The Directors have pleasure in presenting the 23rd Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2016.
The operating results of the Company for the year ended on 31st March, 2016 are briefly indicated below:
(Rs. in lacs
Profit Before Depreciation and Taxation
Profit before Taxation
Provision for taxation - For Current Tax
Provision for taxation - For Deferred Tax
MAT credit Entitlement
Profit after Taxation
DIVIDEND AND TRANSFER TO RESERVES:
In order to plough back resources, your directors do not recommend any payment of dividend for the financial year. Further the Company has not transferred any amount to reserves during the year.
PERFORMANCE OF THE COMPANY & FUTURE PROSPECTS:
During the year under review, total revenue from operations was Rs. 5204.62 Lacs as against Rs. 5667.82 Lacs in previous year.
Profits before Tax for the year has increased to Rs. 232.12 Lacs from Rs. 140.72 Lacs in previous year indicating the growth of about 64.95% in comparison to prior year. Profit after tax has increased to Rs. 146.59 Lacs from Rs. 79.56 Lacs in the previous year indicating the remarkable growth of about 84.25% in comparison to prior year. Further details are given in management discussions and analysis report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY FROM THE CONCLUSION OF THE FINANCIAL YEAR TILL THE END OF THIS REPORT:
There were no other material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:
A report on Management Discussion and Analysis (MDA) is annexed to this report as Annexure II, inter-alia deals adequately with the operations and also current and future outlook of the Company.
ALLOTMENT OF SHARES:
During the year under review company has allotted 20,00,000 Equity shares of Rs. 10/- on preferential basis at a price of Rs. 30/- (Rupees Thirty Only) per share (including premium of Rs. 20/- each) on 9th March, 2016 to the persons belonging to the category other than promoters.
The Company has not accepted or renewed any deposits from public falling within the purview of Section 73 of Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014.
CORPORATE SOCIAL RESPONSIBILITY:
The Company does not fall under the criteria mentioned in Section 135 of the Companies Act, 2013 (“the Act”) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, and accordingly the Company is not required to constitute CSR Committee and is not required to spend any amount in CSR Activity.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152 and other applicable provisions if any, of the Companies Act, 2013, Smt. Archana K. Amin (DIN: 00038985), Whole Time Director of the Company is liable to retire by rotation at the forthcoming Annual General Meeting and she being eligible offers herself for re-appointment. Your Directors recommended her reappointment. During the year, Ms. Neeti Patel was appointed as Whole Time Company Secretary of the Company.
Shri Sanjay Kothari (DIN: 01429539) resigned as a Director with effect from 29th August, 2015 due to pre-occupancy. The Board placed on records its appreciation for the services rendered by him during his tenure as a Director with the Company.
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:
1. Shri Kandarp Amin - Whole Time Director
2. Shri Ajay Patel - Chief Financial Officer
3. Ms. Neeti Patel - Whole Time Company Secretary EXTRACT OF THE ANNUAL RETURN:
Extract of the Annual Return as on 31st March, 2016 in the prescribed form MGT - 9, pursuant to provisions of Section 92(3) of the Companies Act, 2013 and the Companies (Management and Administration) Rules 2014, is annexed to this report as Annexure IV.
CORPORATE GOVERNANCE REPORT:
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 / Listing Agreement, a Report on “Corporate Governance” is attached as an Annexure III and forms part of this report. As per Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Regulations 17 to 27 and Clauses (b) to (i) of sub regulation (2) of Regulation 46 and para C, D and E of Schedule V respectively are not applicable to our Company, but the Company has complied with the same voluntarily.
DIRECTORS’ RESPONSIBILITY STATEMENT :
Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 with respect to the Directors'' responsibility Statement, the Directors'' confirms that:
i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;
ii. they have selected such appropriate accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year on 31st March, 2016 and of the profit of the Company for the year under review;
iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. they have prepared the accounts for the period ended on 31st March, 2016 on a ‘going concern'' basis.
v. they have laid down laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
NUMBER OF BOARD MEETINGS:
During the year the Board of Directors duly met Ten (10) times. The details of the Board Meetings are provided in the Corporate Governance Report which is annexed to the Report.
The properties and assets of the Company are adequately insured.
DECLARATION BY INDEPENDENT DIRECTORS:
Pursuant to the provisions of Section 134 of the Companies Act, 2013 with respect to the declaration given by the Independent Directors of the Company under Section 149 (6) of the Companies Act, 2013, the Board hereby confirms that all the Independent Directors have given declarations and further confirms that they meet the criteria of Independence as per the provisions of Section 149 (6).
PERFORMANCE EVALUATION OF THE BOARD COMMITTEES AND INDEPENDENT DIRECTORS:
Pursuant to the provisions of Companies Act, 2013 and Rules made there under read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 / Clause 49 of the Listing Agreement and on recommendation of Nomination and Remuneration Committee (NRC), the Board of Directors of the Company has laid down the criteria for evaluation of its own performance, its Committees and individual directors including independent Directors.
The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the director being evaluated.
The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation process.
POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION:
Pursuant to the requirements of the Companies Act, 2013, the policy on appointment of Board Members and policy on remuneration of the Directors, KMPs and other employees is as attached as Annexure V to this report.
SECRETARIAL AUDIT REPORT:
M/s. M.P. Mehta & Co., Practicing Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2015-16 pursuant to the provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in prescribed form MR-3 is attached as Annexure VI to this report.
There are no qualifications or other observations or remarks of the Secretarial Auditors in the Report issued by them for the financial year 2015-16 which call for any explanation from the Board of Directors.
CONTRACTS OR AGREEMENTS WITH RELATED PARTIES:
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2013 all the Contracts and arrangements with related parties entered by the Company during the financial year were in ordinary course of Business and on arms'' length basis. Details of the transactions are as mentioned in Annexure VIII.
During the year the Company has not entered into any materially significant related party transactions which may have potential conflict with the interest of the Company at large. Suitable disclosures as required are provided in AS-18 which is forming the part of the notes to financial Statement.
The policy on Related Party Transactions has been uploaded on the website i.e. www.architorg.com
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:
Details pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure VII to this report.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:
The Company has adopted internal control system considering the nature of its business and the size and complexity of operations. The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures etc. The management is taking further steps to strengthen the internal control system.
RISK MANAGEMENT POLICY:
The Company has formulated the Risk Management Policy in order to safeguard the organization from various risks through timely actions. It is designed to mitigate the risk in order to minimize the impact of the risk on the Business. The Management is regularly reviewing the risk and is taking appropriate steps to mitigate the risk.
In the opinion of the Board there has been no identification of element of risk that may threaten the existence of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
The Company has not made any Loans or provided any guarantee or has made any investments falling under purview of Section 186 of the Companies Act, 2013 during the financial year under review.
M/s. G. K. Choksi & Co., Chartered Accountants, (FRN: 101895W) Statutory Auditors of the Company retires at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment. The Board on recommendation of the Audit Committee, recommends their re-appointment at the ensuing Annual General Meeting. AUDITORS’ OBSERVATIONS:
With regard to the observation of auditors regarding:-
No provision of the option loss including interest, the management is of the opinion that the said liability is of contingent nature and for the same, legal matter is pending at DRT Mumbai. In view of the same, it is not recognized as the liability and hence no provision has been made for the option loss and interest thereon.
DISCLOSURE OF AUDIT COMMITTEE:
The Audit Committee of the Company as on 31st March, 2016 consists of following Directors as its members:
1. Shri Haresh Shah - Chairman
2. Shri Bhupendra Mehta - Member
3. Shri Dipesh Kotak - Member
VIGIL MECHANISM :
Pursuant to provisions of Section 177(9) of the Companies Act, 2013 and Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 / Clause 49 of the Listing Agreement, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower Policy. Through this policy Directors, Employees or business associates may report the unethical behavior, malpractices, wrongful conduct, frauds, violations of the Company''s code etc. to the Chairman of the Audit Committee.
The vigil mechanism / whistle blower policy is also available on the website of the Company www.architorg.com
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure I which is attached to this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall affect the going concern status of the Company''s operations as on date of this report.
The Company has maintained cordial relations with the employees of the Company throughout the year. The Directors wishes to place on record sincere appreciation for the services rendered by the employees of the Company during the year.
The Company has not received any complaint under The Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Board is thankful to its bankers for their continued support and assistance, which has played important role in progress of the Company.
Your Directors places on records the contribution of employees of the Company at all levels and other business associates for their commitment, dedication and respective contribution to the Company''s operations during the year under review.
FOR AND ON BEHALF OF THE BOARD
Date: May 30, 2016 FOR ARCHIT ORGANOSYS LIMITED
Plot No. 25/9-A, Phase III, (KANDARP K. AMIN)
G.I.D.C. Naroda, Ahmedabad - 382 330 Chairman