TO THE MEMBERS
Your Directors take the pleasure in presenting their Report and Audited FinancialStatement of the Company along with Auditors' Report thereon for the year ended 31stMarch 2019.
|WORKING RESULTS ||2018-19 ||2017-18 |
| ||(Rupees in lakhs) ||(Rupees in lakhs) |
|Profit/(Loss) before interest depreciation and taxes ||(258.84) ||64.03 |
|Less : Interest ||99.20 ||101.56 |
|Profit/(Loss) before depreciation and taxes ||(358.04) ||(37.53) |
|Less : Depreciation ||6.02 ||6.07 |
|Profit/(Loss) Before Tax & Provisions ||(364.06) ||(43.60) |
|Profit/(Loss) Before Tax ||(364.06) ||(43.60) |
|Less : Provision for Income Tax || || |
|Current Tax ||4.36 ||- |
|Deferred Tax ||12.58 || |
|Profit/ (Loss) after Taxation ||(381.00) ||(43.60) |
|Add: Balance brought forward from previous year ||(3165.41) ||(3121.81) |
|CLOSING BALANCE ||(3546.41) ||(3165.41) |
During the year under review there has been no change in the authorised subscribedand paid-up share capital of the Company As on March 31 2019 the Paid-up share capitalstood at Rs151538500comprising of 15153850. equity shares of 10 each.
Your directors are not recommending any payment on account of dividend
CHANGE IN THE NATURE OF BUSINESS
The company ceased to be a Non Banking Financial Institution as the RegistrationCertificate of the Company under the Section 45 IA of the Reserve Bank of India Act 1934has been cancelled by the Reserve Bank of India vide letter dated 12th September 2018since the Company failed to achieve the net owned fund of two hundred lakhs of rupeesbefore 1st April 2017 in terms of the Revised Regulatory Framework for NBFCs read withNotification No DNBR.007/CGM(CDS)-2015 dated 27th March 2015. Consequently the Company isno longer engaged in the business of a non banking finance company.
MANAGEMENT DISCUSSION AND ANALYSIS
A. FINANCIAL REVIEW
Your Company has a loss of Rs. 381.00 lakh after depreciation and interest. The loss ofRs.3546.41 lakh including brought forward loss of Rs. 3165.41 lakh has been carried to theBalance Sheet.
B. RESOURCES AND LIQUIDITY
The Company as in the past is not relying on any borrowing except unsecured loans tofund its activities.
C. BUSINESS OVERVIEW AND UPDATES
Your company is currently engaged in providing Financial and Other Advisory Servicesbesides dealing in shares and securities. However your board is in constant look out forthe new business avenues which can be taken with the existing business.
D. OPPORTUNITIES AND THREATS
Due to recession all over the world the Indian economy though not affectedsubstantially has suffered and the opportunities have become limited in all sphere ofbusinesses. This did not discourage the board of directors of your Company who areconstantly looking for an opportunity to expand the business of the Company.
Your Company is still in the process of consolidation and has not decided to enter intonew field. It is exploring various business opportunities in the field of Financial andOther Advisory Services but nothing concrete has been derived. Barring unforeseencircumstances your directors hope to find some concrete business opportunity to expand thebusiness of the Company.
F. RISK AND CONCERNS
Your Company at present is exposed to the normal industry risk factor of volatility ininterest rate economic cycle and credit risk. It has not yet decided its future course ofactivities. The impact of new activity as and when decided will be known in the future.
G. ADEQUACY OF INTERNAL CONTROL
The established Internal Control Systems of your Company are adequate to ensure thatall the activities are monitored and controlled against any misuse or misappropriation ofasset and that the transactions are authorized recorded and reported correctly. More sothese internal control systems are regularly monitored by the audit committee of yourCompany and are improved upon on regular basis.
Your Company does not accept fixed deposits from public.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
As per the provisions of the Companies Act 2013 and the Articles of Association of theCompany Mr. Devashish Poddar (DIN: 00457349) Director of the Company retire by rotationand being eligible offer himself for re-appointment.
As per Section 149 and other applicable provisions of The Companies Act 2013 yourDirectors are seeking reappointment of Mr Naresh Birla (DIN:02902650) who was appointed asan Independent Non-Executive Director to hold office for five consecutive years by theMembers of the Company in the 34th Annual General Meeting held on 30thSeptember 2014 and whose term expire on conclusion of the ensuing 39th Annual GeneralMeeting of the company for another term of upto five consecutive years upto 44thAnnual General Meeting of the Company to be held in the year 2024.
As per Section 149 and other applicable provisions of The Companies Act 2013 yourDirectors are seeking appointment of Mr Rakesh Bhartia (DIN: 00877865) who was appointedas Additional Director of the company on 11th May 2019 and whose term expireson the ensuing 39th Annual General Meeting of the company as an Independent Non-ExecutiveDirector of the Company for a term of five consecutive years upto 44th AnnualGeneral Meeting of the Company in the year 2024. The Company received declaration made bythe independent directors of the Company that they fulfill the criteria given underSection 149(6) of the Companies Act 2013 and other applicable provisions.
During the year under review pursuant to the provisions of Section 203 of theCompanies Act 2013 Mr. Ranjan Kumar Poddar- Chairman & Managing Director Mr. SushilKumar.- Chief Financial Officer and Mr Mohit Kaushik- Company Secretary were the KMPs ofthe Company. Mr. Mohit Kaushik Company Secretary of the Company resigned from hisposition on 13th June2019.
The Nomination & Remuneration Committee (NRC) shall evaluate the performance ofeach Director of the Company with reference of the authority under the Nomination andRemuneration Policy of the Company framed in accordance with the provisions of Section 178of the Companies Act 2013 and based on their functions as mentioned in the Code ofConduct of the Directors. Evaluation of Independent Directors shall be carried on by theentire Board in the same way as it is done for the Executive Directors of the Companyexcept the Director getting evaluated. The detail process of evaluation and ratingsthereon are mentioned in the policy.
SUBSIDIARIES JOINT VENTURES ASSOCIATE COMPANIES
|Devi Overseas Pvt. Ltd. ||Associate Company |
|Devi Developers Pvt. Ltd ||Associate Company |
|Carma Arts and Crafts Pvt. Ltd ||Associate Company |
|Carma Creative Pvt. Ltd ||Associate Company |
|Remus India Pvt. Ltd. ||Associate Company |
|Thomas Goode India Pvt. Ltd. ||Associate Company |
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year underreview were on arms length basis and were also in the ordinary course of business. Therewere no materially significant related party transactions entered into by the Company withthe promoters directors key managerial personnel which may have a potential conflictwith the interests of the Company at large. The Related Party Transactions policy asapproved by the Board of Directors is uploaded on the Company's websitewww.aravalisecurities.com. 2
AUDITORS AND AUDITOR'S REPORT:
At the Annual General Meeting held on September 28 2018 M/s. Rajan Goel &Associates Chartered Accountants New Delhi (Firm Registration No. 004624N) wereappointed as statutory auditors of the Company to hold office till the conclusion of 39thAnnual General Meeting of the Company to be held in the calendar year 2019. The Board ofDirectors of the Company at their meeting held on 14th August 2019 on the recommendationof the Audit Committee have made its recommendation for appointment of M/s. Rajan Goel& Associates Chartered Accountants New Delhi (Firm Registration No. 004624N) as theStatutory Auditors of the Company by the Members at the 39th Annual General Meeting of theCompany. Accordingly a resolution proposing appointment of M/s. Rajan Goel &Associates Chartered Accountants New Delhi (Firm Registration No. 004624N) as theStatutory Auditors of the Company to hold office from the conclusion of 39th AnnualGeneral Meeting till the conclusion of 44th Annual General Meeting of the Company pursuantto Section 139 of the Companies Act 2013 forms part of the notice of the 39th AnnualGeneral Meeting of the Company. The Company has received their written consent and acertificate that they satisfy the criteria provided under Section 141 of the Act and thatthe appointment if made shall be in accordance with the applicable provisions of the Actand rules framed thereunder.
During the year under review the Auditors had not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section 134 (3)of the Act.
The Report given by M/s. Rajan Goel & Associates Chartered Accountants New Delhi(Firm Registration No. 004624N) Statutory Auditors on the financial statement of theCompany for the year 2018-19 is part of the Annual Report. There has been noqualification reservation or adverse remark or disclaimer in their Report except asunder:
Auditors in the annexure to their report have drawn attention to the Point No. iistating that certain shares are not registered in the name of the Company. The same are onaccount of bad delivery for which efforts are being made to sort out the same. Furtherwith respect of Point no. viii the notes on financial statement referred to in theAuditor Report are self explanatory and do not call for any further comment.
SECRETARIAL AUDIT REPORT:
A Secretarial Audit Report given by Mr. Sachin Kumar Srivastava Practising CompanySecretary (Membership no. 55362) is given in Annexure-A to this report.
INTERNAL AUDITORS :
The Board of Directors of your Company has re-appointed M/s V.K. KILA & CO.Chartered Accountants New Delhi (Firm Registration No. 007772C) as Internal Auditorspursuant to the provisions of Section 138 of the Companies act 2013 for the financialyear 2019-20.
EXTRACTS OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is given inAnnexure-B to this report.
BUSINESS RISK MANAGEMENT:
The Company has laid down a well defined Risk Management Policy to identify the risksassociated with the business of the Company on a periodical basis and review theminimization programs to mitigate them.
At present the Company has not identified any element of risk which may threaten theexistence of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy and has established the necessary vigilmechanism for employees and directors to report concerns about unethical behavior. Noperson has been denied access to the Chairman of the Audit Committee. The said policy ofthe Company can be accessed at www.aravalisecurities.com.
Pursuant to the Provisions of the Companies Act 2013 and under Securities &Exchange of Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has carried out an Annual Performance Evaluation of its own performanceand all the Directors individually.
The evaluation of Non-Independent Directors Chairman and the Board as a whole was doneat a separate meeting by the Independent Directors.
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
There has been no material change and commitments occurred between the end of thefinancial year of the Company i.e. 31st March 2019 and the date of this report affectingfinancial position of the Company except that Mr Rakesh Bhartia has replaced Mr AshokKumar Sharma as Chairman of the Nomination and Remuneration Committee and as a Member ofthe Audit Committee upon his resignation from the Board of Directors
Your Company has taken adequate steps to ensure compliance with the provisions ofCorporate Governance as prescribed under SEBI (Listing of Obligations and DisclosureRequirements) Regulation 2015 with the Stock Exchanges.
A Certificate from the Auditors of the Company regarding compliance of conditions ofCorporate Governance is given in Annexure-C to this report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that: (a) in thepreparation of the annual accounts the applicable accounting standards had been followedalong with proper explanation relating to material departures; (b) the directors hadselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company at the end of the financial year and of the profit and loss ofthe company for that period; (c) the directors had taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of thisAct for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities; (d) the directors had prepared the annual accounts on a goingconcern basis; and (e) the directors in the case of a listed company had laid downinternal financial controls to be followed by the company and that such internal financialcontrols are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office of the Company during business hours on working days of theCompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the Company Secretary in advance.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company being engaged in the Financial and Other Advisory Services and tradingdoes not have any energy utilization or technology absorption. The Company during the yearunder consideration has not earned or spent any foreign exchange.
Your Company and its Directors wish to extend their sincere thanks for the co-operationreceived from shareholders bankers and other business constituent during the year underreview. Your directors also wish to place on record their deep sense of appreciation forthe commitment displayed by all employees of the Company.
| ||By Order of the Board of Directors |
|Place : Gurgaon ||Ranjan Kumar Poddar |
|Date : 14th August 2019 ||Chairman & Managing Director |
| ||(DIN:00290949) |