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As on: Dec 04, 2020 04:21 AM
Arihant Institute Ltd
Industry: Miscellaneous
BSE Code ISIN Demat Book Value(Rs) NSE Symbol Mar.Cap(Rs Cr.) P/E(TTM) EPS(TTM) Face Value(Rs)
541401 INE997Z01016 14.5401353 N.A 1.85 49.25 0.04 10

To,

THE MEMBERS,

ARIHANT INSTITUTE LIMITED

CIN: L80301GJ2007PLC050413

Your Directors are pleased to present herewith the 12(TH) ANNUAL REPORT together with the Audited Financial Statements and Auditors' report thereon for the year ended 31(st) March, 2019.

FINANCIAL RESULTS/ STATE OF COMPANY AFFAIRS:

The Financial Results of the Company for the year ended on 31(st)March, 2019 are as follows:-

(Amt. in Rs.)
Particulars Year Year
2018-2019 2017-2018
Gross Income 1,74,74,661/- 1,82,04,971/-
Profit / (loss) Before Depreciation, Amortization and 1,44,73,978/- 1,45,90,711/-
Taxation
Depreciation and Amortization 1,186,656/- 17,38,429/-
Profit / (Loss) before Taxation 18,14,026/- 18,75,832/-
Extra Ordinary Item 0.00/- 0.00/-
Provision for taxation - For Current Tax 3,00,000/- 4,75,000/-
Provision for taxation - For Deferred Tax (1,46,221)/- (3,44,298)/-
MAT credit Entitlement 0.00/- 0.00/-
Profit / (Loss) after Taxation 16,60,247/- 17,45,130/-
Appropriations: 0.00/- 0.00/-
Proposed Dividend

CONSOLIDATED FINANCIAL RESULTS:

The company does not have any subsidiary within the meaning of the Companies Act, 2013. So consolidated financial results are not applicable.

DIVIDEND:

In order to conserve the resources, your directors do not recommend any payment of dividend for the year under review.

TRANSFER TO RESERVES:

Except the Profit, the Company has not transferred any amount to reserves during the year.

DEPOSITS:

The Company has not accepted any deposits from Shareholders and Public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made there under. There were no deposits, which were claimed and remained unpaid by the Company as on 31(st) March, 2019.

LOANS FROM DIRECTOR/RELATIVE OF DIRECTOR:

The balances of monies accepted by the Company from Directors/relatives of Directors at the beginning of the year were Rs. 3,398,902/- and at the close of year was Rs. 210,316/-

LOANS, GUARANTEES & INVESTMENTS U/S 186:

Particulars of loans given and of the investments made by the Company, if any during the year under review are as mentioned in the Notes forming part of the Financial Statements.

DIRECTORS' RESPONSIBILITY STATEMENT:

It is hereby stated that:

(a) In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) 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 of the company at the end of the financial year and of the Profitof the Company for that period;

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The Directors have prepared the annual accounts ongoing concern basis;

(e) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

LISTING OF SHARES:

During the year under review on 5(th) May, 2018, 94,05,006 Equity Shares of Rs.10/- each has been listed on the BSE SME (Small and Medium Exchange).

USE OF SALE PROCEEDS:

This Issue is being undertaken to meet the objects, as set forth herein, and to realize the benefits of listing of our Equity Shares on Stock Exchanges, which in our opinion would enhance our Company‘s visibility, brand name and enable us to avail of future growth opportunities. The other Objects of the Issue also include creating a public trading market for the Equity Shares of our Company by listing them on BSE SME Platform.

The Proceeds from the Issue are proposed to be utilized by our Company for the following objects:

1. Training Centre Expansion

2. Technical Infrastructure -Servers & Studio, Portal and Content Development

4. Branding and Marketing

5. Corporate Office Restructuring

6. General corporate purpose

7. IPO related expense

(Collectively referred as the "objects")

The main objects clause of our Memorandum enables our Company to undertake its existing activities and these activities which have been carried out until now by our Company are valid in terms of the objects clause of our Memorandum of Association.

FUND REQUIREMENTS

Breakup of the total fund requirement for the Project work in progress is set forth below:

(Amt in Rs.)
Sr. No. Particulars

Amount

In % age

1 Training Centre Expansion 4,18,28,094 55.77%
Technical Infrastructure-Servers, Studio &
2 Content 1,16,96,000 15.59%
3 Corporate Office Furniture &Equipments 47,50,000 6.33%
4 Branding & Marketing 71,58,116 9.54%
5 General Corporate Purpose 58,17,790 7.76%
6 SME IPO Expenses 37,50,000 5.00%
TOTAL 7,50,00,000 100.00%

The fund requirements mentioned above are based on internal management estimates of our Company and the Lead Manager do not have any opinion on the justification for the same with regards to its exact requirement or appraised by any bank, financial institution or any other external agency. They are based on current circumstances of our business and our Company may have to revise its estimates from time to time on account of various factors beyond its control, such as market conditions, competitive environment, cost of commodities and interest or exchange rate fluctuations. The figures are relied on the documentary evidences provided by the Company, up to the extent available. Consequently, the fund requirements of our Company are subject to revisions in the future at the discretion of the management.

In the event of any shortfall of funds for the activities proposed to be financed out of the issue proceeds as stated above, our Company may reallocate the issue proceeds to the activities where such shortfall has arisen, subject to compliance with applicable laws. Further, in case of a shortfall in the issue proceeds or cost overruns, our management may explore a range of options including utilizing our internal accruals or seeking debt financing. However, due to economic slowdown and change in the preference pattern of the customer, management has made change in business strategy after consultation with board and approval in the board meeting. Management has decided to utilize IPO proceeds, as suggested by Board Members, towards repayment of debt, creditors liability, statutory obligation, advance against purchase of technology, advance against rental property and working capital requirement.

Management at forthcoming board meeting and AGM, shall take necessary approval from directors and shareholders. Post approval from shareholders and management shall be intimated to Stock Exchange and ROC for necessary change. Management shall take necessary steps to assure that effects of change objects shall be reflected in the financials of the company and wherever required.

GROUP COMPANIES:

Following are the group companies of Arihant Institute Limited:

1. Aadi Corpoway Private Limited

2. Arihant Press Private Limited

INDEPENDENT DIRECTORS:

In terms of Section 149 of the Companies Act, 2013 and rules made there under, as on date of this report, the Company has two Non-Executive Independent Directors in line with the Companies Act, 2013.

A separate meeting of Independent Directors was held in the financial year 2018-19to review the performance of Non- Independent Directors and Board as whole and of the chairman and assess the quality, quantity and timeliness of flow of information between Company Management and Board. The terms and conditions of appointment of Independent Directors and Familiarization program for Independent Director are incorporated on the website of the Company at www.arihantinstitute.com.

The Independent directors have submitted their disclosure to the Board that they fulfil all the requirements as to qualify for their appointment as an Independent Director under the provisions of Section 149 read with Schedule IV of the Companies Act, 2013. The Board confirms that the independent directors meet the criteria as laid down under the Companies Act, 2013.

CHANGES IN CAPITALSTRUCTURE:

During the year under review, there was no change in the authorized share capital of your Company which stands as Rs. 9,50,00,000/- (Rupees Nine Crore Fifty Lacs) divided into 95,00,000 (Ninety-five Lacs) Equity Shares of Rs. 10/- each. During the year under review, 25,00,000 Equity Shares of Rs. 10/- each at the premium of Rs. 20/- per share has been issued by the company under an Initial Public Offer dated 31(st) May, 2018. The paid up share capital stands as Rs.94,050,060 as on 31(st) March 2019.

MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY:

No material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which this financial statement relate and on the date of this report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

During the year under review, there is no change in the nature of business of your Company.

DIRECTORS, KMPs AND CHANGES THEREOF:

1. INDUCTION OF DIRECTORS AND KMP:

During the year under review, Mr. Sandip Vinodkumar Kamdar was appointed as an Additional Director (Designated as Whole Time Director) and Chief Executive Officer of the company w.e.f. 31/08/2018 and to hold office up to the date of the ensuing Annual General Meeting. Necessary Resolution has been proposed for his appointment as a director of the company for an approval of the members of the company.

During the year under review, w.e.f 8(th) June, 2018, Mrs. Falguni Dhrumil Shah has resigned from the post of Company Secretary and Compliance Officer of the company. The Board places appreciation for the services rendered by her during their tenure with the Company.

Miss. Jigisha Bimalbhai Solanki is appointed as a Company Secretary & Compliance Officer of the Company on 11(th) June, 2018. On 30/09/2018, Miss. Jigisha Bimalbhai Solanki has resigned from the post of Company Secretary and Compliance Officer of the company. The Board places appreciation for the services rendered by her during their tenure with the Company. During the year under review, on 04(th) January, 2019, Miss. Nisha Kushwaha has been appointed as a Company Secretary and Compliance Officer of the Company After the closure of the financial year but before the date of reporting on 01(st) May, 2019 Miss. Nisha Kushwaha has resigned from the post of Company Secretary and Compliance Officer of the company.The Board places appreciation for the services rendered by her during their tenure with the Company.

2. CHANGE IN DESIGNATION OF DIRECTORS:

During the year under review, there was no change in the designation of any of the directors of the company.

3. CESSATION:

Mr. Kashyap Trivedi (DIN: 01931400) has resigned from the post of Whole Time Director & Chief Executive Officer (CEO) of the company due his pre-occupancy of business dated 16(th) July 2018.The Board places appreciation for the services rendered by him during their tenure with the Company.

After the closure of the financial year but before the reporting period Mr.Jigar Umeshbhai Shah (DIN:05328340) and Mr. Rushiraz Zavernhai Patel (DIN:08017580) directors of the company has filed their respective Form DIR-11 dated 25/05/2019 and 02/08/2019 intimating their resignations from the company.

DETAILS OF BOARD MEETINGS:

During the year under review, the Board of Directors met 7 times and an intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. The details of dates of meeting and attendance of directors in such meetings is enclosed herewith as an Annexure: 1

COMMITTEE OF THE BOARD AND THEIR MEETINGS:

As on 31(st) March, 2019, the Board had Committees i.e. the Audit Committee, the Nomination & Remuneration Committee, the Stakeholder's Relationship Committee and Internal Complaints Committee. Full details of the constitution of such committees and meeting held of such committee during the financial year is annexed herewith as an Annexure: 2.

EXTRACTS OF ANNUAL RETURN:

Extract of the Annual Return for the financial year ended under review in the prescribed form MGT-9, pursuant to provisions of Section 92(3) of the Companies Act, 2013 is annexed to this report as Annexure- 3.

ANNUAL EVALUATION OF BOARD'S PERFORMANCE:

Pursuant to the requirements of the Companies Act, 2013 and in accordance with the policy laid down by the Nomination and Remuneration Committee (NRC), as approved by the Board of Directors, the Board has carried out an annual evaluation of its performance, its Committees and all individual directors. In a separate meeting of Independent Directors, performance of Non Independent Directors, performance of the Board as a whole and performance of the Chairman & Managing Director was evaluated.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

There were no related party transactions made by the Company during the year under review.

STATUTORY AUDITORS:

Your company has been listed on BSE SME Platform w.e.f 5(th) June, 2018. As per the requirement of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, listed company have to conduct audit from the auditor holding the certificate of Peer Review Auditor. As M/s. A. J. Parekh & Associates does not holding the certificate of Peer Review Auditor, they placed before the board a resignation letter dated 21(st) August, 2018 stating that they will not be able to do audit from the financial year 2018-19 onwards and they will hold office upto the date of issue of Audit Report for the financial year 2017-18 only.

To fill up such casual vacancy aroused on the place of Statutory Auditor of the Company, on the recommendation of an Audit Committee, the board of Directors on their meeting dated 31(st) August, 2018, appointed M/s. NGST & Associates, Chartered Accountants, (FRN:135159W) holding the certificate of Peer Review Auditor, as a Statutory Auditor of the company.

Pursuant to provision of Section 139(8) of the Companies Act, 2013 and rules made thereunder from time to time, the board is entitled to fill up the casual vacancy but if such casual vacancy is as a result of the resignation of an auditor, such appointment shall also be approved by the company at a general meeting convened within three months of the recommendation of the Board and he shall hold the office till the conclusion of the next annual general meeting.

The Directors recommend to the members of the company to give an approval for an appointment of M/s. NGST & Associates and reappoint them for the period of Five Year from 2018-19 to 2022-23.

SECRETARIAL AUDIT:

As per Section 204 of the Companies Act, 2013, every listed company and Unlisted Public Company having paid up share capital of Rupees Fifty Crore or more or Turnover of Rupees Two Fifty Crore or more is required to annex a Secretarial Audit Report with its Board Report, given by A Practicing Company Secretary.

As on the financial year ended on 31(st) March, 2019, your company is falling under the requirement of Section 204 of the Companies Act, 2013 so the requirement to do Secretarial Audit is applicable for the financial year 2018-19.

OBSERVATION BY STATUTORY AUDITOR:

The Auditors' Report to the members for the year under review does not contain any qualification.

INTERNAL AUDITOR:

For the financial year 2018-19, your company was not falling under the criteria of Section 138 of the Companies Act, 2013 read with rule 13 of Companies (Accounts) Rules, 2014 so the requirement to appoint an Internal Auditor of the company for the year 2018-19 is not applicable.

INTERNAL FINANCIAL CONTROL SYSTEM:

The Company has an Internal Financial Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Financial Control function is well defined.

REMUNERTION POLICY:

In accordance with the provisions of Section 178 of the Companies Act, 2013 and Part D of Schedule II of SEBI (LODR) Regulations, 2015, the policy on Nomination and Remuneration of Directors, KMPs and Senior Management of your Company is uploaded on the website at the following link: Link: http://arihantinstitute.com/policies/

RISK MANAGEMENT:

The Company has in place a robust risk management framework which identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed and mitigated to protect the interest of the shareholders and stakeholders, to achieve business objectives and enable sustainable growth.

The risk management framework is aimed at effectively mitigating the Company's various business and operational risks, through strategic actions. Risk management is embedded in our critical business activities, functions and processes. The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risk and future action plans.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

During the year under review, there are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operation.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your attention is drawn to the perception and business outlook of your management for your company forcurrent year and for the industry in which it operates including its position and perceived trends in nearfuture. The Management Discussion and Analysis Report as stipulated under Schedule V of the SEBI (ListingObligations & Disclosure Requirements) Regulations, 2015 is annexed herewith as an Annexure: 4 and forms part of this Director'sReport.

PARTICULARS OF EMPLOYEES RELATED DISCLOSURES

Details as required under Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the statement showing the name of the employees drawing remuneration in excess of the limits set out in Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-5.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Section 135 of the Companies Act, 2013 has imposed CSR mandate on companies having minimum threshold limit of net worth, turnover or net profit as prescribed. Since the company does not meet any one of these criterion, it remains outside the purview of Section 135 and consequently the reporting requirements there under do not at present apply to us.

VIGIL MECHANISM

Your Company has formulated a vigil mechanism to deal with instances of unethical behaviour, actual or suspected, fraud or violation of Company's code of conduct or ethics policy. The policy on Vigil Mechanism is uploaded on the website of the Company at following link: http://arihantinstitute.com/policies/.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company has in place an Anti harassment policy in line with the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Any complaint/ grievances from women employees are reported to Chairman. All employees (Permanent, contractual, temporary, trainees) are covered under the policy. There was no complaints received from any employee during the financial year 2018-19and no complaint is outstanding as on 31(st) March, 2019.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated hereunder:-

Conservation of Energy:

1. The steps taken or impact on conservation of energy:-

The Company has taken measures and applied strict control system to monitor day to day power consumption, to endeavor to ensure the optimal use of energy with minimum extent possible wastage as far as possible. The day to day consumption is monitored and various ways and means are adopted to reduce the power consumption in an effort to save energy.

2. The steps taken by the company for utilizing alternate sources of energy.

Company has not taken any step forutilizing alternate sources of energy.

3. The capital investment on energy conservation equipments.

Company has not made any capital investment on energy conservation equipments

Technology Absorption

Company has not imported any technology and hence there is nothing to be reported here.

Foreign Exchange Earning and Outgo:

The details of Foreign exchange Earnings and outgo during the year are as follows:

(Rs. In Lacs)
Particulars 2018-2019 2017-2018
Foreign Exchange Earnings (Rs.) NIL NIL
Foreign Exchange Outgo (Rs.) NIL NIL

CAUTIONARY STATEMENT:

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward looking within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed in the statement.

ACKNOWLEDGEMENTS:

The Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, various State Governments, the Banks/ Financial Institutions and other stakeholders. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company's success. The Directors look forward to their continued support in future.

FOR ARIHANT INSTITUTE LIMITED

DATE: 08/12/2019
PLACE: AHMEDABAD SIGNATURE SIGNATURE
SANDIP/VINODKUMAR KAMDAR VINOD CHIMANLAL SHAH
CHIEF EXECUTIVE OFFICER & WHOLE TIME DIRECTOR CHAIRMAN & NON EXECUTIVE DIRECTOR
DIN:00043214 DIN:08033798