Your Directors are pleased to present the Twenty Fourth Annual Report on the businessand operations of your Company together with the audited financial statements and accountsfor the year ended 31st March 2016.
The following table gives the financial highlights of your company on a standalone andconsolidated basis for the financial year 2015-16:
| || || |
(Rs. in Lacs)
|Particulars ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Gross income ||4545.42 ||4938.19 ||5585.71 ||6212.65 |
|Profit before depreciation ||998.22 ||1120.63 ||1387.95 ||1758.70 |
|Depreciation ||91.87 ||107.20 ||100.62 ||124.01 |
|Profit before tax ||906.34 ||1013.43 ||1287.32 ||1597.68 |
|Provision for taxation ||305.70 ||306.53 ||431.45 ||489.48 |
|Net profit after taxation ||600.63 ||706.90 ||855.87 ||1108.20 |
|Balance of profit and loss a/c (b/f) ||236.58 ||117.07 ||560.46 ||380.76 |
|Profit available for appropriation ||837.22 ||823.98 ||1416.22 ||1489.11 |
|Appropriations: || || || || |
|Transfer to general reserve ||400.00 ||400.00 ||630.00 ||725.00 |
|Transfer to statutory reserve ||Nil ||Nil ||9.65 ||16.26 |
|Dividend (inclusive of dividend tax) ||187.96 ||187.39 ||187.96 ||187.39 |
|Balance carried to balance sheet ||249.25 ||236.58 ||588.60 ||560.46 |
Review Of Operations
During the year under review the company has posted gross income of Rs.4545.42 lacs(previous year Rs. 4938.19) on a standalone basis and a net profit after tax for theyear 2015-16 of Rs.600.63 Lacs compared to Rs.706.90 Lacs in the previous year. On aconsolidated basis during the year under review the company has posted gross income ofRs.5585.71 Lacs (previous year Rs. 6212.65). The consolidated net profit during the sameperiod stands at Rs.855.87 lacs compared to Rs.1108.20 lacs in the previous year. Adetailed note on the Companys operational and financial performance is given inManagement Discussion and Analysis (MDA) Report which is annexed to the DirectorsReport. The MDA report has been prepared in compliance with the terms of Regulation 34(2)(e) of SEBI (LODR) 2015 with the BSE Ltd.
Transfer To General Reserves
The Company proposes to transfer Rs.400.00 lacs to the general reserves out of theamount available for appropriations and an amount of Rs.249.25 lacs are proposed to beretained in the Profit and Loss Account.
The paid up Equity Share Capital as at March 31 2016 stood at Rs.10.41 Crore. Duringthe previous year under review the Company has not issued shares with differential votingrights nor has granted any stock options or sweat equity.
Your Directors in their meeting held on March 10 2016 had declared the interimdividend Rs.0.75 (15% per share) on the Equity Shares of the Company for the financialyear 2015-16.
In view of the overall performance of the company and to support future growth yourBoard of Directors do not recommend final dividend.
The Company did not accept any public deposits during the year under review.
As on 31st March 2016 Your Company had seven (7) subsidiaries. During theyear the Board of Directors reviewed the business operations and financial performance ofthe said Companies.
1. Arihant Futures and Commodities Limited
2. Arihant Financial Services Limited
3. Arihant Lifespace Infra Developers Limited (formerly Arihant Finsec Limited)
4. Arihant Insurance Broking Services Limited
5. Arihant Financial Planners and Advisors Pvt. Ltd.
6. Ahinsa Lifespace Infraheight Ltd.
7. Arihant Housing Financial Corporation Limited
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 your Companyhas prepared Consolidated Financial Statements of the Company which do not forms part ofthis Annual Report. Further a Statement containing salient features of financialinformation of the Subsidiary Companies is disclosed in the prescribed format AOC-1pursuant to Section 129(3) of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 is annexed with standalone balance sheet to this Report. The Statement alsoprovides details of performance and financial position of each of the Companies. TheCompany will provide a copy of separate annual accounts in respect of each of itssubsidiary to any shareholder of the Company who asks for it.
In accordance with the provisions of Section 136 of the Companies Act 2013 theAudited Financial Statements the Consolidated Financial Statements and the relatedinformation of the Company and the Audited Accounts of the Subsidiaries Companies areavailable on our website i.e. www.arihantcapital.com. These documents shall also beavailable for inspection during the business hours i.e. between 10.00 a.m. to 6.00 p.m.on all working days (except Saturday and Sunday) at the Registered Office of the Company.
Consolidated Financial Statements
In accordance with the accounting standard AS-21 the consolidated financial statementsare furnished herewith and form part of this Annual Report. These statements have beenprepared on the basis of audited financial statements received from the subsidiarycompanies as approved by their Board of Directors.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mr. Sunil Kumar Jain who is due to retire byrotation at the forthcoming Annual General Meeting and being eligible offers himself forre-appointment. The Board recommends his re-appointment for the consideration of themembers of the company at the ensuing Annual General Meeting.
During the year under review Board appointed Mr. Pavan Kumar Ved as an AdditionalDirector of the company with effect from 12th February 2016.
Mr. Pankaj Kumar Gupta & Mr. Rakesh Jain resigned from the post of Directorship.The Board placed on record its deep appreciation for their valuable contributions asmember of the Board and also for the significant contribution they have made to themanagement of affairs of the company and for the valuable advises they have made to theBoard from time to time during his tenure as Directors of the Company.
Key Managerial Personnel
The following are the Key Managerial Personnel of the Company:
|S. No. ||Name ||Designation |
|1 ||Mr. Ashok Kumar Jain ||Chairman & Managing Director |
|2 ||Mrs. Anita Surendra Gandhi ||Whole Time Director |
|3 ||Mr. Tarun Goyal ||Chief Financial Officer |
|4 ||Mr. Mahesh Pancholi ||Company Secretary |
All Independent Directors have given declarations that they meet criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
As per requirement of Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 separate meeting of theindependent directors ("Annual Independent Directors Meeting") was convenedwhich reviewed the performance of the Board (as a whole) the non-independent directorsand the Chairman.
Number of Meetings of The Board
The details of the number of meetings of the Board held during the financial year2015-16 forms part of the Corporate Governance Report.
Committees of The Board:
The Board of Directors has the Following Committees:
1. Audit Committee
2. Remuneration and Nomination Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.
Particulars Of Loans Guarantees Or Investments By Company
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
Whistle Blower Policy
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act 2013read with Rule 7 of Companies (Meetings of Board and its Powers) Rules 2014 and SEBI(LODR) Regulations 2015 the Company has in place a Whistle Blower Policy which providesfor a vigil mechanism that encourages and supports its Directors and employees to reportinstances of illegal activities unethical behavior actual or suspected fraud orviolation of the Companys Code of Conduct or Ethics Policy. It also provides foradequate safeguards against victimization of persons who use this mechanism and directaccess to the Chairman of the Audit Committee in exceptional cases. The Whistle BlowerPolicy has been posted on the website of the company www.arihantcapital.com.
Remuneration And Nomination Policy
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of directors key managerial personnel and senior management of the company.This policy also lays down criteria for selection and appointment of Board members. Thedetails of this policy are explained in the Corporate Governance Report.
Transfer Of Amounts To Investor Education And Protection Fund
Pursuant to the provisions of Section 125(1) of the Companies Act 2013 relevantamounts which remained unpaid or unclaimed for a period of seven years have beentransferred by the Company to the Investor Education and Protection Fund.
Conservation Of Energy Technology Absorption And Foreign Exchange Earnings/ Outgo
In view of the nature of activities which are being carried on by the Company Rules8(3) A and B of the Companies (Accounts) Rules 2014 concerning conservation of energy andtechnology absorption respectively are not applicable to the Company. However as per Rule8(3) C details regarding foreign exchange inflow and outflow shall be referred asmentioned in Note No. 26 of Notes forming part of Balance Sheet.
Information As Per Rule 5(2) Of The Chapter Xiii The Companies (Appointment AndRemuneration Of Managerial Personnel) Rules 2014
The information required Pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and forming part of the Directors Report for the year ended 31stMarch 2016 is given in the separate "Annexure-C" of this Report.
The above annexure is not being sent along with this Report to the members of theCompany in line with the provisions of Section 136 of the Companies Act 2013. Members whoare interested in obtaining these particulars may write to the Company Secretary at theRegistered Office of the Company or through mail addressed firstname.lastname@example.org. The aforesaid Annexure is also available forinspection by the Members at the Registered Office of the Company 21 days before the 24thAnnual General Meeting and upto the date of the ensuing Annual General Meeting duringbusiness hours on working days.
Internal Audit & Internal Financial Control And Its Adequacy
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/ revised standard operating procedures. TheCompanys internal control system is commensurate with its size scale andcomplexities of it operations. The internal and operational audit is entrusted to M/s.Jain Doshi & Co. a reputed firm. The main thrust of internal audit is to test andreview controls appraisal of risks and business processes besides benchmarking controlswith best practices in the industry. The audit function maintains its independence andobjectivity while carrying out assignments. It evaluates on a continuous basis theadequacy and effectiveness of internal control mechanism. The function also proactivelyrecommends improvement in policies and processes suggests streamlining of controlsagainst various risks.
Based on the assessment carried out by the management and the evolution of the resultsof the assessment The Board of Directors are of the opinion that the Company has adequateInternal Financial Controls System that is operating effectively as at March 31 2016.There were no instances of fraud which necessitates reporting of material misstatement tothe Companys operations.
There have been no communications from regulatory agencies concerning non-compliancewith or defficiencies in financial reporting practices.
The provisions of the Companies Act 2013 mandates formal annual evaluation of theBoard of Directors its committees and individual Directors. The provisions of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 also require that the Board shall monitor and review the Board Evaluation Framework.The annual performance evaluation of the Board as a whole all Directors as well as theevaluation of the Board Committees including Audit Committee Nomination &Remuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility Committee of the Board of Directors of the Company was carried out. Thedetails of evaluation process as carried out and the evaluation criteria and frameworkhave been explained in the Corporate Governance Report forming part of this AnnualReport.
Directors Responsibility Statement
In pursuance of Section 134(3) (c) read with section 134(5) of the Companies Act 2013the Directors statement as an averment of their responsibility is as under:
(i) The Company has in the preparation of the annual accounts for the year ended March31 2016 followed the applicable accounting standards along with proper explanationsrelating to material departures if any.
(ii) 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 as at 31st March 2016 and of the profit orloss of the Company for the year ended on that date.
(iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) The Directors have prepared the annual accounts for the financial year ended 31stMarch 2016 on a going concern basis.
(v) The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively; and
(vi) That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and those systems are adequate and operatingeffectively.
Auditors And Auditors Report
M/s Arora Banthia & Tulsiyan Chartered Accountants auditors of the company isbearing firm registration no. 007028C who are statutory auditor of the company hold officeup to the forthcoming Annual General Meeting and are recommended for re-appointment forthe Financial Year 2016-2017. As required under the provisions of section 139 of theCompanies Act 2013 the Company has obtained written confirmation from the M/s AroraBanthia & Tulsiyan that their appointment if made would be in conformity with thelimits specified in the said Section.
The notes to the accounts referred to in the Auditors Report are self-explanatoryand therefore do not call for any further comments.
Management Discussion And Analysis Report
The Management Discussion and Analysis Report covering the matters listed in Regulation34(2) (e) of the SEBI (LODR) 2015 for the year under review is given as a separatestatement in the Annual Report.
Your directors reafirm that the Company has complied with the corporate governancenorms as stipulated under the provisions of the listing agreement entered into with theBSE and prescribed by the Securities and Exchange Board of India (SEBI).
A Certificate from Practicing Company Secretary confirming compliance to the corporategovernance requirements by the Company is attached to this report. A detailed report oncorporate governance as stipulated in Schedule V (c) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is included in the Annual Report.
Policy On Disclosure Of Material Events And Information
During the year under review your Company has adopted the Policy on Disclosure ofMaterial Events and Information in accordance with Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 to determine theevents and information which are material in nature and are better required to bedisclosed to the Stock Exchange. The said policy is available on the website of theCompany www.arihantcapital.com.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations with effect fromDecember 1 2015. Accordingly all listed entities were required to enter in to theListing Agreement within six months from the effective date. The company entered intoListing Agreement with the BSE Limited during February 2016. Your Company has paid thelisting fees as payable to the BSE Limited for the financial year 2016-17 on time.
Corporate Social Responsibility
Aligning with the guidelines of the Section 135 of the Companies Act 2013 and theRules framed there under we had constituted a Committee which is responsible forformulating and monitoring the CSR Policy of the Company. For the Financial Year 2015-16the company has contributed to a Registered Trust amount of Rs 200000/-(Rupees Two Lacsonly) towards its CSR Activities. This charitable trust is doing welfare activities andprogrammes for promoting education of poor children. Further remaining amount will beinvested by the Company in upcoming Financial Year 2016-2017 in specified CSR Activitiescovered under Section 135 and Schedule VII of the Companies Act 2013.
Extract Of Annual Return
The details forming part of the extract of the Annual return in form MGT-9 is annexedherewith as "Annexure A"
Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and remuneration of managerial personnel) Rules 2014 the company hasappointed M/s Ajit Jain & Co. practicing company secretary to undertake thesecretarial audit of the company. The Secretarial Audit Report is annexed herewith"Annexure B".
Related Party Transactions
All related party transactions that were entered into during the financial year underreview were on arms length basis and in the ordinary course of the business and thatthe provisions of Section 188 of the Companies Act 2013 and the Rules made there underare not attracted. Thus disclosures in Form AOC-2 in terms of Section 134 of theCompanies Act 2013 is not required. There are no materially significant related partytransactions made by the company with the promoters key managerial personnel or otherdesignated persons which may have potential conflict with interest of the company atlarge. All related party transactions are placed before the Audit Committee and the Boardfor approval if applicable. Prior omnibus approval of the Audit Committee is obtained forthe transactions which are of a foreseen and repetitive nature. The Company has developeda framework through Standard Operating Procedures for the purpose of identification andmonitoring of such Related Party Transactions and suitable disclosures as required byAS-18 has been made in notes of Financial Statement.
Prevention Of Insider Trading
The company has adopted a code of conduct for prevention of insider trading with a viewto regulate trading in securities by the Directors and designated employees of thecompany. The code requires pre-clearance for dealing in the companys shares andprohibits the purchase or sales of companys shares by the Directors and designatedemployees by in possession of unpublished price sensitive information in relation to thecompany and during the period when the trading window is closed. The compliance officer isresponsible for implementation of the code. All Board of Directors and designatedemployees have confirmed compliances with the code.
Your directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year underreview: Neither the Managing Director nor Whole Time Director of the companyreceived any remuneration or commission from any of its subsidiaries.
?No significant or material orders were passed by the regulators or courts ortribunals which impact the going concern status of the companys operation in future.
DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Director further state that as required by the sexual harassment of women atworkplace (Prevention Prohibition & Redressal) Act 2013 the Company has formulatedand implemented a policy on prevention of sexual harassment at workplace with a mechanismof lodging complaints. During the year under review no complaints were reported to theBoard.
Your directors take this opportunity to thank the customers shareholders financialinstitutions stock exchanges SEBI Reserve Bank of India National Securities DepositoryLimited Central Depository Services Limited and other government and regulatory agenciesfor their consistent support and encouragement to the Company.
We also place on record our sincere appreciation to all the members of Arihant familyincluding our employees and authorized persons for their hard work support andcommitment. Their dedication and competence has made these results achievable.
| ||For and on behalf of the Board of Directors |
|Place: Indore ||Ashok Kumar Jain |
|Dated: 24thMay 2016 ||(Chairman) |