Your Directors are pleased to present the Directors' Report of your Company togetherwith the Audited Statement of Accounts and the Auditors' Report for the Financial Yearended 31st December 2014. The summarized financial results for the Financial Year are asunder:
| || |
(Rs. in Lakhs)
|PARTICULARS ||1st Oct 13 to 31st Dec 14 (15 months) ||1st Oc 12 to 30th Sep 13 (12 Months) |
|Income ||7341.98 ||6912.86 |
|Expenditure ||5921.17 ||5629.65 |
|Earnings before Interest Depreciation and Tax ||1420.81 ||1283.21 |
|Interest ||1262.77 ||815.92 |
|Depreciation ||75.92 ||60.05 |
|Profit before Tax and || || |
|Exceptional items || ||180.10 |
|Profit before Tax ||158.04 ||277.13 |
|Provision for tax ||29.19 ||60.00 |
|Profit after Tax ||128.85 ||167.13 |
|APPROPRIATIONS || || |
|Proposed Dividend || ||--- |
|Balance profit carried forward ||128.85 ||167.13 |
IMPLEMENTATION OF COMPANIES ACT 2013
As per General Circular No. 08/2014 of Ministry of Corporate Affairs dated 04.04.2014clarifies that the financial statements (and documents required to be attached thereto)auditor's report and Board's report in respect of financial years that commenced earlierthan 1st April 2014 shall be governed by the relevant provisions/ Schedules/ rules of theCompanies Act 1956. However as good corporate governance few important aspects arecovered below:
a) DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY:
The main objective of Risk Management is risk reduction and avoidance as also to helpthe Company identify the risks faced by the business and optimize the risk managementstrategies. The Company has a defined risk management framework. The company has laid downprocedures to inform Board members about the risk assessment and minimization proceduresand is responsible for framing implementing and monitoring the risk management plan forthe company.
The company has constituted a risk management committee whose constitution is asbelow. It assists the Board in functioning of framing implementing monitoring andreviewing the Risk Management Plan lays down procedures to inform the Board on the RiskAssessment and Minimization Procedures review the said procedures periodically and to seewhether the Executive Management controls the risks through properly defined frameworkand such other functions as it may deem fit.
Constitution of Risk Management Committee:
|S.No ||Name of the member ||Category |
|1 ||Mr. Ravikant Choudhry ||Chairman Non executive Independent |
|2 ||Mr. A. Damodaran ||Member Non executive Independent |
|3 ||Mr. Bharat Jain ||Member Executive Non Independent Director |
b) INTERNAL FINANCIAL CONTROL
Your Company has well defined and adequate internal controls and procedurescommensurate with its size and nature of its operations. This is further strengthened bythe Internal Audit done concurrently.
Your Company has appointed M/s. Ernst & Young LLP Major international accountingand consulting firm as the Internal Auditors of the Company. The Internal Auditorsdirectly and periodically report to the Audit Committee as required by the Clause 49 ofthe Listing Agreement.
Besides the Company has an Audit Committee comprising Non-Executive Directors tomonitor its financial management operations and systems.
The Audit committee at its meeting held on 14.11.2014 has evaluated the internalfinancial controls and risk management system accordingly.
c) EXTRACT OF THE ANNUAL RETURN:
The extract of Annual Return as provided under subsection (3) of section 92 of the Actis covered in the Corporate Governance Report of this Annual Report.
d) NUMBER OF BOARD MEETINGS HELD DURING THE YEAR ALONG WITH THE DATES OF THE MEETINGS
The details of number of Board Meetings held during the year along with the dates ofthe meetings are covered in the Corporate Governance Report of this Annual Report.
e) AUDIT COMMITTEE
The Audit Committee composition under provisions of section 177 of the Act and Clause49(III) of the Listing agreement are covered in the Corporate Governance Report of thisAnnual Report.
f) CORPORATE SOCIAL RESPONSIBILITY (CSR):
Corporate Social Responsibility provisions are not applicable to your Company as yourCompany did not qualify the rules provided in Section 135 of the Companies Act 2013.
The Company's total Income is Rs.73.42 crores during the financial year 2013-14 asagainst Rs.69.13 crores in the previous year 2012-13 and the Earnings before InterestDepreciation and Tax (EBIDT) is Rs. 14.21 crores during the financial year 2013-14 asagainst Rs. 12.83 crores in the previous year 2012-13. The Profit after tax (PAT) for thefinancial year is Rs. 1.29 crores compared to previous year profit of Rs.1.67 crores. Onconsolidated basis the total income of your Company and its subsidiaries and Jointventure stands at Rs.101.02 crores and consolidated loss after tax stood at Rs. 16.31crores as compared to the previous year consolidated loss after at Rs. 18.56. The earningsper Share (EPS) basic and diluted stands at Rs. 1.50 considering the total equity capitalof Rs.8.60 crores (8600000 equity shares of Rs.10/- each) as on 31st December 2014.
This decrease in profit is primarily due to onetime settlement scheme entered into bythe Company with the HUDCO and made a full and final settlement for the long pending claimfiled against the Company by HUDCO before the Debt Recovery Tribunal (DRT) whereby theDRT vide its order dated 26/08/2011 ordered for payment of interest of 9% p.a. on Rs.154854845/- with interest pendent lite and future thereon from 1.7.2004. Your Companyhas successfully settled a claim pending against it since 2004. This has significantlybrought down the profits of the Company for the year under review. The other reasons fordecrease include economic slowdown depressed markets increase in interest costs and costof raw materials. A more detailed discussion and analysis on the performance of theCompany in retrospect as well as the outlook is detailed in the Management Discussion andAnalysis Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as required under clause 49 of theListing Agreement with the Stock Exchanges is presented in a separate section forming partof the Annual Report.
During the year under review the Company has executed and handed over 2 residentialprojects covering an area of 4.19 Lakh square feet. The Company's Project managers areguided by policy and principle in the successful implementation and completion of variousprojects.
|Project name ||Location ||Area (Sqft) |
|Escapade Real Estate Pvt. Ltd. Villa Viviana- Phase II Township Project In association with J P Morgan India Property Fund ||GST Road Chennai ||1300000 |
|North Town Estates Pvt. Ltd. Township Project In association with PVP Ventures Ltd and Unitech Ltd. ||Perambur Chennai ||3024000 |
|Arihant Unitech Reality Projects Ltd Green Wood (Plotted development) ||Thazambur Chennai ||1684800 |
|Arihant - Esta (Residential Complex) ||Mugappair Chennai ||194145 |
|Arihant Tiara (Residential Complex) ||Nandambakkam Chennai ||148020 |
|TOTAL || ||6350965 |
Your directors do not declare any Dividend for the financial year ended 31st December2014 due to inadequate profit and to Conserve reserves.
During the year under review the Company did not raise funds by way of fixed depositsfrom the public.
SUBSIDIARY COMPANIES AND ITS ACCOUNTS
There are four subsidiaries of your Company as on 31st December 2014. The financialdetails of the Subsidiary Companies as well as the extent of holdings therein are providedin a separate section of the Annual Report pursuant to Section 212 of the Companies Act1956. Ministry of Corporate Affairs vide its general circular no.2/2011 dated 8thFebruary 2011 has issued a direction under Section 212(8) of the Companies Act 1956granting general exemption with respect to the provision of section 212 of the CompaniesAct 1956. With the consent of the Board and following the aforesaid direction the annualaccounts and other details of Subsidiary Companies are not attached. However the annualaccounts of subsidiary companies and the related detailed information shall be madeavailable to shareholders of holding and subsidiary companies seeking such information atany point of time. The annual accounts of the subsidiary companies shall also be kept forinspection by any shareholders in the corporate office and registered office of theholding company and of the subsidiary companies concerned and a note to the above effectwill be included in the details of accounts of subsidiaries to any shareholder on demand.No Company ceases to be Subsidiary and no Company has been made Subsidiary during the yearunder review.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on consolidated financial statementsread with Accounting Standard AS-23 on investment in associates AS-27 on financialreporting of interest in Joint Venture Auditors Report on the consolidated financialstatements audited consolidated Balance Sheet Profit and Loss account and Cash flowstatements are provided in the Annual Report.
REPORT ON CORPORATE GOVERNANCE
Your Company ensures good corporate governance by implementing and complying with thepolicies standards set out by Securities and Exchange Board of India and other regulatoryauthorities. The requisite certificate issued by Mrs. V. Padmapriya Practicing CompanySecretary confirming compliance with the conditions of Corporate Governance as stipulatedunder clause 49 of the Listing Agreement is attached to this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN -EXCHANGE EARNINGS AND OUTGO.
The necessary details are furnished in Notes to Financial statements no. 33.
PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)
During the period under review no employee was in receipt of remuneration in excess ofthe limits laid down in Subsection (2A) of Section 217 of the Companies Act 1956.
In compliance with the provisions of section 149 152 and other applicable provisionsif any of the Act and listing agreement Mr. Ravikanth Choudhry (DIN: 00831721) Mr.Damodaran Arumugam (DIN: 00083139) Mr. Karan Bhasin (DIN: 02168581) & Mrs. AnnGonsalvez (DIN: 07136630) are proposed to be appointed as Independent Directors (Non -Executive) of the Company for a term of five consecutive years from the conclusion of thisAnnual General Meeting and shall not be liable to retirement by rotation. The briefresume of directors who are to be appointed as stipulated under clause 49(II)(B) of theListing Agreement are furnished in the Corporate Governance Report forming part of thisAnnual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217 (2AA) of the Companies Act 1956 theBoard of Directors of the Company hereby state and confirm that:
(i) That in the preparation of the Annual Accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of the affairs of the Company at the end of theFinancial Year and of the profit of the Company for that period;
(iii) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) That the Directors had prepared the Annual Accounts on a going-concern basis;
(v) That the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;
(vi) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
The company has appointed M/s B.P Jain & Co. Chartered Accountants (FirmRegistration no.050105S) in the 22nd Annual General Meeting proposed to be held on 30thJune 2015 until the conclusion of the next Annual General Meeting of the Company on suchremuneration as may be fixed by the Board of Directors subject to ratification of membersevery year.
Your Company always endeavors to keep the time of response to shareholders' requests/grievances at the minimum. Priority is accorded to address all the issues raised by theshareholders and provide them a suitable reply at the earliest possible time. TheShareholders' and Investors' Grievance Committee of the Board met to review the redressalof investors grievances. The shares of your Company are continued to be traded inElectronic Form and the ematerialized on arrangement exists with both the depositoriesviz. National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL). As on 31st December 2014 6901720 (Sixty Nine lakhs Onethousand Seven hundred and Twenty only) shares have been ematerialized representing80.25% of the subscribed capital.
The shares of your Company are listed in Madras Stock Exchange Limited Bombay StockExchange Limited and National Stock Exchange of India Limited. The Company has paid thelisting fees for the Financial Year 2013-2014 to the Stock Exchanges where its securitiesare listed. The listed capital of the Company with BSE and NSE is 8600000 fully paid-upequity shares of Rs.10/- each. The Company had made a request to Madras Stock Exchange Ltdfor delisting its entire securities (7000000 equity shares of Rs.10/- each) voluntarilyafter obtaining the approval of shareholders at the 15th Annual General Meeting of theCompany held on 28.03.2008. The Exchange informed that it is in the process of voluntarywinding up vide circular issued by SEBI dated 22.05.2014.
TRANSFER OF UNPAID DIVIDEND TO IEPF (INVESTOR EDUCATION AND PROTECTION FUND)
Details of unclaimed Dividend:
|Financial Year ||Date of Declaration of Dividend ||Unpaid Dividend amount. As on 30.09.2013 (Rs.) ||Due date for transfer to IEPF. |
|2007-08 ||20-03-2009 ||64470.00 ||18-04-2016 |
|2008-09 ||26-03-2010 ||144244.00 ||24-04-2017 |
|2010-11 ||30-03-2012 ||65606.00 ||28-04-2019 |
The Shareholders are requested to claim their unclaimed dividends before theaforementioned due dates. The unpaid dividend once transferred to IEPF cannot be claimedby the Shareholders.
THE COMPANIES (COST ACCOUNTING RECORD) RULES 2011
As per the Companies (Cost Records and Audit) Amendment Rules 2014 dated 31stDecember 2014 cost audit is not applicable to your Company.
The Board wishes to place on record its appreciation of all employees of the Companyfor their wholehearted efforts and contribution to the performance and growth of theCompany.
Your Directors place on record their gratitude for the support and co- operationreceived from CMDA Corporation of Chennai ELCOT Banks and Financial InstitutionsCustomers Suppliers and Shareholders and for their continued support. The Board also wishto place its sincere appreciation to the dedicated and committed team of employees.
For and on behalf of the Board of Directors
ARIHANT FOUNDATIONS & HOUSING LIMITED
|S/d. ||S/d. |
|(KAMAL LUNAWATH) ||(VIMAL LUNAWATH) |
|Managing Director ||Cheif Financial Officer |
|DIN: 00087324 ||DIN: 00586269 |
|Place: Chennai || |
|Date: 27.02.2015 || |