Arihant Capital Markets Ltd Directors Report.
Your Directors have pleasure in presenting the Twenty Seventh Annual Report on the business and operations of your Company and the Financial Statements for the year ended 31 March 2019.
The following table gives the financial highlights of your Company on a Standalone and Consolidated basis for the financial year 2018-2019:
( Rs. in Lacs)
|Profit Before Depreciation||2462.71||2961.34||2772.03||3079.18|
|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|
|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. 8,116.80 lacs (previous year Rs. 9,426.99 lacs) on a Standalone Basis and a net profit after tax, for the year 2018-19, of Rs. 1,683.39 Lacs compared to Rs. 2,003.25 Lacs in the previous year. On a Consolidated basis during the year under review, the company has posted gross income of Rs.10,307.17 Lacs (previous year Rs.10,244.41 lacs). The Consolidated net profit during the same period stands at Rs.1,902.01 lacs as compared to Rs.2,066.83 lacs in the previous year.
A detailed note on the Companys operational and financial performance is given in Management 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) of SEBI (LODR) 2015 with the BSE Ltd.
Transfer to General Reserves
The Company proposes to transfer Rs.1,500.00 Lacs to the general reserves out of the amount available for appropriations and an amount of Rs.1,265.15 lacs are proposed to be retained in the Profit and Loss Account.
The paid up Equity Share Capital as at March 31, 2019 stood at Rs.10.41 Crore. There has 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 the Equity Shares of the Company for the financial year 2018-19.The dividend payout is subject to approval of member at the ensuing 27 Annual General Meeting.
During the Financial Year 2018-19 under review The Company has neither invited nor accepted any public deposits within the meaning of section 73 & 74 of the Companies Act, 2013 read with Companies (Acceptance or Deposit) Rules 2014.
As on 31 March, 2019 Your Company had eight wholly owned subsidiaries. During the year, the Board of Directors reviewed the business operations and financial performance of the said 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 Financial Planners and Advisors Pvt. Ltd.)
6. Ahinsa Lifespace Infraheight Limited.
7. Arihant Asset Management Limited (Formerly Known as -Arihant Housing Finance Corporation Limited)
8. Arihant Capital (IFSC) Limited.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, your Company has prepared Consolidated Financial Statements of your Company which is forming part of this Annual Report. Further, a Statement containing salient features of financial information of the Subsidiary Companies is disclosed in the prescribed format AOC-1, pursuant 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 also provides details of performance and financial position of each of the Companies. The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the Audited Financial Statements, the Consolidated Financial Statements and the related information of the Company and the Audited Accounts of the Subsidiaries Companies, are available on our website i.e. www.arihantcapital.com. These documents shall also be available 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 Statements are furnished herewith and form part this Annual Report.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Sunil Kumar Jain who is due to retire by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment. The Board recommends his re-appointment for the consideration of the members of the company at the ensuing
Annual General Meeting. Mr. Pavan Kumar Ved Director of the Company, resigned with effect from 25 September, 2018 due to some personal reason. The Board Places on record his appreciation for the invaluable contributions made by him during his tenure as a Non-Executive Director of the Company.
All Independent Directors have given declarations that they meet criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
As per requirement of Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 separate meeting of the independent directors ("Annual Independent Directors Meeting") was convened, which reviewed the performance of the Board (as a whole), the non-independent directors and the Chairman.
Mr. Akhilesh Rathi and Mr. Parag Rameshbhai Shah is eligible for reappointment as an Independent Director for a second term of Five years commencing from 01/04/2019 upto 31/03/2024 at the ensuing AGM for the approval of the Members by way of Special Resolution. Mr. Ashish Maheshwari is eligible for appointment as an Independent director to 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 to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board members. The details of this policy are explained in the Corporate Governance Report. There has been no change in the policy during the year.
Board and Committee Meetings
The details of the composition of the Board and its Committees and the number of meetings held and attendance of Directors at such meetings are provided in the Corporate Governance 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 of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements forming part of Annual Report.
Whistle Blower Policy/ Vigil Mechanism
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read 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 provides for a vigil mechanism that encourages and supports its Directors and employees to report instances of illegal activities, unethical behavior, actual or suspected, fraud or violation of the Companys Code of Conduct or Ethics Policy. It also provides for adequate safeguards against victimization of persons who use this mechanism and direct access to the Chairman of the Audit Committee in exceptional cases.
During the year under review, no protected disclosure concerning any reportable matter in accordance with the Vigil mechanism and Whistle Blower policy of the Company was received 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 amounts which remained unpaid or unclaimed for a period of seven years from the date they become due for payment have been transferred by the Company to the Investor Education and Protection Fund.
Conservation Of Energy, Technology Absorption and Foreign Exchange Earnings/ Outgo
In view of the nature of activities which are being carried on by the Company, Rules 8(3) A and B of the Companies (Accounts) Rules, 2014 concerning conservation of energy and technology absorption respectively are not applicable to the Company. The Company has been continuously using technology in its operations; however efforts are made to further reduce 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 measures have 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 development or import substitution : Not Applicable
III. In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year) : Not Applicable
IV. Company has not incurred any expenditure on Research and Development during the year under review.
C. Foreign Exchange earning & outgo : Foreign exchange earned in terms of actual in flow Rs.1386596 (previous Year Rs.NIL)
Information as Per Rule 5(2) Of the Chapter Xiii, the Companies (Appointment and Remuneration 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) Rules, 2014 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 and mitigating risks which may impact attainment of short and long term business goals of your company. The risk management framework, which is based on our holding Companys risk management process, is aligned with strategic planning, deployment and capital project evaluation process of the Company. The process aims to analyze internal and external environment and manage economic, financial, market, operational, compliance and sustainability risks and capitalizes opportunities of business success.
The Internal Financial control framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transaction with proper authorization and ensuring compliances with corporate policies.
The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant the provision of the act and the corporate governance requirement as prescribed by the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement, Regulation 2015 (SEBI Listing Regulation).
The performance of the board was evaluated by the board after seeking inputs from all the Directors on the basis of criteria such as board composition and structure, effectiveness of board processes, information and functioning, etc. as provided by the Guidance 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 from the committee members on the basis of criteria such as the composition of the committee, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual director on the basis of criteria such as the contribution of the individual directors to the board and committee meeting like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meeting, etc.
Directors Responsibility Statement
In pursuance of Section 134(3) (c) read with section 134(5) of the Companies Act, 2013, the Directors statement, as an averment of their responsibility, is as under:
(i) The Company has, in the preparation of the annual accounts for the year ended March 31, 2019, followed the applicable accounting standards along with proper explanations relating to material departures, if any.
(ii) They had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs as at 31 March 2019 and of the profit or loss of the Company for the year ended.
(iii) They have taken proper and sufficient care to the best of their knowledge for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) They have prepared the annual accounts for the financial year ended 31 March 2019 on a going concern basis.
(v) They have laid down internal financial controls to be followed by the company and that 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 applicable laws and those systems are adequate and operating effectively.
Auditors and Auditors Report
The Members at the 25 Annual General Meeting of the Company held on 09 September, 2017, had appointed M/s Dinesh Ajmera & Associates, Chartered Accountants (Firm Registration no. 011970C) as the Statutory Auditor of the Company to hold office for a term of five years i.e., from the conclusion of the said Annual General Meeting until the conclusion of 30 Annual General Meeting, subject to rati cation of their appointment by the shareholders, every year. The Ministry of Corporate Affairs vide its Noti cation dated 7 May 2018, has dispensed with the requirement of rati cation of Auditors appointment by the shareholders, every year. Hence, the resolution relating to rati cation of Auditors appointment 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 & Associates have furnished a certi cate that their appointment is within the limits prescribed.
There are no quali cations, reservations or adverse remarks made by Statutory Auditors in their Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report covering the matters listed in Clause 34(2) (e) of the SEBI (LODR), 2015, for the year under review is given as a separate in the Annual Report.
Your Company is committed towards maintaining high standards of Governance. The Report on Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A Certi cate from Practicing Company Secretary con rming compliance to the corporate governance requirements by the Company is attached to this report.
Corporate Social Responsibility
Your Company is committed to improve the quality of life of the communities in its focus areas through long term value creation for all its Stakeholders through its various Corporate Social Responsibility (CSR) initiatives.
Brief details on various focus areas of interventions are part of the Annual Report on CSR activities annexed to this report as "Annexure-C" in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy 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 (Management and 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 under, the Company had appointed M/s Ajit Jain & Co., Practicing Company Secretary, to undertake the Secretarial Audit of the Company for the year ended 31 March 2019. The Secretarial Audit Report issued in this regard is annexed as "Annexure - C" The secretarial audit report does contain any quali cations, reservations, adverse remarks or disclaimer.
Related Party Transactions
All related party transactions that were entered into during the financial year under review were on arms length basis and in the ordinary course of the business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosures in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. There were no materially significant Related Party Transactions made by the Company during the year that required shareholders approval under Regulation 23 of the Listing Regulations.
All Related Party Transactions are placed before the Audit Committee for prior approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which 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 the following 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 any remuneration or commission from any of its subsidiaries.
No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status any companys operation in future.
Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and 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 at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. An Internal Committee is in place to redress complaints received regarding sexual harassment. The Company has not received any complaint of sexual harassment during financial year 2018-2019.
Your directors take this opportunity to thank the customers, shareholders, financial institutions, stock exchanges, SEBI, Reserve Bank of India, National Securities Depository Limited, Central Depository Services (India) Limited and other government and regulatory agencies for their consistent support and encouragement to the Company.
We also place on record our sincere appreciation to all the members of Arihant family including our employees and authorized persons for their hard work, support and commitment. Their dedication and competence has made these results achievable.
|For and on behalf of the Board of Directors|
|Ashok Kumar Jain|