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Arvee Laboratories (India) Ltd.

BSE: 535050 Sector: Health care
NSE: ARVEE ISIN Code: INE006Z01016
BSE 05:30 | 01 Jan Arvee Laboratories (India) Ltd
NSE 05:30 | 01 Jan Arvee Laboratories (India) Ltd

Arvee Laboratories (India) Ltd. (ARVEE) - Director Report

Company director report

To

The Members of

ARVEE LABORATORIES ( INDIA ) LIMITED

( formerly known as Arvee Laboratories ( India ) Private Limited )

Ahmedabad

Your Directors have pleasure in presenting the 7th Annual Report and Audited Statementof Accounts for the year ended on 31st March 2018 with Auditor's Reportthereon.

Financial Highlights

( Rs. In Lacs )

Particulars 2017 - 2018 2016-17
Revenue from Operations 4614.68 3442.31
Other Income 22.94 51.37
Total Revenue 4637.62 3493.69
Profit before Depreciation and Financial Expenses and Taxation 739.93 640.67
Depreciation 215.48 206.88
Financial Expenses 332.86 347.76
Profit before Tax 191.58 86.02
Tax Expense -
Current Tax 22.66 16.39
Prior Period Taxes 0.23 -
Deferred Tax 59.76 (85.54)
Profit After Tax 108.91 155.17

Total Revenue has increased by 32.7%. Profit before tax has increased by 122% TheCompany is taking all the possible steps to increase the profitability.

Transfer to Reserves :

The Opening Balance of Reserves and Surplus is Rs. 15.38 Lacs. The whole of the Profitof Rs. 108.91 lacs is transferred to the Reserves and Surplus. Further there was additionof Rs. 744.60 lacs towards Securities Premium Account. The Closing Balance of Reserves& Surplus is of Rs. 868.90 lacs.

Dividend :

In order to conserve resources your Directors do not recommended dividend for the year2017-18 on Equity Shares of the Company.

Details regarding Energy Conservation :

Pursuant to Rule 8 ( 3 ) of Companies ( Accounts ) Rules 2014 the Board of Directorshereby statge as under declare that.

A. CONSERVATION OF ENERGY:

B. CONSERVATION OF ENERGY:

Power & Fuel Consumption: Current Year
Electricity:
i) Purchased:
(a) Units 1337120 units
(b) Amount 9556809.00
(c) Units/per liter of Diesel Oil --
(d) Cost per unit (') 7.15/Unit
ii) Own Generation:
(a) Units --
(b) Amount --
(c) Units/per liter of Diesel Oil --
(d) Cost per unit (') --
iii) Windmill Turbine:
(a) Units --
(b) Amount --

Steps taken or impact on conservation of energy.

In line with the Company's commitment towards conservation of energy all unitscontinue with their efforts aimed at improving energy efficiency through innovativemeasures to reduce wastage and optimize consumption. Some of the measures taken by theCompany in this direction at its units located at areas under:

a. We have made optimum use of electrical motors and day light resources at plant.

b. Installation of LEDs at several locations.

The steps taken by the company for utilising alternate sources of energy:

NIL

Details regarding Technology Absorption :

Pursuant to Rule 8 ( 3 ) of Companies ( Accounts ) Rules 2014 the Board of Directorshereby declare that there are no particulars to report for Technology Absorption. Howeverthe Company takes help of the technical consultants from time to time.

Details regarding Foreign Exchange Earnings and Outgo :

The details regarding foreign exchange earnings and outgo are provided in the note no.32 to the financial Statement. Members are requested to refer the same.

Disclosure of Directors Responsibility Statement :

As required u/s 134 (5) of the Companies Act 2013 the Directors hereby state andconfirm:

i. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any.

ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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 as on31/03/2018 and of the profit of the company for that period.

iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.

iv. The Directors have prepared the annual accounts on a going concern basis.

v. The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

vi. The directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Listing:

The Equity Shares of your Company are listed on Emerge Platform of National StockExchange of India Limited. The Company has paid necessary listing fees for the year 2018 -2019.

Details of Material Changes and Commitments Occurred during the Period affectingfinancial position of the Company:

During the year under review there were no significant and material orders passed byany Regulators or Court or Tribunals which may have impact on the going concern status. Noorder has been passed by any Regulators or Court or Tribunals which may have impact on theCompany's operation in future. Further there is no material changes and commitmentsoccurred subsequent to the Balance sheet till date of report.

Particulars of Loans Gurantees and Investments under Section 186 of the Companies Act2013:

The Company has not provided any guarantee or provided any Security to any Person forthe loans availed by others. The details regarding the Loans and Advances Investments ifany are provided in the Balance Sheet.

Particulars of Contracts or Arrangements with Related Parties under Section 188 of theCompanies Act 2013 :

All contracts / arrangements / transactions if any entered by the Company during thefinancial year with related parties were in the ordinary course of business and on anarm's length basis. During the year the Company has entered into transactions withrelated parties which could be considered material in accordance with the policy of theCompany on materiality of related party transactions.

No advance is paid to any related party ( other than loans and advances ) for enteringany transaction. No Bad Debts of related parties.

The details of the related party transactions are disclosed in note 29 to the financialstatement which sets out related party disclosures. The requisite details are alsoprovided in form AOC - 2 which forms part of the report.

Disclosure of Companies covered under Section 178 ( 1 ) on Directors appointment andRemuneration including matters referred under Section 178 ( 3 ) of Companies Act 2013 andDetails of Statement indicating manner in which formal annual evaluation made by Board ofits Performance and of its Committees and individual Directors:

The Company has devised a Policy for Directors; appointment and remuneration includingcriteria for determining qualifications performance evaluation and other matters ofIndependent Directors Board Committees and other individual Directors which includecriteria for performance evaluation of both non-executive directors and executivedirectors.

The Company's Nomination & Remuneration policy which includes the Director'sappointment & remuneration and criteria for determining qualifications positiveattributes independence of the Director & other matters is attached as Annexure- I tothis Report and the same is also available on the website of the Company at the linkwww.arveelabs.com

Declaration by Independent Directors:

The Independent Directors of the Company namely Vishal Nitin Mehta Chandrakala AshokBhatt and Amishkumar Maheshkumar Shah have confirmed to the Board that they meet thecriteria of independence as specified under Section 149 ( 6 ) of the Companies Act 2013and they qualify to be independent directors. They have also confirmed that they meet therequirements of independent directors as specified in the SEBI ( Listing Obligations andDisclosure Requirements ) Regulations 2015.

Auditors and Audit Report:

Bharatiya & Malkani Chartered Accountants have resigned as Statutory auditors ofthe Company with effect from 23rd May 2018. The Board of Directors haveappointed KCJM & Associates Chartered Accountants Ahmedabad with effect from 23rdMay 2018 as Statutory auditors of the Company.

It is proposed to appoint KCJM & Associates Chartered Accountants [ FRN : 121324W) as Statutory auditors of the Company at the ensuing annual general meeting of theCompany.

The Company has received Consent letter from KCJM & Associates confirming theirconsent and eligibility to act as Statutory auditor.

There is no qualification or adverse remarks made by the auditors in their report.

Disclosure of Risk Management Policy :

The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking.

SECRETARIAL AUDIT

During the Financial year 2016-17 the Company being a Private Limited Company was notrequired to appoint a secretarial auditor. Pursuant to the requirements of Section 204(1)of the Act and Rule 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company has appointed M/s. Jalan Alkesh & AssociatesCompany Secretary in Practice to conduct the secretarial audit for the financial year2017-18. Secretarial Audit is attached and marked as Annexure II.

Board Meetings:

During the year under review 13 ( Thirteen ) Board meetings were held. The dates ofBoard meetings are 3rd May 2017 10th June 2017 5thAugust 2017 6th September 2017 20th September 2017 22ndSeptember 2017 4th December 2017 4th December 2017 5thDecember 2017 22nd December 2017 5th February 2018 17thFebruary 2018 19th February 2018

Attendance by Directors:

Date of Board Meeting No. of Directors entitled to attend meeting No. of Directors attended
3rd May 2017 3 3
10th June 2017 3 3
5th August 2017 3 3
6th September 2017 3 3
20th September 2017 3 3
22nd September 2017 3 3
4th December 2017 3 3
4th December 2017 6 3
5th December 2017 6 6
22nd December 2017 6 6
5th February 2018 6 6
17th February 2018 6 6
19th February 2018 6 6

In respect of the above board meetings adequate notice was given to all theDirectors together with the agenda. The gap between two Board meetings does not exceed 120days.

Corporate Governance:

Since the Company securities are listed on emerge platform of NSE by virtue ofRegulation 15 of SEBI ( Listing Obligations and Disclosure Requirements ) Regulations2015 the compliance of corporate governance provisions as specified in regulation 17 to 27and clauses ( b ) to ( i ) of sub - regulation ( 2 ) of Regulation 46 and para C D and Eof Schedule V are not applicable to the Company. Hence Corporate Governance requirement donot apply.

Management Discussion and Analysis Report

Management Discussion and Analysis Report as required under Regulation 34 and ScheduleV of the SEBI ( Listing Obligations and Disclosure Requirements ) Regulations 2015 isattached herewith and marked as Annexure III.

Code Of Conduct

The Board of Directors has already adopted the Code of Ethics and Business Conduct forthe Directors and Senior Management personnel. This code is a comprehensive codeapplicable to all Directors Executive as well as Non - executive and members of theSenior Management. The Code has been circulated to all the members of the Board and SeniorManagement Personnel and compliance of the same has been affirmed by them.

A declaration given by the Managing Director and CEO is given below:

The Company has obtained from all the members of the Board and Senior ManagementPersonnel of the Company affirmation that they have complied with the Code of Ethics andBusiness Conduct framed for Directors and Senior Management Personnel in respect of thefinancial year 2017-18."

The company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of the Companyand can be accessed at www.arveelabs.com

Dematerialization of Shares:

100% Equity Shares of the Company are in demat form.

Committees:

a. Audit Committee:

Audit Committee as per the provisions of Section 177 of the Companies Act 2013 andRegulation 18 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015have been constituted with effect from 4th December 2017.

Role of the audit committee

1. Overseeing the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statements are correct sufficient andcredible.

2. Recommending to the Board the appointment re-appointment and if required thereplacement or removal of the statutory auditor and the fixation of audit fees.

3. Approval of payment to statutory auditors for any other services rendered by thestatutory auditors.

4. Reviewing with the management the annual financial statements before submission tothe board for approval with particular reference to:

a. Matters required to be included in the Directors Responsibility Statement to beincluded in the Board's report in terms of clause (c) of sub-section 3 of Section 134 ofthe Companies Act 2013.

b. Changes if any in accounting policies and practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgment bymanagement.

d. Significant adjustments made in the financial statements arising out of auditfindings.

e. Compliance with listing and other legal requirements relating to financialstatements.

f. Disclosure of any related party transactions.

g. Modified opinion(s) in the draft audit report.

5. Reviewing with the management the half yearly and annual financial statementsbefore submission to the board for approval.

6. Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offerdocument/prospectus/notice and the report submitted by the monitoring agency monitoringthe utilization of proceeds of a public or rights issue and making appropriaterecommendations to the Board to take up steps in this matter.

7. Reviewing and monitoring the auditor's independence and performance andeffectiveness of audit process.

8. Approval of any transactions of the Company with Related Parties including anysubsequent modification thereof.

9. Scrutiny of inter-corporate loans and investments.

10. Valuation of undertakings or assets of the Company wherever it is necessary.

11. Evaluation of internal financial controls and risk management systems.

12. Reviewing with the management performance of statutory and internal auditorsadequacy of the internal control systems.

13. Reviewing the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit.

14. Discussion with internal auditors on any significant findings and follow up thereon.

15. Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board.

16. Discussion with statutory auditors before the audit commences about the nature andscope of audit as well as post-audit discussion to ascertain any area of concern.

17. To look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors.

18. To review the functioning of the Whistle Blower mechanism in case the same exists.

19. Approval of appointment of Chief Financial Officer or any other person heading thefinance function or discharging that function after assessing the qualificationsexperience & background etc. of the candidate.

20. To overview the Vigil Mechanism of the Company and took appropriate actions in caseof repeated frivolous complaints against any Director or Employee.

21. Monitoring the end use of funds raised through public offers and related matters.

The Audit Committee shall mandatorily review the following information:

1. Management Discussion and Analysis of financial condition and results of operations.

2. Statement of significant related party transactions (as defined by the AuditCommittee) submitted by management.

3. Management letters / letters of internal control weaknesses issued by the statutoryauditors.

4. Internal audit reports relating to internal control weaknesses.

5. The appointment removal and terms of remuneration of the chief internal auditorshall be subject to review by the audit committee.

6. Statement of deviations:

a) Half yearly statement of deviation(s) including report of monitoring agency ifapplicable submitted to stock exchange(s) in terms of Regulation 32(1).

b) Annual statement of funds utilized for purposes other than those stated in theoffer document/prospectus/notice in terms of Regulation 32(7).

Powers of the Audit Committee

• Investigating any activity within its terms of reference;

• Seeking information from any employee;

• Obtaining outside legal or other professional advice; and

• Securing attendance of outsiders with relevant expertise if it considersnecessary.

The composition of audit committee is as under

Name of the Director Designation
Vishal Nitin Mehta Indpendent Director
Amishkumar Maheshkumar Shah Indpendent Director
Shalin Sudhakarbhai Patel Managing Director

Vishal Nitin Mehta acts as a Chairman of the Committee.

The Company Secretary of the Company acts as the Secretary to the Audit committee.

Stakeholders Committee:

The Stakeholders Relationship Committee was constituted as per the provisions ofSection 178(5) of the Companies Act 2013 and Regulation 20 of SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 vide resolution passed at the meeting ofthe Board of Directors held December 04 2017. The terms of reference of the StakeholdersRelationship Committee include the following:

1. Redressal of shareholders'/investors' complaints.

2. Reviewing on a periodic basis the approval of transfer or transmission of sharesdebentures or any other securities made by the Registrar and Share Transfer Agent;

3. Issue of duplicate certificates and new certificates on split/consolidation/renewal.

4. Non-receipt of declared dividends balance sheets of the Company.

5. Carrying out any other function as prescribed under the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.

The composition of Stakeholders Relationship Committee is as under :

Name of the Director

Status in Stakeholders Relationship

Committee
Mr. Amishkumar Maheshkumar Shah Chairman
Mr. Shalin Bharat Chokshi Member
Mr. Saumil Bharatbhai Chokshi Member

The Company Secretary acts as a secretary of the Committee.

Nomination and Remuneration Committee:

The constitution of the Nomination and Remuneration Committee as per the provisions ofSection 178 of the Companies Act 2013 and Regulation 19 of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 was approved by a Meeting of the Board ofDirectors held on December 04 2017.

The role of Nomination and Remuneration Committee is as under :

1. Formulation of the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board of Directors a policy relating tothe remuneration of the directors Key Managerial Personnel and other employees.

2. Formulation of criteria for evaluation of performance of Independent Directors andthe Board of Directors.

3. Devising a policy on diversity of Board of Directors.

4. Identifying persons who are qualified to become directors and who may be appointedin senior management in accordance with the criteria laid down and recommend to the Boardof Directors their appointment and removal.

5. Whether to extend or continue the term of appointment of the Independent Directoron the basis of the report of performance evaluation of Independent Directors.

6. Such other matters as may from time to time be required by any statutorycontractual or other regulatory requirements to be attended to by such committee.

The composition of Nomination and Remuneration Committee is as under

Name of the Director Status in Stakeholders Relationship Committee
Chandrakala Ashok Bhatt Chairman
Mr. Vishal Nitin Mehta Member
Mr. Saumil Bharatbhai Chokshi Member

The Company Secretary acts as a secretary of the Committee.

No committee meetings were held during the year.

Corporate Social Responsibility :

The Company do not fall under the Criteria of Section 135 of the Companies Act 2013.

Investor Education and Protection Fund:

No amount was required to be transferred to Investor Education and Protection Fund.

Disclosure under Rule 8 ( 5 ) of Companies Accounts Rules 2014 :

a) Disclosure of financial Summary / Highlights :

Particulars 2017 - 2018 2016-17
Revenue from Operations 4614.68 3442.31
Other Income 22.94 51.37
Total Revenue 4637.62 3493.69
Profit before Depreciation and Financial Expenses and Taxation 739.93 640.67
Depreciation 215.48 206.88
Financial Expenses 332.86 347.76
Profit before Tax 191.58 86.02
Tax Expense -
Current Tax 22.66 16.39
Prior Period Taxes 0.23 -
Deferred Tax 59.76 (85.54)
Profit After Tax 108.91 155.17

Total Revenue has increased by 32.7%. Profit before tax has increased by 122%

The Company is taking all the possible steps to increase the profitability.

b) Disclosure of Change in Nature of Business :

There is no change in nature of Company Business.

c) Details of Directors / Key Managerial Personnel Appointed / Resigned:

During the year under the review following Directors / Key Managerial Personnel wereappointed.

a. Chandrakala Ashok Bhatt - Indpendent Director appointed with effect from 4thDecember 2017

b. Vishal Nitin Mehta - Indpendent Director appointed with effect from 4thDecember 2017

c. Amishkumar Maheshkumar Shah - Indpendent Director appointed with effect from 4thDecember 2017

Shalin Sudhakarbhai Patel appointed as a Managing Director of the Company with effectfrom 4th December 2017. Shalin Bharat Chokshi was appointed as a Whole TimeDirector of the Company with effect from 4th December 2017.

During the year under review Mr. Maulesh Raval was appointed as Chief FinancialOfficer of the Company with effect from 4th December 2017.

Ms. Neelam Chhotrani was appointed as a Company Secretary of the Company with effectfrom 4th December 2017.

During the year under the review no Director / Key Managerial Personnel have resigned.

d) Details of Holding / Subsidiary Companies / Joint Ventures / Associate Companies:

During the year under review the Company has no holding / subsidiary companies / jointventures / associate companies.

e) Details regarding Deposit covered under Chapter V of the Companies Act 2013.

The Company has not invited any deposit other than the exempted deposit as prescribedunder the provision of the Companies Act 2013 and the rules framed there under asamended from time to time. Hence there are no particulars to report about the depositfalling under Rule 8 (5) (v) and (VI) of Companies (Accounts) Rules 2014

f) Details of Deposit which are not in compliance with requirements of Chapter V of theAct.

Not Applicable

g) Details of Significant and Material Orders passed by Regulators or Courts orTribunals.

There are no material changes and commitments if any affecting the financial positionof the Company between the financial years end of the Company and date of the report.

h) Internal financial Controls.

The Company has identified and documented all key internal financial controls whichimpact the financial statements. The financial controls are tested for operatingeffectiveness through ongoing monitoring and review process of the management andindependently by the Internal Auditors. In our view the Internal Financial Controlsaffecting the financial statements are adequate and are operating effectively.