Your Directors have great pleasure in presenting the TWENTY FIFTH Annual Reporttogether with the Audited Accounts of your Company for the Financial Year ended31.03.2019.
|The financial results of the company compared to the previous year are summarized as under: || ||(Rs. in Lakhs) |
|Particulars ||For the year ended 31.03.2019 ||For the year ended 31.03.2018 |
|Revenue from Operations ||40.07 ||71.19 |
|Other Income ||- ||- |
|Gross Income ||40.07 ||71.19 |
|Profit / (Loss) before Financial cost Depreciation and Tax ||15.23 ||27.65 |
|Less: Financial Cost ||- ||- |
|Profit / (Loss) before Depreciation and Tax ||15.23 ||27.65 |
|Less: Depreciation ||- ||- |
|Profit / (Loss) before Tax & Exceptional / Extraordinary Items ||15.23 ||27.65 |
|Less: Exceptional and Extraordinary Items ||- ||- |
|Profit / (Loss) before Tax ||15.23 ||27.65 |
|Less: Tax Expense ||1.34 ||0.70 |
|Profit/ (Loss) After Tax for the year ||13.88 ||26.94 |
|EPS ||0.28 ||0.54 |
MATERIAL CHANGES AND COMMITMENTS:
There have been n
material changes & Commitments which have occurred between the end of thefinancial year of the company to which the balance sheet relates and the date of thereport 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 2019.The Company has no associate company or joint venture company as onMarch 31 2019.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Current Board Composition:
|Name ||Designation |
|Ravikant Choudhry ||Non-Executive Chairman |
|Nishikanth Mohanlal Choudhary ||Managing Director |
|Ajit Kumar Chordia * ||Independent Director |
|Narendra Balvantrai Bhatt ||Independent Director |
|Mohana ||Independent Director |
* Mr.Ajit Kumar Chordia resigned from his directorship with effect from 30th April2019.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Nishikanth Mohanlal Choudhry Managing Director willretire by rotation at the ensuing Annual General Meeting and is eligible forre-appointment.
Board of Directors :
Composition and Category
As on 31 March 2019 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 2019 are detailed below:
|Name of Director ||Nature of Directorship || |
No. of Directorship excluding Directorship in our Company
Chairmanship / Membership in the Committees by Board of Directors of Company
| || || || |
|Mr. Ravikant Choudhry ||Non - Executive Chairman ||1 ||1 ||3 |
|Mr. Nishikanth Mohanlal Choudhary ||Managing Director ||Nil ||Nil ||Nil |
|Mr. Ajit Kumar Chordia ||Non-Executive Independent Director ||2 ||1 ||1 |
|Mr. Narendra B Bhatt ||Non-Executive Independent Director ||Nil ||2 ||1 |
|Mrs. Mohana ||Non-Executive Independent Director ||Nil ||Nil ||3 |
* for the purpose of Directorship / committee membership all private companies andsection 8 companies have not been considered.
** only Chairmanship / membership of audit committee and stakeholders relationshipcommittee have been considered.
INDEPENDENT DIRECTORS AND FAMILIRISATION PROGRAMME
In terms of the provisions of Section 149(7) of the Companies Act 2013 all theIndependent Directors of the Company have furnished a declaration to the Company statingthat they fulfill the criteria of Independent Director as prescribed under Section 149(6)of the Companies Act 2013 and are not being disqualified to act as an IndependentDirector.
In compliance with Regulation 25 of the SEBI Listing Regulations the Board has adopteda policy on familiarization programme for Independent Directors of the Company. The policyfamiliarizes the Independent Directors with the nature of industry in which the Companyoperates business model of the Company their roles rights and responsibilities in theCompany.
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.
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 Half yearly and Annual Results.
Business performance and steps for improvement.
Legal proceedings involving the Company.
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 31st March 2019 Four (4) Board Meetings were held. Thedates on which the Board Meetings were held are 19.05.2018 11.08.2018 01.11.2018 and09.02.2019. Details of attendance at the Board meetings and the last Annual GeneralMeeting:
|Name of the Director || |
Board Meetings Attended
Attendance in Last AGM
|Mr. Ravikant Choudhry || |
|Mr. Nishikanth Mohanlal Choudhary || |
|Mr. Ajit Kumar Chordia || |
|Mr. Narendra B Bhatt || |
|Mrs. Mohana || |
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 as mentioned below.
(A) AUDIT COMMITTEE:
The Audit Committee of the Board comprises three directors namely Mr. Ajit KumarChordia the Chairman Mr. Ravikant Choudhry and Mrs. Mohana Members. The composition ofAudit Committee meets the requirement of Section 177 of the Companies Act 2013. Membersof 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: 19.05.201811.08.2018 01.11.2018 and 09.02.2019.
|Name of the Director || |
Audit Committee Meetings Attended
|Mr. Ajit Kumar Chordia || |
|Mr. Ravikant Choudhry || |
|Mrs. Mohana || |
(iv) Recommendation of Audit Committee
During the year under review all the recommendations made by the Audit Committee wereaccepted by the Board.
(B) SHAREHOLDERS RELATIONSHIP COMMITTEE
Shareholders Relationship Committee in line with Section 178 (5) of the Companies Act2013 is headed by Mr. Narendra B Bhatt Independent Director Mr. Ravikanth ChoudhryNon-executive Director and Mrs.Mohana as members.
The Committee monitors redressal of complaints received from shareholders/investorswith respect to transfer of shares non-receipt of dividend non-receipt of Annual Reportetc. The Committee also take note on number of transfers processed issue of fresh sharecertificates dematerialization of share certificates report about top shareholdersshare holding pattern etc.
No Compliant received for this financial year No instrument of transfers was pendingon 31st March 2019. During the year the Committee was met 11 times 17.09.201829.09.2018 26.10.2018 23.11.2018 07.12.2018 14.12.2018 01.02.2019 22.02.201901.03.2019 22.03.2019 30.03.2019 and all members attended the meeting
(C) NOMINATION AND REMUNERATION COMMITTEE
The Company has a Remuneration Committee consists of Chairman Mr. Narendra B BhattIndependent Director Mr. Ajit Kumar Chordia Independent Director and Mr. RavikantChoudhry Director as members.
The Nomination and Remuneration Committee met once during the year on 19th May 2018 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.
(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 a committeein 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 share certificates.
Share Transfer Committee meeting met 11 times 17.09.2018 29.09.2018 26.10.201823.11.2018 07.12.2018 14.12.2018 01.02.2019 22.02.2019 01.03.2019 22.03.201930.03.2019 and all members attended the meeting.
The Board of Directors of the Company has carried out the annual evaluation of its ownperformance as well as the evaluation of the working of its Committees and individualDirectors. This exercise was carried out through structured questionnaires formulated bythe Nomination & Remuneration Committee. The questionnaires are circulated to all thedirectors to seek their response on the evaluation. The evaluation framework provides forperformance parameters and possible paths for improvements.
The performance evaluation of the Non-Independent Directors Chairman and the Board asa whole were carried out by the Independent Directors.
The Directors have expressed their satisfaction with the evaluation process and itsresults.
REMUNERATION POLICY OF THE COMPANY
The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required under Section 178(3) of the Companies Act 2013 can beviewed on the Company's website www.arihantssecurities.com. There has been no change inthe policy since the last financial year.
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.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review no significant and material orders were passed by theregulators or courts or tribunals which impact the going concern status and futureoperations of the Company.
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 guaranteesin the normal course of business to meet contractual obligations.
The Equity Shares of the Company are listed at the Bombay Stock Exchange. The AnnualListing Fees for the financial year 2019-2020 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) haveresigned from the auditorship as Statutory Auditors of the company. It is proposed toappoint Mr. K. Nandhiswaran (Membership No. 207644) Chartered Accountants Chennai whohas given their Consent and eligibility for appointment as the Auditor. The company hasreceived confirmation that their appointment will be within the limits prescribed underSection 139 read with section 141 of the Companies Act 2013. Now it is recommended to theshareholders for Appointment of Mr. K. Nandhiswaran as the Company's Statutory Auditorsfrom the conclusion of this annual general meeting and to hold office until the conclusionof the 30th Annual General Meeting of the Company.
The Audit Committee in its meeting has recommended the appointment of the Auditors. Thenecessary 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 2018-19. 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 2019 is attached and formspart of this Report.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year were onarm's length basis in the ordinary course of business and were in the compliance with theapplicable provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations2015. There were no materially significant Related PartyTransactions made by the company during the year that would have required Shareholderapproval under the SEBI (Listing Obligations and Disclosure Requirements)Regulations2015.
There were transactions during the year and the particulars of contracts orarrangements with related parties in Form AOC-2 are annexed and forms part 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. 51881665 (Five Crore Eighteen Lakhs Eighty One ThousandSix Hundred and Sixty five 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 assures 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.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
During the year under review no complaints were received pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013.
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 terms of Non-Banking Financial (Non Deposit Accepting or Holding) CompaniesPrudential Norms (Reserve Bank) Directions 2007 for the year ended on 31 March 2019.
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 layingmaximum emphasis on the effective system of Corporate Governance particularly with a viewto improve its image efficiency effectiveness and integrity in all its dealings. TheCompany's Corporate Governance philosophy is to be ethical in its conduct of its businessto constantly strive to grow with profits and to enhance shareholders value to themaximum 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 31st March2019 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 2019 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.
| ||For and on behalf of the Board |
| ||Sd/- |
| ||Chairman |
|Date: 30th May 2019 ||(Ravikant Choudhry) |
|Place: Chennai ||(DIN: 00831721) |