Arihants Securities Ltd.
|BSE: 531017||Sector: Financials|
|NSE: N.A.||ISIN Code: INE190D01015|
|BSE LIVE 14:49 | 30 May||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 531017||Sector: Financials|
|NSE: N.A.||ISIN Code: INE190D01015|
|BSE LIVE 14:49 | 30 May||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Your Directors have great pleasure in presenting the TWENTY SECOND Annual Reporttogether with the Audited Accounts of your Company for the Financial Year ended31.03.2016.
The financial results of the company compared to the previous year are summarized asunder:
MATERIAL CHANGES AND COMMITMENTS:
There have been no material changes & Commitments which have occurred between theend of the financial year of the company to which the balance sheet relates and the dateof the report affecting the financial position of the company.
The company does not propose to carry any amount to reserves during the financial year.
In order to conserve the financial resources of the company for growth and expansionplans the Board of Directors do not recommend any dividend for the financial year underreview.
PARTICULARS OF SUBSIDIARY COMPANY ASSOCIATE COMPANY AND JOINT VENTURE COMPANY
The Company is neither a holding company nor it is a subsidiary of any other company asat March 31 2016.The Company has no associate company or joint venture company as onMarch 31 2016.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Ravikant Choudhry Director of the company retires by rotation at the ensuingAnnual General Meeting of the Company and being eligible offers himself for reappointment.
Current Board Composition:
Your Board recommends the above appointment/reappointment of Directors in the bestinterest of the Company.
The company is making consistent efforts for appointment of whole time CompanySecretary and CFO. The company has been availing services of practicing company secretaryfrom time to time to ensure compliance of the provisions of the applicable acts andstatutes. Also the Annual Return of the Company is being certified by practicing companysecretary from year to year and the company is also taking certifications from them forStock Exchange Compliances.
1. Board of Directors :
Composition and Category
As on 31 March 2016 the Board of the Company consists of Five (5) directors. TheBoard has an optimum combination of Executive and Non-Executive Directors. The compositionof the Board is in conformity with SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015 with reference to number of Executive and Non-Executive Directors.
The Executive Director is involved in the day to day management of the Company andNon-Executive Directors including the Independent Director bring external and widerperspective and independence to the decision making.
Mr. Nishikanth Mohanlal Choudhary Managing Director of the Company works under thedirection control and supervision of the Board of Directors. The Board of Directors meetregularly to discuss appraise and approve matters relating to company's strategy plansbudgets financials and operations.
The details of the composition nature of Directorship and the directorships held incompanies by the Directors of the Company as on 31 March 2016 are detailed below:
Board Agenda :
Meetings are governed by a structured Agenda and a Board member may bring up any matterfor consideration of the meeting in consultation with the Chairman. The detailed agendaand relevant information is sent to every director at least 7 working days in advance foreach meeting facilitating effective discussion and decision making. An indicative list ofthe information usually placed before the Board is as under:
Annual Budgets and updates thereon.
Capital expenditure proposals if any and review of their implementation Quarterly Halfyearly and Annual Results.
Business performance and steps for improvement. Legal proceedings involving theCompany.
Minutes of meetings of Audit Committee Remuneration Committee and ShareholdersCommittee. Materially important show cause notices non-compliances if any etc.
During the financial year ended 31 March 2016 Five (5) Board Meetings were held. Thedates on which the Board Meetings were held are 30.05.2015 10.07.2015 10.08.201514.11.2015 13.02.2016.
Details of attendance at the Board meetings and the last Annual General Meeting:
*Mrs. Mohana was appointed with effect from 10.07.2015.
In compliance to the provisions of Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has various Committees of theBoard. Details of scope constitution terms of reference number of meetings held duringthe year under review along with attendance of Committee Members therein are as mentionedbelow.
(A) AUDIT COMMITTEE:
The Audit Committee of the Board comprises three directors namely Mr. Ajit KumarChordia the Chairman Mr. Ravikanth Chudhry and Ms. Mohana members. The composition ofAudit Committee meets the requirement of Section 177 of the Companies Act 2013
Members of the Audit Committee have requisite financial and management expertise.
(ii) Terms of reference
Recommendation for appointment remuneration and term of appointment of theauditors of the Company.
Discussion and review of periodic audit reports and discussion with externalAuditors about the scope of audit including the observations of Auditors.
Review and monitor the auditor's independence and performance
Overseeing Financial Reporting Process
Reviewing periodic financial results financial statements and auditors' reportthereon.
Evaluation of internal financial controls and risk management systems.
Valuation of undertakings or assets of the Company.
The committee met 4 times during the period on the following dates: 30.05.201510.08.2015 14.11.2015 and 13.02.2016.
(B) SHAREHOLDERS RELATIONSHIP COMMITTEE
Shareholders RelationshipCommittee in line with Section 178 (5) of the Companies Act2013 is headed by Mr. Narendra B BhattIndependent Director Mr. RavikanthChoudhryNon-executive Director and Mohana as members.
The Committee monitors redressal of complaints received from shareholders/investorswith respect totransfer of shares non-receipt of dividend non-receipt of Annual Reportetc. The Committee also takenote on number of transfers processed issue of fresh sharecertificates dematerialization of sharecertificates report about top shareholders shareholding pattern etc.
There was only one Compliant received for this financial year and it is resolved Noinstrument of transfers was pending on 31st March 2016.
During the year the Committee was met 2 times 30.05.2015 and 13.02.2016 and allmembers attended the meeting.
(C) NOMINATION AND REMUNERATION COMMITTEE
The Company has a Remuneration Committee consists of Chairman Mr. Narendra BBhattIndependent Director Mr. Ajit Kumar Chordia Independent Director and Mr.RavikanthChudhry Director as members.
The Nomination and Remuneration Committee met once during the year on 28 May 2015 andall the members have attended the meeting.
The company has a Managing Director and there was no payment to him as he has foregonehis remuneration for the year in view of low profits made by the company. No remunerationhas been paid to any directors of the company.
REMUNERATION POLICY OF THE COMPANY:
At all levels and all times monetary compensation has been if not the sole but the mostimportant motivational aspect for getting the job fulfilled under any given businessscenario.
It is the endeavor of Arihant's Securities Limited ("Company") that itsNomination & Remuneration Policy should represent the mode in which the Companycarries out its business practices i.e. Fair transparent inclusive and flexible.
The Company strives that its Remuneration Policy should attract motivate improveproductivity and retain manpower by creating a congenial work environment encouraginginitiatives personal growth and team work and inculcating a sense of belonging andinvolvement besides offering appropriate remuneration packages and superannuationbenefits.
This Nomination and Remuneration Policy applies to Directors Key Managerial Personnel(KMP) Senior Management and other employees of the Company.
In pursuance of the Company's policy to consider human resources as its invaluableassets to pay equitable remuneration to all Directors Key Managerial Personnel andEmployees of the company to harmonize the aspirations of human resources consistent withthe goals of the company and in terms of the provisions of the Companies Act 2013 thispolicy on nomination and remuneration of Directors Key Managerial Personnel (KMP) andSenior Management has been formulated by the Nomination and Remuneration/CompensationCommittee ("NRC") and approved by the Board of Directors of the Company
CONSTITUTION OF COMMITTEE:
The Board of Directors of the Company (the Board) shall constitute the committee to beknown as the Nomination and Remuneration/Compensation Committee consisting of three ormore non-executive directors out of which not less than one-half are independentdirectors. The Chairman of the Committee is an Independent Director. However thechairperson of the company (whether executive or nonexecutive) may be appointed as amember of the Nomination and Remuneration Committee but shall not chair suchCommittee."
The Nomination and Remuneration/Compensation Committee and this Policy shall be incompliance with Section 178 of the Companies Act 2013 read along with the applicablerules thereto. The objective of this policy is to lay down a framework in relation toremuneration of Directors KMP Senior Management Personnel and other Employees. The KeyObjectives of the Committee would be:
1.1. To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.
1.2. Formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of Directors key managerial personnel and other employees.
1.3. Formulation of criteria for evaluation of Independent Director and theBoard.
1.4. To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
1.5. To recommend to the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.
1.6. To provide to Key Managerial Personnel and Senior Management reward linkeddirectly to their effort performance dedication and achievement relating to theCompany's operations.
1.7. To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
1.8. To develop a succession plan for the Board and to regularly review the plan. 1.9.To assist the Board in fulfilling responsibilities.
1.10 To Implement and monitor policies and processes regarding principles of corporategovernance
a) Directors (Executive and Non -Executive)
b) Key Managerial Personnel
c) Senior Management Personnel;
d) Other Employees
"Act" means the Companies Act 2013 and Rules framed there under asamended from time to time.
"Board" means Board of Directors of the Company.
"Directors" mean Directors of the Company
"Key Managerial Personnel" means
i. Managing Director or Chief Executive Officer or Manager and in their absence aWhole time Director;
ii. Chief Financial Officer;
iii. Company Secretary ; and
iv. such other officer as may be prescribed.
'Other employees' means all employees other than the Directors KMPs and the SeniorManagement Personnel.
'Policy or This Policy' means "Nomination and Remuneration Policy."
"Senior Management" means Senior Management means the personnel of thecompany who are members of its core management team excluding Board of Directorscomprising all members of management one level below the executive directors includingthe functional heads.
1. Appointment Criteria And Qualifications:
a) The Committee shall identify and ascertain the integrity qualificationexpertise and experience of the person for appointment as Director KMP or at SeniorManagement level and recommend to the Board his / her appointment.
b) A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.
c) The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years. Provided that the term of theperson holding this position may be extended beyond the age of seventy years with theapproval of shareholders by passing a special resolution based on the explanatorystatement annexed to the notice for such motion indicating the justification for extensionof appointment beyond seventy years
2. Term /Tenure:
a) Managing Director/Whole-timeDirector:
The Company shall appoint or re-appoint any person as its Executive Chairman ManagingDirector or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.
b) Independent Director:
An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.
No Independent Director shall hold office for more than two consecutive terms of uptomaximum of 5 years each but such Independent Director shall be eligible for appointmentafter expiry of three years of ceasing to become an Independent Director. Provided that anIndependent Director shall not during the said period of three years be appointed in orbe associated with the Company in any other capacity either directly or indirectly.
The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval(yearly).
Due to reasons for any disqualifications mentioned in the Act or under any otherapplicable Act rules and regulations there under the Committee may recommend to theBoard with reasons recorded in writing removal of a Director KMP or Senior ManagementPersonnel subject to the provisions and compliance of the said Act rules and regulations.
The Directors KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion in retain the Director KMP Senior Management Personnel in the sameposition/remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.
The Board shall consist of such number of Directors including atleast one womenDirector and not less than fifty percent of the Board of Directors comprisingnon-executive directors as is necessary to effectively manage the Company of its size.
When the Chairman of the Board is a non-executive director at least one-third of theBoard should comprise independent directors and in case the Company does not have aregular non-executive Chairman or in case the regular non-executive Chairman is a promoterof the Company at least half of the Board comprise independent directors.
The Committee will lead the process for Board appointments. All Board appointments willbe based on the skills diverse experience independence and knowledge which the Board asa whole requires to be effective. The Committee shall seek to address Board vacancies byactively considering candidates that bring a diversity of background and opinion fromamongst those candidates with the appropriate background and industry or related expertiseand experience. The candidates will be considered against objective criteria having dueregard to the benefits of diversity on the Board.
Additionally the Board may consider appointment of experts from various specializedfields such as finance law information technology corporate strategy marketing andbusiness development international business operations management etc. so as to bringdiversified skill sets on board or succeed any outgoing director with the same expertise.
POLICY FOR REMUNERATION TO DIRECTORS/KMP/SENIOR MAMAGEMENT PERSONNEL:
1.Remuneration to Managing/ Whole-Time / Executive / Managing Director KMP and SeniorManagement Personnel:
The Remuneration/ Compensation/ Commission etc. to be paid to Director/ManagingDirector etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force.
2. Remuneration to Non-Executive/IndependentDirector:
The Non-Executive Independent Director may receive remuneration/compensation/commission as per the provisions of the Companies Act 2013. The amount ofsitting fees shall be subject to limits as provided under the Companies Act 2013 andrules made there under or any other enactment for the time being in force.
3. Remuneration to other Employees:
Apart from the Directors KMPs and Senior Management Personnel the remuneration forrest of the employees is determined on the basis of the role and position of theindividual employee including professional experience responsibility job complexity andmarket conditions. The various remuneration components basic salary allowancesperquisites etc. may be combined to ensure an appropriate and balanced remunerationpackage. The annual increments to the remuneration paid to the employees shall bedetermined based on the appraisal carried out by the HODs of various departments. Decisionon Annual Increments shall be made on the basis of this appraisal.
Nomination Duties :
The duties of the Committee in relation to nomination matters include:
Ensuring that there is an appropriate induction & training programme in place fornew Directors and members of Senior Management and reviewing its effectiveness; Ensuringthat on appointment to the Board Non-Executive Directors receive a formal letter ofappointment in accordance with the Guidelines provided under the Companies Act2013;Identifying and recommending Directors who are to be put forward for retirement byrotation.
Determining the appropriate size diversity and composition of the Board;
Setting a formal and transparent procedure for selecting new Directors for appointmentto the Board; Developing a succession plan for the Board and Senior Management andregularly reviewing the plan; Evaluating the performance of the Board members and SeniorManagement in the context of the Company's performance from business and complianceperspective; Making recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract Delegating any of its powers to one or more of itsmembers or the Secretary of the Committee; Recommend any necessary changes to the Board.
Considering any other matters as may be requested by the Board.
The duties of the Committee in relation to remuneration matters include:
To consider and determine the Remuneration Policy based on the performance and alsobearing in mind that the remuneration is reasonable and sufficient to attract retain andmotivate members of the Board and such other factors as the Committee shall deemappropriate all elements of the remuneration of the members of the Board.
To approve the remuneration of the Senior Management including key managerial personnelof the Company maintaining a balance between fixed and incentive pay reflecting short andlong term performance objectives appropriate to the working of the Company.
To delegate any of its powers to one or more of its members or the Secretary of theCommittee
To consider any other matters as may be requested by the Board;
REVIEW AND AMENDEMENT:
1. The NRC or the Board may review the Policy as and when it deems necessary.
2. This Policy may be amended or substituted by the NRC or by the Board as and whenrequired and also by the Compliance Officer where there is any statutory changesnecessitating the change in the policy. However no such amendment or modification will bebinding on the Directors and employees unless the same is communicated in the mannerdescribed as above.
(D) SHARE TRANSFER COMMITTEE
With an understanding to provide quick responses for request of transfer transmissionetc. from the shareholders the Board of Directors of the Company constituted asub-committee in the style of "Share Transfer Committee".
Share Transfer Committee is headed by Mr. Ravikant Choudhry Non-executive DirectorMrs. Mohana Independent Director and Mr. Narendra Balvantrai Bhatt Independent Director.
Terms of Reference in brief:
Transfer Transmission and Transposition of shares. Consolidation and Split of sharecertificates.
Issuances of duplicate share certificates confirmation of demat/remat request andother connected matters.
Share Transfer Committee meeting met twice in the year 09.10.2015 and 07.01.2016.
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.
RECOMMENDATION OF AUDIT COMMITTEE
During the year under review all the recommendations made by the Audit Committee wereaccepted by the Board.
The Company has not accepted any deposits either from the shareholders or public withinthe meaning of the Companies (Acceptance of Deposits) Rules 2014 during the year.
PARTICULARS OF LOANS INVESTMENT GUARANTEE AND SECURITY U/S 186(4) OF THE COMPANIESACT 2013
The Company has not given any loans or made investment or provided any guarantee/security during the financial year under review. The Company has not given any guaranteesother than bank guarantees in thenormal course of business to meet contractualobligations.
The Equity Shares of the Company are listed at the Bombay Stock Exchange. The AnnualListing Fees for the financial year 2016-2017 has been paid to Bombay Stock Exchange.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofCompanies Act 2013 and the relevant rules.
M/S. N R Krishnamoorthy & Co Chartered Accountants Chennai (FRN: 001492S)Statutory Auditors of the company hold office until the conclusion of the ensuing AnnualGeneral meeting of the Company and are eligible for ratification to hold office tillconclusion of the ensuing next annual general meeting as per the provisions of CompaniesAct 2013 subject to ratification by shareholders in the annual general meeting every year.The company has received confirmation that their appointment will be within the limitsprescribed under Section 139 read with section 141 of the Companies Act 2013.
The Audit Committee in its meeting has recommended the reappointment of the Auditors.The necessary resolution is being placed before the shareholders for approval.
There are no reservations qualifications or adverse remarks contained in the AuditorsReport.
SECRETARIAL AUDIT REPORT:
Pursuant to provisions under Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company has appointed M/s. ASJ & Associates Practicing Company Secretaries toundertake Secretarial Audit for the financial year 2015 16. The Secretarial Audit Reportis attached and forms part of this report.
REPLY TO SECRETARIAL AUDIT REPORT:
The Board has taken note of all the points mentioned in Secretarial Audit Report andassures to comply with the provisions at the earliest.
EXTRACT OF ANNUAL RETURN
An extract of Annual Return in Form MGT-9 as on March 31 2016 is attached and formspart of this Report.
Regulation 15(2) (a) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 states that COMPLIANCE WITH THE CORPORATE GOVERNANCE PROVISIONS ASSPECIFIED IN REGULATION 27 SHALL NOT BE APPLICABLE IN RESPECT OF LISTED ENTITY:
a) Having PAID UP EQUITY SHARE CAPITAL NOT EXCEEDING Rupees TEN CRORE AND
b) NET-WORTH NOT EXCEEDING Rupees TWENTY FIVE CRORES as on the last day of previousfinancial year.
Since the Paid Up Equity Capital of the Company is only Rs. 50000000 (Rupees FiveCrore only)and Net Worth is Rs. 47472213 (Four Crore Seventy Four Lakh Seventy TwoThousand Two Hundred and Thirteen only) the company is not required to submit CorporateGovernance along with Directors' Report.
However your Board of Directors assure the members that the Company continues tomaintain highest Standards of Integrity transparency in operations excellence in serviceto all shareholders and strong Corporate Governance Standards.
The Board of Directors assure that the Corporate Governance Standards as stipulated inthe Companies Act 2013 have been fully complied with.
CORPORATE SOCIAL RESPONSIBILITY:
The provisions of the Companies Act 2013 on Corporate Social Responsibility are notapplicable to the company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company is a financial services company. Therefore its operations do not accountfor energy consumptions. Accordingly Rules 2A and 2B of the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules 1988 concerning conservation ofenergy and technology absorption respectively are not applicable to the Company. Howeverthe Company is taking all possible measures to conserve energy. The management keepsitself abreast of the technological advancements in the industry.
There are no inflow and outflow of foreign exchange during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS:
a) Overview Industry Structure Development and Outlook
Our Company is concentrating mostly on Trading in Shares and also on Loan financing.The growth of the Industry had faced very critical times due to depreciation in the Indianrupee and partly due to political reasons. So the Stock markets and other financialsectors had gone through very tough times and had to content with the stagnation. Theprice rise and other national and International factors have also contributed to thestagnated growth of the Indian Capital Markets. Under the above circumstances ourCompany's performance for the year ended was moderate.
The present outlook in the Capital Markets seems to be encouraging when compared to theprevious year environment and the Company is expected to do well in the coming years.
b) Business performance and Segment Reporting
The company is presently operating in two identifiable business segments viz. ShareSegment and Loan Segment. It operates in one geographical segment; services in India only.The particulars of segment wise revenue results and capital employed are furnishedseparately.
c) Internal Control System and its adequacy
The system of internal control has been established to provide reasonable assurance ofsafeguarding assets and maintenance of proper Accounting records and its accuracy. Thebusiness risks and its control procedures are reviewed frequently. Systems audit is alsoconducted regularly to review the systems with respect to Security and its Adequacy.Reports are prepared and circulated to Senior Management and action taken to strengthencontrols where necessary.
d) Risk Management
Risk evaluation and management is an ongoing process in the company
e) Human resources and Industrial relations
Your company continues to have cordial relations with its employees
f) Cautionary Statement ;
Statements in the Management discussion and analysis describing the company'sobjectives projections estimates and expectations may be "forward lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the company's operations include economic conditions affectingdemand/supply and prices conditions in the domestic and overseas markets in which thecompany operates/ going to operate changes in government regulations tax laws and otherstatutes and other incidental factors.
COMPLIANCE WITH RBI PRUDENTIAL NORMS:
The company has complied with the prudential norms on income recognition accountingstandards assets classification provisioning for bad and doubtful debts as applicable toit in in terms of Non-Banking Financial (Non Deposit Accepting or Holding) CompaniesPrudential Norms (Reserve Bank) Directions 2007 for the year ended on 31 March 2016.
Company's Vision and Philosophy on the Code of Governance:
The vision of Arihant's Securities Limited is to be a financially sound profitablegrowth oriented and technology friendly Company committed to building values andmaximizing gains for all its stakeholders for those doing business with it and forothers associated with it. In its pursuit to attain its goals the Company is
Laying maximum emphasis on the effective system of Corporate Governance particularlywith a view to improve its image efficiency effectiveness and integrity in all itsdealings. The Company's Corporate Governance philosophy is to be ethical in its conduct ofits business to constantly strive to grow with profits and to enhance shareholders valueto the maximum extent. The Corporate Governance policies of your Company recognize theaccountability of the Board Of Directors vis-a-vis all its constituents viz. BorrowersShareholders Employees Government & other Regulatory Authorities and others dealingwith it and doing business with it.
DIRECTORS' RESPONSIBILITY STATEMENT:
As per Section 134(3)(c) of the Companies Act 2013 the Board of Directors herebyconfirm the following statement:
(i) in the preparation of the annual accounts for the financial year ended 31 March2016 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
(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 of the company as at March 31 2016 and of the profitand loss of the company for that period;
(iii) the directors had 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 had prepared the annual accounts on a going concern basis; and
(v) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and
(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your directors wish to place on record their deep appreciation of the dedication andcommitment of employees to the growth of your company during the year. Your directors alsoexpress their sincere gratitude to the customers bankers consultants Auditors and theshareholders for their continued patronage and cooperation.
FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arms length transaction under third proviso thereto.
1. Name of the Related Party and Nature of Relationship:
a). ASL Capital Holdings Private Limited Common Director
2. Nature of Transaction: Purchases Rs.5809824/- Sales Rs.3397851/-
3. Duration of Transaction:
Purchase and sale is made under regular basis and they are transaction entered in theordinary course of business.
4. Salient terms of transaction: Purchase and sale is the ordinary course of businessthere is no specific terms of transaction.
5. Date of approval by board:
As this is done under regular basis specific approval of Board is not required and thetransaction is done under arm's length price.
6. Amount paid as advance if any: NIL
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31 2016
[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
ARIHANT'S SECURITIES LIMITED
138 Dr.RAdhakrishnan Salai Mylapore Chennai 600004
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Arihant's SecuritiesLimited (hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on our verification of M/s Arihant's Securities Limited books papers minutebooks forms and returns filed and other records maintained by the company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of secretarial audit. We hereby report that in our opinion the companyhas during the audit period covering the financial year ended on 31 March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:
1. We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31 March 2016 accordingto the provisions of:
i) The Companies Act 2013 (the Act) and the rules made thereunder;
ii) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;
iii)The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
iv)Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992; c) The Securities and Exchange Board of India (Delisting of EquityShares) Regulations 2009: d) The securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines 1999;
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; f) The Securities and Exchange Board of India (Registrars to an Issueand Share Transfer Agents) Regulations 1993 regarding the Companies Act and dealing withclient;
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009; and
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards with respect to Meetings of Board of Directors (SS-1) andGeneral Meetings (SS-2) issued by
The Institute of Company Secretaries of India (made mandatory with effect from 1 July2015) (ii) The Listing Agreements entered into by the Company with Bombay StockExchange(s) if applicable
During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above subject to thefollowing observation as noticed by us:
1 The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015 with effect from 15th May 2015
2 Not applicable to the Company as it does not have any such Scheme.
3 Not applicable to the Company as the Company does not have any debts listed. 4 Notapplicable to the Company as there was no delisting done during the year.
5 Not applicable to the Company as there was no buy-back by the Company during theyear.
1. Appointment of Woman director as required by the Companies Act 2013 SEBI(Listing Obligations and Disclosure
iRequirements) Regulations 2015 and erstwhile Listing Agreement has been complied witheffect from 10 July i2015.
2. The optimum composition of independent & non independent directors is inaccordance with Companies Act 2013 and Reg. 17 (1) (b) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and erstwhile Listing Agreement with effectfrom 10 July 2016 after appointment of Women Director.
3. Constitution of Audit Committee & Nomination and Remuneration Committeein accordance with Section 177 and
178 of the Companies Act 2013 along with Listing Agreement has been complied witheffect from 1 October 2015.
4. The Company has defaulted in appointment of Chief Financial officer andCompany Secretary as required under Section 203 of the Companies Act 2013.
5. The Company has defaulted in appointment of Internal Auditor as requiredunder Section 138 of the Companies Act 2013.
6. The Company has defaulted in filing forms for reappointment of ManagingDirector and Independent director appointed at the 20 Annual General meeting of thecompany.
7. Out of their total holding the Promoter Group is yet to convert 7.73% of thetotal share capital into dematerialised form as required under Regulation 31 (2) of SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015.
We further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors except for Point 1and 2 above for the year under review. The changes in the composition of the Board ofDirectors that took place during the period under review were carried out in compliancewith the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days before the meeting in advance anda system exists for seeking and obtaining further information and clarifications on theagenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members' views whereverthere is any are captured and recorded as part of the minutes.
We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
We further report that during the audit period there were no events/actions havinga major bearing on the company's affairs in pursuance of the above referred laws rulesregulations guidelines standards etc. referred to above were undertaken/done by theCompany.
This Report is to be read along with Annexure A of even date which forms integral partof this Report.
ARIHANT'S SECURITIES LIMITED
138 Dr.RAdhakrishnan Salai Mylapore Chennai 600004
Our secretarial audit report of even date s to be read along with this letter.
a. Maintenance of secretarial and other records s the responsibility of the managementof the Company. Our responsibility is to express an opinion on the relevant records basedon our audit.
b. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the relevant records andcompliances. The verification was done on test basis to verify that correct facts arereflected n secretarial and other relevant records. We believe that the processes andpractices we followed provide a reasonable basis for our opinion.
c. We have not verified the correctness and appropriateness of financial and taxrecords and books of accounts of the Company.
d. Wherever required we have obtained the Management Representation about thecompliance of laws rules and regulations and happening of events etc.
e. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards s the responsibility of management. Our examination was limited tothe verification of the procedures on test/sample basis.
f. The Secretarial Audit report s neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.