Ybur Directors are pleased to present the Twenty Fifth Annual Report on the businessand operations of your Company together with the audited financial statements and accountsfor the year ended 31st March 2017.
The following table gives the financial highlights of your Company on a standalone andconsolidated basis for the financial year 2016-17:
| || |
(Rs. in Lacs)
| || |
|Particulars ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Gross income ||7694.15 ||4545.42 ||8694.62 ||5585.71 |
|Profit before depreciation ||2322.87 ||998.22 ||2588.90 ||1387.95 |
|Depreciation ||75.78 ||91.87 ||83.59 ||100.62 |
|Profit before tax ||2247.08 ||906.34 ||2505.31 ||1287.32 |
|Provision for taxation ||756.05 ||305.70 ||836.79 ||431.45 |
|Net profit after taxation ||1491.03 ||600.63 ||1668.51 ||855.87 |
|Balance of profit and loss a/c (b/f) ||249.26 ||236.58 ||588.60 ||560.46 |
|Profit available for appropriation ||1740.29 ||837.22 ||2257.12 ||1416.22 |
|Appropriations: || || || || |
|Transfer to general reserve ||800.00 ||400.00 ||1040.00 ||630.00 |
|Transfer to statutory reserve ||Nil ||Nil ||11.25 ||9.65 |
|Dividend (inclusive of dividend tax) ||0.00 ||187.96 ||0.00 ||187.96 |
|Balance carried to balance sheet ||940.29 ||249.25 ||1205.87 ||588.60 |
Review Of Operations
During the year under review the Company has posted gross income of Rs.7694.15 lacs(previous year Rs.4545.42) on a standalone basis and a net profit after tax for the year2016-17 of Rs.1491.03 Lacs compared to Rs.600.63 Lacs in the previous year. On aconsolidated basis during the year under review the Company has posted gross income ofRs.8 694.62 Lacs (previous year Rs.5585.71). The consolidated net profit during the sameperiod stands at Rs. 1668.51 lacs compared to Rs.855.87 lacs in the previous year.
A detailed note on the Company's operational and financial performance is given inManagement Discussion and Analysis (MDA) Report which is annexed to the Directors' Report.The MDA report has been prepared in compliance with the terms of Regulation 34(2) (e) ofSEBI (LODR) 2015 with the BSE Ltd.
Transfer To General Reserves
The Company proposes to transfer Rs.800.00 lacs to the general reserves out of theamount available for appropriations and an amount of Rs.940.29 lacs are proposed to beretained in the Profit and Loss Account.
The paid up Equity Share Capital as at March 31st 2017 stood at Rs. 10.41Crore. During the previous year under review the Company has neither issued shares withdifferential voting rights nor has granted any stock options or sweat equity.
Ybur Directors recommended the dividend Rs.0.75 (15% per share) on the Equity Shares ofthe Company for the financial year 2016-17.The dividend payout is subject to approval ofMember at the ensuing 25th Annual General Meeting.
During the Financial Yfear 2016-17 under review the Company has neither invited noraccepted any public deposits within the meaning of section 73 & 74 of the CompaniesAct 2013 read with Companies (Acceptance or Deposit) Rules 2014.
As on 31st March 2017 Your Company had eight Wholly Owned Subsidiaries.During the year the Board of Directors reviewed the business operations and financialperformance of the 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 Finance Corporation Limited
8. Arihant Capital (IFSC) Limited.*
* This Company Incorporated on 20th December 2016
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 your Companyhas prepared Consolidated Financial Statements of your Company which is forming 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 this Report. The Statement also provides details ofperformance and financial position of each of the Companies. The Company will provide acopy of separate annual accounts in respect of each of its subsidiary to any shareholderof 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 PM. onall 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 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 Mrs. Anita Surendra Gandhi who is due to retireby rotation at the forthcoming Annual General Meeting and being eligible offers herselffor reappointment. The Board recommends her re-appointment for the consideration of theMembers of the Company at the ensuing Annual General Meeting.
Further Mr. Ashish Maheshwari is appointed an Additional Independent Director witheffect from 27th May 2017. By virtue of provision of Section 161 of theCompanies Act 2013 his term expires at the ensuing Annual General Meeting of the Company.The Members are requested to approve his appointment as recommended by the Board.
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.
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.
Number of Meetings of the Board
The details of the number of meetings of the Board held during the financial year2016-17 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/ Vigil Mechanism
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 Company's Code of Conduct or Ethics Policy. It also provides for adequatesafeguards against victimization of persons who use this mechanism and direct access tothe Chairman of the Audit Committee in exceptional cases.
During the year under review no protected disclosure concerning any reportable matterin accordance with the Vigil Mechanism and Whistle Blower Policy of the Company wasreceived by the Company.
The Whistle Blower Policy has been posted on the website of the Company www.arihantcapital.com.
Transfer of Amounts to Investor Education and Protection Fund
Pursuant to the Section 123 & 125 of the Companies Act 2013 the relevant amountswhich remained unpaid or unclaimed for a period of seven years from the date they becomedue for payment have been transferred by the Company to the Investor Education andProtection 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. The Company has beencontinuously using technology in its operations however efforts are made to furtherreduce energy consumption.
During the year The Company did not have any foreign exchange inflow and outflow.
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 2017.
Disclosure relating to remuneration and other details as required under Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as provided in the Annual Report.
Having regard to the provision of the first proviso to section 136 (1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to theMembers of the Company. The said information is available for inspection by the Members atthe Registered Office of the Company during business hours and any Member interested inobtaining such information may write to the Company Secretary and same will be furnishedon request.
Risk Management & Internal Financial Control and its Adequacy
Your Company has in place a mechanism to identify assess monitor and mitigatevarious risks to key business objectives. Major risks identified by the business andfunctions are systematically addressed through mitigating actions on a continuing basis.These are also discussed at the meeting of the Audit Committee and the Board of yourCompany.
Your Company's internal control systems are commensurate with the nature of itsbusiness and the size and complexity of its operations. These are routinely tested byStatutory as well as Internal Auditors. Significant audit observation and action takenthereon are reported to the Audit Committee.
The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual Directors pursuant the provision of the Act and theCorporate Governance requirement as prescribed by the Securities and Exchange Board ofIndia (Listing Obligation and Disclosure Requirement Regulation 2015 (SEBI ListingRegulation).
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of criteria such as Board composition and structureeffectiveness of Board processes information and functioning etc. as provided by theGuidance Note on Board Evaluation issued by the Securities and Exchange Board of India onJanuary 5th 2017
The performance of the committee was evaluated by the Board after seeking inputs fromthe committee Members on the basis of criteria such as the composition of the committeeeffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual Director on the basis of criteria such as the contribution of the individualDirectors to the Board and committee meeting like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meeting etc.
Director's Responsibility Statement
In pursuance of Section 134(3) (c) read with section 134(5) of the Companies Act 2013the Director's 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 31stMarch 2017 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 2017 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 2017 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
As per the provision of the Act the period of office of M/s Arora Banthia &Tulsiyan Chartered Accountants Statutory Auditors of the Company expires at the ensuingAnnual General Meeting of the Company. The Board has recommended the appointment of M/sDinesh Ajmera & Associates Chartered Accountants as the Statutory Auditor of theCompany in their place for a term of Five Consecutive Years from the conclusion of the25th Annual General Meeting of the Company scheduled to be held in the year2017 till the conclusion of the 30th Annual General Meeting to be held in 2022for approval of Shareholder of the Company based on the recommendation of the AuditCommittee.
The Notes on financial statement referred to in the Auditors report are selfexplanatory and do not call for any further comments. The Auditors Report does not containany qualifications reservations adverse remarks or disclaimers.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report covering the matters listed in Clause34(2) (e) of the SEBI (LODR) 2015 for the year under review is given as a separateAnnexure in the Annual Report.
Yaur Directors reaffirm 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.
Corporate Social Responsibility
The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in annexure of this report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. For other details regarding the CSR Committee pleaserefer to the Corporate Governance report which is a part of this report. The policy isavailable on the website of the Company.
Extract of Annual Return
As provide under Section 92(3) of the act the extract of the Annual return is given in"Annexure A" in the prescribed Form MGT-9 which is a part of this report.
The Board appointed M/s Ajit Jain & Co. Practicing Company Secretary to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewithRs.Annexure B". The Secretarial Audit Report does contain any qualificationsreservations adverse remarks or disclaimer.
Related Party Transactions
All related party transactions that were entered into during the financial year underreview were on arm's length basis and in the ordinary course of the business and that theprovisions of Section 188 of the Companies Act 2013 and the Rules made there under arenot attracted. Thus disclosures in Form AOC-2 in terms of Section 134 of the CompaniesAct 2013 is not required. There are no materially significant related party transactionsmade by the Company with the promoters key managerial personnel or other designatedpersons which may have potential conflict with interest of the Company at large. Allrelated party transactions are placed before the Audit Committee and the Board forapproval if applicable. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The Company has developed aframework 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 Company's shares and prohibitsthe purchase or sales of Company's shares by the Directors and designated employees by inpossession of unpublished price sensitive information in relation to the Company andduring the period when the trading window is closed. The compliance officer is responsiblefor implementation of the code. All Board of Directors and designated employees haveconfirmed 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 under review:
Neither the Managing Director nor Whole Time Director of the Company receivedany 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 any Company's 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: 27th May 2017 ||(Chairman) |