Ltd|
|NSE 05:30 | 01 Jan||Art Nirman Ltd|
|BSE: 538384||Sector: Infrastructure|
|NSE: ARTNIRMAN||ISIN Code: INE738V01013|
|BSE 05:30 | 01 Jan||Art Nirman Ltd|
|NSE 05:30 | 01 Jan||Art Nirman Ltd|
Your Directors take pleasure in presenting the 8thAnnual Report of thecompany along with Audited Financial Statements for the financial year ended on 31stMarch2019. Further in compliance with the Companies Act 2013 the company has made allrequisite disclosures in the Board Report with the objective of accountability andtransparency in its operations and to make you aware about its performance and futureperspective. The Board of Directors feels pleasure and is very much thankful to all thestakeholders of the company who have shown their trust and interest in Company.
The highlights of financial performance for the year 2018-19 in comparative format areas under:
STATE OF COMPANY'S AFFAIRS:
During the year under review your Company has achieved total net sales of INR 1951.36lakhs and achieved Net Profit After Tax (NP) of INR 131.74 Lakhs.
The Profit after Tax of the Company increased by 15% in the FY 2018-19 due tooperational efficiencies.
Your Board of Directors regret their inability to recommend and declare any dividendwith a view to be conserve the resources and to plough back the profits of the Company forfuture growth of the Company.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
There is no unpaid/unclaimed dividend during the year hence the provision of Section125 of the Companies Act 2013 does not apply.
CHANGE IN THE NATURE OF BUSINESS IF ANY-
During the year there is no change in the nature of business of the Company.
During the year under review the Company has closing balance of INR 33897849/-asReserve and Surplus as on 31.03.2019 including the profits of the current year of INR13173730/-.
SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any subsidiary Joint Ventures or associate company duringthe year.
CONSOLIDATED FINANCIAL STATEMENTS
Company doesn't have any subsidiaries and hence company is not required to prepareconsolidated financial statement for the F. Y. 2018-19.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the period under review. Hence therequirement for furnishing the details of deposits which are not in compliance withChapter V of the Act is not applicable.
During the year under review the Company has raised its authorized capital from INR80000000/-(Rupees Eight crores) divided into 8000000 equity shares of INR 10/- eachto INR 250000000(Rupees Twenty-five Crores) divided into 25000000 equity shares ofINR 10/- each by passing shareholder resolution in the Extra Ordinary General Meeting heldon 30th May 2018.
The Authorised Share Capital of the company as on 31st March 2019 is INR250000000(Rupees Twenty-five Crores) and Paid up capital of the company as on 31stMarch 2019 is INR 121760000 (Rupees Twelve Crore Seventeen Lakhs Sixty Thousand)divided into 12176000 equity shares of INR 10/- each.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENT:
Your company is in comply with provision of Section 185 & 186 of the Companies Act2013 provide loan to the one trust and details of Loans Guarantees and Investmentscovered under the provisions of Section 186 of the Companies Act 2013 are given in thenotes of financial statement.
PARTICULARS OF RELATED PARTY TRANSACTION:
During the year Company has entered in to related party transactions at Arm's lengthprice and disclosures in that regard have been made in Annexure A in prescribedformat AOC-2 and forms part of this report.
There are no contracts entered into by the Company which are "Not at Arm's Lengthbasis" and hence no disclosure in that regard is made.
EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in prescribed format of MGT-9 pursuant to theprovisions of Section 92 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is furnished in Annexure B and forms part of thisreport.
DIRECTORS AND KEY MANAGEMENT PERSONNEL:
Composition of Board
The Board of Directors of the Company has an optimum combination of ExecutiveNon-Executive and Independent Directors in compliance with provisions of Section 149 ofCompanies Act 2013. As on 31st March 2019 the Board of Company comprises of5(Five) Directors. The Chairman of the Board is an Executive Director.
Directors whose term is liable to determination by retirement by rotation:
In accordance with the provisions of Companies Act 2013 and its Articles ofAssociation the term of Mr. Piyushkumar Thakkar (DIN: 07555460) being ExecutiveDirector is liable to retire by rotation and being eligible offers himself forreappointment as Director of the Company. Necessary resolution for his reappointment isplaced before you for your approval in Annual General Meeting.
Declaration from Independent Director
The Company has received declarations from all Independent Directors of the Companythat they continue to meet the criteria of independence as prescribed under Section 149 ofthe Companies Act 2013 and Regulation 25 of the SEBI (LODR) Regulations 2015. TheIndependent Directors have code of conduct.
Therefore Board is duly composed as per the Companies Act 2013 provisions and SEBI(Listing Obligation and Disclosure Requirements) 2015. There is no change held in thecomposition of Board of Directors during the Financial Year 2018-19.
BOARD AND COMMITTEE COMPOSITION AND MEETINGS:
Board Meeting and Composition
The Board of Directors met 10 times during the financial year 2018- 2019 in accordancewith the provisions of the Companies Act 2013 and rules made thereunder. The interveninggap between two board meetings was within the period prescribed under the Companies Act2013 and as per Secretarial Standard-1. The prescribed quorum was presented for all theMeetings and Directors of the Company actively participated in the meetings andcontributed valuable inputs on the matters brought before the Board of Directors from timeto time.
10 board meeting are held as under:
CMD Chairman and Managing Director ED Executive Director NED Non Executive Director.
Meeting of Independent Directors:
During the year under review the Independent Directors duly met on 08thNovember 2018in absence of other non-independent Directors and reviewed the performanceof Non- Independent Directors and the Board as a whole reviewed the performance ofChairperson of the Company taking into account the views of the other Executive andNon-Executive Directors.
Committee Meeting and Composition
The Company has three committees viz; Audit Committee Nomination and RemunerationCommittee Stakeholders Relationship Committee which has been established as a part of thebetter corporate governance practices and is in compliance with the requirements of therelevant provisions of applicable laws and statutes.
The Audit Committee of the Company was originally constituted on 07.09.2016 incompliance with requirements of SEBI (LODR) Regulations 2015 and provisions of Section 177of the Companies Act 2013 read with Rule 6 of the Companies (Meetings of the Board andits Powers) Rules 2014 as amended from time to time. It adheres to the terms of referencewhich is prepared in compliance with Section 177 of the Companies Act 2013 and SEBI(LODR) Regulations 2015. 5 (Five) Audit Committee meetings were held during the year2018-19 at the Registered Office of the Company respectively on 05.04.2018 30.05.201806.08.2018 08.11.2018 09.02.2019. The Company Secretary acts as Secretary to the AuditCommittee Pursuant to provisions of Rule 7 of Companies (Meetings of Board and its Powers)Rules 2014 Vigil Mechanism is being reviewed by the Audit Committee. The provisions ofRegulation 22 of SEBI (LODR) Regulations 2015 are not applicable to the Company assecurities of the Company are listed on SME platform of Stock Exchange.
The Members of the Committee are:-
Two third of the members of the Committee are Independent Directors and all the membersare financially literate. The composition role functions and powers of the AuditCommittee are in line with the requirements of applicable laws and regulations. The AuditCommittee shall oversee financial reporting process and disclosures review financialstatements internal audit reports related party transactions financial and riskmanagement policies auditors qualifications compliance with Accounting Standard etc. andoversee compliance with Stock Exchange and requirements concerning financial statementsand fixation of legal audit fee as well as payment for other services etc.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee was originally constituted on 07.09.2016 inaccordance with SEBI (LODR) Regulation 2015 and Section 178 of the Companies Act 2013read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules 2014 asamended from time to time.
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration of Directors Key managerial Personnel and other employees. The said policyis available on the website of the Company.
2 (Two) meetings of the committee were held during the year 2018-19 at the RegisteredOffice of the Company on 05.04.2018 and 06.09.2018. the Members of the Committee are asfollow:
Stakeholders Relationship Committee
The Stakeholders Relationship Committee was originally constituted on 07.09.2016 incompliance with provisions of section 178 of Companies Act 2013 and requirements ofRegulation 20 of SEBI (LODR) Regulations 2015. Company Secretary is the ComplianceOfficer who acts as the Secretary to the Committee. 4 (Four) meetings were held duringthe year 2018-19 at the Registered Office of the Company on 30.04.2018 14.07.201826.10.2018 and 26.02.2019.
The Members of the Committee are as under:
The Stakeholders Relationship Committee looks into shareholders' complaints related totransfer of shares non-receipts of balance sheet besides complaints from SEBI StockExchanges Court and various Investor Forums. It oversees the performance of the Registrarand Transfer Agent and recommends measures for overall improvement in the quality ofinvestor services. The Company is in compliance with the SCORES which was initiated bySEBI for processing the investor complaints in a centralized web based redress system andonline redressal of all the shareholder's complaints.
POLICY ON DIRECTORS' APPOINTMENT:
Pursuant to provisions of section 178 read with 134(3)(e) of Companies Act 2013 TheNomination and Remuneration Committee (NRC) has approved the criteria and process foridentification/ appointment of Directors which are as under:
Criteria for Appointment:
The proposed Director shall meet all statutory requirements and should:
Possess highest values ethics and integrity.
Not have any direct or indirect conflict with business operations.
Be willing to devote time and efforts.
Have relevant experience.
Have understanding about corporate functionality.
Understand real value of stakeholders.
Process for identification of Directors / Appointment of Directors:
Board Members may suggest any potential person to the Chairman of the Company meetingthe above criteria. If the chairman deems fit recommendation will be made by him to NRC.
Chairman himself can also recommend a person to NRC.
NRC shall process and evaluate the proposal and shall submit theirrecommendation to Board.
Board shall consider such proposal on merit and decide suitably.
Criteria for Performance Evaluation:
The Board considered and approved criteria for performance evaluation of itself andthat of its committees and individual directors.
Criteria for Board Evaluation:
Focus on strategic decisions.
Qualitative discussion and processes.
Criteria for Committee Evaluation:
Fulfillment of allotted responsibilities.
Effectiveness of recommendation meetings.
Criteria for Independent and Non Independent Directors' evaluation:
Contribution through their experience and expertise.
Focus on Stakeholders' interest.
MANNER OF EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS:
The Evaluation of Board its Committees and Individual Directors was carried out as perprocess and criteria laid down by the Board of Directors based on the recommendation ofthe Nomination and Remuneration Committee.
The obtaining and consolidation of feedback from all Directors in this regards wascoordinated by the Chairman of Independent Directors' meeting for Board andNon-Independent Directors while the process of evaluation of the Independent Directors wascoordinated by the Chairman of the Company. Based on this Chairman of the Company briefthe Board and each of the Individual Directors as applicable.
The Company has formulated a policy relating to the remuneration of the Directors KeyManagerial Personnel and other employees of the Company which is as under:
A) Components of Remuneration:
Fixed Pay comprising Basic Salary HRA Car Allowance (applicable to GeneralManagers &above employees) Conveyance Allowances / Reimbursement Company'scontribution to Provident Fund Superannuation Fund Gratuity etc.
Variable Pay which is either in the form of: Commission to Managing Directorsand Commission to Whole-time Directors
B) Annual Appraisal process:
- Annual Appraisals are conducted following which annual increments and promotions indeserving cases are decided once in a year based on:
- Employees self-assessment
- Assessment by Immediate Superior and
- Assessment by Head of Department
Annual Increment leading to an increase in Fixed Pay consists of Economic Rise based onAll India Consumer Price Index published by the Government of India or Internal Surveywherein inflation on commonly used items is calculated.
C) Remuneration of Independent Directors:
The Company has formulated a policy for the remuneration of Independent Directors asfollows:
Reimbursement of Expenses incurred by Independent Directors for attending any meetingof the Board.
CHIEF FINANCIAL OFFICER:
Mr. Kirtar Munshi is holding post of Chief Financial Officer of the Company since 03rdSeptember 2016.
Ms. YeshaYatishbhai Shah* a member of Institute of Company Secretaries of India isholding post of Company Secretary of the Company from 01st June 2019.
*Ms. Ziral Pankajkumar Soni resigned from the post of company secretary on 10thApril2019 and board of director of the company has appoint Ms. Yesha Yatishbhai Shah ascompany secretary with effect from 01st June 2019.
The Compliance officer of the Company is Ms. Yesha Yatishbhai Shah* being the memberof Institute of Company Secretaries of India designated as Company Secretary and holdingthe post of compliance officer since01st June 2019.
*Ms. Ziral Pankajkumar Soni resigned from the post of compliance officer on 10thApril2019 and board of director of the company has appoint Ms. Yesha Yatishbhai Shah ascompliance officer with effect from 01st June 2019.
STATEMENT ON FORMAL ANNUAL EVALUATION OF BOARD:
Nomination and Remuneration Committee annually evaluates the performance of individualdirectors Committees and of the Board as a Whole in accordance with the formal systemadopted by the Board. Further the Board also regularly in their Board Meeting held forvarious purposes evaluates the performance of the individual directors committees and ofthe Board as a whole. The Board considers the recommendation made by Nomination andRemuneration Committee in regard to the evaluation of Board Members.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
(a) In the preparation of the annual accounts for the financial year ended March 312018 the applicable accounting standards have been followed along with proper explanationrelating to material departures.
(b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period under review.
(c) The directors have taken proper and sufficient care for 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.
(d) The directors have prepared the annual accounts on a going concern basis.
(e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
After the close the Financial Year on 31st March 2019 and before the date ofthe Report following material changes affecting the financial position of the Companyhave occurred:
1. The Board of Directors in their Board Meeting held on 25th April 2019have allotted 5130000 Equity Shares (Convertible warrant which are converted into equityshares) of INR 10/- each at INR 16/- each to the allottees approved by the members.
2. The Board of Directors in their Board Meeting held on 2nd May 2019 haveallotted 7650000 Equity Shares (Convertible warrant which are converted into equityshares) of INR 10/- each at INR 16/- each to the allottees approved by the members.
3. Members of the company in their Extra Ordinary General Meeting held on 28thJune 2019 have passed the resolution for appointment of M/s. ARPAN SHAH & ASSOCIATESChartered Accountants (FRN.: 125049W Peer Review Certificate No. 011646) as StatutoryAuditor of the company till the date of ensuring Annual General Meeting to fill the casualvacancy caused by M/s. Dhiren Shah & Co. Chartered Accountants (FRN: 114633W).
4. The board of director of the company on their meeting held on 8th July2019 decided to migrate on the main board for that approval of shareholders by way offollowing postal ballot procedure is required. Till 22nd July 2019 Notice ofPostal Ballot sent to the all the shareholders of the company via E-Mail and PhysicalMode. The result for the same will be declare on 26th August 2019.
Other Relevant Disclosure:
5. The company has filed appeal against the order levying penalty by NSE for imposingfine of INR 1019936/- under section 108 (2) of SEBI (ICDR) Regulation 2009 on12.07.2019 for delay in filing application of listing of shared allotted pursuant toconversion of warrants allotted to promoter group of 12780000 equity shares However thecompany's case is that the regulation prescribing time line have already been repealed andreplaced with amended guideline and hence there is no delay. The matter is yet to belisted for hearing.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concerns status and Company's operations in future.
The shareholders of the company on its Extra Ordinary General Meeting held on 28thJune 2019 has appointed M/s. Arpan Shah & Associates Chartered Accountants (FRN.:125049W Peer Review Certificate No. 011646) till the ensuring Annual General Meeting tofill the casual vacancy caused by the resignation of M/s. Dhiren Shah & Co. CharteredAccountants (FRN: 114633W).
There are no qualifications reservations or adverse remarks (subj. to notes formingintegral part of financial statements) made by M/s. Arpan Shah & Associates CharteredAccountants the Statutory Auditors of the Company in their report.
Board's Comment on the Auditors' Report
Notes to Accounts & Auditors remarks in the Auditors' report are self explanatoryand do not call for any further comments.
As required under provisions of Section 204 of the Companies Act 2013 and Rules framedthereunder the Board has appointed the Secretarial Auditors of the Company M/s YashMehta & Associates Practicing Company Secretaries for conducting the SecretarialAudit for the FY 2018-19.
Secretarial Audit Report in Form MR-3 issued by the Secretarial Auditor of the Companyfor the year ended on March 31 2019 is attached to the Director's Report as Annexure-C.
Board's Comments on the Secretarial Audit Report
The Company has not filed Investor Grievance Report Certificate under Regulation 7 and40(10) of SEBI (LODR) Regulations 2015 for the quarter ended 31.03.2018.
Your Directors have noted the remarks mentioned by Secretarial Auditor in his reportand clarifies that the non-submission is purely unintentional and the management does nothave any malafide intention. It is just an oversight and lapse and the same is correctedand uploaded on the website of the Company for members' reference.
Cost Audit& Cost Record
As per the section 148 of the Companies Act 2013 and the Companies (Cost Records andAudit) rules 2014 and as per notified by the Central Government the cost audit isapplicable to the company who is in the process of manufacturing. Your company is notcovered u/s 148 of the Companies Act 2013 and the Companies (Cost Records and Audit)rules 2014 so there is no requirement of cost audit.
D. K. Thakkar & Co Chartered Accountant Ahmedabad was appointed as InternalAuditor of the Company to conduct Internal audit pursuant to the provisions of Section 138of the Companies Act 2013 and rules made thereunder.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure-D.
The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the
Registered Office of the Company during business hours on working days of the Company.
If any member is interested in obtaining a copy thereof such Member may write to theCompany Secretary in this regard.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions of Corporate Social Responsibility (CSR) are not applicable to theCompany and hence no disclosures have been made in this regard.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO
The disclosures required to be made under the provisions of Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption are not applicable to the Company. There isno amount of Foreign Exchange inflow or outflow during the year and hence no disclosureshave been made in this regard.
ENVIRONMENT HEALTH AND SAFETY (EHS)
The Company accords the highest priority to health environment and safety. The Companydoes not carry on manufacturing operations. The Company takes utmost care for theemployees and ensures compliance with the applicable rules and regulation applicable tothe Company.
STATEMENT REGARDING THE DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:
The Company has developed risk management policy. The Company has in place a mechanismto identify assess monitor and mitigate various risks towards the key businessobjectives of the Company. Major risks identified by the business and functions aresystematically addressed through mitigating actions on a continuing basis. The RiskManagement is being taken care by the Audit Committee of the Company.
ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls with reference tofinancial statements. The Board has inter alia reviewed the adequacy and effectiveness ofthe Company's internal financial controls relating to its financial statements. During theyear no reportable material weakness was observed.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated in Rule 34(2)(e) read with Schedule V of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reportis annexed as Annexure E and forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT
Your Company has been complying with the principals of good Corporate Governance overthe years and is committed to the highest standards of compliance. Pursuant to regulation15(2)(b) of the SEBI (LODR) Regulations 2015 the compliance with the corporate governanceprovisions as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and para C D and E of schedule V shall not apply to the listed entity which haslisted its specified securities on the SME Exchange.
Therefore the Corporate Governance Report is not applicable on the Company andcertificates related thereto have not been obtained and therefore not disclosed in theAnnual Report.
DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT / UNCLAIMED SUSPENSE ACCOUNT:
Pursuant to Para F of Schedule V of SEBI (LODR) Regulations 2015 there are no sharesheld in the Demat Suspense Account or Unclaimed Suspense Account.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013.
The Company has always been committed to provide a safe and conducive work environmentto its employees. Your Directors further state that during the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The Directors place on record their sincere thanks to the Bankers Business associatesconsultants customers employees for their continued support extended to your Companiesactivities during the year under review. Your Directors also acknowledges gratefully theshareholders for their support and confidence reposed on your Company.