DIRECTOR'S REPORT Dear Shareholders, Your Directors are pleased to present the Twenty Third Annual Report on the business and operations of your Company together with the audited financial statements and accounts for the year ended 31st March 2015. Review of Operations During the year under review, the company has posted gross income of Rs.4,938.19 lacs (previous year Rs. 3,567.13) on a standalone basis and a net profit after tax, for the year 2014-15, of Rs.706.90 lacs compared to Rs.251.26 Lacs in the previous year. On a consolidated basis during the year under review, the company has posted gross income of Rs.6,212.65 lacs (previous year Rs. 4,633.34). The consolidated net profit during the same period stands at Rs.1,108.20 lacs compared to Rs.360.27 lacs in the previous year. A detailed note on the Company's 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 Clause 49 of the Listing Agreement with the BSE Ltd. Dividend Your Directors recommended a dividend of Rs.0.75 per share i.e. 15 per cent (previous year also 15 per cent) on 2,08,22,560 equity shares to be appropriated from the profits of the year 2014-2015, subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM). Transfer to General Reserves The Company proposes to transfer Rs.400.00 lacs to the general reserves out of the amount available for appropriations and an amount of Rs.236.58 lacs is proposed to be retained in the Profit and Loss Account. Public Deposits The Company did not accept any public deposits during the year under review. Subsidiaries Your Company has seven subsidiaries: 1. Arihant Futures and Commodities Limited 2. Arihant Financial Services Limited 3. Arihant Lifespace Infra Developers Limited (formerly - Arihant Finsec Limited) 4. Arihant Insurance Broking Services Limited 5. Arihant Financial Planners and Advisors Pvt. Ltd. 6. Ahinsa Lifespace Infraheight Ltd. 7. Arihant Housing Finance Corporation Ltd. Pursuant to the general circular no. 2/2011 dated 8th February 2011 of the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit & Loss A/c. and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. 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 and the said annual accounts will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies. Directors In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of the Company, Mr. Ashok Kumar Jain, who is due to retire by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. The company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of Independence as prescribed both under the Act and clause 49 of the listing agreement with the stock exchange. Number of Meetings of The Board The details of the number of meetings of the Board held during the financial year 2014-15 forms part of the Corporate Governance Report. Particulars of Loans, Guarantees or Investments By Company 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. Whistle Blower Policy The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the company www.arihantcapital.com 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. Transfer of Amounts To Investor Education And Protection Fund Pursuant to the provisions of Section 125(1) of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of seven years 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, Rule 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. However as per Rule 8(3)C, details regarding foreign exchange inflow and outflow shall be reffered as mentioned in Note No. 26 of Notes forming part of Balance Sheet. Particulars of Employees The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Director Report for the year ended 31st March, 2015 is given in the separate "Annexure C " of this Report. The above annexure is not being sent along with this Report to the members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by the Members at the Registered Office of the Company, 21 days before the 23rd Annual General Meeting and upto the date of the ensuing Annual General Meeting during business hours on working days. Director's Responsibility Statement In pursuance of Section 134(3) (c) read with section 134(5) of the Companies Act, 2013, the 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 March 31, 2015, followed the applicable accounting standards along with proper explanations relating to material departures, if any. (ii) The Directors have 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 31st March 2015 and of the profit or loss of the Company for the year ended on that date. (iii) The Directors have 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 have prepared the annual accounts for the financial year ended 31st March 2015, on a going concern basis. (v) The Directors 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) There is a proper system to ensure compliance with the provisions of all applicable laws and that such system are adequate and operating effectively. Auditors and Auditor's Report M/s Arora Banthia & Tulsiyan, Chartered Accountants, auditors of the company, bearing firm registration no. 007028C retire at the ensuing AGM and, being eligible, offer themselves for re-appointment. As required under the provisions of section 139 of the Companies Act, 2013, the Company has obtained written confirmation from the M/s Arora Banthia & Tulsiyan that their re-appointment, if made, would be in conformity with the limits specified in the said Section. The notes to the accounts referred to in the Auditor's Report are self-explanatory and therefore, do not call for any further comments. Management Discussion and Analysis Report The Management Discussion and Analysis Report covering the matters listed in Clause 49 of the Listing Agreement for the year under review is given as a separate statement in the Annual Report. Corporate Governance Your directors reaffirm that the Company has complied with the corporate governance norms as stipulated under the provisions of the listing agreement entered into with the stock exchanges and prescribed by the Securities and Exchange Board of India (SEBI). A Certificate from practicing company secretary confirming compliance to the corporate governance requirements by the Company is attached to this report. A detailed report on corporate governance as stipulated in clause 49 of the listing agreement is included in the Annual Report. Secretarial Audit Pursuant to the provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of managerial personnel) Rules, 2014 the company has appointed M/s Ajit Jain & Co., practicing company secretary to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith "Annexure B". Related Party Transactions All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with the promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large and hence, enlosing of form AOC-2 is not required, suitable disclosures as required by AS-18 has been made in notes of financial statement. Prevention of Insider Trading The company has adopted a code of conduct for prevention of insider trading with a view to regulate trading in securities by the Directors and designated employees of the company. The code requires pre-clearance for dealing in the company's shares and prohibits the purchase or sales of company shares by the Directors and designated employees by in possession of unpublished price sensitive information in relation to the company and during the period when the trading window is closed. The compliance officer is responsible for implementation of the code. All Board of Directors and designated employees have confirmed compliances with the code. Consolidated Financial Statements In accordance with the accounting standard AS-21, the consolidated financial statements are furnished herewith and form part of this report accounts. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by their Board of Directors. GENERAL 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: • Details relating to deposits covered under chapter V of the Companies Act, 2013. • Issue of equity shares with the differential rights as to dividend, voting or otherwise. • Issue of shares (including sweat equity shares) to employees of the company under any scheme. • 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 company's operation in future. Your Director further state that as required by the sexual harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. During the year under review, no complaints were reported to the Board. ACKNOWLEDGMENT 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 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 (Chairman Place: Indore Dated: 29th May, 2015 |