Your Directors have pleasure in presenting the Twenty Seventh Annual Report on thebusiness and operations of your Company and the Financial Statements for the year ended 31March 2019.
The following table gives the financial highlights of your Company on a Standalone andConsolidated basis for the financial year 2018-2019:
| || || |
( Rs. in Lacs)
|Particulars ||Standalone ||Consolidated |
| ||2018-2019 ||2017-2018 ||2018-2019 ||2017-2018 |
|Gross Income ||8116.80 ||9426.99 ||10307.17 ||10244.41 |
|Profit Before Depreciation ||2462.71 ||2961.34 ||2772.03 ||3079.18 |
|Depreciation ||114.38 ||92.82 ||119.80 ||99.15 |
|Profit Before Tax ||2348.32 ||2868.52 ||2652.22 ||2980.03 |
|Provision for Taxation ||664.92 ||865.27 ||750.20 ||913.20 |
|Net Profit After Taxation ||1683.39 ||2003.25 ||1902.02 ||2066.83 |
|Balance of Profit and Loss a/c (b/f) ||1270.03 ||940.29 ||1489.47 ||1205.87 |
|Profit Available for Appropriation ||2953.43 ||2943.54 ||3391.50 ||3272.70 |
|Appropriations: || || || || |
|Transfer to General Reserve ||1500.00 ||1500.00 ||1575.00 ||1585.00 |
|Transfer to Statutory Reserve ||Nil ||Nil ||21.22 ||10.26 |
|Dividend (inclusive of dividend tax) ||188.27 ||173.51 ||188.27 ||187.96 |
|Balance Carried to Balance Sheet ||1265.15 ||1270.03 ||1607.00 ||1489.47 |
Review of Operations
During the year under review the Company has posted gross income of Rs. 8116.80lacs (previous year Rs. 9426.99 lacs) on a Standalone Basis and a net profit after taxfor the year 2018-19 of Rs. 1683.39 Lacs compared to Rs. 2003.25 Lacs in the previousyear. On a Consolidated basis during the year under review the company has posted grossincome of Rs.10307.17 Lacs (previous year Rs.10244.41 lacs). The Consolidated net profitduring the same period stands at Rs.1902.01 lacs as compared to Rs.2066.83 lacs in theprevious 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 Director's 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.1500.00 Lacs to the general reserves out of theamount available for appropriations and an amount of Rs.1265.15 lacs are proposed to beretained in the Profit and Loss Account.
The paid up Equity Share Capital as at March 31 2019 stood at Rs.10.41 Crore. Therehas been no change in the capital structure of Company during the year under review.
Your Directors are pleased to recommend the dividend Rs.0.75 (15% per share) on theEquity Shares of the Company for the financial year 2018-19.The dividend payout is subjectto approval of member at the ensuing 27 Annual General Meeting.
During the Financial Year 2018-19 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 31 March 2019 Your Company had eight wholly owned subsidiaries. During the yearthe Board of Directors reviewed the business operations and financial performance of thesaid Companies.
1. Arihant Futures and Commodities Limited
2. Arihant Financial Services Limited
3. Arihant Lifespace Infra Developers Limited
4. Arihant Insurance Broking Services Limited
5. Arihant Investment Advisers Pvt. Limited. (Formerly Known as-Arihant FinancialPlanners and Advisors Pvt. Ltd.)
6. Ahinsa Lifespace Infraheight Limited.
7. Arihant Asset Management Limited (Formerly Known as -Arihant Housing FinanceCorporation Limited)
8. Arihant Capital (IFSC) Limited.
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 to this Report "Annexure-E." 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.In accordance with the Accounting Standard AS-21 the Consolidated Financial Statementsare furnished herewith and form part this Annual Report.
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 forreappointment. The Board recommends his re-appointment for the consideration of themembers of the company at the ensuing
Annual General Meeting. Mr. Pavan Kumar Ved Director of the Company resigned witheffect from 25 September 2018 due to some personal reason. The Board Places on record hisappreciation for the invaluable contributions made by him during his tenure as aNon-Executive Director of the Company.
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 (1) (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.
Mr. Akhilesh Rathi and Mr. Parag Rameshbhai Shah is eligible for reappointment as anIndependent Director for a second term of Five years commencing from 01/04/2019 upto31/03/2024 at the ensuing AGM for the approval of the Members by way of SpecialResolution. Mr. Ashish Maheshwari is eligible for appointment as an Independent directorto hold office for Five consecutive years for term upto 31/03/2022.
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. There has been nochange in the policy during the year.
Board and Committee Meetings
The details of the composition of the Board and its Committees and the number ofmeetings held and attendance of Directors at such meetings are provided in the CorporateGovernance Report which forms part of the Annual Report.
Particulars of Loans Guarantees or Investments by Company
The Details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to Financial Statementsforming part of Annual Report.
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.
A. Conservation of Energy
The steps taken or impact on conservation of energy:
I. The operations of your Company are not energy intensive. However adequate measureshave been initiated to reduce energy consumption.
II. The capital investment on energy conservation equipments : NIL
B. Technology Absorption:
I. The efforts made towards technology absorption: Not Applicable.
II. The benefits derived like product Improvement cost reduction product developmentor import substitution : Not Applicable
III. In case of imported technology (imported during the last three years reckoned fromthe beginning of the Financial Year) : Not Applicable
IV. Company has not incurred any expenditure on Research and Development during theyear under review.
C. Foreign Exchange earning & outgo : Foreign exchange earned in terms ofactual in flow Rs.1386596 (previous Year Rs.NIL)
Information as Per Rule 5(2) Of the Chapter Xiii the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
Details pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(2)& 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forming part of the Board Report and are annexed herewith as "Annexure-D"
Risk Management & Internal Financial Control and Its Adequacy
Company has an effective risk management framework for identifying prioritizing andmitigating risks which may impact attainment of short and long term business goals of yourcompany. The risk management framework which is based on our holding Company's riskmanagement process is aligned with strategic planning deployment and capital projectevaluation process of the Company. The process aims to analyze internal and externalenvironment and manage economic financial market operational compliance andsustainability risks and capitalizes opportunities of business success.
The Internal Financial control framework has been designed to provide reasonableassurance with respect to recording and providing reliable financial and operationalinformation complying with applicable laws safeguarding assets from unauthorized useexecuting transaction with proper authorization and ensuring compliances with corporatepolicies.
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.
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 March31 2019 followed the applicable accounting standards along with proper explanationsrelating to material departures if any.
(ii) They had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs as at 31 March 2019 and of the profit or loss of the Company forthe year ended.
(iii) They have taken proper and sufficient care to the best of their knowledge for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
(iv) They have prepared the annual accounts for the financial year ended 31 March 2019on a going concern basis.
(v) They have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and are operating effectively; and (vi)They had devised proper systems to ensure compliance with the provisions of all applicablelaws and those systems are adequate and operating effectively.
Auditors and Auditor's Report
The Members at the 25 Annual General Meeting of the Company held on 09 September 2017had appointed M/s Dinesh Ajmera & Associates Chartered Accountants (Firm Registrationno. 011970C) as the Statutory Auditor of the Company to hold office for a term of fiveyears i.e. from the conclusion of the said Annual General Meeting until the conclusion of30 Annual General Meeting subject to rati cation of their appointment by theshareholders every year. The Ministry of Corporate Affairs vide its Noti cation dated 7May 2018 has dispensed with the requirement of rati cation of Auditor's appointment bythe shareholders every year. Hence the resolution relating to rati cation of Auditor'sappointment is not included in the Notice of the ensuing Annual General Meeting.
In terms of provisions of Section 139 of the Act M/s Dinesh Ajmera & Associateshave furnished a certi cate that their appointment is within the limits prescribed.
There are no quali cations reservations or adverse remarks made by Statutory Auditorsin their Report.
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 separate inthe Annual Report.
Your Company is committed towards maintaining high standards of Governance. The Reporton Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. A Certi cate from Practicing CompanySecretary con rming compliance to the corporate governance requirements by the Company isattached to this report.
Corporate Social Responsibility
Your Company is committed to improve the quality of life of the communities in itsfocus areas through long term value creation for all its Stakeholders through its variousCorporate Social Responsibility (CSR) initiatives.
Brief details on various focus areas of interventions are part of the Annual Report onCSR activities annexed to this report as "Annexure-C" in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. Thepolicy adopted by the Company can be viewed at website of the Company.
Extract of Annual Return
As provide under Section 92(3) of the act and Rule 12 (1) of the Companies (Managementand Administration) Rules 2014 the extract of the Annual return is given in "Annexure-A" in the prescribed Form MGT-9 which is a part of this report.
Pursuant to the provisions of Section 204 of the Act and the rules made there underthe Company had appointed M/s Ajit Jain & Co. Practicing Company Secretary toundertake the Secretarial Audit of the Company for the year ended 31 March 2019. TheSecretarial Audit Report issued in this regard is annexed as "Annexure - C" Thesecretarial audit report does contain any quali cations reservations adverse remarks ordisclaimer.
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 were no materially significant Related Party Transactionsmade by the Company during the year that required shareholders' approval under Regulation23 of the Listing Regulations.
All Related Party Transactions are placed before the Audit Committee for priorapproval. Prior omnibus approval of the Audit Committee is obtained for the transactionswhich are repetitive in nature or when the need for them cannot be foreseen in advance.
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 received anyremuneration or commission from any of its subsidiaries.
No significant or material orders were passed by the regulators or courts or tribunalswhich 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 Company has zero tolerance towards sexual harassment at workplace. It has a well -defined policy in compliance with the requirements of the Sexual Harassment of women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder. An Internal Committee is in place to redress complaints received regardingsexual harassment. The Company has not received any complaint of sexual harassment duringfinancial year 2018-2019.
Your directors take this opportunity to thank the customers shareholders financialinstitutions stock exchanges SEBI Reserve Bank of India National Securities DepositoryLimited Central Depository Services (India) Limited and other government and regulatoryagencies for 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 |
| ||Ashok Kumar Jain |
| ||(Chairman) |
|Place: Indore || |
|Dated: 21/05/2019 || |