DIRECTORS' REPORT TO, THE MEMBERS ARIHANT TOURNESOL LIMITED Your Directors take pleasure in presenting the 24 th Annual Report along with Audited Financial Statements of your Company for the Financial Year ended 31st March, 2015 2. DIVIDEND: With a view to repair past losses which resulted in erosion of reserves and conservation of resources for future betterment, the Board of Directors do not recommend any dividend for the year. 3. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO (SECTION 134 (3) (ml OF THE COMPANIES ACT, 2013: Since there is no manufacturing carried on by the Company, particulars required to be given in the terms of Section 134(3) (c) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of energy and Technology Absorption is not applicable. The Company has no earning and expenditure in foreign Exchange. 4. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT; There have been no Material changes and Commitments that have been affecting the financial position of the Company which have been occurred between the end of the financial year of the company to which the financial statements relate and the date of the report 5. REVISION OF FINANCIAL STATEMENT OF THE COMPANY/THE REPORT OF THE BOARD: The Financial Statement of the Company/Board Report is not required to be revised during the Financial Year 2014-2015 as the same is as per Section 131 of the Companies Act, 2013. 10. FIXED DEPOSITS: During the year, the Company has not accepted any deposits covered under section 73 to 76 under the Companies Act, 2013. 11. INTERNAL FINANCIAL CONTROL: The Company has adequate and effective control systems, commensurate with its size and nature of business, to ensure that assets are efficiently used and the interest of the Company is safe guarded and the transactions are authorized, recorded and reported correctly. Checks and balances are in place to determine the accuracy and reliability of accounting data. The preventive control systems provide for well-documented policy, guidelines, and authorization and approval procedures. The Company has also developed a Risk Assessment policy and is reviewed by the Board of Directors. 12. BOARD MEETINGS A calendar of Meetings is prepared and circulated in advance to the Directors. The Board met five times during the year. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. The details of which are given below: 14. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS UNDER SECTION 149 (6) OF THE COMPANIES ACT, 2013: The Company has received the necessary declaration from each Independent Directors in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In view of the above provisions, your Company has following Independent Directors 15. NOMINATION AND REMUNERATION COMMITTEE: The 'Nomination and Remuneration Committee' consists of three Directors with two independent directors and one executive director with the Chairman being the Independent Director, and the said constitution is in accordance with the provisions of Section 178 of the Companies Act, 2013. The Committee acts in accordance with the Terms of Reference as approved and adopted by the Board. The Composition of the Committee is as under: Chairman: Mr. Dayanand Jha Members: Ms. Kalpita Sawant and Mr. Rajender Gurnarti. 16. AUDIT COMMITTEE: In accordance with the provisions of Section 177 of the Companies Act, 2013 your Company has constituted an "Audit Committee" comprising of minimum three directors consisting of two nonexecutive Independent directors and one executive director with the Chairman being Independent director. The Audit Committee acts in accordance with the Terms of Reference specified by the Board in writing. Chairman: Mr. Dayanand Jha Members: Mr. Rajender Gurnani and Ms. Kalpita Sawant The functions of the Audit Committee are broadly: (a) Overview of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. (b) Review and monitoring of internal control system and compliance of audit observations of the Auditors. (c) Review of the financial statements before submission to the Board. (d) Supervision of other financial and accounting matters as may be referred to by the Board. (e) Reviewing, with the management, performance of statutory and internal auditors, and adequacy of internal control systems (f) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as have post-audit discussion to ascertain any area of concern. (g) Reviewing the company's financial and risk management policies. (h) Overseeing vigil mechanism for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate and exceptional cases. 17. THE VIGIL MECHANISM: Pursuant to Section 177 of the Companies Act, 2013, the company has established a 'Vigil Mechanism' for directors and employees to report their genuine concerns to the company. The company oversees this 'Vigil Mechanism' through the Audit Committee of the Board. 18. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES As the company has been incurring losses until last year, it was not obligatory upon the company to form a CSR committee pursuant to Section 135 of the Companies Act, 2013 and the Rules made there under. 19. QUALIFICATION GIVEN BY THE AUDITORS The Board of Directors of the Company has given their explanations or comments on every qualification, reservation or adverse remark or disclaimer made by Statutory Auditor — Refer Annexure VIII. 20. AUDITORS: R.B. Pandya & Co., who are the statutory auditors of your Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. Members of the Company at the AGM held on 30th, September, 2014 had approved the appointment of R.B. Pandya & Co as the Statutory Auditors for a period of three financial years i.e., up to Financial Year ended 2017. As required by the provisions of the Companies Act, 2013, their appointment should be ratified by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM. 21. LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY The company has not given any loan or guarantee or provided security in connection with a loan to any other body corporate during the year. 22. CONTRACT OR ARRANGEMENT WITH RELATED PARTIES The Company has not entered into transactions with related parties in accordance with the provisions of the Section 188 of Companies Act, 2013 and the rules made thereunder. 23. RISK MANAGEMENT. Your Directors have enlarged mandate of Audit Committee to include responsibility to assist the Board in (i) overseeing and approving the company's enterprise wide risk management framework; and (ii) periodic appraisal to assess any change needed in the context of changing business environment 24. PERFORMANCE EVALUATION The company has in place a policy on performance evaluation of independent directors, board, committees and individual directors, the board of directors evaluates its own performance in terms of operations of the company, financial results etc. the performance of committee(s) is evaluated by the board based on effectiveness of committee, its functioning and decisions etc. the board also reviews the performance of individual director (s) based on the contribution of the individual director to the board/ committee meetings, participation in discussions, inputs given in the meeting. As required under section 178(2) of the Companies Act, 2013 and under Schedule IV to the Companies Act, 2013 on Code of conduct for Independent Directors, a comprehensive exercise for evaluation of the performances of every individual director, of the Board as a whole and its Committees and of the Chairperson of the Company has been carried by your company during the year under review as per the evaluation criteria approved by the Board and based on guidelines given in Schedule IV to the Companies Act, 2013. For the purpose of carrying out performance evaluation exercise, four types of Evaluation forms were devised in which the evaluating authority has allotted to the individual Director, the Board as a whole, its Committees and the Chairperson appropriate rating as Excellent, Very Good, Good or Satisfactory depending upon the performance. Such evaluation exercise has been carried out (i) of Independent Directors by the Board (ii) of Non-independent Directors by all the Independent Directors in separate meeting held for the purpose (iii) of the Board as a whole and its Committees by all the Independent Directors in separate meeting held for the purpose on 20thAugust, 2015. (iv) of the Chairperson of your Company by the Independent Directors in separate meeting held on 21th August, 2015 after taking into account the views of the Executive and Non-Executive Directors (v) of individual Directors by the Nomination and Remuneration Committee (vi) of the Board by itself Having regard to the industry, size and nature of business your company is engaged in, the evaluation methodology adopted is, in the opinion of the Board, sufficient, appropriate and is found to be serving the purpose. 25. EQUITY SHARES WITH DIFFERENTIAL RIGHTS Your Company has not issued any equity shares with deferential voting Rights. 26. DISCLOSURE OF REMUNERATION PAID TO DIRECTOR AND KEY MANAGERIAL PERSONNEL; Your company has not paid any remuneration to Director nor the Key Managerial Personnel 27. PARTICULARS OF EMPLOYEES: None of the employees of the Company is drawing remuneration in excess of the limits prescribed under Rule (5)(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 28. EMPLOYEES'' STOCK OPTION PLAN: Your Company has not issued any Employee Stock Option Plan to their employees as Company is not burgeoning rather is reviving from heavy losses. 29. SWEAT EQUITY SHARES: Your Company has not issued any no. of Sweat equity shares according to section 54 of the Companies Act, 2014. Since the shares are not issued the details of issuance of sweat equity shares to its directors/ employees in accordance with Section 54 of the Companies Act, 2013 read with Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable. 30. BOARD EVALUATION MECHANISM: Pursuant to the provisions of Companies Act 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, that of individual Directors as well as evaluation of its committees. The evaluation criteria, as defined in the Nomination and Remuneration Policy of the Company, covered various aspects of Board such as composition, performance of specific duties, obligations and governance. The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution made in the discussions, contribution towards formulation of the growth strategy of the Company, independence of judgement, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company etc. The Directors have expressed their satisfaction with the evaluation process. 31. LISTING ON STOCK EXCHANGES Your company's equity shares are listed on The Bombay Stock Exchange, Mumbai (BSE). The company has paid the listing fees to the stock exchanges for the financial year 2014-15. 32. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to sub-section (5) of Section 134 of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained /received from the operating management, your Directors make the following statement and confirm that- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) 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 at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had 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 had prepared the annual accounts on a going concern basis; (e) the directors had laid down internal financial controls to be followed by the company and such internal financial controls are adequate and operating effectively (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and with aid down internal financial controls to be followed by the company and that such systems were adequate and operating effectively. 33. ACKNOWLEDGEMENT: Your Directors place on record their sincere gratitude for the assistance, guidance and co-operation the Company has received from all stakeholders. The Board further places on record its appreciation for the dedicated services rendered by the employees of the Company. For and on behalf of the Board CHAIRMAN Place : MUMBAI Date : 05/09/2015 |