Arihant Foundations & Housing Ltd

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<dhhead>DIRECTORS’ REPORT</dhhead>

Your directors are pleased to present the Directors’ Report of your Company together with the Audited Financial

Statements and the Auditors’ Report for the period ended 31st March 2024. The summarized financialresults for the Financial Year are as under:

WORKING RESULTS:

FINANCIAL RESULTS: Standalone Financial Results

During the year under review, the company has Revenue from operations of Rs. 7656.31 Lakhs (Previous Year: Rs. 3922.70 Lakhs) and Other Income of Rs. 1360.94 Lakhs (Previous Year: Rs. 1935.16 Lakhs), and the Profit/(Loss) before tax Rs. 432.74 Lakhs (Previous Year Rs. 162.18). After providing for Interest & Finance charges, and Depreciation, the Company performed well during the year under with a Profit after Tax of Rs. 322.50 Lakhs as compared to the previous year’s Profit of Rs. 115.62 Lakhs).

Consolidated Financial Results:

During the year under review, the company has Revenue from operations of Rs. 12408.21 Lakhs (Previous Year: Rs. 6426.68 Lakhs) and Other Income of Rs. 1164.66 Lakhs (Previous Year: Rs. 2031.98 Lakhs). After providing for Interest & Finance charges, and Depreciation, the Company has performed well during the year under review despite poor market conditions during the year with a Profit after Tax of is Rs. 1350.13 Lakhs as compared to the previous year’s profit of Rs. 997.20 Lakhs).

FINANCIAL PERFORMANCE:

(Rs. In Lakhs)

DIVIDEND

Your Company has been consistent in generating operating cash flow over the years. The Board has recommended a final dividend of 1 per equity share, in its meeting held on September 6, 2024, subject to approval by the shareholders at the ensuing annual general Meeting.

SHARE CAPITAL

During the year under review, the Company has not altered/modified its authorized share capital and has not issued any shares including equity shares with differential rights as to dividend, voting or otherwise. The Company has not issued any sweat equity shares to its directors or employees.

The Paid-up Share Capital of the Company as on 31st March 2024 is Rs. 8,60,00,000 divided into 86,00,000 Equity Shares of Rs.10 each fully paid up.

RESERVES & SURPLUS

The Company has transferred net profitof Rs. 322.50 Lakhs to retained earnings account for the financial year ending 31st March 2024.

SUBSIDIARIES & JOINT VENTURES/ASSOCIATES

There are eight wholly owned subsidiary and one joint venture of your Company as on 31st March,2024. M/s Arihant Griha Limited, M/s. Vaikunt Housing Limited, M/s. Varenya Constructions Limited, M/s. Transparent Heights Real Estate Limited, M/s Escapade Real Estates Private Limited M/s. Vihaana Realty Private Limited M/s. Vinyasa Realty Private Limited and M/s. Verge Realty Private Limited are the Wholly owned subsidiaries of your Company. M/s. Kairav Developers Limited is the Joint Venture entity of your Company. M/s. North Town Estate Private Limited ceased as subsidiary of the Company during the year under review.

Details of financial statements of subsidiaries and joint venture are given in AoC-1 as Annexure 1.

RELATED PARTY TRANSACTIONS:

All transactions entered into with Related Parties (as definedunder the Companies Act, 2013) during the financial year were in the ordinary course of business the provisions of Section 188 of the Companies Act, 2013 and within the ambit of Reg. 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.

The Board has approved a policy for related party transactions which has been uploaded on the Company’s website. https://www.arihantspaces.com/investors. Details of transactions with related parties are given in Form AOC - 2 which is attached to this report as Annexure 2.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Pursuant to Regulation 34(2)(e) of the Listing Regulations, Management Discussion and Analysis Report is given in Annexure 3.

PUBLIC DEPOSITS

The Company has not accepted any deposits falling within the meaning of Section 73 or 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year and as such, no amount on account of principal or interest on deposits from public was outstanding as on 31st March 2024.

REPORT ON CORPORATE GOVERNANCE

Your Company ensures good corporate governance by implementing and complying with the policies, standards set out by Securities and Exchange Board of India and other regulatory authorities. The requisite certificate issued by M/s. V Suresh Associates, Practicing Company Secretary, confirming of Corporate Governance as stipulated under Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached to this Report as Annexure 4 & 5.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no material changes and commitments affecting the financial occurred between the end of the financial year ended 31st March 2024 to which the Financial Statements relates and the date of signing of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments made during the year are given in the note: 4, 6 & 11 to the Financial Statements.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE FINANCIAL YEAR:

No application was made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of

2016) during the financial year 2023-24.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF DURING THE FINANCIAL YEAR:

Not applicable during the financial year.

CHANGE IN NATURE OF BUSINESS:

During the year under review, there has been no change in the Company’s nature of business.

DIRECTORS:

During the period the Composition of Directors the Company was in compliance with Section 149 of the Companies Act and Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015.

DIRECTORS RETIRING BY ROTATION

Pursuant to the requirements of the Act and Articles of Association of the Company, Mr. Vimal Lunawath (DIN: 00586269) is liable to retire by rotation and, being eligible, offers himself for re-appointment. The Board recommends the appointment of Mr. Vimal Lunawath (DIN: 00586269) as Director of the Company, retiring by rotation.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel of the Company:

*Appointed on 20.09.2023 # Resigned on 30.08.2023 ^ Appointed on 30.05.2024

The remuneration and other details of these Key Managerial Personnel for Financial Year 2023-24 are provided in the Annual Return which is available on the website of the Company.

COMMITTEES: AUDIT COMMITTEE

The Audit Committee had a number of meetings, both formal and internal interactions, with the management team to review Accounts, Finances, Compliances and Risks, and in ensuring improved internal reporting, analyses and financial performances.

Given the increasing complexities presented by the new Companies Act and other Laws, the Audit Committee has also focused on Compliance and Governance to meet the needs of the present and the future. When necessary, external consultants have been brought in to support the Committee and the Management team.

We are happy to report to you that the governance of your Company is of a high order as a result. Further improvements are being implemented.

The Audit Committee composition under provisions of section 177 of the Act and as required under Reg. 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is depicted below:

Mr. Karan Bhasin, Chairman of the Committee –I & NE ** Mr. Prateek Khicha, Member of the Committee – I & NE#

Mr. Kamal Lunawath, Managing Director, Member of the Committee – NI &E Ms. Mary Belinda Jyotsna, Secretary of the Committee.

Note: I- Independent, NE- Non-Executive, E- Executive

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee has been active in its role as stipulated in Section 178 of the Companies Act 2013. The policy of remuneration for the Directors, KMPs and employees are stated elsewhere in the report.

The Nomination & Remuneration Committee consists of Mr. Karan Bhasin, Chairman of the committee, Mrs. Ann Gonsalvez, Independent Director and Mr. Prateek Khicha, Independent Director. The Company Secretary of the Company acts as the Secretary to the Committee.

The Committee is formed in accordance with Section 178 of the Companies Act, 2013. The Nomination and Remuneration Committee has coined a Remuneration Policy as under Reg. 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the purpose of determining the Remuneration to the Directors.

STAKEHOLDER GRIEVANCE COMMITTEE/ STAKEHOLDER RELATIONSHIP COMMITTEE:

The Stakeholder Grievance committee comprises of, Mr. Karan Bhasin – Chairman of the committee, Mr. Kamal Lunawath, Managing Director and Mr. Prateek Khicha, Independent Director as the members of the committee. The Company Secretary of the Company acts as the Secretary to the Committee.

The Committee is formed in accordance with Section 178 of the Companies Act, 2013 to consider and resolve the grievances of security holders of the company.

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the period under review, the following are the changes in directors and Key Managerial Personnel

After the closure of financial year-

MEETINGS OF THE BOARD AND COMMITTEES:

During the Financial Year 2023-24, the Board of Directors met Eleven (11) times and the details of the meetings of the Board and its Committees are given in the Corporate Governance Report (Annexure 4). The gap intervening between two meetings was within the time prescribed under the Act and Listing Regulations. Details of attendance of meetings of the Board, its Committees and the Annual General Meeting are included in the Report on Corporate Governance, which forms part of this Annual Report.

DECLARATION BY INDEPENDENT DIRECTORS

A declaration by the Independent Directors that they meet the criteria of independence as provided in subsection (6) of Section 149 of the Companies Act, 2013 was taken on record by the Board in their meeting held on May 04, 2024. The terms and conditions of appointment of the Independent Directors are placed on the website of the Company https://www.arihantspaces.com/investors/code-of-conduct/

The Company has also disclosed the Directors’ familiarization program on its website https://www.arihantspaces. com/investors/code-of-conduct/.

The independent directors have met on 14.02.2024 and reviewed the performance of non-executive directors, chairman and executive directors and analyzed the flow of information to the Board. All the Independent directors were present at the meeting.

The Board also evaluated its own performance and that of its committees & Independent Directors.

NON-EXECUTIVE DIRECTORS’ COMPENSATION AND DISCLOSURES

None of the Independent / Non-Executive Directors have any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Indian Accounting Standards (IND-AS) on consolidated financial statements read with Accounting Standard IND-AS-28 on investment in associates and on financial reporting of interest in Joint Venture, Auditors Report on the consolidated financial statements, audited consolidated Balance Sheet, Profit and Loss account and Cash flow statements are provided in the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN –EXCHANGE EARNINGS AND OUTGO.

The company has taken necessary steps for conservation of energy and technology absorption. There are no foreign –exchange earnings and outgo.

PARTICULARS OF EMPLOYEES:

Details of employees covered under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure 6 to this annual report. Employees at all levels have performed well.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION

AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up by your Company to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year the Company has not received any complaint under Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

REMUNERATION POLICY OF THE COMPANY:

The objective of the remuneration policy of the Company is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by the Regulators or the going concern status of the Company.

SECRETARIAL STANDARDS

The Company is in compliance with the Secretarial Standards on Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

PROHIBITION OF INSIDER TRADING

In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading)

Regulations, 2015, as amended (PIT Regulations), the Company has adopted the revised "Code of Conduct to Regulate, Monitor and Report Trading by Insiders" ("the Code"). The Code is applicable to all Directors, Designated persons and connected Persons and their immediate relatives, who have access to unpublished price sensitive information relating to the Company. The Company has also formulated a ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)’ in compliance with the PIT Regulations. The aforesaid Codes are posted on the Company’s website and can be accessed by using web link at: https:// www.arihantspaces.com/investors/code-of-conduct STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR

In the opinion of the Board of Directors of the Company, Independent Directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized and respected individuals in their respective fields. It’s an optimum mix of expertise (including financial expertise), leadership and professionalism.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. 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 true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period.

The directors have taken proper and sufficient care to maintain 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. the directors have prepared the annual accounts on a going concern basis. that proper internal financial controls were in place operating effectively. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

CEO/CFO CERTIFICATION

Appropriate certification as required under Reg. 17(8) of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015. Mr. Kamal Lunawath, Managing Director and Mr. Vimal Lunawath, Chief

Financial Officer have certified to the Board regarding Financial Statements for the year ended 31st March 2024 which is attached as Annexure II to CG.

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

The Code of Conduct of the Company aims at ensuring consistent standards of conduct and ethical business practices across the Company. This Code is reviewed on an annual basis and the latest Code is available on the website of the Company at weblink https://www.arihantspaces.com/wp-content/uploads/2022/06/Code-of-Conduct-for-Directors-and-SM.pdf. Pursuant to the Listing Regulations, confirmation

Director regarding compliance with the Code by all the Directors and senior management of the Company is given in Annexure I to the Corporate Governance.

VIGIL MECHANISM / WHISTLE BLOWER MECHANISM

The Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

CORPORATE SOCIAL RESPONSIBILITY

The obligation to incur expenses under Corporate Social Responsibility is not applicable to your Company for the current year. A CSR committee of the Board, however, has been constituted and a policy on Corporate Social Responsibility Policy has been uploaded on the Company’s website https://www.arihantspaces.com/wp-content/uploads/2020/06/CSR-POLICY.pdf

STATEMENT PURSUANT TO LISTING REGULATIONS:

Your Company’s shares are listed with BSE Ltd. We have paid the respective annual listing fees and there are no arrears.

STATUTORY AUDITORS

The Company has appointed M/s. B.P Jain & Co, Chennai (Firm Regn. No. 007735S) in the 29th Annual General Meeting held on 30th September 2022 for a period of 5 years from the 29th annual general meeting until the conclusion of the 34th annual general meeting of the Company on such remuneration as may be fixed by the Board of Directors. In view of the amendment to the Companies Act, 2013 notified by the Ministry of Corporate Affairs dated 7th May 2018, no longer their appointment needs to be ratified by the Members of the company.

AUDITORS’ REPORT

There are no qualifications or adverse remarks mentioned in the Auditors’ report. The notes to accounts, forming further clarification. partoffinancial

SECRETARIAL AUDITORS

The Board appointed M/s. V Suresh Associates, Practicing Company Secretaries, Chennai to conduct a Secretarial Audit for the Financial Year 2023-24. The Secretarial Audit Report for the Financial Year ended March 31, 2024, is attached to this Report as Annexure 7.

REPLY TO SECRETARIAL AUDIT REPORT:

The Board of Directors’ explanation for the observations made in the Secretarial Audit report is annexed in Annexure 8

ADEQUACY OF INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL

The Company has in place adequate Internal Audit and Internal Financial Controls with reference to the financial statements, which is evaluated by the Audit Committee as per Part C of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Apart from Statutory Audit, your Company, in compliance with Section 138 of the Companies Act, 2013, had engaged M/s N. S. Shastri & Co, (Firm Registration No 015093S) Chartered Accountants, Bangalore as the Internal

Auditors of the Company for the financial year 2023-24. Findings and observations of the Internal Auditors are discussed, and suitable corrective actions are taken as per the directions of the Audit Committee on an on-going basis to improve efficiency in operations.

The Company’s internal control systems are well established and commensurate with the nature of its business and the size and complexities of operations and adequate with reference to the financial statements as envisaged under the Companies Act, 2013.

PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEES

Pursuant to the provisions of the Act and Listing Regulations and as per Guidance Note on Board Evaluation issued by SEBI on 5th January 2017, the Board has carried out annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its committees at its meeting held on 14th November 2023. The Nomination and Remuneration Committee has defined the evaluation criteria for the performance evaluation of individual Directors, the Board and its Committees. The performance of the Board, its committees and individual Directors was evaluated by the Nomination and Remuneration Committee and Board after seeking input from all the respective Committee members and Directors.

RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, The Company has a risk policy defining governance model, risk assessment and prioritization process. The Risk Management Committee adopted a follow-up risk management framework to review and monitor the key risks and their mitigation measures periodically and provide an update to the Board on the Company’s risks. The Audit Committee has additional oversight on financial risks and controls.

ANNUAL RETURN

The annual return of the Company has been uploaded in the web site and the same can be accessed through web site link https://www.arihantspaces.com/investors.

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT,

2013:

The ratio of the remuneration of each Director to the median employee’s remuneration for the financial year and such other details as prescribed is as given below:

The median remuneration for the period from April 2023 to March 2024 Rs.15,83,760/-

The percentage increase in remuneration of the Managing Director, Chief Financial Officer, Company Secretary, Manager if any, in the financial year:

Mr. Kamal Lunawath – (Managing Director): N.A.

Mr. Vimal Lunawath (Chief Financial Officer): N.A.

Ms. Mary Belinda Jyotsna– (Company Secretary): N.A.

The percentage increase in the median remuneration of employees in the financial year: 189 %

The number of permanent employees on the rolls of company: 75

Average percentiles increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration: The increase in remuneration is based on the remuneration policy of the Company. g) If remuneration is as per the remuneration policy of the company: Yes REPORTING OF FRAUD

The Auditors of the Company have not reported any fraud as specified under Section 143 (12) of the Companies

Act, 2013.

PERSONNEL

The Board wishes to place on record its appreciation for all employees of the Company, for their wholehearted efforts and contribution to the performance and growth of the Company.

CAUTIONARY STATEMENT

The Annual Report including those which relate to the Directors’ Report, Management Discussion and Analysis Report may contain certain statements on the Company’s intent expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward-looking statement. Some of the factors that could affect the Company’s performance could be the demand and supply for Company’s product and services, changes in Government regulations, tax laws, forex volatility etc.

COST RECORDS AND COST AUDITORS

The provisions of Section 148(1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 in respect of Cost Audit is not applicable to the Company.

ACKNOWLEDGEMENTS

Your directors place on records their gratitude for the support and co- operation received from CMDA, Corporation of Chennai, Banks and Financial Institutions, Customers, Suppliers and Shareholders and for their continued support. The Board also wishes to place its sincere appreciation to the dedicated and committed team of employees.