Arihants Securities Ltd Directors Report.

To,

The Members,

Your Directors have great pleasure in presenting the TWENTY FIFTH Annual Report together with the Audited Accounts of your Company for the Financial Year ended 31.03.2019.

FINANCIAL HIGHLIGHTS:

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 the financial year of the company to which the balance sheet relates and the date of the report affecting the financial position of the company.

RESERVES:

The company does not propose to carry any amount to reserves during the financial year.

DIVIDEND:

In order to conserve the financial resources of the company for growth and expansion plans, the Board of Directors do not recommend any dividend for the financial year under review.

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 as at March 31, 2019.The Company has no associate company or joint venture company as on March 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 April 2019.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Nishikanth Mohanlal Choudhry, Managing Director, will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

Board of Directors :

Composition and Category

As on 31 March, 2019, the Board of the Company consists of Five (5) directors. The Board has an optimum combination of Executive and Non-Executive Directors. The composition of 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 and Non-Executive Directors including the Independent Director bring external and wider perspective and independence to the decision making.

Mr. Nishikanth Mohanlal Choudhary, Managing Director of the Company works under the direction, control and supervision of the Board of Directors. The Board of Directors meet regularly to discuss, appraise and approve matters relating to companys strategy, plans, budgets, financials and operations.

The details of the composition, nature of Directorship and the directorships held in companies 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

Committee Chairman

Committee Member

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 and section 8 companies have not been considered.

** only Chairmanship / membership of audit committee and stakeholders relationship committee have been considered.

INDEPENDENT DIRECTORS AND FAMILIRISATION PROGRAMME

In terms of the provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Company stating that 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 Independent Director.

In compliance with Regulation 25 of the SEBI Listing Regulations, the Board has adopted a policy on familiarization programme for Independent Directors of the Company. The policy familiarizes the Independent Directors with the nature of industry in which the Company operates, business model of the Company, their roles, rights and responsibilities in the Company.

The company is making consistent efforts for appointment of whole time Company Secretary and CFO. The company has been availing services of practicing company secretary from time to time to ensure compliance of the provisions of the applicable acts and statutes. Also the Annual Return of the Company is being certified by practicing company secretary from year to year and the company is also taking certifications from them for Stock Exchange Compliances.

Board Agenda :

Meetings are governed by a structured Agenda and a Board member may bring up any matter for consideration of the meeting in consultation with the Chairman. The detailed agenda and relevant information is sent to every director at least 7 working days in advance for each meeting, facilitating effective discussion and decision making. An indicative list of the 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 Shareholders Committee.

• Materially important show cause notices, non-compliances, if any, etc.

Board Meeting:

During the financial year ended 31st March 2019, Four (4) Board Meetings were held. The dates on which the Board Meetings were held are 19.05.2018, 11.08.2018, 01.11.2018 and 09.02.2019. Details of attendance at the Board meetings and the last Annual General Meeting:

Name of the Director

Board Meetings Attended

Attendance in Last AGM

Mr. Ravikant Choudhry

4

Yes
Mr. Nishikanth Mohanlal Choudhary

4

Yes
Mr. Ajit Kumar Chordia

4

Yes
Mr. Narendra B Bhatt

4

Yes
Mrs. Mohana

4

Yes

BOARD COMMITTEES

In compliance to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has various Committees of the Board. Details of scope, constitution, terms of reference, as mentioned below.

(A) AUDIT COMMITTEE:

(i) Composition

The Audit Committee of the Board comprises three directors, namely Mr. Ajit Kumar Chordia, the Chairman, Mr. Ravikant Choudhry and Mrs. Mohana, Members. The composition of Audit 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 the auditors of the Company.

• Discussion and review of periodic audit reports and discussion with external Auditors about the scope of audit including the observations of Auditors.

• Review and monitor the auditors independence and performance

• Overseeing Financial Reporting Process

• Reviewing periodic financial results, financial statements and auditors report thereon.

• Evaluation of internal financial controls and risk management systems.

• Valuation of undertakings or assets of the Company.

(iii) Attendance

The committee met 4 times during the period on the following dates: 19.05.2018, 11.08.2018, 01.11.2018 and 09.02.2019.

Name of the Director

Audit Committee Meetings Attended

Mr. Ajit Kumar Chordia

4

Mr. Ravikant Choudhry

4

Mrs. Mohana

4

(iv) Recommendation of Audit Committee

During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

(B) SHAREHOLDERS RELATIONSHIP COMMITTEE

Shareholders Relationship Committee in line with Section 178 (5) of the Companies Act, 2013 is headed by Mr. Narendra B Bhatt, Independent Director, Mr. Ravikanth Choudhry, Non-executive Director, and Mrs.Mohana, as members.

The Committee monitors redressal of complaints received from shareholders/investors with respect to transfer of shares, non-receipt of dividend, non-receipt of Annual Report etc. The Committee also take note on number of transfers processed, issue of fresh share certificates, dematerialization of share certificates, report about top shareholders, share holding pattern etc.

No Compliant received for this financial year, No instrument of transfers was pending on 31st March, 2019. During the year the Committee was met 11 times 17.09.2018, 29.09.2018, 26.10.2018, 23.11.2018, 07.12.2018, 14.12.2018, 01.02.2019, 22.02.2019, 01.03.2019, 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 Bhatt, Independent Director, Mr. Ajit Kumar Chordia, Independent Director, and , Mr. Ravikant Choudhry, Director as members.

The Nomination and Remuneration Committee met once during the year on 19th May 2018 and all the members have attended the meeting.

The company has a Managing Director and there was no payment to him as he has foregone his remuneration for the year in view of low profits made by the company. No remuneration has been paid to any directors of the company.

(D) SHARE TRANSFER COMMITTEE

With an understanding to provide quick responses for request of transfer, transmission etc., from the Shareholders, the Board of Directors of the Company constituted a committee in the style of "Share Transfer Committee".

Share Transfer Committee is headed by Mr. Ravikant Choudhry Non-executive Director, Mrs. 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, 26.10.2018, 23.11.2018, 07.12.2018, 14.12.2018, 01.02.2019, 22.02.2019, 01.03.2019, 22.03.2019, 30.03.2019 and all members attended the meeting.

BOARD EVALUATION

The Board of Directors of the Company has carried out the annual evaluation of its own performance as well as the evaluation of the working of its Committees and individual Directors. This exercise was carried out through structured questionnaires formulated by the Nomination & Remuneration Committee. The questionnaires are circulated to all the directors to seek their response on the evaluation. The evaluation framework provides for performance parameters and possible paths for improvements.

The performance evaluation of the Non-Independent Directors, Chairman and the Board as a whole were carried out by the Independent Directors.

The Directors have expressed their satisfaction with the evaluation process and its results.

REMUNERATION POLICY OF THE COMPANY

The policy of the Company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Section 178(3) of the Companies Act, 2013, can be viewed on the Companys website www.arihantssecurities.com. There has been no change in the policy since the last financial year.

VIGIL MECHANISM:

The Company has established a vigil mechanism and overseas through the committee the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee 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 the regulators or courts or tribunals which impact the going concern status and future operations of the Company.

DEPOSITS:

The Company has not accepted any deposits either from the shareholders or public within the 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 COMPANIES ACT, 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 guarantees in the normal course of business to meet contractual obligations.

LISTING:

The Equity Shares of the Company are listed at the Bombay Stock Exchange. The Annual Listing 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 they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of Companies Act, 2013 and the relevant rules.

AUDITORS:

M/S. N R Krishnamoorthy & Co, Chartered Accountants, Chennai (FRN: 001492S), have resigned from the auditorship as Statutory Auditors of the company. It is proposed to appoint Mr. K. Nandhiswaran (Membership No. 207644), Chartered Accountants, Chennai who has given their Consent and eligibility for appointment as the Auditor. The company has received confirmation that their appointment will be within the limits prescribed under Section 139 read with section 141 of the Companies Act, 2013. Now it is recommended to the shareholders for Appointment of Mr. K. Nandhiswaran as the Companys Statutory Auditors from the conclusion of this annual general meeting and to hold office until the conclusion of the 30th Annual General Meeting of the Company.

The Audit Committee in its meeting has recommended the appointment of the Auditors. The necessary resolution is being placed before the shareholders for approval.

AUDITORS REPORT:

There are no reservations, qualifications or adverse remarks contained in the Auditors Report.

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 Directors of the Company has appointed M/s. ASJ & Associates, Practicing Company Secretaries to undertake Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report is 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 and assures 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 forms part of this Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on arms length basis, in the ordinary course of business and were in the compliance with the applicable provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015. There were no materially significant Related Party Transactions made by the company during the year that would have required Shareholder approval under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.

There were transactions during the year and the particulars of contracts or arrangements with related parties in Form AOC-2 are annexed and forms part of this report.

CORPORATE GOVERNANCE:

Regulation 15(2) (a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 states that COMPLIANCE WITH THE CORPORATE GOVERNANCE PROVISIONS AS SPECIFIED 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 PREVIOUS FINANCIAL YEAR.

Since the Paid Up Equity Capital of the Company is only Rs. 5,00,00,000 (Rupees Five Crore only)and Net Worth is Rs. 5,18,81,665 (Five Crore Eighteen Lakhs Eighty One Thousand Six Hundred and Sixty five only), the company is not required to submit Corporate Governance along with Directors Report.

However your Board of Directors assure the members that the Company continues to maintain highest Standards of Integrity, transparency in operations, excellence in service to all shareholders and strong Corporate Governance Standards.

The Board of Directors assures that the Corporate Governance Standards as stipulated in the Companies Act, 2013 have been fully complied with.

CORPORATE SOCIAL RESPONSIBILITY:

The provisions of the Companies Act, 2013 on Corporate Social Responsibility are not applicable 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 account for energy consumptions. Accordingly, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 concerning conservation of energy and technology absorption respectively are not applicable to the Company. However, the Company is taking all possible measures to conserve energy. The management keeps itself 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, PROHIBITION AND REDRESSAL) ACT, 2013

During the year under review, no complaints were received pursuant to the Sexual Harassment 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 Indian rupee and partly due to political reasons. So the Stock markets and other financial sectors had gone through very tough times and had to content with the stagnation. The price rise and other national and International factors have also contributed to the stagnated growth of the Indian Capital Markets. Under the above circumstances, our Companys performance for the year ended was moderate.

The present outlook in the Capital Markets seems to be encouraging when compared to the previous 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., Share Segment and Loan Segment. It operates in one geographical segment; services in India only. The particulars of segment wise revenue, results and capital employed are furnished separately.

c) Internal Control System and its adequacy

The system of internal control has been established to provide reasonable assurance of safeguarding assets and maintenance of proper Accounting records and its accuracy. The business risks and its control procedures are reviewed frequently. Systems audit is also conducted regularly to review the systems with respect to Security and its adequacy. Reports are prepared and circulated to Senior Management and action taken to strengthen controls 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 companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the companys operations include economic conditions affecting demand/supply and prices conditions in the domestic and overseas markets in which the company operates/ going to operate, changes in government regulations, tax laws and other statutes and other incidental factors.

COMPLIANCE WITH RBI PRUDENTIAL NORMS:

The company has complied with the prudential norms on income recognition, accounting standards, assets classification, provisioning for bad and doubtful debts as applicable to it in terms of Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 for the year ended on 31 March 2019.

COMPANYS VISION AND PHILOSOPHY ON THE CODE OF GOVERNANCE:

The vision of Arihants Securities Limited is to be a financially sound, profitable, growth oriented and technology friendly Company committed to building values and maximizing gains for all its stakeholders, for those doing business with it, and for others associated with it. In its pursuit to attain its goals, the Company is laying maximum emphasis on the effective system of Corporate Governance particularly with a view to improve its image, efficiency, effectiveness, and integrity in all its dealings. The Companys Corporate Governance philosophy is to be ethical in its conduct of its business, to constantly strive to grow with profits, and to enhance shareholders value to the maximum extent. The Corporate Governance policies of your Company recognize the accountability of the Board Of Directors vis-a-vis all its constituents viz. Borrowers, Shareholders, Employees, Government & other Regulatory Authorities, and others dealing with it and doing business with it.

DIRECTORS RESPONSIBILITY STATEMENT:

As per Section 134(3)(c) of the Companies Act, 2013 the Board of Directors hereby confirm the following statement:

(i) in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) the directors 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 of the company as at March 31, 2019 and of the profit and loss of the company for that period;

(iii) the directors had taken proper and sufficient care 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) 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 the company and that such internal financial controls are adequate and were operating effectively and

(vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT:

Your directors wish to place on record their deep appreciation of the dedication and commitment of employees to the growth of your company during the year. Your directors also express their sincere gratitude to the customers, bankers, consultants, Auditors and the shareholders 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)