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Aarcon Facilities Ltd.

BSE: 532024 Sector: Infrastructure
NSE: N.A. ISIN Code: INE056J01015
BSE 00:00 | 12 Feb Aarcon Facilities Ltd
NSE 05:30 | 01 Jan Aarcon Facilities Ltd
OPEN 5.60
PREVIOUS CLOSE 5.60
VOLUME 100
52-Week high 5.89
52-Week low 5.60
P/E
Mkt Cap.(Rs cr) 3
Buy Price 6.19
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.60
CLOSE 5.60
VOLUME 100
52-Week high 5.89
52-Week low 5.60
P/E
Mkt Cap.(Rs cr) 3
Buy Price 6.19
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00

Aarcon Facilities Ltd. (AARCONFACILIT) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 26th Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended on 31stMarch 2019.

1. Financial summary or highlights/Performance of the Company

The financial results for the year as under:

(Rupees in Lacs)

Particular Year ended 31.03.2019 Year ended 31.03.2018
Sales & Other Income 38.15 0.72
Profit before Depreciation 9.82 (21.05)
Less: Depreciation 13.01 12.56
Profit/Loss of the year (3.19) (33.61)
Less: Provision for Taxation 0.00 0.00
Provision for Deferred Tax (0.89) (0.24)
Profit/Loss After Tax (2.30) (33.37)

2. Dividend

Your Board does not recommend any dividend for the financial year 2018-19.

3. Reserves

Your Board does not propose to carry to any reserves for the financial year 2018- 19.

4. Brief description of the Company's working during the year/State of Company's affair

There was revenue from operation of Rs. 37.57 lacs during the FY 2018-19 as compared tonil revenue during previous FY 2017-18 and there is loss of Rs. 2.30 lacs during the FY2018-19 as compared to loss of Rs. 33.37 lacs during the previous FY 2017-18.

5. Change in the nature of business if any

The Company has discontinued the business of managing theatres as mentioned in ClauseIII (C) 103 in Memorandum of Association in the financial year 2017-18.

The Company has started new business of running and managing restaurant cafe tavernbeerhouse refreshment-room lodging housekeepers etc. as mentioned in Clause III (C) 21 inMemorandum of Association during the financial year 2018-19.

6. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report

No material changes occurred subsequent to the close of the financial year of theCompany to which the balance sheet relates and the date of the report.

7. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future

No significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future during the financialyear and or subsequent to the close of the financial year of the Company to which thebalance sheet relates and the date of the report.

8. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements.

The management of the Company has taken adequate steps for internal financial controlswith reference to Financial statements.

9. Details of Subsidiary/Joint Ventures/Associate Companies

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

10. Performance and financial position of each of the subsidiaries associates andjoint venture companies included in the consolidated financial statement

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

11. DEPOSITS

Your Company has not accepted any deposit during the year and there was no deposit atthe beginning of the year. Therefore the details relating to deposits covered underChapter V of the Act is not applicable.

12. STATUTORY AUDITORS

M/s Bharat Parikh & Associates the existing statutory auditors of the Company hadbeen appointed at the Extra-ordinary General meeting of the Company held on 25/05/2019due to the resignation of M/s Ashish Mehta & Associates Chartered Accountants witheffect from 03/04/2019 till the conclusion of the ensuing Annual General Meeting.

The Board of Directors propose to appoint M/s. Bharat Parikh & AssociatesChartered Accountants as statutory auditors of the Company at the ensuing Annual GeneralMeeting. The Company has received consent and eligibility certificate from the Auditorswith regards to the appointment.

13. AUDITORS' REPORT

The observations of the Auditors are explained wherever necessary in an appropriatenotes to the Audited Statement of Accounts.

14. SHARE CAPITAL

During the year under review the Company has not issued any securities nor has grantedany stock option or sweat equity.

15. EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9 forming part of the Board's reportis attached herewith as (Annexure-E)

16. Conservation of energy technology absorption and foreign exchange earnings andoutgo

The details of conservation of energy technology absorption foreign exchange earningsand outgo are attached herewith (Annexure-A)

17. Corporate Social Responsibility (CSR)

As your Company does not fall under the class of Companies specified under section 135of the Companies Act 2013 for spending any sum towards Corporate Social Responsibility asNet worth of the Company is below Indian Rupees 500 crore or Turnover is below IndianRupees 1000 crore or a Net Profit is below Indian Rupees 5 crore during the precedingfinancial year ended on 31st March 2018 and therefore the Company has notspent any sum towards Corporate Social Responsibility during the financial year 2018-19.

18. Directors

A) Changes in Directors and Key Managerial Personnel

> Mr. Narendrakumar Chandubhai Patel has tendered his resignation with effect from 1stMarch 2019 and accepted' at the Board meeting held on 1st March 2019.

> Mr. Bharat Ramchandra Gupta Managing Director of the Company retires by rotationat the ensuing annual general meeting and being eligible offers himself for re-appointmentas Director.

B) Declaration by an Independent Director(s) and re- appointment if any

Ddeclarations by Mr. Kamal Bachubhai Pandya and Mr. Narendrakumar Chandubhai PatelIndependent Directors that they meet the criteria of independence as provided insub-section (6) of Section 149 of the Companies Act 2013 have been received.

Mr. Bharat Ramchandra Gupta Managing Director of the Company retiring by rotation andeligible for re-appointment has given his consent and declaration under form DIR-8pursuant to Section 164(2) read with Rule 14(1) of Companies (Appointment andQualification of Directors) Rules 2014.

Details of director seeking re-appointment as per regulation 36 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulation 2015with the Bombay stock exchange is attached herewith. (Annexure- F).

C) Formal Annual Evaluation

The Company has devised a policy for performance evaluation of Independent DirectorsBoard Committees and individual Directors which includes criteria for performanceevaluation of executive directors and non-executive directors.

In evaluating the suitability of individual Board members the Committee may take intoaccount factors such as:

i. General understanding of the Company's business;

ii. Educational back ground and experience:

iii. Personal and professional ethics integrity and values;

iv. Willingness to devote sufficient time and energy in carrying out their duties andresponsibilities effectively.

19. Number of meetings of the Board of Directors

During the year from 1st April 2018 to 31st March 2019 theBoard of Directors met seven times on the following dates:

Sr. No. Date Board Strength No. of Directors Present
1 20-04-18 4 4
2 28-06-18 4 4
3 14-08-18 4 4
4 26-09-18 4 4
5 03-11-18 4 4
6 07-02-19 4 4
7 01-03-19 3 3

20. Audit Committee

The Audit Committee of the Company comprising of the following Directors of the Boardduring the year under review:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mr. Narendrakumar Chandubhai Patel Non-Executive Independent Director
3 Mr. Bharat Ramchandra Gupta Executive Director

There was no occasion regarding non acceptance of any recommendation of the AuditCommittee during the year.

Audit Committee meetings were held on 28/06/2018 14/08/2018 03/11/2018 &07/02/2019 during the year.

However Mr. Narendrakumar Chandubhai Patel has tendered his resignation with effectfrom 1st March 2019. Due to his resignation the Audit Committee wasreconstituted and comprising of the following Directors of the Board:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mrs. Anupama Bharat Gupta Non-Executive Director
3 Mr. Bharat Ramchandra Gupta Executive Director

Note: The constitution of above committee doesn't comply with the provision of theSection 177(2) of the Companies Act 2013.

21. Details of establishment of vigil mechanism for directors and employees

Your Board has established vigil mechanism pursuant to rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and the Board has nominated Mr. KamalBachubhai Pandya Director of the Company to oversee the efficient working of the vigilmechanism.

The Company has framed a whistle blower policy in terms of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulation 2015. *

22. Nomination and Remuneration Committee

The Nomination And Remuneration Committee of the Company comprising of the followingDirectors of the Board during the year under review:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mr. Narendrakumar Chandubhai Patel Non-Executive Independent Director
3 Mr. Bharat Ramchandra Gupta Executive Director

The policy formulated by Nomination And Remuneration Committee:

The terms of reference of the committee inter alia include succession planning forBoard of Directors and Senior Management Employees identifying and selection ofcandidates for appointment of Directors/Independent Directors based on certain laid downcriteria identifying potential individuals for appointment of Key Managerial personneland other senior managerial position and review the performance of the Board of Directorsand Senior Management personnel including Key managerial personnel based on certaincriteria approved by the Board. While reviewing the performance the committee ensuresthat the remuneration is reasonable and sufficient to attract retain and motivate thebest managerial talents remuneration commensurate with the performance of individual andgroup and also maintains a balance between both short and long term objectives of thecompany.

The meeting of Nomination and Remuneration committee was held on 07/02/2019 during thefinancial year under review.

However Mr. Narendrakumar Chandubhai Patel has tendered his resignation with effectfrom 1st March 2019. Due to his resignation the Nomination and RemunerationCommittee was reconstituted and comprising of the following Directors of the Board:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mrs. Anupama Bharat Gupta Non-Executive Director
3 Mr. Bharat Ramchandra Gupta Executive Director

Note: The constitution of above committee doesn't comply with the provision of theSection 178(1) of the Companies Act 2013.

23. Stakeholders Relationship Committee

The Stakeholders Relationship Committee of the Company comprising of the followingDirectors of the Board during the year under review:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mr. Narendrakumar Chandubhai Patel Non-Executive Independent Director
3 Mr. Bharat Ramchandra Gupta Executive Director

The meeting of Stakeholders Relationship committee was held on 07/02/2019 during theyear under review.

However Mr. Narendrakumar Chandubhai Patel has tendered his resignation with effectfrom 1st March 2019. Due to his resignation the Stakeholders RelationshipCommittee was reconstituted and comprising of the following Directors of the Board:

Sr. No. Name of the Director Designation
1 Mr. Kamal Bachubhai Pandya Non-Executive Independent Director
2 Mrs. Anupama Bharat Gupta Non-Executive Director
3 Mr. Bharat Ramchandra Gupta Executive Director

24. Particulars of loans guarantees or investments under section 186

The Company has not given any loan guarantees or investments under section 186 to anyperson or body corporate except loan to employees of the Company as per Company's policyfor employees.

25. Particulars of contracts or arrangements with related parties:

The Company has not entered into any contract or arrangement with related partyreferred to in sub-section (1) of section 188 of the Companies Act 2013. Form No. AOC -2regarding transactions under section 188 of the Companies Act 2013 is enclosed herewith(Annexure-B).

26. Managerial Remuneration:

Disclosures pursuant to section 197(12) of the Companies Act 2013 read with Rule 5(1)5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are enclosed herewith (Annexure-C).

27. Secretarial Audit Report

The Secretarial Audit Report pursuant to section 204(1) of the Companies Act2013 givenby M/s. Dinesh Mehta & Co. a Company Secretary in practice enclosed herewith(Annexure-D).

The Secretarial Audit Report does not contain any qualification reservation or adverseremark except:

a) The Company has not appointed chief financial officer and company secretary asrequired under section 203 of the Companies Act 2013 and the Company has not appointedqualified Company Secretary as compliance officer of the Company as per Regulation 6 ofSEBI LODR.

b) The Company has not appointed Internal Auditor as required under Section 138 of theCompanies Act 2013.

c) The Company has not paid annual listing fees to BSE for the financial year 2018-19.

d) Due to resignation of Mr. Narendrakumar Chandubhai Patel with effect from 1stMarch 2019 as an independent director the Audit committee of the Company has beenre-constituted and it was not as required under Section 177 of the Companies Act 2013 dueto not forming a majority by independent directors.

e) The Nomination and Remuneration committee of the Company has not been constituted asrequired under Section 178 of the Companies Act 2013 which requires three or morenon-executive directors out of which not less than one half shall be independentdirectors.

f) The Company has not published quarterly / annual financial result in any newspaperduring the year under review as required under Regulation 33 and 47 of SEBI (ListingObligations and Disclosure Requirements) Regulation 2015.

g) The promoters of the Company does not hold 100% of shares in dematerialization formas per Regulation 31 of LODR

Explanation:

a) Due to financial loss during the financial year 2018-19 and the Company isfinancially not strong enough that can bear expenses of salary of chief financial officerand company secretary and therefore not appointed key managerial personnel. As soon as theCompany's financial position improves the company will appoint key managerial personnel.

b) As the financial position of the Company is not sound and continue to loss duringthe financial year 2018-19 (period under review) the Company has not appointed internalauditor. As soon as the Company's financial position improves the company will appointinternal auditor.

c) Due to fund problem the Company could not pay the annual listing fees for the FY2018-19.

d) The Company is in search of the proper candidate for the position of an IndependentDirector and could not find proper person to fill in vacancy of an Independent Director.Audit committee of the Company will be re-constituted after appointment of IndependentDirector as required under Section 177 of the Companies Act 2013

e) The Company is in search of the proper candidate for the position of an IndependentDirector and could not find proper person to fill in vacancy of an Independent Director.The Nomination and Remuneration committee of the Company will be re-constituted afterappointment of Independent Director as required under Section 178 of the Companies Act2013

f) As the financial position of the Company is not sound and continue to make lossduring the financial year 2018-19 (period under review) the Company has not publishedquarterly / annual financial result in any newspaper during the year under review.

g) The Company will apply for the dematerialization of shares in near future.

28. Corporate Governance Report

As stipulated in the Regulation 72 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulation 2015 the Company does not require tocomply with Regulation 17 to Regulation 27 of the said regulation as Paid-up Capital doesnot exceed Rs. 10 Crores or Net worth does not exceed Rs. 25 Crores which is specified inRegulation 15 and hence did not need to obtain Corporate Governance Report.

29. Code of Conduct

The Company has adopted a code of conduct for its directors and designated seniormanagement personnel. All the Board members and senior management personnel followcompliance of code of conduct.

30. Risk management policy

In today's economic environment Risk Management is a very important part of business.The main aim of risk management is to identify monitor and take precautionary measures inrespect of the events that may pose risks for the business. Your Company's risk managementis embedded in the business processes. Your company has identified the following risks:

Key Risk Impact to Aarcon Facilities Limited Mitigation Plans
Recession in reality market. Risk of recession in reality affects the function of the Company. The Company does not launch any new project during recession period.
Interest Rate Risk Any increase in interest rate can affect the finance cost Company has enough fund to meet the need arises.
Competition Risk Every company is always exposed to competition risk. By continuous efforts to enhance the brand image of the Company.
Compliance Risk - Increasing regulatory Requirements. Any default can attract penal provisions By regularly monitoring and review of changes in regulatory framework.

31. Directors' Responsibility Statement

Your Directors state that—

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. the directors had 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 and ofthe profit and loss of the company for that period;

c. the directors had 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 had prepared the annual accounts on a going concern basis; and

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 had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

32. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

The Company has framed an anti-harassment policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaint Committee has been set up to redress complaints received regularly. Allemployees (permanent contractual temporary trainees) are covered under the policy.There was no compliant received from any employee during the financial year 2018-19 andhence no complaint is outstanding as on 31.03.2019 for redressal.

33. Compliance with Secretarial Standards and SEBI (Listing Obligation and DisclosureRequirement) Regulations 2015:

The Company has complied with secretarial standards issued by the Institute of CompanySecretaries of India and SEBI (Listing Obligation and Disclosure Requirement) Regulations2015 as applicable to the Company from time to time except the following:

1. Regulation 6 of LODR - The Company has not appointed qualified Company Secretary ascompliance officer of the Company.

2. Regulation 47 of LODR - The Company does not publish any information as mentioned inthe said provision.

3. Regulation 31 of LODR - The promoters of the Company does not hold 100% of shares indematerialization form.

34. Acknowledgements

The Board of Directors gratefully acknowledge the assistance and co-operation receivedfrom the Bank of India Indusind Bank and all other statutory and non- statutory agenciesfor their co-operation.

The Board of Directors also wish to place on record their gratitude and appreciation tothe members for their trust and confidence shown in the Company.

The Board of Directors would like to especially thank all the employees of the Companyfor their dedication and loyalty.

Date: 30th May 2019 By Order of the Board of Directors
Regd. Office:
401 402 Earth Complex
Opp. Vaccine Institute
Old Padra Road Bharat Ramchandra Gupta Anupama Bharat Gupta
Vadodara Gujarat 390015 Managing Director Director
02221605 DIN: 00547897 DIN: