Arvee Laborat. Director Discussions


To The Members of,

ARVEE LABORATORIES (INDIA) LIMITED

Your Directors have pleasure in presenting the 10th Annual Report on the business and operations of the Company together with Audited Statement of Accounts for the year ended on 31st March 2021 with Auditors Report thereon.

Financial Highlights

(Rs. In Lacs)

Particulars 2020 - 2021 2019 - 2020
Revenue from Operations 4737.50 4541.87
Other Income 58.48 34.60
Total Revenue 4795.98 4576.47
Depreciation 240.66 228.90
Financial Expenses 57.64 98.77
Profit before Tax 364.14 309.05
Tax Expense - 96.40 79.16
Profit After Tax 267.73 222.89
Add : Balance Brought forward from the previous year 580.48 350.58
Balance carried to the next year 848.22 580.48

The above performance is based on standalone basis. Consolidated figures are not applicable.

State of Affairs:

Turnover of the Company has increased marginally. However profit after tax has increased by 16.46%. Considering the covid situation during the year under review, your Directors are hopeful of Company better performance in future.

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

Transfer to Reserves (i.e. Other Equity):

During the year under review, your Company has utilized a sum of Rs. 551.00 Lacs from the Security Premium Reserve for the issue of bonus shares. The Opening Balance of Security Premium Reserve stands at Rs. 744.60 Lacs whereas the closing balance of Security Premium Reserve stands at Rs. 193.60 Lacs.

The Opening Balance of Retained Earnings stands at Rs. 580.48 Lacs. During the year under review whole of the Profit after tax of Rs. 267.73 Lacs has been transferred to Retained Earnings. The Closing Balance of Retained Earnings stands at Rs. 848.22 Lacs.

Dividend:

In order to conserve resources, your Directors do not recommended dividend for the year 2020-21 on Equity Shares of the Company.

Details regarding Energy Conservation:

Pursuant to Rule 8 (3) of Companies (Accounts) Rules, 2014, the Board of Directors hereby state as under declare that.

A. CONSERVATION OF ENERGY:

Power & Fuel Consumption: Current Year
Electricity:
i) Power Consumed(Purchased):
(a) Units 14,06,175 units
(b) Amount 1,02,60,509.87
(c) Units/per liter of Diesel Oil --
(d) Cost per unit (Rs.) 7.30/Unit
ii) Own Generation:
(a) Units --
(b) Amount --
(c) Units/per liter of Diesel Oil --
(d) Cost per unit (Rs.) --
iii) Windmill Turbine:
(a) Units --
(b) Amount --

Steps taken or impact on conservation of energy.

In line with the Companys commitment towards conservation of energy, all units continue with their efforts aimed at improving energy efficiency through innovative measures to reduce wastage and optimize consumption. Some of the measures taken by the Company 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 There was no capital investment on energy conservation equipment.

Details regarding Technology Absorption;

Pursuant to Rule 8 (3) of Companies (Accounts) Rules, 2014, the Board of Directors hereby declare that there are no particulars to report for Technology Absorption. However the 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. 38 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 and confirm:

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

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 as on 31/03/2021 and of the profit of the company for that period.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 the company and that such internal financial controls are adequate and were operating effectively.

vi. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Listing;

The Equity Shares of your Company were listed on Emerge Platform of National Stock Exchange of India Limited. However with effect from 22nd March, 2021 the Shares of the Company are traded on Capital Market Segment (Main Board) of the National Stock Exchange of India Limited. The Company has paid necessary listing fees for the year 2021 - 2022.

Details of Material Changes and Commitments, Occurred during the Period affecting financial position of the Company;

During the year under review there were no significant and material orders passed by any Regulators or Court or Tribunals which may have impact on the going concern status. No order has been passed by any Regulators or Court or Tribunals which may have impact on the Companys operation in future. Further there is no material change and commitments occurred subsequent to the Balance sheet till date of report.

Particulars of Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013:

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

Particulars of Contracts or Arrangements with Related Parties under Section 188 of the Companies Act, 2013:

All contracts / arrangements / transactions, if any, entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company has not entered into transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy for determination of Material Related party transaction is available at http: / /arveelabs.com/doc/OTHER POLICIES.pdf

No advance is paid to any related party (other than loans and advances) for entering any transaction. No Bad Debts of related parties. . There being no ‘material RPTs as defined under regulation 23 of Listing Regulations, 2015, there are no details to be disclosed in Form AOC-2 in this regard.

The details of the related party transactions are disclosed in note 35 to the financial statement which sets out related party disclosures.

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

The Company has devised a Policy for Directors; appointment and remuneration including criteria for determining qualifications, performance evaluation and other matters of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of both non-executive directors and executive directors.

The Companys Nomination & Remuneration policy which includes the Directors appointment & remuneration and criteria for determining qualifications, positive attributes, independence of the Director & other matters is available on the website of the Company at the link www.arveelabs.com. Nomination and Remuneration Policy is annexed and marked as Annexure I

Declaration by Independent Directors:

The Independent Directors of the Company namely Vishal Nitin Mehta, Chandrakala Ashok Bhatt and Parag Manubahi Shah (w.e.f. 27th June 2020), Mrs. Neetu Rishi Jalan (w.e.f. 12th February, 2021) have confirmed to the Board that they meet the criteria of independence as specified under Section 149 ( 6 ) of the Companies Act, 2013 and they qualify to be independent directors. They have also confirmed that they meet the requirements of independent directors as specified in the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Share Capital:

During the year under review the Company has issued bonus shares in ratio of 1:1. Accordingly the Share Capital of the Company has been increased from Rs. 551.00 Lacs to 1102.00 Lacs.

Issue of Equity Shares with Differential Rights:

Details required to be stated as per Rule 4 (4) of Companies (Share Capital and Debenture Rules) 2014 is not applicable.

Disclosure regarding Employee Stock Options:

Details required to be given as stated in Rule 12 (19) Companies (Share Capital and Debenture Rules) 2014 is not applicable.

Disclosure regarding Sweat Equity Shares:

Details required to be given as stated in Rule 8 (13) Companies (Share Capital and Debenture Rules) 2014 is not applicable.

Auditors and Audit Report:

KCJM & Associates, Chartered Accountants, Ahmedabad vide their letter dated 17 th July, 2021 have tendered resignation to be effective from 18th July, 2021. The Board has decided to appoint M/s. Jaimin Deliwala & Co, Chartered Accountant to hold office as Statutory Auditor till the conclusion of forthcoming annual general meeting. Further the Board has decided to appoint M/s. Jaimin Deliwala & Co, Chartered Accountant as Statutory auditors for a period of five years including for the financial year 2021 - 2022, subject to the approval of Shareholders in general meeting.

Further Board has also sought the approval of members for filing the Casual Vaccancy as described in the notice of annual general meeting.

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

Internal Audit:

Your Company has appointed M/s. Keval Ponkiya & Associates, Chartered Accountants as internal auditors.

Cost Audit and Cost Records:

The Company has maintained adequate Cost records required to be maintained in terms of the Companies Act, 2013. Cost Audit provisions are not applicable to the Company.

Disclosure of Risk Management Policy:

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making.

SECRETARIAL AUDIT

The Company has obtained a Secretarial Audit Report M/s. Jalan Alkesh & Associates, Company Secretary in Practice to conduct the secretarial audit for the financial year 2020-21. Secretarial Audit is attached and marked as Annexure II.

In the opinion of the Board there is no qualification or adverse remarks.

Secretarial Compliance Report pursuant to Regulation 24A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed to the Board Report and marked as Annexure III

In the opinion of the Board there is no qualification or adverse remarks.

Board Meetings:

During the year under review, 10 (Ten) Board meetings were held. The dates of Board meetings and attendance details are as under:

Sr. No. Date of Board Meeting No. of Directors entitled to attend No. of Directors who have attended the meeting Name of the Director who Attended
1 27th June, 2020 4 4 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Vishal Nitin Mehta
2 29th June, 2020 5 5 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
3 24th August, 2020 5 5 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat
Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
4 10th October, 2020 5 5 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
5 15th October, 2020 5 5 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
6 24th October, 2020 5 5 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
7 5th November, 2020 5 5 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
8 8th February, 2021 5 5 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
9 12 th February, 5 5 1. Mr. Shalin Sudharkbhai Patel
2021 2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
10 5th March, 2021 6 6 1. Mr. Shalin Sudharkbhai Patel
2. Mr. Shalin Bharat Chokshi
3. Mrs. Chandrakala Ashok Bhatt
4. Mr. Parag Manubhai Shah
5. Mr. Vishal Nitin Mehta
6. Mrs. Neetu Rishi Jalan

In respect of the above board meetings adequate notice was given to all the Directors together with the agenda. The gap between two Board meetings does not exceed 120 days. Independent Directors meeting was held on 24th August, 2020.

Corporate Governance;

Since the Company securities were listed on emerge platform of NSE, by virtue of Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the compliance of corporate governance provisions as specified in regulation 17 to 27 and clauses (b) to (i) of sub - regulation (2) of Regulation 46 and para C, D and E of Schedule V were not applicable to the Company. However with effect from 22nd March, 2021 the securities of the Company are available for trading on Capital Market Segment (Main Board) and consequently with effect from 22nd March, 2021 the provision of Corporate Governance became applicable. The report on Corporate Governance is provided in Annexure IV.

Management Discussion and Analysis Report;

Management Discussion and Analysis Report as required under Regulation 34 and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached herewith and marked as Annexure V.

Certificate on Corporate Governance Report;

A Certificate by Practicing Company Secretary for Corporate Governance Report is enclosed herewith and marked as Annexure VI.

Code of Conduct;

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

A declaration given by the Managing Director is given below:

The Company has obtained from all the members of the Board and Senior Management Personnel of the Company, affirmation that they have complied with the Code of Ethics and Business Conduct framed for Directors and Senior Management Personnel in respect of the financial year 2020-2021."

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

Voluntary Revision of Financial Statements / Board Report:

There was no voluntary revision of financial statements or Board Report during the financial year.

Dematerialization of Shares:

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

Policies:

Various policies required under the provision of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are adopted and uploaded on the website of the Company namely www.arveelabs.com

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS:

During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India (ICSI).

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:

(Rs. In Lacs)

Particulars 2020 - 2021 2019 - 2020
Revenue from Operations 4737.50 4541.87
Other Income 58.48 34.60
Total Revenue 4795.98 4576.47
Depreciation 240.66 228.90
Financial Expenses 57.64 98.77
Profit before Tax 364.14 309.05
Tax Expense - 96.40 79.16
Profit After Tax 267.73 222.89
Add : Balance Brought forward from the previous year 580.48 350.58
Balance carried to the next year 848.22 580.48

Total Revenue has risen by 4.7%. Profit after tax has risen by approximately 21.78%. Though the revenue of the Company has increased by a small percentage but due to effective management and cost of materials declining the profits have grown.

b) Disclosure of Change in Nature of Business:

The Company is engaged in Chemicals. There is no change in nature of Company Business.

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

During the year under the review, Mr. Parag Manubhai Shah was appointed as an Additional Director with effect from 27th June, 2020. The appointment of Mr. Parag Manubhai Shah as a Director was approved by the shareholders in the annual general meeting of the Company held on 29th September, 2020.

Mrs. Neetu Jalan was appointed as an Additional Director by the Board of Directors with effect from 12th February, 2021.

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

Further pursuant to provision of Section 149 ( 10 ) of the Companies Act, 2013 none of the independent director(s) have completed term of five years and therefore no independent director(s) are eligible for reappointment of second term.

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

The Company has s no subsidiary companies / joint ventures / associate companies either at the beginning of the year or at the end of year. However during the year under review, the Company has incorporated 1 wholly owned subsidiary Company namely Arvee Sepeciality Chemicals Private Limited (later name changed to Arvee Speciality Chemicals Private Limited) and the entire investment in wholly owned subsidiary Company was sold off during the year.

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 prescribed under the provision of the Companies Act, 2013 and the rules framed there under, as amended from time to time. Hence there are no particulars to report about the deposit falling 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 the Act.

Not Applicable

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

There are no material changes and commitments, if any, affecting the financial position of 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, which impact the financial statements. The financial controls are tested for operating effectiveness through ongoing monitoring and review process of the management and independently by the Internal Auditors. In our view the Internal Financial Controls, affecting the financial statements are adequate and are operating effectively.

Extract of Annual Return:

Extract of Annual return pursuant to Section 92 of the Companies Act, 2013 for the year ended on 31st March, 2021 is available on the website of the Company i.e. www.arveelabs.com

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee are set up at shop floor level to redress complaints received regularly and are monitored by women line supervisors who directly report to the Chairman. All employees (permanent, contractual, temporary, trainees) are covered under the policy. There was no compliant received from any employee during the financial year 2020-21 and hence no complaint is outstanding as on 31.03.2021 for redressal.

Particulars of Employees:

The Particulars of Employees required to be given pursuant to Section 197 of the Companies Act 2013 is provided in Annexure VII.

Material Changes and Commitments & Changes, if any affecting the financial Position between financial year end of the Company and date of Report:

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

Non Disqualification of Directors:

A Certificate obtained from Practicing Company Secretary regarding non disqualification of Directors of the Company is annexed and marked as Annexure VIII.

Acknowledgement

Your Directors express their gratitude for the continued support, co-operation, and assistance received by the Company from various Central and State Government Department, Bankers and valued customers of the company.

FOR & ON BEHALF OF THE BOARD OF
Place: Ahmedabad ARVEE LABORATORIES (INDIA) LIMITED
Dated: 17th July, 2021 Sd/-
CHAIRMAN CUM MANAGING DIRECTOR
Shalin Sudharkarbhai Patel
(DIN: 01779902)