To The Members
Your Directors have pleasure in presenting the Twelfth Annual Report onthe business and operations of the Company together with the Audited Financial Statementsfor the financial year ended on 31st March 2020.
1. FINANCIAL RESULTS:
Highlights of the Financial Results for year are as under:
|Particulars || |
|2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from Operations ||15134 ||23382 ||29949 ||26209 |
|Profit before Finance costs Depreciation and Amortisation & Tax ||4510 ||7917 ||9100 ||7024 |
|Less: Finance Costs ||1822 ||2014 ||2434 ||2126 |
|Less : Depreciation and Amortisation ||82 ||88 ||111 ||115 |
|Profit before share in profit/(loss) of Joint ventures & Tax ||2605 ||5815 ||6555 ||4783 |
|Share of Profit/(Loss) from Joint ventures ||- ||- ||(16) ||(4) |
|Profit before tax ||2605 ||5815 ||6539 ||4779 |
|Less : Current Tax ||273 ||- ||404 ||952 |
|Less : Deferred Tax ||394 ||1212 ||2021 ||709 |
|Profit for the year ||1938 ||4603 ||4114 ||3118 |
|Total comprehensive income for the year ||1940 ||4600 ||4116 ||3115 |
|Net Profit/(Loss) attributable to : || || || || |
|Equity holders of the parent ||- ||- ||3933 ||3064 |
|Non-controlling interest ||- ||- ||183 ||51 |
The standalone total revenue of the Company is Rs.15134 lacs in the FY2019-20 against Rs.23382 lacs in FY 2018-19 a decline of 35%.
The consolidated total revenue of the Company has increased toRs.29949 lacs in the FY 2019-20 against Rs.26209 lacs in FY 2018-19 an increase of 14%.
A detailed analysis of the financial results is given in the ManagementDiscussion and Analysis Report which forms part of this report.
Keeping in mind the need to conserve the resources for the futuredevelopment of the Company your Directors do not recommend any dividend on Equity Sharesfor the year under review.
4. TRANSFER TO RESERVES:
During the year under review no amount is appropriated from Profit andLoss Account and transferred to any Reserve Account.
5. SHARE CAPITAL:
During the year 2019-20 the Company has allotted 320000 equityshares of Rs.10/- each to the eligible employee(s) pursuant to the exercise of stockoptions granted to them under Employees Stock Option Scheme - 2013 (AIL ESOP 2013).Consequently the paid up equity share capital of the Company as at 31st March2020 stood at Rs.355535500/- consisting of 35553550 equity shares of Rs.10/- each.
During the year under review the Company has neither issued shareswith differential voting rights nor sweat equity shares.
6. EMPLOYEE STOCK OPTION SCHEME:
The Company has instituted the Arvind Infrastructure Limited (nowArvind SmartSpaces Limited) - Employees Stock Option Scheme - 2013 (AIL ESOP - 2013) aswell as Arvind Infrastructure Limited - Employees Stock Option Plan - 2016 (AIL ESOP -2016) to grant equity based incentives to certain eligible employees directors of theCompany and its Subsidiary Companies. During the year under review the Company has notgranted any stock options.
Details of equity shares issued upon exercise of stock options by theeligible employee(s) under AIL ESOP - 2013 and AIL ESOP 2016 and disclosure in compliancewith Section 62 of the Companies Act 2013 read with Rule 12 of Companies (Share Capitaland Debentures) Rules 2014 and the Securities and Exchange Board of India (Share basedEmployee Benefits) Regulations 2014 are set out in Annexure - A to this report.
7. DISCLOSURE UNDER SECTION 67 (3) (C) OF THE COMPANIES ACT 2013:
No disclosure is required under section 67 (3) (c) of the CompaniesAct 2013 read with Rule 16(4) of Companies (Share Capital and Debentures) Rules 2014 inrespect of voting rights not exercised directly by the employees of the Company as theprovisions of the said section are not applicable.
During the year the Company has made fresh borrowings on aconsolidated basis for its working capital requirements with overall increase in loan bookby Rs.4800 lacs. Total Consolidated Debt of the Company stands at Rs.21809 lacs as on 31stMarch 2020.
9. CREDIT RATING:
Indian Ratings and Research (IRA) has assigned its rating "INDAl" to the Short-Term Loan of Rs. 100/- Crores taken by the Company.
During the year under review the Company has not accepted any depositsfalling under the ambit of Section 73 of the Companies Act 2013 and the Rules framedthereunder. Further there are no outstanding deposits as at 31st March 2020.
11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 read with the Companies (Meetings ofBoard and its Powers) Rules 2014 are given in the notes to the Financial Statements.
12. CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated Financial Statements of the Company are prepared inaccordance with relevant provisions of the Companies Act 2013 including Indian AccountingStandards
specified under Section 133 of the Companies Act 2013 and form part ofthis Annual Report.
13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Arvind SmartSpaces Limited undertakes "Corporate SocialResponsibility'' (CSR) initiatives through Strategic Help Alliance for Relief toDistressed Area ("SHARDA") Trust and Narottam Lalbhai Rural Development Fund("NLRDF"). SHARDA and NLRDF have been active in improving the quality of life ofthe urban poor and rural poor respectively.
As a part of initiatives under CSR the Company has taken theinitiatives in the projects related to the Education Health and Environment around theareas of its operations in Nasmed and Adhana villages in Tal. Kalol Dist. GandhinagarGujarat where your Company's signature real estate project "Arvind Uplands" islocated. The Company has also supported to a project of skill upgrading of women fromdisadvantaged communities in Bangalore. The brief details of CSR Policy and the amountspent during the financial year 2019-20 on the said activity is enclosed as Annexure - B.
14. HUMAN RESOURCES:
The Company believes that Human Resources will play a significant rolein its future growth. With an unswerving focus on nurturing and retaining talent theCompany provides avenues for learning and development through functional behavioural andleadership training programs knowledge exchange conferences communication channels forinformation sharing to name a few. The Company provides various opportunities to theemployees to develop and hone their skills to take up higher responsibilities in theorganization.
A well - defined competency framework outlines the leadershipbehaviours expected from employees to be successful in Arvind Group. The Company also usesvarious communication channels to seek employees' feedback about the overall workingenvironment and the necessary tools and resources they need to perform at their bestpotential.
Diverse employee engagement initiatives are launched to ensureemployees of various age and background continue to be effective in their roles and buildmeaningful career at Arvind.
The Group's Corporate Human Resources plays a critical role incompany's talent management process.
15. RISK MANAGEMENT:
The Real Estate market is inherently a cyclical market and is affectedby macroeconomic conditions changes in governmental schemes changes in supply and demandfor products availability of consumer finance and liquidity. These factors can affect thedemand for both our forthcoming and ongoing projects.
The Company has developed and implemented Risk Management Policy. Thepolicy identifies the threat of adverse events which
may affect shareholder's value ability of Company to achieveobjectives or implement business strategies. Further such risk are categorized intoStrategic Risks Operating Risks and Regulatory Risks.
Under the framework the Company has laid down a Risk Management Policywhich defines the process for identification of risks its assessment mitigationmeasures monitoring and reporting. While the Company through its employees and ExecutiveManagement continuously assess the identified Risks the Audit Committee reviews theidentified Risks and its mitigation measures annually.
16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. Moreover the Company's Internal Audit departmenthas adequate experience and expertise in internal controls operating system andprocedures. In discharging their role and responsibilities the department is supported byan external audit firm.
The system is supported by documented policies guidelines andprocedures to monitor business and operational performance which are aimed at ensuringbusiness integrity and promoting operational efficiency.
The Internal Audit Department reviews the adequacy of internal controlsystem in the Company its compliance with operating systems and laid down policies andprocedures. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board of Directors from time to time.
17. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a vigil mechanism named Whistle Blower Policy to dealwith instances of fraud and mismanagement if any. The details of the Whistle BlowerPolicy are explained in the Corporate Governance Report and also posted on the website ofthe Company at
18. SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:
As on 31st March 2020 the Company has 1 (one) holdingCompany 13 (Thirteen) subsidiaries including 2 (two) wholly owned subsidiaries and 2(two) Joint venture Companies.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013read with Companies (Accounts) Rules 2014 a statement containing salient features offinancial statements of subsidiaries associates and joint venture Companies in Form AOC-1is attached to the Financial Statements. The separate audited financial statements inrespect of each of the subsidiary shall be kept open for inspection at the RegisteredOffice of the
Company. The Company will also make available these documents uponrequest by any member of the Company interested in obtaining the same.
The Company has framed a policy for determining material subsidiarieswhich has been posted on company's website athttps://arvindsmartspaces.com/wp-content/uploads/2018/05/AIL-Policy-on-Material-Subsidiaries.pdf
19. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
As on 31st March 2020 the Board of Directors consist of 7(seven) Directors out of which 1 (one) is Executive Director 2 (two) are Non-ExecutiveNon-Independent Directors and 4 (four) are Non-Executive Independent Directors including aWoman Director. The composition is in compliance with the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
As per the provisions of Section 152(6) of the Companies Act 2013 andthe Company's Articles of Association Mr. Sanjay S. Lalbhai (DIN 00008329) shall retireby rotation at the ensuing Annual General Meeting and being eligible has offered himselffor re-appointment as the Director of the Company.
Mr. Kamal Singal is appointed as Managing Director & CEO in theAnnual General Meeting of the Company held on 11th May 2015 for a period of 5(five) years with effect from 1st June 2015 to 31st May 2020. Itis proposed to re-appoint him as Managing Director & CEO for the another term of 5(five) years with effect from 1st June 2020 to 31st May 2025 bypassing special resolution as set out in item No. 7 of the notice convening the AGM.
Mr. Pratul Shroff is appointed as an Independent Director not liableto retire by rotation in the Annual General Meeting of the Company held on 11thMay 2015 for a period of 5 (five) years with effect from 28th March 2015 to27th March 2020. It is proposed to re-appoint him as an Independent Directornot liable to retire by rotation for the second term of 5 (five) years with effect from28th March 2020 to 27th March 2025 by passing special resolutionas set out in item No. 5 of the notice convening the AGM.
Mr. Prem Prakash Pangotra is appointed as an Independent Director notliable to retire by rotation in the Annual General Meeting of the Company held on 11thMay 2015 for a period of 5 (five) years with effect from 28th March 2015 to27th March 2020. It is proposed to re-appoint him as an Independent Directornot liable to retire by rotation for the second term of 5 (five) years with effect from28th March 2020 to 27th March 2025 by passing special resolutionas set out in item No. 6 of the notice convening the AGM.
Ms. Pallavi Vyas is appointed as an Additional Director in the categoryIndependent Director by the Board of Directors of the Company on 5th August2019 on the basis of recommendation of the Nomination & Remuneration Committee. It isproposed to appoint her as an Independent Director not liable to retire
by rotation for a term of 5 (five) years with effect from 5thAugust 2020 to 4th August 2025 by passing ordinary resolution as set out initem No. 4 of the notice convening the AGM.
The Independent Directors have submitted requisite declarationsconfirming that they continue to meet the criteria of independence as prescribed underSection 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Independent Directors havealso confirmed that they have complied with Schedule IV of the Companies Act 2013 and theCompany's Code of Conduct.
None of the Directors are disqualified from being appointed asDirectors as specified in section 164 of the Companies Act 2013.
As per the provisions of Section 203 of the Companies Act 2013 Mr.Kamal Singal - Managing Director & CEO Mr. Mehul Shah Chief Financial Officer and Mr.Prakash Makwana - Company Secretary are the key managerial personnel of the Company.
20. FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and Regulation17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board has carried out an evaluation of independent directors which includes theperformance of directors fulfilment of criteria of independence specified in theseregulations and their independence from the Management its own performances as well asevaluation of working of its Committees on the basis of criteria formulated by theNomination and Remuneration Committee which are broadly in compliance with the GuidanceNote on Board Evaluation issued by SEBI vide its Circular dated 5th January2018. The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.
21. APPOINTMENT AND REMUNERATION POLICY:
The Board has on the recommendation of the Nomination and RemunerationCommittee framed a policy for selection and appointment of Directors Key ManagerialPersonnel and Senior Management and their remuneration. The same is posted on Company'swebsite at https://arvindsmartspaces.com/wp-content/uploads/2019/06/Nomination-and-Remuneration- Policy.pdf
22. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:
In compliance with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has put in place a familiarization programmefor the Independent Directors to familiarize them with their role rights andresponsibility as Directors the working of the Company nature of the industry in whichthe Company operates business model etc. The same is also posted on the website of theCompany at https://arvindsmartspaces.com/wp- content/uploads/2018/05/FamiliarisationProgramee for IDs.pdf
23. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES:
A calendar of Board and Committee Meetings is prepared and circulatedin advance to the Directors to enable them to plan their schedule for effectiveparticipation in the Meetings.
During the year under review 6 (six) meetings of the Board ofDirectors 4 (four) meetings of Audit Committee 3 (three) meetings of Nomination andRemuneration Committee 4 (four) meetings of Stakeholders' Relationship Committee 2 (two)meetings of Corporate Social Responsibility Committee and 16 (sixteen) meetings ofManagement Committee of Board of Directors were convened and held the details of whichare provided in the Corporate Governance Report forming part of this Report.
24. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
(a) in the preparation of the annual accounts for the year ended on 31stMarch 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(b) they have selected such accounting policies and applied themconsistently and made judgements and estimates that are 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 and loss of the Company for that period;
(c) they have taken proper and sufficient care towards the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) they have prepared annual accounts on a going concern basis;
(e) they have laid down proper internal financial controls which areadequate and are operating effectively;
(f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems are adequate and operating effectively.
25. RELATED PARTY TRANSACTIONS:
All transactions with Related Parties are placed before the AuditCommittee and the Board for their approval. Prior omnibus approval of the Audit Committeeand the Board is obtained for the transactions which are of a foreseen and repetitivenature. The transactions entered into pursuant to the omnibus approval so granted areaudited and a statement giving details of all the related party transaction specifying thenature value and terms
and conditions of the transactions is placed before the Audit Committeeand the Board of Directors for their approval on a quarterly basis.
All the related party transactions are entered into on arm's lengthbasis in the ordinary course of business and are in compliance with the applicableprovisions of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. There are no materially significant related partytransactions made by the Company with Promoters Directors or Key Managerial Personneletc. which may have potential conflict with the interest of the Company at large or whichwarrants the approval of the shareholders. Accordingly no transactions are being reportedin Form AOC-2 in terms of Section 134 of the Companies Act 2013 read with Companies(Accounts) Rules 2014. However the details of the transactions with Related Party areprovided in the Company's financial statements in accordance with the IND AS - 24.
The Policy on Related Party Transactions as approved by the Board isposted on Company's website at
26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS /TRIBUNALS:
There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its futureoperations.
(a) Statutory Auditor:
M/s. S R B C & Co LLP Chartered Accountants (ICAI FirmRegistration No. 324982E / E300003) were appointed as Statutory Auditors of the Companyfor a period of 5 (five) consecutive years at the Annual General Meeting held on 14thSeptember 2017.
The Report given by M/s. S R B C & Co LLP Chartered Accountants onthe financial statements along with the notes to the financial statements of the Companyfor the financial year 2019-2020 is forming part of the Annual Report. There has been noqualification reservation or adverse remark or disclaimer in their Report. During theyear under review the Auditors had not reported any matter under Section 143(12) of theAct therefore no detail is required to be disclosed under Section 134(3)(ca) of theCompanies Act.
(b) Cost Auditors:
On the recommendation of the Audit Committee the Board of Directorsappointed M/s Kiran J. Mehta & Co. Cost Accountants Ahmedabad (Firm Registration No.000025) as Cost Auditors of the Company for the year 2020-21 under
Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014. M/s Kiran J. Mehta & Co. have confirmed thatthey are free from disqualification specified under Section 141(3) and proviso to Section148(3) read with Section 141(4) of the Companies Act 2013 and that their appointmentmeets the requirements of Section 141(3)(g) of the Companies Act 2013. They have furtherconfirmed their independent status and an arm's length relationship with the Company.
The remuneration payable to the Cost Auditors is required to beratified by the Members in a general meeting.
Accordingly a Resolution seeking Members' ratification for theremuneration payable to M/s Kiran J. Mehta & Co. Cost Auditors is included at ItemNo. 3 of the notice convening the Annual General Meeting.
(c) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the Company has appointed M/s N. V. Kathiria & Associates a firm of CompanySecretaries in Practice to conduct the Secretarial Audit of the Company for the financialyear 2019-20. Report of the Secretarial Audit in Form MR-3 for the financial year 2019-20is enclosed as Annexure - C. In connection with the auditor's observation in this reportit is clarified that the Company has appointed woman director on 5th August2019 in compliance with section 149 of the Companies Act 2013 read with Rule 3 of theCompanies (Appointment and Qualifications of Directors) Rules 2014 and regulation 17(1)of The Securities and Exchange Board of India (Listing Obligations & DisclosuresRequirements) Regulations 2015.
28. ENHANCING SHAREHOLDERS VALUE:
Your Company believes that its Members are among its most importantstakeholders. Accordingly your Company's operations are committed to the pursuit ofachieving high levels of operating performance and cost competitiveness consolidating andbuilding for growth enhancing the productive asset and resource base and nurturingoverall corporate reputation. Your Company is also committed to creating value for itsother stakeholders by ensuring that its corporate actions positively impact thesocio-economic and environmental dimensions and contribute to sustainable growth anddevelopment.
29. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION &ANALYSIS:
The Corporate Governance Report and Management Discussion &Analysis which forms part of this Report is set out as separate Annexure together withthe Certificate from the Practicing Company Secretary regarding compliance of conditionsof
Corporate Governance as stipulated in Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
30. BUSINESS RESPONSIBILITY REPORT:
The Business Responsibility Report for the year ended 31stMarch 2020 as stipulated under Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed which forms part of this AnnualReport.
31. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
Information in accordance with the provisions of Section 134(3)(m) ofthe Companies Act 2013 read with Companies (Accounts) Rules 2014 regarding conservationof energy and technology absorption are not given as the Company has not undertaken anymanufacturing activity. There were no foreign Exchange Earnings or Outgo during the periodunder review except on foreign travelling.
32. ANNUAL RETURN:
The details forming part of the extract of the Annual Return in FormMGT-9 is annexed herewith as Annexure - D which is forming part of this report.
33. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of the Company will be providedupon request. In terms of Section 136(1) of the Companies Act 2013 the Report andAccounts are being sent to the Members and others entitled thereto excluding theinformation on employees' particulars which is available for inspection by the Members atthe Registered Office of the Company during business hours on working days of the Companyup to the date of the ensuing Annual General Meeting. If any member is interested inobtaining a copy thereof such member may write to the Company Secretary in this regard.
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended are given in Annexure -E to this report.
34. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
The Company has zero tolerance for Sexual Harassment at Workplace andhas adopted a policy against sexual harassment in line with the provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and therules framed thereunder. Arvind SmartSpaces Limited Internal Complaints Committee("ASLICC") is formed by the Company which is working under purview of grouplevel Committee
i.e. Arvind Internal Complaints Committee ("AICC") thedetails of which are declared across the organization. All the members of ASLICC aretrained by the subject experts on handling the investigations and proceedings as definedin the policy.
During the financial year 2019-20 the Company has not received anycomplaints on sexual harassment and hence no complaints remain pending as of 31stMarch 2020.
Your Directors take this opportunity to express their sincere thanks toall the employees customers suppliers business associates bankers investors lendersregulatory and government authorities and stock exchanges for their support.
| ||By Order of the Board |
|Date: 25th June 2020 ||Sanjay S. Lalbhai |
|Place: Ahmedabad ||Chairman |