Directors Report of Arman Financial Services Ltd.
Mar 31, 2023
Board''s Report
The Board of Directors of the Company with immense pleasure present their 31st Director''s Report together with the
Audited Financial Statement for the year ended on March 31, 2023.
You are our valued partners in the Company and we are happy to share our vision of growth with you. Our guiding principles
are a blend of optimism and conservatism, which has been and will be the guiding force of all our future endeavors.
The summary of operating results for the year is given below:
1. FINANCIAL PERFORMANCE
|
Particulars |
Consolidated |
Standalone |
||
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
|
Total Revenue |
42,390.47 |
23,500.56 |
9,614.02 |
6,621.85 |
|
Profit Before Interest and Depreciation |
29,810.49 |
13,592.12 |
6,841.76 |
3,929.00 |
|
Finance Charges |
17,199.63 |
8,945.03 |
3,069.78 |
1,789.01 |
|
Depreciation |
115.49 |
95.27 |
13.03 |
10.03 |
|
Net Profit Before Tax |
12,495.37 |
4,551.82 |
3,758.95 |
2,129.96 |
|
Current Tax |
2,832.90 |
1,495.10 |
787.90 |
490.10 |
|
Deferred Tax (Asset)/Liability |
266.24 |
(115.84) |
134.90 |
16.42 |
|
Short/(Excess) provision of income tax of |
15.10 |
0.28 |
0.00 |
0.00 |
|
Net Profit After Tax |
9,381.13 |
3,172.28 |
2,836.15 |
1,623.44 |
|
Basic Earnings Per Share (In C) |
110.47 |
37.36 |
33.40 |
19.12 |
|
Diluted Earnings Per Share (In C) |
107.28 |
37.35 |
33.02 |
19.12 |
Your Company continues to engage in the business
of Asset Finance, MSME and Microfinance. The
Parent Company, Arman Financial Services Limited,
is engaged in two-wheeler finance and MSME;
while the microfinance business is managed
through Arman''s wholly owned subsidiary, Namra
Finance Limited. The financial statements of both
Arman and Namra, as well as the consolidated
financials of Arman are included within the
Annual Report.
Consolidated Performance Highlights
⢠AUM was C1,942.93 Crores in FY 2022-23 as
compared to C1,233.22 Crores in FY 2021-22,
increased by 58%.
⢠Disbursement was C1,766.75 Crores in FY
2022-23 as compared to C1,023.29 Crores in
FY 2021-22, increased by 73%.
⢠Total income was C423.91 Crores in
FY 2022-23 as compared to C235.01 Crores in
FY 2021-22, increased by 80%.
⢠Profit before taxes was C124.95 Crores in
FY 2022-23 as compared to C45.52 Crores in
FY 2021-22, increased by 174%.
⢠Profit for the year attributable to owners of the
Company was C93.81 Crores in FY 2022-23
as compared to C31.72 Crores in FY 2021-22,
increased by 196%.
⢠The basic Earning Per Share was C110.47 as
compared to C37.36, increased by 196%.
⢠The diluted Earning Per Share was C107.28 as
compared to C37.35, increased by 187%.
Standalone Performance Highlights
⢠AUM was C315.29 Crores in FY 2022-23 as
compared to C211.22 Crores in FY 2021-22,
increased by 49%.
⢠Disbursement was C281.86 Crores in FY 2022¬
23 as compared to C183.18 Crores in FY 2021¬
22, increased by 54%.
⢠Total income was C96.14 Crores in FY 2022-23
as compared to C66.22 Crores in FY 2021-22,
increased by 45%.
⢠Profit before taxes was C37.59 Crores in FY
2022-23 as compared to C21.30 Crores in FY
2021-22, increased by 77%.
⢠Profit for the year attributable to owners of the
Company was C28.36 Crores in FY 2022-23
as compared to C16.23 Crores in FY 2021-22,
increased by 75 %.
⢠The basic Earnings Per Share was C33.40 as
compared to C19.12, increased by 75%.
⢠The diluted Earnings Per share was C33.02 as
compared to C19.12, increased by 73%.
In order to conserve capital, the Directors of your
Company do not recommend any dividend payment
at the ensuing Annual General Meeting ("AGMâ).
The Dividend Distribution Policy of the Company
approved by the Board is in line with the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulationsâ). The
Policy has been uploaded on the website of the
Company at https://armanindia.com/policyncode.
aspx -> Dividend Distribution Policy.
The Company proposes to transfer C568.00 Lakhs
(previous year C325 Lakhs) to Special Reserve
created u/s 45-IC of the Reserve Bank of India Act,
1934 ("RBI Actâ). The Company has also transferred
C10.00 Lakhs (previous year C10.00 Lakhs) to the
general reserve.
The Company is not required to maintain cost
records as per the provisions of Section 148(1) of the
Companies Act, 2013.
6. MATERIAL CHANGES & COMMITMENT AFFECTING
THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments,
that would affect financial position of the Company
from the end of the financial year of the Company to
which the financial statements relate and the date of
the director''s report.
During the year under review, Acuite reviewed the
ratings on various bank facilities and debt instrument
of the Company and it''s subsidiary. Acuite has
reaffirmed its rating for long term bank facility
and debt instruments to "ACUITE A-â; (A minus;
outlook stable).
CARE has also reaffirmed its rating for various
Non-Convertible Debentures ("NCDsâ) at "CARE
BBB â; stable (Triple B plus; outlook stable). The
Grading of Namra Finance Limited (WOS) was
also upgraded to ''MFI 1'' (MFI one) by CARE
Advisory Research & Training Limited during the
year 2022-23.
8. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE
COMPANIES
The Company has one wholly owned subsidiary,
named ''Namra Finance Limited'' as on date. During
the year, no changes took place in the group
corporate structure of your Company. The Company
has formulated a policy for determining ''material''
subsidiaries pursuant to the provisions of the SEBI
(Listing Obligations & Disclosure Requirements)
Regulations, 2015 ("SEBI LODR Regulationsâ). The
said policy is available at the Company website at
the link https://armanindia.com/policyncode.aspx ->
Policy for Material Subsidiary.
The consolidated financial statements presented
by the Company include financial information of its
subsidiary prepared in compliance with applicable
accounting standards. The salient features of Namra
Finance Limited in Form AOC-1 is attached hereunder
as per "Annexure-1â as required under Section 129
(3) of the Companies Act, 2013.
Further pursuant to Section 136 of Companies
Act, 2013, financial statements of the Company,
consolidated along with relevant documents and
separate audited accounts in respect of subsidiary
are available on the website of the Company.
During the year under review, the Company has
further invested C80.00 Crore in Namra Finance
Limited (wholly owned subsidiary) by subscribing
80,00,000 Lakhs equity shares of C10/- each at the
rate of C100.00 per share (including premium of
C90.00 per share). Total investment in wholly owned
subsidiary stood at C185.63 Crore.
10. SURRENDERED RBI CATEGORY "A" LICENSE
The Board of Directors of the Company in its meeting
held on Feb 23, 2023, has voluntarily decided to
convert it''s license from "Deposit takingâ to "Non¬
Deposit takingâ after considering the fact that from
the inception of the Company in the year 1992, the
Company has neither solicited nor received any
public deposits and merely holding the deposit taking
license was neither a business necessity nor serving
the Company''s best interests. RBI has accepted
Company''s request for convert itself from "Deposit
takingâ to "Non-Deposit takingâ and has issued a new
license of Non Deposit Taking NBFC (NBFC -ICC)
dated May 12, 2023.
11. UNCLAIMED DIVIDEND & SHARES
During the year Company has transferred unclaimed
dividend for the year 2014-15 of C3,52,038/- to
Investor Education and Protection Fund (IEPF)
pursuant to provision of Section 124 of the Companies
Act, 2013 which remained unclaimed for a period of
more than seven years.
Members desirous of claiming their shares and
dividend which have been transfered to the IEPF,
may refer to the refund procedure, as detailed on
www.iepf.gov.in. Underlying shares on which dividend
has remained unclaimed from FY 2015-16 onwards,
will be due for transfer to IEPF account during the year
and individual notices to that effect has been sent
to concerned shareholders. Shareholders who have
not yet encashed their unclaimed/unpaid amounts
are requested to correspond with the Company''s
Registrar and Transfer Agents, at the earliest to avoid
transfer of dividend and underlying shares to IEPF.
12. PARTICULARS OF LOANS GIVEN, INVESTMENTS
MADE, GUARANTEES GIVEN OR SECURITY
PROVIDED BY THE COMPANY
Except the loans, guarantees and investments made
in subsidiary Company, there were no other loans,
guarantees or investments made by the Company
under Section 186 of the Companies Act, 2013 during
the year under review and hence the said provision is
not applicable.
During the year under review, your Company has not
accepted or renewed any Deposit within the meaning
of Section 73 of the Companies Act, 2013 read with
the Companies (Acceptance of Deposits) Rules,
2014. Hence, the requirement of furnishing details of
deposits which are not in compliance with Chapter V
of the Companies Act, 2013 is not applicable.
14. DIRECTORS AND KEY MANAGERIAL
PERSONNEL
The composition of the Board is in accordance
with the provisions of Section 149 of the Act and
Regulation 17 of the SEBI Listing Regulations, with an
appropriate combination of Non-Executive Directors
and Independent Directors. The complete list of
Directors of the Company has been provided as part
of the Corporate Governance Report.
The Board of Directors consists of 9 (Nine) members,
of which 4 (Four) are Independent Directors and
1 (One) is a Nominee Director. The Board also
comprises of 2 (two) women Directors, including 1
(one) Independent Director. In accordance with the
Articles of Association of the Company and pursuant
to the provisions of Section 152 of the Companies
Act, 2013, Mr. Aakash Patel [DIN- 02778878] and Mrs.
Ritaben Patel [DIN- 00011818] will retire by rotation at
the ensuing AGM and being eligible, offer themselves
for reappointment.
The terms and conditions of appointment of
Independent Directors are available on the website
of the Company at https://armanindia.com/
policyncode.aspx -> Policy for Appointment of
Independent Director. The Board is of the opinion that
the Independent Directors of the Company possess
requisite qualifications, experience, expertise and
hold highest standards of integrity.
a) Key Managerial Personnel (KMP)
The Board has identified the following officials
as Key Managerial Personnel pursuant to
Section 203 of the Companies Act, 2013:
1) Mr. Jayendrabhai B. Patel - Vice
Chairman & Managing Director and C.E.O.
2) Mr. Aalok J. Patel - Joint
Managing Director
3) Mr. Vivek A. Modi - Chief Financial Officer
4) Mr. Jaimish G. Patel - Company Secretary
& Compliance Officer
15. MEETING OF THE BOARD & AUDIT COMMITTEE
The Board during the financial year 2022-23 met
6 (six) times and Audit Committee met 4 (four)
times. All the recommendations made by the Audit
Committee during the year were accepted by the
Board. The details of the constitution and meetings
of the Board and the Committees held during the year
are provided in the Corporate Governance Report
which forms part of this Annual Report.
16. NOMINATION AND REMUNERATION
COMMITTEE
As per the Section 178(1) of the Companies Act,
2013 the Company has constituted Nomination
and Remuneration Committee, details of which are
provided in the Corporate Governance Report which
forms part of this Annual Report.
17. REMUNERATION POLICYRemuneration to Executive Directors
The remuneration paid to Executive Directors is
recommended by the Nomination and Remuneration
Committee and approved by Board in the Board
meeting, subject to the subsequent approval of the
shareholders at the ensuing Annual General Meeting
and such other authorities, as may be required. The
remuneration is decided after considering various
factors such:
⢠Level of skill, knowledge and core competence
of individual.
⢠Functions, duties and responsibilities.
⢠Company''s performance and achievements.
⢠Compensation of peers and industry standard.
The Company may if the need arise, strike a balance
between the fixed and incentive pay reflecting short
and long-term performance objectives appropriate
to the working of the company and its goal. The
Nomination & Remuneration Committee of Board of
Directors shall recommend periodic revision in the
remuneration of Executive Directors to the Board
and the Board shall fix their remuneration taking into
consideration above factors as also ceiling limits
prescribed under the Companies Act, 2013 and other
statutes. The same shall also be approved by the
shareholders where required.
Remuneration to Non-Executive Directors
Non-Executive Directors are paid sitting fees for each
meeting of the Board and Committees of Directors
attended by them. They are also given the traveling
and other expenses they incur for attending to the
Company''s affairs, including attending Committee,
Board and General meetings of the Company.
Remuneration of KMP (Excl. MD) & Other
Employees
The authority to structure remuneration for KMP
(Excl. M.D.) & other employees and the annual revision
thereof has been delegated to the Managing Director
and Joint Managing Director of the Company, based
on Company performance, individual performance
evaluation, recommendations of respective
functional heads and other factors having a bearing.
If there is any specific regulatory requirement for
fixation / revision of remuneration of KMP or any
other employee, by the Board or any committee, then
the same shall be done in compliance thereof.
18. PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES
The information required pursuant to Section 197(12)
read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014 is furnished hereunder as per "Annexure-2â.
However, the information required pursuant to
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 in respect of employees of
the Company, will be provided upon request. In terms
of Section 136(1) of the Companies Act, 2013, the
Report and Accounts are being sent to the Members
and others entitled thereto, excluding the information
on employees'' particulars which is available for
inspection by the Members at the Registered office
of the Company during business hours on working
days of the Company up to the date of the ensuing
Annual General Meeting. If any Member is interested
in obtaining a copy thereof, such Member may write
to the Company Secretary in this regard.
19. DISCLOSURES AS PER THE SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL)
ACT, 2013
The Company has in place a policy for prevention,
prohibition and redressal of sexual harassment at
workplace. Further, the Company has constituted an
Internal Committee under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013, where complaints in the nature
of sexual harassment can be registered. Appropriate
reporting mechanisms are in place for ensuring
protection against sexual harassment and the right
to work with dignity. There were no complaints /
cases filed / pending with the Company during the
financial year.
20. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies
Act, 2013 the Board of Directors of the Company
confirms that-
a) In the preparation of the annual accounts
for the year ended on March 31, 2023, the
applicable accounting standards had 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
as at March 31, 2023 and of the profit and loss
of the Company for the year ended on that date;
c) 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;
d) The Directors have prepared the annual
accounts on a going concern basis;
e) That the Directors have laid down internal
financial controls to be followed by the
Company and that the financial controls are
adequate and are operating effectively; and
f) 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.
The Company has complied with Secretarial
Standards issued by the Institute of Company
Secretaries of India on Board Meetings and
General Meetings.
22. DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have submitted the
declaration of independence, pursuant to the
provisions of Section 149(7) of the Act and Regulation
25(8) of the SEBI Listing Regulations, stating that
they meet the criteria of independence as provided
in Section 149(6) of the Act and Regulations 16(1)
(b) of the SEBI Listing Regulations and they are not
aware of any circumstance or situation, which exist
or may be reasonably anticipated, that could impair
or impact his / her ability to discharge his / her duties
with an objective independent judgment and without
any external influence.
The Company has familiarized the Independent
Directors with the Company, their roles,
responsibilities in the Company, nature of industry
in which the Company operates, business model
of the Company, etc. The details relating to the
familiarization programme are available on the
website of the Company at https://armanindia.com/
policyncode.aspx -> Familiarization Programme For
Independent Directors.
24. AUDITORS AND AUDIT REPORTS
a) Statutory Auditors
Pursuant to the provisions of Section 139(2) of the
Companies Act, 2013 and the rules made thereunder
and RBI requirements, the Members at their 29th
AGM held on September 29, 2021, has appointed
M/s Talati & Talati LLP, Chartered Accountants,
(Firm Registration No. 110758W/W100377), as the
Statutory Auditors of the Company for a term of three
years, i.e., from the conclusion of 29th AGM till the
conclusion of the 32nd AGM.
The Auditors'' Report to the Members for the year
under review is unmodified. The Notes to the
Accounts referred to in the Auditors'' Report are self¬
explanatory and therefore do not call for any further
clarifications under Section 134(3)(f) of the Act.
b) Secretarial Auditors
Pursuant to the provisions of Section 204 of the
Companies Act, 2013, the Companies (Appointment
and Remuneration of Managerial Personnel)
Rules, 2014 and Regulation 24A of the SEBI
(Listing Obligations & Disclosure Requirements)
Regulations, 2015, the Company has appointed M/s
GKV & Associates, Practicing Company Secretary
(Membership No.: F12366 and Certificate of Practice
No.: 19866) to undertake the Secretarial Audit of the
Company for the financial year 2022-23.
Further, in terms of the provisions of Regulation
24A of the SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015 and Circular
No. CIR/ CFD/CMD1/27/2019 dated February 8,
2019 issued by SEBI, M/s GKV & Associates has
issued the Annual Secretarial Compliance Report,
confirming compliance by the Company of the
applicable SEBI regulations and circulars / guidelines
issued thereunder.
The Secretarial Audit Report is appended as
"Annexure-3â to this Report. There is no adverse
remark, qualification, reservation or disclaimer in the
Secretarial Audit Report.
25. RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm''s
length basis, in the ordinary course of business and
are in compliance with the applicable provisions
of the Companies Act, 2013 and the SEBI (Listing
Obligations & Disclosure Requirements) Regulations,
2015. There are no materially significant related party
transactions made by the Company with Promoters,
Directors or Key Managerial Personnel etc. which
may have potential conflict with the interest of the
Company at large or which warrants the approval of
the shareholders. Accordingly, no transactions are
being reported in Form AOC-2 in terms of Section
134 of the Act read with Rule 8 of the Companies
(Accounts) Rules, 2014. However, the details of the
transactions with Related Party are provided in the
Company''s financial statements in accordance with
the Accounting Standards.
All Related Party Transactions are presented to the
Audit Committee and the Board. Omnibus approval is
obtained for the transactions which are foreseen and
repetitive in nature. A statement of all related party
transactions is presented before the Audit Committee
on a quarterly basis, specifying the nature, value and
terms and conditions of the transactions.
The Policy on materiality of related party transactions
and dealing with related party transactions as
approved by the Board, may be accessed on the
Company''s website at the link https://armanindia.
com/policyncode.aspx -> Policy on Materiality of
Related Party Transactions and Dealing with Related
Party Transactions.
The Company has constituted a Risk Management
Committee in terms of the requirements of
Regulation 21 of the Listing Regulations and has also
adopted a Risk Management Policy. The details of
the Risk Management Committee are disclosed in
the Corporate Governance Report.
The Company has a risk management framework
and Board members are periodically informed about
the proceedings of the Risk Management Committee
to ensure management controls risk by means of
a properly designed framework. The Board is kept
apprised of the proceedings of the meetings of the
Risk Management Committee. The Company, as it
advances towards its business objectives and goals,
is often subjected to various risks.
Risk Management is at the core of our business and
ensuring we have the right risk-return trade-off in
line with our risk appetite is the essence of our Risk
Management while looking to optimize the returns
that go with that risk.
The Company has in place, adequate systems of
Internal Control to ensure compliance with policies
and procedures. It is being constantly assessed and
strengthened with new / revised standard operating
procedures and tighter information technology
controls. Internal audits of the Company are
regularly carried out to review the internal control
systems. Further, the Company has been conducting
management audit report by an external agency.
The Internal Audit Report and Management Audit
Report, along with auditor''s recommendations and
implementation contained therein are regularly
reviewed by the Audit Committee of the Board.
Internal Auditor has verified the key internal financial
control by reviewing key controls impacting financial
reporting and overall risk management procedures of
the Company and found the same satisfactory. It was
placed before the Audit Committee of the Company.
28. INTERNAL FINANCIAL CONTROL
The Company has, in all material respects, an
adequate internal financial controls system and such
internal financial controls were operating effectively
based on the internal control criteria established by the
Company considering the essential components of
internal control, stated in the Guidance Note on Audit
of Internal Controls over Financial Reporting issued
by the Institute of Chartered Accountants of India.
The Company has in place an adequate internal audit
framework to monitor the efficacy of internal controls
with the objective of providing to the Audit Committee
and the Board of Directors, an independent and
reasonable assurance on the adequacy and
effectiveness of the organization''s risk management,
internal control and governance processes. The
framework is commensurate with the nature of the
business, size, scale and complexity of its operations.
The audit plan is approved by the Audit Committee,
which regularly reviews compliance to the plan.
Pursuant to the provisions of the Companies Act and
the SEBI Listing Regulations, the Board has carried
out an annual evaluation of its own performance,
performance of the Directors individually and the
Committees of the Board.
The Nomination & Remuneration Committee and
the Board have laid down the manner in which
formal annual evaluation of the performance of the
Board as a whole, individual directors and its various
Committees is being made.
It includes circulation of evaluation response /
feedback sheet separately for evaluation of the
Board and its Committees, Independent Directors /
Non-Executive Directors / Managing Director / Chief
Executive Officer / Chairperson of the Company.
The evaluation of Board as a whole, individual
directors and its various Committees is being carried
out by the Nomination & Remuneration Committee of
the Company and subsequently it gives the report of
evaluation to the Board for review.
We strive to maintain high standards of Corporate
Governance in all our interactions with our
stakeholders. The Company has conformed to
the Corporate Governance code as stipulated
under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. A separate section
on Corporate Governance along with a certificate
from the M/s. GKV & Associates, Practicing Company
Secretary, confirming the level of compliance is
attached and forms a part of the Board''s Report.
The Company''s Equity Shares are compulsorily
tradable in electronic form. As on March 31,2023, out
of the Company''s total equity paid-up share capital
comprising of 84,92,334 Equity Shares, only 1,48,810
(1.75%) Equity Shares were in physical form and the
remaining capital was in dematerialised.
As per SEBI notification No. SEBI/LAD-NRO/
GN/2018/24 dated June 8, 2018 and further
amendment vide notification No. SEBI/LAD-NRO/
GN/2018/49 dated November 30, 2018, requests
for effecting transfer of securities is not processed
from April 1,2019 unless the securities are held in the
dematerialised form with the depositories.
Further, transmission or transposition of securities
held in physical or dematerialised form is also
effected only in dematerialised form. Therefore,
Members holding securities in physical form are
requested to take necessary action to dematerialize
their holdings.
The Company has implemented a Whistle Blower
Policy, whereby employees and other stakeholders
can report matters such as generic grievances,
corruption, misconduct, illegality and wastage /
misappropriation of assets to the Company. The
policy safeguards the whistle blowers to report
concerns or grievances and also provides direct
access to the Chairman of the Audit Committee. The
details of the Whistle Blower Policy are available on
Company''s website at the link: https://armanindia.
com/policyncode.aspx -> Whistle Blower Policy
In accordance with the ''Green Initiative'', the Company
has been sending the Annual Report / Notice of AGM
in electronic mode to those shareholders whose
Email Ids are registered with the Company and /
or the Depository Participants. Your Directors are
thankful to the Shareholders for actively participating
in the Green Initiative.
Pursuant to the provisions of Section 134(3)(a) of
the Act, the Annual Return in form MGT-7 for the
Company for the financial year 2022-23 is available
on the website of the Company at https://armanindia.
com/OtherReports.aspx?Page = Annual-return
->Annual Return 2022-23
36. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
OUTGO
A. Conservation of energy and technology
absorption:
Since the Company does not carry out any
manufacturing activity, the particulars regarding
conservation of energy, technology absorption and
other particulars as required by the Companies
(Accounts) Rules, 2014 are not applicable.
B. Foreign exchange earnings and outgo:
There were no foreign exchange earnings during the
year (previous year also Nil) while the expenditure
in foreign currency by the Company during the year
was USD equivalent of C28,87,500 (previous year: Nil)
towards due diligence fees.
⢠Authorized Share Capital:
During the year under review, the authorized
share capital of the Company was reclassified
to 1,40,00,000 ordinary equity shares of
the Company of the face value of C10/-
each aggregating to C14,00,00,000/- and
10,00,000 Optionally Convertible Redeemable
Preference Shares of C10/- each aggregating to
C1,00,00,000/-.
⢠Paid up Share capital:
As on March 31, 2023, the Company''s paid-up
Equity Share Capital was C8,49,23,340/- divided
into 84,92,334 Equity Shares of C10/- each and
Optionally Convertible Redeemable Preference
Shares capital was C31,09,720/- divided into
3,10,972 Optionally Convertible Redeemable
Preference Shares.
⢠Buy Back of Securities:
The Company has not bought back any of its
securities during the year under review.
⢠Sweat Equity:
The Company has not issued any Sweat Equity
Shares during the year under review.
No Bonus Shares were issued during the year
under review.
⢠Issue of Compulsorily Convertible
Debentures (CCDs)
Your Company has issued and allotted
6,24,388 Unsecured Compulsorily Convertible
Debentures ("CCDsâ) of C1,230/- each
aggregating C76.80 cr. on September 28,
2022 on a private placement basis to various
investors pursuant to shareholder''s approval
obtained in Extra Ordinary General meeting of
the Company held on September 15, 2022.
The CCDs shall carry a coupon of 15% (fifteen
percent) simple interest per annum calculated
on the basis of a 365 (three hundred sixty
five) day year and the actual number of days
elapsed. These CCDs will be converted into
6,24,388 ordinary equity shares of Rs.10/- each
on the earlier of following events:
a) the Investor electing to convert the CCDs
into equity shares by issuing a conversion
notice to the Company; and
b) the date of expiry of 18 (eighteen) months
from the date of allotment of CCDs
("Conversion Dateâ).
⢠Issue of Optionally Convertible Redeemable
Preference Shares (OCRPS)
Your Company has issued and allotted
3,10,972 Optionally Convertible Redeemable
Preference Shares ("OCRPSâ) of C10/- each at
a premium of C1,220/- per shares aggregating
C38.25 cr. on September 28, 2022 on a private
placement basis to various investors pursuant
to shareholder''s approval obtained in Extra
Ordinary General meeting of the Company held
on September 15, 2022.
The OCRPS shall carry a cumulative right of
dividend at a fixed amount of C123/- (Indian
Rupees One Hundred and Twenty Three only)
per annum out of the profits of the Company
and the payment of such dividend shall have
priority over any dividend rights of the equity
shares of the Company.
The OCRPS will either:
a) be convertible into equivalent of 3,10,972
equity shares of the face value of C10/-
each of the Company, at a conversion
price of C1,230/- per equity share
(including a premium of C1,220/- per
share) at the option of the allottee within
a period not exceeding 18 months from
the date of allotment of OCRPS; or
b) be redeemed at a price of C1,230/-
per OCRPS at the option of the
allottee if the allottee chooses not to
convert the OCRPS.
⢠Employees Stock Option Plan
There has been no material change in the ESOP
Schemes during the year under review. The
ESOP Scheme is in compliance with the SEBI
(Share Based Employee Benefits and Sweat
Equity) Regulations, 2021 ("SBSE Regulationsâ).
During the financial year under the review, the
Company has allotted 750 ordinary equity
shares of C10/- each on May 17, 2022 to the
eligible employees of the Company/ Subsidiary
Company pursuant to ''Arman Employee Stock
Option Plan 2016''. Particulars of Employee
Stock Options granted, vested, exercised and
allotted are given in "Annexure-4â.
38. CORPORATE SOCIAL RESPONSIBILITY
In accordance with Section 135 of the Act, your
Company has constituted a Corporate Social
Responsibility ("CSRâ) Committee. The CSR
Committee has formulated and recommended to the
Board, a Corporate Social Responsibility Policy ("CSR
Policyâ) indicating the activities to be undertaken by
the Company, which has been approved by the Board.
The CSR Policy is available on the website of the
Company at https://armanindia.com/policyncode.
aspx-> Corporate Social Responsibility Policy.
Further, the details including Composition of the CSR
Committee, the CSR Policy and the CSR Report are
given at "Annexure-5â.
39. BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORTING
Your Company forms part of the top 1000 listed
entities on BSE Limited and National Stock
Exchange of India Limited as on March 31, 2023.
Accordingly, pursuant to Regulation 34 (2) (f) of
SEBI Listing Regulations, Company is required to
submit a Business Responsibility Sustainability
Report ("BRSRâ) as a part of the Annual Report. The
Company''s BRSR describing the initiatives taken
by the Company is uploaded on the website of the
Company at https://armanindia.com/OtherReports.
aspx?Page=BRSR -> BRSR 2022-23.
The Code of Conduct for all Board members and
Senior Management of the Company have been laid
down and are being complied with in words and spirit.
The compliance on declaration of Code of Conduct
signed by Managing Director & CEO of the Company
is included as a part of this Annual Report.
41. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT
Management''s discussion and analysis forms a
part of this annual report and is annexed to the
Board''s report.
42. DETAILS OF FRAUDS REPORTED BY THE
AUDITORS
During the year under review, neither the Statutory
Auditor nor the Secretarial Auditor have reported
to the Audit Committee under Section 143(12) of
the Companies Act, 2013 any instances of fraud
committed against the Company by its officers
or employees.
43. ANY SIGNIFICANT AND MATERIAL ORDER
PASSED BY REGULATORS OR COURTS OR
TRIBUNAL
There is no significant material order passed by
the Regulators / Courts which would impact the
going concern status of the Company and its
future operations.
44. PROCEEDINGS UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016
There was no proceeding initiated/pending against
your Company under the Insolvency and Bankruptcy
Code, 2016 during the financial year under review.
45. 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
The Company has not made any such valuation
during the FY23.
46. GRATITUDE & ACKNOWLEDGEMENTS
The Board expresses its sincere thanks to all the
employees, customers, suppliers, investors, lenders,
regulatory / government authorities and stock
exchanges for their co-operation and support and
look forward to their continued support in future.
For and on behalf of the Board of Directors of,
Arman Financial Services Limited
Date: August 14, 2023 (Vice Chairman & Managing Director) (Joint Managing Director)
Place: Ahmedabad DIN: 00011814 DIN: 02482747
Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting the 26th Directorâs Report of your Company together with the Audited Financial Statement for the year ended on 31st March, 2018.
You are our valued partners in the Company and we are happy to share our vision of growth with you. Our guiding principles are a blend of optimism and conservatism, which has been and will be the guiding force of all our future endeavors.
The summary of operating results for the year is given below:
1. FINANCIAL PERFORMANCE
(Amount in Rs.)
|
Particulars |
Consolidated |
Standalone |
||
|
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
|
Total Revenue |
80,03,47,585 |
53,59,44,111 |
27,31,96,179 |
16,57,75,976 |
|
Profit Before Interest and Depreciation |
46,42,69,355 |
32,68,70,879 |
15,43,31,042 |
8,69,19,162 |
|
Finance Charges |
36,26,07,844 |
22,52,46,066 |
10,84,86,332 |
4,80,01,495 |
|
Provision for Depreciation |
37,32,412 |
29,42,396 |
10,71,855 |
11,06,664 |
|
Net Profit Before Tax |
9,79,29,099 |
9,86,82,417 |
4,47,72,855 |
3,78,11,003 |
|
Provision for Tax |
3,11,84,709 |
3,62,10,000 |
1,38,40,000 |
1,31,10,000 |
|
Deferred Tax (Asset)/Liability |
(62,12,318) |
(7,64,020) |
(11,26,905) |
(2,77,859) |
|
Net Profit After Tax |
7,29,56,708 |
6,32,36,437 |
3,20,59,760 |
2,49,78,862 |
2. OPERATIONS
Your Company is engaged in the business of Asset Finance, MSME and Microfinance. The Parent Company, Arman Financial Services Limited, is engaged in Asset Finance viz. two-wheeler finance and MSME; while the Microfinance business is managed through Armanâs wholly owned subsidiary, Namra Finance Limited. The financial statements of both Arman and Namra, as well as the consolidated financials of Arman are included within the Annual Report.
Financial year 2017-18 was a remarkable year for the Company, in many ways. The first two quarters were defined by steady recovery after the demonetization event of November 2017. The last two quarters were of unparalleled growth in Disbursements, Assets Under Management (AUM), and Profits as well. The AUM of the Company increased from RS. 192 crores to RS. 424 crores, a 121% increase. Consolidated disbursements totaled RS. 542 crores compared to RS. 247 crores the previous year, a 119% increase.
In FY 2018, the Board and the Shareholders approved an equity infusion by a SAIF Partners managed fund. The deal was concluded in April 2018. The investment came in the form of Compulsory Convertible Debentures (CCDs), and will almost double the net worth of the Company on a fully diluted basis. The equity infusion will be used by the Company to increase the AUM, both with the proceeds and the higher leveraging allowable with the increased net worth.
Income from operations during the year under review was RS. 80.03 crores against RS. 53.59 crores for the previous year, resulting in an increase of 49%. Earnings before Interest & Taxes (EBIT) for the current year is RS. 46.05 crores (RS. 32.39 crores in previous year) thereby resulting in increase of 42%. Net Profit after Taxes amounted to RS. 7.30 crores (RS. 6.32 crores in previous year) thereby resulting in increase of 16% in the fiscal year.
3. DIVIDEND
Your Directors are pleased to recommend a Dividend of RS. 1.00/- (Previous Year RS. 1.00/-) per equity share of RS. 10/-each (i.e. 10%) for the year ended 31st March, 2018, subject to approval by the members at the ensuing Annual General Meeting.
4. AMOUNTS TRANSFERRED TO RESERVES
The Board of the Company has transferred the amounts to reserve as under:
- Transfer to special reserve as required by section 45-IC of the Reserve Bank of India Act, 1934: RS. 65,00,000/-
- Transfer to general reserve: RS. 10,00,000/-
5. MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, that would affect financial position of the Company from the end of the financial year of the Company to which the financial statements relate and the date of the directors report.
6. CREDIT RATING
The Companyâs bank(s) / Financial Institute(s) facilities are rated by CARE Rating Limited. The Company continues to have rating CARE BBB for its working capital facilities and for long term borrowings, which indicates stable outlook regarding timely payment of financial obligations.
7. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES
The Company has one wholly owned subsidiary, named Namra Finance Limited as on date. During the year no changes took place in the group corporate structure of your Company. The Company has formulated a policy for determining âmaterialâ subsidiaries pursuant to the provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The said policy is available at the Company website at the link https:// www.armanindia.com/corporategovernance.aspx --> Policy For Material Subsidiary.
The consolidated financial statements presented by the Company include financial information of its subsidiary prepared in compliance with applicable accounting standards. The salient features of Namra Finance Limited in Form AOC-1 is attached hereunder as per âAnnexure-1â as required under Section 129 (3) of the Companies Act, 2013.
8. UNCLAIMED DIVIDEND & SHARES
During the year Company has transferred unclaimed dividend for the year 2009-10 of RS. 1,73,168/- to Investor Education and Protection Fund pursuant to provision of Section 124 of the Companies Act, 2013 which remained unclaimed for a period of more than seven years.
Further, during the year 1,13,681 shares on which dividend had remained unclaimed for last 7 years were transferred to Investor Education & Protection Fund in accordance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, after complying due procedure. Members desirous of claiming their shares and dividend may refer to the refund procedure for claiming the aforementioned amounts/shares transferred to the I EPF Authority, as detailed on www.iepf.gov.in. Underlying shares on which dividend has remained unclaimed from 2010-11 onwards, will be due for transfer to IEPF account during the year and individual notices to that effect will be sent to concerned shareholders. Shareholders who have not yet encashed their unclaimed/unpaid amounts are requested to correspond with the Companyâs Registrar and Transfer Agents, at the earliest to avoid transfer of dividend and underlying shares to IEPF.
9. LOANS, GUARANTEES AND INVESTMENTS
Except the loans, guarantees and investments made in subsidiary Company, there were no other loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.
10.PUBLIC DEPOSITS
During the year under review, your Company has not accepted or renewed any Deposit within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement of furnishing details of deposits which are not in compliance with Chapter V of the Companies Act, 2013 is not applicable.
11. DIRECTORS AND KMP
The Board of Directors consists of 8 members, of which 3 are Independent Directors and 1 is Nominee Director. The Board also comprises of one women Director. In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mrs. Ritaben Patel [DIN-00011818] and Mr. Aalok Patel [DIN-02482747] will retire by rotation at the ensuing AGM and being eligible, offer themselves for reappointment.
Mr. Mridul Arora (DIN-03579584) has been appointed as Nominee Director (Non-Executive) w.e.f. 12.04.2018 pursuant to investment agreement executed by Company with SAIF Partners India V Limited and provision of Article of Association of the Company.
Mr. Alok Prasad (DIN: 00080225) has been appointed as an Additional Director (Independent) for a period of five years with effect from 01.08.2018. Brief resumes of the directors being appointed / re-appointed form part of the Notice of the ensuing AGM.
During the year, Mr. Amit Manakiwala, Whole Time Director, has resigned from the Board of Director of the Company. The Board has accepted his resignation w.e.f. 31.08.2017 and also placed on record itâs appreciation for the valuable service, advice and guidance rendered by Mr. Amit Manakiwala as a member of core management team for last 25 years.
Mr. Chinubhai R. Shah, Chairman & Independent Director of the Company has given his resignation from the office of Directorship citing health issue w.e.f. 25.05.2018. The Board has accepted his resignation and placed on record its appreciation & deep gratitude for the valuable guidance and for uninterrupted leadership for last 24 years and acknowledges his integrity, fairness, astute leadership, keen insight and prudent judgment as a member of the Board.
The Board has identified the following officials as Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013:
1. Jayendra Patel - Managing Director and C.E.O.
2. Amit Manakiwala- Whole Time Director (upto 31.08.2017)
3. Aalok Patel - Executive Director & C.F.O. (upto 25.05.2018)
4. Vivek Modi - C.F.O. (w.e.f. 26.05.2018)
5. Jaimish Patel - Company Secretary & Compliance Office
12.MEETING OF THE BOARD & AUDIT COMMITTEE
The Board during the financial year 2017-18 met five times and Audit Committee met four times. All the recommendations made by the Audit Committee during the year were accepted by the Board. The details of the constitution and meetings of the Board and the Committees held during the year are provided in the Corporate Governance Report which forms part of this Annual Report.
13.NOMINATION AND REMUNERATION COMMITTEE
As per the Section 178(1) of the Companies Act, 2013 the Company has constituted Nomination and Remuneration Committee, details of which are provided in the Corporate Governance Report which forms part of this Annual Report.
14.REMUNERATION POLICY Remuneration to Executive Directors
The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by Board in the Board meeting, subject to the subsequent approval of the shareholders at the ensuing Annual General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company.
Remuneration to Non-Executive Directors
Non-Executive Directors are paid sitting fees for each meeting of the Board and Committee of Directors attended by them.
15.PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished hereunder as per âAnnexure-2â.
However, the information required pursuant to 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 in respect of employees of the Company, will be provided upon request. In terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the Members at the Registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
16.DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and no complaint has been received on sexual harassment during the financial year 2017-18.
17. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-
a) In the preparation of the annual accounts for the year ended on 31st March, 2018, the applicable accounting standards had 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 as at 31st March, 2018 and of the profit and loss of the Company for the year ended on that date;
c) 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;
d) The Directors have prepared the annual accounts on a going concern basis;
e) That the Directors have laid down internal financial controls to be followed by the Company and that the financial controls are adequate and are operating effectively; and
f) 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.
18.DECLARATION BY INDEPENDENT DIRECTORS
A declaration of independence in compliance with Section 149(6) of the Companies Act, 2013, has been taken on record from all the independent directors of the Company.
19.AUDITORS AND AUDIT REPORTS
a) Statutory Auditors
M/s Samir M. Shah & Associates, Chartered Accountants (FRN: 122377W) were appointed as a Statutory Auditors of the Company with the approval of members at the 25th Annual General Meeting to hold office till the conclusion of the 30th Annual General Meeting. As per the recent amendment issued by Ministry of Corporate Affairs, ratification statutory auditors at every AGM is not required and hence your Directors have not proposed the ratification of M/s Samir M. Shah & Associates at ensuing AGM. Auditorâs Report for the year under review does not contain any qualifications, reservations or adverse remarks.
b) Secretarial Auditors
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 Pinakin Shah & Co., a firm of Company Secretaries in practice, to conduct the Secretarial Audit of the Company for the financial year 201718. The Secretarial Audit Report is annexed herewith as âAnnexure-3â. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.
20. RELATED PARTY TRANSACTIONS
All the related party transactions are entered on armâs length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Companyâs financial statements in accordance with the Accounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board, may be accessed on the Companyâs website at the link https://www.armanindia.com/ corporategovernance.aspx --> Policy For Materiality Of Related Party Transactions
21.RISK MANAGEMENT
Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the Company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives:
- Provide an overview of the principles of risk management
- Explain approach adopted by the Company for risk management
- Define the organizational structure for effective risk management
- Develop a âriskâ culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions.
- Identify access and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Companyâs human, physical and financial asset.
22.INTERNAL CONTROL SYSTEM
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter information technology controls. Internal audits of the Company are regularly carried out to review the internal control systems. The Audit Reports of Internal Auditor along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. Internal Auditor has verified the key internal financial control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.
23.INTERNAL FINANCIAL CONTROL
The Company has laid down certain guidelines, processes and structure, which enables implementation of appropriate internal financial controls across the organisation. Such internal financial controls encompass policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively. Because of the inherent limitations of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements in financial reporting due to error or fraud may occur and not be detected. Also, evaluation of the internal financial controls is subject to the risk that the internal financial control may become inadequate because of changes in conditions, or that the compliance with the policies or procedures may deteriorate.
The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control, stated in the Guidance Note on Audit of Internal Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
24. CORPORATE SOCIAL RESPONSIBILITY
The Company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitute Corporate Social Responsibility Committee.
25.ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its Audit Committee & Nomination & Remuneration Committee. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution and independence of judgment to safeguard the interest of the Company and its minority shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors.
26. CORPORATE GOVERNANCE
We strive to maintain high standards of Corporate Governance in all our interactions with our stakeholders. The Company has conformed to the Corporate Governance code as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Corporate Governance along with a certificate from the M/s Pinakin Shah & Co., Practicing Company Secretary, confirming the level of compliance is attached and forms a part of the Boardâs Report.
27. WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company has implemented a Whistle Blower Policy, whereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage / misappropriation of assets to the Company. The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee. The details of the Whistle Blower Policy are available on Companyâs website at the link: https://www.armanindia.com/corporategovernance. aspx --> Whistler Blower Policy
28. GREEN INITIATIVE
In accordance with the âGreen Initiativeâ, the Company has been sending the Annual Report / Notice of AGM in electronic mode to those shareholders whose Email ids are registered with the Company and / or the Depository Participants. Your Directors are thankful to the shareholders for actively participating in the Green Initiative.
29. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as required under Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed herewith as âAnnexure-4â for your kind perusal and information.
30. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO
A. Conservation of energy and technology absorption
Since the Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable.
B. Foreign exchange earnings and outgo
There were no foreign exchange earnings and outgo during the year under review.
31.SHARES & SHARE CAPITAL
- Buy Back of Securities:
The Company has not bought back any of its securities during the year under review.
- Sweat Equity:
The Company has not issued any Sweat Equity Shares during the year under review.
- Bonus Shares:
No Bonus Shares were issued during the year under review.
- Issue of Compulsorily Convertible Debentures (CCDs)
Your Company has issued and allotted 16,66,667 Unsecured Compulsorily Convertible Debentures (âCCDsâ) of RS. 300/- each aggregating RS. 50 crores on a preferential basis under Regulation 28(1) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and pursuant to shareholderâs approval obtained in Extra Ordinary General meeting of the Company held on 29.03.2018.
These CCDs will be converted into 18,90,417 ordinary equity shares of RS. 10/- each on a following manner:
a. 16,66,667 CCDs will be converted into 16,66,667 ordinary equity shares; and
b. up to a maximum of 2,23,750 ordinary equity shares of the Company will be issued, at the option of the holder of the CCDs, upon the conversion of the aggregate accrued but unpaid coupon (net of withholding taxes in India and interest paid in cash) on such CCDs.
The Company has also obtained in principle approval from the BSE Limited and National Stock Exchange of India Limited to issue and allot above mentioned CCDs.
- Employees Stock Option Plan
During the FY 2017-18 Company has granted 97,500 stock options (of which, 59,050 stock options were granted to the employee of Namra Finance Limited, a wholly owned subsidiary) to the eligible employees of the Company / Subsidiary Company pursuant to âArman Employee Stock Option Plan 2016â. Particulars of Employee Stock Options granted during the year are given in âAnnexure-5â. Further, the Company has granted 9,000 stock options to the eligible employees of the Company / Subsidiary Company on 25.05.2018.
- Reclassification of âpromoter and promoter group categoryâ to âpublic categoryâ
Mr. Amit Rajnikant Manakiwala, Mrs. Himani Amit Manakiwala and Mr. Maulik Amit Manakiwala existing promoters have requested the Company to reclassify them from âpromoter and promoter group categoryâ to âpublic categoryâ since:
1) They are not holding more than 1% shares of the Company;
2) They do not have any special rights in the Company through formal or informal arrangements;
3) They do not directly or indirectly, exercise control over the affairs of the Company;
4) They have neither any representation on the Board of the Company nor have any veto / special rights as to voting power or control over the Company;
5) They will not act as Key Managerial Personnel of the Company.
Board of Director has accepted their request to reclassify them from âpromoter and promoter group categoryâ to âpublic categoryâ.
32.CODE OF CONDUCT
The Code of Conduct for all Board members and Senior Management of the Company have been laid down and are being complied with in words and spirit. The compliance on declaration of code of Conduct signed by Managing Director & CEO of the Company is included as a part of this Annual Report.
33.MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Managementâs discussion and analysis forms a part of this annual report and is annexed to the Boardâs report.
34. ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNAL
There is no significant material order passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
35.GRATITUDE & ACKNOWLEDGEMENTS
The Board expresses its sincere thanks to all the employees, customers, suppliers, investors, lenders, regulatory / government authorities and stock exchanges for their co-operation and support and look forward to their continued support in future.
For and on behalf of the Board of Directors of,
Arman Financial Services Limited Jayendra Patel
(Vice Chairman & Managing Director)
DIN: 00011814
Aalok Patel
(Exe. Director)
Date: 09.08.2018 DIN: 02482747
Place: Ahmedabad
Mar 31, 2016
Dear Shareholders,
The Directors have pleasure in presenting the 24th Director''s Report of your Company together with the Audited Financial Statement for the year ended on 31st March, 2016.
You being our valued partners in the Company for a long time, we share our vision of growth with you and our guiding principles are a blend of optimism which has been and will be the guiding force of all our future endeavors.
The summary of operating results for the year and appropriation of divisible profits is given below: FINANCIAI PERFORMANCE
(Amount in Rs.)
|
Particulars |
Consolidated |
Standalone |
||
|
2015-16 |
2014-15 |
2015-16 |
2014-15 |
|
|
Gross Income |
406,923,839 |
296,114,209 |
159,174,647 |
152,556,194 |
|
Profit Before Interest and Depreciation |
276,691,643 |
202,342,970 |
95,381,452 |
100,097,718 |
|
Finance Charges |
153,831,667 |
107,354,489 |
56,715,827 |
55,600,592 |
|
Gross Profit |
122,859,976 |
94,988,481 |
38,665,625 |
44,497,126 |
|
Provision for Depreciation |
1,792,862 |
2,398,245 |
1,327,368 |
2,230,635 |
|
Net Profit Before Tax |
121,067,114 |
92,590,236 |
37,338,257 |
42,266,491 |
|
Provision for Tax |
41,090,474 |
31,017,933 |
12,406,393 |
14,464,908 |
|
Net Profit After Tax |
79,976,640 |
61,572,303 |
24,931,863 |
27,801,583 |
|
Balance of Profit brought forward |
141,696,010 |
104,024,926 |
106,176,811 |
95,276,447 |
|
Balance available for appropriation |
221,672,650 |
165,597,229 |
131,108,674 |
123,078,030 |
|
Proposed Dividend on Equity Shares |
9,694,514 |
8,309,584 |
9,694,514 |
8,309,584 |
|
Tax on proposed Dividend |
1,973,575 |
1,691,635 |
1,973,575 |
1,691,635 |
|
Transfer to General Reserve |
1,100,000 |
1,200,000 |
1,000,000 |
1,200,000 |
|
Transfer to Special Reserve U/s 45-IC of RBI Act |
16,275,000 |
12,700,000 |
5,025,000 |
5,700,000 |
|
Surplus carried to Balance Sheet |
190,673,749 |
141,696,010 |
113,415,585 |
106,176,811 |
COMPANY''S AFFAIRS AND FUTURE OUTLOOK
Your Company is engaged in the business of Asset Finance and Microfinance. The Parent Company, Arman Financial Services Limited, is engaged in Asset Finance, viz. Two-wheeler and Three-Wheeler finance; while the Microfinance business is managed through Arman''s wholly owned subsidiary, Namra Finance Limited. The financial statements of both Arman and Namra, as well as the consolidated financials of Arman are included within the Annual Report. The Company has performed admirably in a highly competitive business segment and this performance has been consistent over a period of many years.
Net interest income from operations during the year under review was RS.40.69 Crores against RS.29.61 Crores for the previous year, resulting in increase of 37.42%. Earnings before Interest & Taxes (EBIT) for the current year is RS.27.49 Crores (RS.19.99 Crores in previous year) thereby resulting in increased of 37.52%. Net Profit after Taxes amounted to RS.08.00 Crores (RS.6.16 Crores in previous year) thereby resulting increase of 30%. Earnings Per share were RS.11.27 (For RS.10 each). The Company''s consolidated Assets-Under-Management has crossed RS.175 Crores, and consolidated Disbursements totaled RS.348 Crores.
CHANGE IN NATURE OF BUSINESS, IF ANY
Your Company continues to operate the same business segment as that of previous year and there is no change in the nature of the business.
DIVIDEND
Your Directors are pleased to recommend a Dividend of RS.1.40/- (Previous Year RS.1.20) per equity share of RS.10/- each (i.e. 14%) for the year ended 31st March, 2016, subject to approval by the Members at the ensuing Annual General Meeting.
AMOUNTS TRANSFERRED TO RESERVES
The Board of the Company has transferred the amounts to reserve as under:
- Transfer to special reserve as required by section 45-IC of the Reserve Bank of India Act, 1934: RS.50,25,000
Transfer to general reserve: RS.10,00,000
CHANGES IN SHARE CAPITAL, IF ANY
There is no change in the share capital of the Company during the Year.
SUBSIDIARY
The Company has one wholly owned subsidiary, named Namra Finance Limited as on date. During the year no changes took place in the group corporate structure of your Company. The Company has formulated a policy for determining ''material'' subsidiaries pursuant to the provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The said policy is available at the Company website at the link http://armanindia.com/pdf/ Corporate Governance PDF/material_subsidiary.pdf
The consolidated financial statements presented by the Company include financial information of its subsidiary prepared in compliance with applicable accounting standards. The salient features of Namra Finance Limited in Form AOC-1 is attached hereunder as per Annexure-1 as required under section 129 (3) of the Companies Act, 2013.
UNCLAIMED DIVIDEND AS ON 31ST MARCH, 2016
The unclaimed dividend as on 31st March, 2016 was RS.15,26,542.20. No transfer of unclaimed/unpaid dividend was required to be made to the Investor Education And Protection Fund during the year.
MATERIAL CHANGES AND COMMITMENTS
The RIF NorthWest-2, a Institutional Investor of the Company has sold their entire holding through Stock Exchange on 30.06.2016 and transferred 12,04,474 Class "A" Ordinary Equity Shares (DVR) held by them to Namra Holdings & Consultancy Services Private Limited. Other than the above disclosure, no material changes and commitments have occurred after the close of the financial year till the date of this report, which affect the financial position of the Company.
LOANS, GUARANTEES AND INVESTMENTS
Except the loans, guarantees and investments made in subsidiary Company, there were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.
PUBLIC DEPOSITS
The Company has not accepted any deposits from the public within the meaning of the provisions of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1988.
DIRECTORS AND KMP
In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Smt. Ritaben Patel [DIN 00011818] and Shri Aalok Patel [DIN-02482747] will retire by rotation at the ensuing AGM and being eligible, offers themselves for reappointment.
Shri Aditya Bhandari, Nominee Director of RIF NorthWest-2, has resigned from the Board of Director of the Company. The Board has accepted his resignation in its meeting held on 11/08/2016.
The term of Shri Jayendra Patel, Managing Director has expired on 31/08/2016. On recommendation of Nomination & Remuneration Committee in their meeting held on 11/08/2016, your directors recommend his reappointment as Managing Director for further period of 5 (five) years on a remuneration as specified in the notice calling 24th Annual General Meeting.
Mr. Shashikant N. Thakar has resigned from the post of the Company Secretary of the Company and in place of him Mr. Jaimish G. Patel has been appointed as a Company Secretary of the Company w.e.f. 01st March, 2016.
The Board has identified the following officials as Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013:
1. Mr. Jayendra B. Patel - Managing Director and C.E.O.
2. Mr. Aalok Patel - Executive Director and C.F.O.
3. Mr. Amit Manakiwala - Whole Time Director.
4. Mr. Jaimish G. Patel - Company Secretary (w.e.f. 01.03.2016)
MEETING OF THE BOARD & AUDIT COMMITTEE
The Board during the financial year 2015-16 met eight times and Audit Committee met four times. All the recommendations made by the Audit Committee during the year were accepted by the Board. The details of the constitution and meetings of the Board and the Committees held during the year are provided in the Corporate Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
As per the Section 178 (1) of the Companies Act, 2013 the Company has constituted Nomination And Remuneration Committee, details of which are provided in the Corporate Governance Report which forms part of this Annual Report.
REMUNERATION POLICY
Remuneration to Executive Directors:
The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by Board in the Board meeting, subject to the subsequent approval of the shareholders at the ensuing Annual General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company.
Remuneration to Non Executive Directors:
The Non-Executive Directors are paid sitting fees for each meeting of the Board and Committee of Directors attended by them.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished hereunder as per Annexure-2.
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, a statement showing the names and other particulars of the employees is furnished as per Annexure-3.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and no complaint has been received on sexual harassment during the financial year 2015-16.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Companies Act, 2013 the Board of Directors of the Company confirms that-
a) In the preparation of the annual accounts for the year ended on 31st March, 2016, the applicable accounting standards had 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 as at 31st March, 2016 and of the profit and loss of the Company for the year ended on that date;
c) 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;
d) The Directors have prepared the annual accounts on a going concern basis;
e) That the Directors have laid down internal financial controls to be followed by the Company and that the financial controls are adequate and are operating effectively; and
f) 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.
DECLARATION BY INDEPENDENT DIRECTORS
A declaration of independence in compliance with Section 149(6) of the Companies Act, 2013, has been taken on record from all the independent directors of the Company.
STATUTORY AUDITORS
M/s J. T Shah & Co, Chartered Accountants, Ahmedabad (FRN No-190616W) were appointed as a Statutory Auditors of the Company with the approval of members at the 23rd Annual General Meeting to hold office till the conclusion of the 25th Annual General Meeting. The Board, in terms of Section 139 of the Act, on the recommendation of the Audit Committee, has recommended for the ratification of the Members, the appointment of M/s J. T Shah & Co., Chartered Accountants, Ahmedabad from the conclusion of the ensuing Annual General Meeting till the conclusion of the 25th Annual General Meeting for such a remuneration that may be determined by the Board of Directors of the Company on recommendation of Audit Committee.
SECRETARIAL AUDITORS
M /s Pinaki n Sha h & Co. , Practicing Company Secretary, Ahmedabad were appointed to conduct secretarial audit under section 204 of the Companies Act, 2013 for the financial year 2015-16. The Secretarial Audit report is annexed herewith as Annexure-4. The Secretarial Audit report does not contain any qualification, reservation or adverse remark.
The Board has appointed M/s Pinakin Shah & Co., Practicing Company Secretary as a Secretarial Auditors of the Company for the financial year 2016-17.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large and Approval of the Board of Directors & shareholders was obtained wherever required. Further all the necessary details of transaction entered with the related parties are attached herewith in Form No- AOC-2 as Annexure-6.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board, may be accessed on the Company''s website at the link http://armanindia.com/pdf/CorporateGovernancePDF/ related_party_transaction.PDF
RISK MANAGEMENT
Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the Company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives:
Provide an overview of the principles of risk management
Explain approach adopted by the Company for risk management
Define the organizational structure for effective risk management
- Develop a "risk" culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions.
Identify access and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Company''s human, physical and financial asset.
INTERNAL CONTROL SYSTEM
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter information technology controls. Internal audits of the Company are regularly carried out to review the internal control systems. The Audit Reports of Internal Auditor along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. Internal Auditor has verified the key internal financial control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.
INTERNAL FINANCIAL CONTROLS
The Company has laid down certain guidelines, processes and structure, which enables implementation of appropriate internal financial controls across the organization. Such internal financial controls encompass policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively. Because of the inherent limitations of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements in financial reporting due to error or fraud may occur and not be detected. Also, evaluation of the internal financial controls is subject to the risk that the internal financial control may become inadequate because of changes in conditions, or that the compliance with the policies or procedures may deteriorate.
The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control, stated in the Guidance Note on Audit of Internal Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
CORPORATE SOCIAL RESPONSIBILITY
The Company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitute Corporate Social Responsibility Committee.
ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its Audit Committee & Nomination & Remuneration Committee.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution and independence of judgment to safeguard the interest of the Company and its minority shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors.
CORPORATE GOVERNANCE
We strive to maintain high standards of Corporate Governance in all our interactions with our stakeholders. The Company has conformed to the Corporate Governance code as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Corporate Governance along with a certificate from the M/s. Pinakin Shah & Co. Practicing Company Secretary, Ahmedabad confirming the level of compliance is attached and forms a part of the Board''s Report.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has implemented a Whistle Blower Policy, whereby employees and other stakeholders can report matters such as generic grievances, corruption, misconduct, illegality and wastage/misappropriation of assets to the Company. The policy safeguards the whistle blowers to report concerns or grievances and also provides direct access to the Chairman of the Audit Committee. The details of the Whistle Blower Policy are available on Company''s website at the link: http://www.armanindia.com/pdf/ Corporate GovernancePDF/whistle_blower_policy.pdf
GREEN INITIATIVE
In accordance with the ''Green Initiative'', the Company has been sending the Annual Report/Notice of AGM in electronic mode to those Shareholders whose Email ids are registered with the Company and / or the Depository Participants.
Your Directors are thankful to the Shareholders for actively participating in the Green Initiative.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed herewith as Annexure-7 for your kind perusal and information.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
A. Conservation of energy and Technology absorption
Since the Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable.
B. Foreign exchange earnings and outgo
There were no foreign exchange earnings and outgo during the year under review.
SHARES
Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.
Bonus Shares
No Bonus Shares were issued during the year under review. Employees Stock Option Plan
The Company has not provided any Stock Option Scheme to the employees.
CODE OF CONDUCT
The Code of Conduct for all Board members and Senior Management of the Company have been laid down and are being complied with in words and spirit. The compliance on declaration of code of Conduct signed by Managing Director and CEO of the Company is included as a part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management''s discussion and analysis forms a part of this annual report and is annexed to the Board''s report.
ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS
The Company has received demand order from the Income Tax Department under the scrutiny of the assessment year 2012-13 amounting RS.7.42 Crores. The assessing officer has added an investment of RS.15 Crore made by RIF North West-2 in the Company, as an unexplained income of the Company.
The Company has also filed an appeal to challenge the said demand order before Commissioner of Income Tax, which is pending.
ACKNOWLEDGEMENT
The Board places on record their appreciation of the support of all stakeholders.
For, and on behalf of the Board
Date: 11/08/2016 Chinubhai Shah
Place: Ahmedabad Chairman
DIN: 00558310
Mar 31, 2014
Dear Members,
Your Directors are pleased to present the Twenty Second Annual Report
and the Audited Accounts for the financial year ended March 31, 2014.
Summary of the Financial Results
PARTICULARS Year Ended
31st March, 2014
(Rs.)
Income from operations 24,47,32,650
Profit before Interest,
& Depreciation 15,90,03,695
Less
Interest 9,11,72,168
Depreciation 11,39,409 9,23,11,577
PROFIT BEFORE TAXATION 6,66,92,118
Provision for Taxation (21,800,000)
Deferred Tax Assets 99,062
PROFITS AFTER TAXATION 4,49,91,180
Prior Period Items NIL
Excess/(Short) provision for NIL
earlier year
Add: Balance Brought Forward
from Previous year 7,79,35,250
PROFITS AVAILABLE FOR 12,29,26,430
APPROPRIATIONS
APPROPRIATIONS
Dividend 6,924,653
Tax on Dividend 1,176,848 8,101,501
Transfer to General Reserve 15,00,000
Transfer to Special Reserve 9,425,000
PROFIT & LOSS A/C SURPLUS 10,38,99,929
PARTICULARS Year Ended
31st March, 2013
(Rs.)
Income from operations 16,98,50,230
Profit before Interest,
& Depreciation 10,58,61,241
Less
Interest 5,72,51,632
Depreciation 10,76,794 5,83,28,426
PROFIT BEFORE TAXATION 4,75,32,815
Provision for Taxation (15,605,000)
Deferred Tax Assets 1,579,779
PROFITS AFTER TAXATION 3,35,07,594
Prior Period Items NIL
Excess/(Short) provision for (71,760)
earlier year
Add: Balance Brought Forward
from Previous year 5,78,51,553
PROFITS AVAILABLE FOR 9,12,87,387
APPROPRIATIONS
APPROPRIATIONS
Dividend 45,19,114
Tax on Dividend 7,68,023 52,87,137
Transfer to General Reserve 15,00,000
Transfer to Special Reserve 65,65,000
PROFIT & LOSS A/C SURPLUS 7,79,35,250
FINANCIAL PERFORMANCE
Net Revenue from Operations for the year ended March 31, 2014 was Rs
2447.32 lacs representing an increase of 44.09 per cent over the
previous year.
Profit before tax for the year was at Rs.666.92 lacs representing an
increase of 40.31 per cent over the previous year.
CONSOLIDATED PERFORMANCE
The consolidated profit before interest, depreciation, exceptional
items and taxes (EBITDA) was Rs 1590.04 Lacs in the Financial Year
2013-14, higher by 50.02 per cent over the previous year. Consequently,
the consolidated profit before exceptional items and taxes (PBT) was Rs
666.92 Lacs in the Financial Year 2013-14 compared to Rs 475.33 Lacs in
the previous year.
APPROPRIATIONS
Dividend
The Board has recommended payment of dividend at Rs 1/- per equity
share of 10/- each for the financial year 2013-14. The dividend, if
approved by the members at the Annual General Meeting, will result in a
cash outflow of Rs 81.02 lacs including dividend tax.
Transfer to Reserves
According to Companies (Transfer of Profits to Reserves) Rules, 1975,
the Board has recommended a transfer of Rs.15,00,000/- to the general
reserve and as required by Section 45-IC of the Reserve Bank of India
Act, 1934. an amount of Rs. 94,25,000/- to Special Reserve.
SHARE CAPITAL
During the year, the following changes were effected in the Share
Capital of your Company:- Increase in Issued and Paid up Share Capital
The following securities were allotted on 14/10/2013 during the
financial year:
i. 71,286 Ordinary Equity Shares of face value of Rs. 10/- each at a
premium of Rs 46.95 per equity share;
ii. 12,04,474 Class- "A" Ordinary Equity Share of Rs. 10/- each at a
premium of Rs 46.95 per equity share.
LISTING OF SHARES
The Company's share continues to remain listed with the Stock Exchange,
Mumbai, where the shares are actively traded. BSE vide its letter no.
DCS/PREF/JS/FIP/679/2013-14 dated 12/03/2014 has approved listing of
71,286 equity shares of Rs 10/- each issued at a premium of Rs 46.95
per equity share
SUBSIDIARY COMPANY
The consolidated financial statements presented by the Company include
financial information of its subsidiary prepared in compliance with
applicable Accounting Standards. The balance sheet, Statement of profit
and loss and other documents of the subsidiary company are covered in
this Annual Report as required under Section 212(8) of the Companies
Act, 1956.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis has been reviewed by the Audit
Committee and the same forms a part of the Annual Report.
CORPORATE GOVERNANCE
The Company is committed to good corporate governance in line with the
Listing Agreement. The Company is in compliance with the provisions on
corporate governance specified in the Listing Agreement with the Bombay
Stock Exchange Limited.
A certificate of compliance from M/s Pinakin Shah & Co., Ahmedabad, a
practicing Company Secretary (FCS-2562) and the report on Corporate
Governance form part of this Directors' Report.
DIRECTORS
Shri Amitbhai R. Manakiwala [DIN 00011810] and Smt Ritaben J. Patel
[DIN 00011818] retire at 22nd Annual General Meeting and have offered
themselves for re-appointment. It is also proposed to appoint Shri
Chinubhai R Shah [DIN 00558310], Shri Kaushikbhai D Shah [DIN 00024305]
and Shri Lokesh Kumar Singh [DIN 02299205] as Independent Directors of
the Company for a term up to five years, at the forthcoming Annual
General Meeting.
Necessary Resolutions for the appointment of the aforesaid Directors
have been included in the Notice convening the ensuing Annual General
Meeting and details of the proposals for appointment of independent
directors are mentioned in the explanatory statement to the Notice.
CODE OF CONDUCT
The code of conduct for all board members and Key Managerial Personnel
of the Company has been laid down and is being complied in words and
spirit. The declaration on compliance of code of conduct signed by Vice
Chairman & Managing Director of the Company is included as a part of
this Annual Report.
SECRETARIALAUDIT
Pinakin Shah & Co., Practicing Company Secretary (FCS-2562) conducted
Secretarial Audit pursuant to provisions of Section 383A of the
Companies Act, 1956, for the financial year 2013-14. They have
submitted the report confirming compliance with the applicable
provisions of the Companies Act, 1956.
STATUTORY DISCLOSURES:
ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Particulars required to be furnished by the Companies (Disclosure of
particulars in the Report of Board of Directors) Rules 1988:
Part A and B pertaining to conservation and technology absorption are
not applicable to the Company However the Company endeavored to
conserve energy consumption wherever feasible.
The Company has neither used nor earned any foreign exchange during the
year under review.
PERSONNEL
The Industrial Relations scenario continued to be cordial. The Company
regards its employees as a great asset and accords high priority to
training and development of employees.
Information as required under Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
and Companies (Particulars of Employees) Amendment Rules, 2011 is nil.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed;
(b) Appropriate accounting policies have been selected and applied
consistently and have made judgements 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, 2014 and of the profit of the Company
for the year ended March 31, 2014;
(c) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) The annual accounts have been prepared on a going concern basis.
CASH FLOW
A Cash Flow statement for the year ended on 31st March, 2014 is
attached to the Balance Sheet.
AUDITORS
M/s J. T. Shah & Co., Chartered Accountants, Ahmedabad [Membership
No.45669] were appointed as the statutory auditors of the Company
financial year 2013-14 at the Annual General Meeting of the Company
held on 30/08/2013. M/s J. T. Shah & Co., Chartered Accountants,
Ahmedabad [Membership No.45669] have been the Auditors of the Company
since Incorporation and have completed a term of 21 years. As per the
provisions of section 139 of the Act, no listed company can appoint or
re-appoint an audit firm as auditor for more than two terms of five
consecutive years and has also provided a period of three years from
the date of commencement of the Act to comply with this requirement.
In view of the above, M/s J. T. Shah & Co., Chartered Accountants,
Ahmedabad [Membership No.45669], being eligible for re- appointment,
offer themselves for re-appointment and based on the recommendation of
the Audit Committee, the Board of Directors proposes their
reappointment as the statutory auditors of the Company. However they
will be eligible for reappointment for a maximum period of three years
to hold office from the conclusion of this Annual General Meeting.
FIXED DEPOSITS
No fixed deposits were accepted from the public during the year.
However, deposits from Directors as at March 31, 2014 stood at Rs 10.09
lacs. The Company does not have any unclaimed or overdue deposits as of
date.
INSURANCE
The Company's assets are adequately insured against major risks.
ACKNOWLEDGEMENT
The Board appreciates and places on record the contribution made by
employees to the sustained satisfactory business performance during the
period under review. The Board also places on record their appreciation
of the support of all stakeholders particularly shareholders,
customers, suppliers, the medical fraternity and business partners, all
of whom have contributed to the Company's success.
For and on behalf of the Board
Place: Ahmedabad.
Date: 11/08/2014 CHINUBHAI R. SHAH
CHAIRMAN
Registered Office :
502-503, Sakar III
Opp. Old High Court
Off Ashram Road
Ahmedabad 380014
Gujarat, India.
Mar 31, 2013
To The Members,
The Directors have pleasure in presenting the Twenty first Annual
Report along with the audited accounts of the Company for the year
ended 31st March, 2013.
FINANCIAL RESULTS
PARTICULARS Year Ended Year Ended
31st March, 2013 31st March, 2012
Income from operations 16,98,50,230 15,50,29,007
Profit before Interest,
& Depreciation 10,58,61,241 10,27,06,133
Less
Interest 5,72,51,632 5,61,94,476
Depreciation 10,76,794 5,83,28,426 10,38,109 5,72,585
PROFIT BEFORE TAXATION 4,75,32,815 4,54,73,548
Provision for Taxation '' (15,605,000) (14,700,000)
Deferred Tax Assets 1,579,779 (164,001)
PROFITS AFTER TAXATION 3,35,07,594 3,06,09,547
Prior Period Items NIL NIL
Excess/(Short) provision
for earlier year (71,760) NIL
Add: Balance Brought Forward
from Previous year 5,78,51,553 3,87,82,266
PROFITS AVAILABLE
FOR APPROPRIATIONS 9,12,87,387 6,93,91,813
APPROPRIATIONS
Dividend 45,19,114 32,61,280
Tax on Dividend 7,68,02 3 52,87,137 5,28,980 37,90,260
Transfer to General Reserve 15,00,000 15,50,000
Transfer to Special Reserve 65,65,000 62,00,000
PROFIT & LOSS A/C SURPLUS 7,79,35,250 5,78,51,553
FINANCIAL PERFORMANCE
In the year under review,
Gross income was Rs. 1698.50 lacs as compared to Rs. 1550.29 lacs in the
previous year showing the growth of 9.56%.
The Profit before Taxes for the year is Rs. 475.33 lacs as compared to Rs.
454.74 lacs in the previous year showing the growth of 4.52%.
The net profit for the year is Rs. 335.07 lacs as compared to Rs. 306.10
lacs in the previous year showing the increase of- 9.46%.
APPROPRIATIONS
Dividend
The Board has recommended a dividend of Rs. 0.80 per equity share
(previous year Rs. 0.80 per equity share) of fully paid up face value of
Rs. 10/-, amounting to Rs. 45,19,114/- (previous year Rs. 32,61,280). The tax
on distributed profits payable on this dividend is Rs. 768,023/-
(previous year Rs. 528,980) making the aggregate distribution to Rs.
52,87,137/- (previous year Rs. 37,90,260). The proposed dividend would
be tax free in the hands of the shareholders.
Transfer to Reserves
According to Companies (Transfer of Profits to Reserves) Rules, 1975,
the Board has recommended a transfer of Rs. 15,00,000/- to the general
reserve and an amount of Rs. 65,65,000/- transfer to Special Reserve as
required by Section 45-IC of the Reserve Bank of India Act, 1934.
SHARE CAPITAL
During the year, the following changes were effected in the Share
Capital of your Company:-
Increase in Issued and Paid up Share Capital
a) The following securities were allotted on 16/04/2012 during the
financial year:
13,58,129 Ordinary Equity Shares of face value 10/- each at a premium
of Rs. 46.95 per equity share;
12,75,760 10% Compulsorily Convertible Debentures [CCD] of face value
of Rs. 56.95 per CCD with a right exercisable by the CCD holder to
subscribe for one Ordinary Equity Share of 10/- each per CCD; or for
one ''A'' Ordinary Share of Rs. 10/- each per CCD.
4,28,329 Warrants of face value of Rs. 28/- per warrant with a right
exercisable by the warrant holder to subscribe for one Ordinary Equity
Share of 10/- each per warrant.
Out of it, 214,164 Warrants were converted into equity shares on
13/02/2013. The new Equity Shares rank paripassu with the existing
Equity Shares of your Company.
LISTING OF SHARES
The Company''s share continues to remain listed with The Stock Exchange,
Mumbai, where the share is actively traded. BSE vide its letter no
DSC/PREF/SJ/FIP/037/2013-2014 dated 15/04/2013 has approved listing of
214,164 equity shares of Rs. 10/- each converted at a premium of Rs. 18/-
per equity share on 13/02/2013.
SUBSIDIARY COMPANY
M/s Namra Finance Limited a wholly owned subsidiary has received a
license numbered 01.00517 dated February 14, 2013 from RBI awarding
"NBFC-MFI" (Non-Banking Finance Company - Microfinance Institution)
license and it became the first company in India to receive "NBFC-MFI"
license. It has commenced business w.e.f 15/02/2013.
An additional capital of Rs. 300.00 lacs has been infused. Its Balance
Sheet, Profit and Loss Account and other documents have been attached
with this annual report.
MANAGEMENT DISCUSSION & ANALYSIS
Management Discussion and Analysis have been reviewed by the Audit
Committee and the same is forming a part of this Annual Report.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the listing agreement, a report on corporate
governance along with auditors'' certificate of its compliance is
included as part of the annual report.
DIRECTORS
The clause 153 read with clause 154 of Articles of Association of the
Company provide that at least two-thirds of our Directors shall be
subject to retirement by rotation. One third of these retiring
Directors must retire from office at each Annual General Meeting of the
shareholders. A retiring Director is eligible for re-election.
Shri Jayendrabhai Patel, Shri Chinubhai Shah and Shri Aalok Patel will
retire by rotation and being eligible, offer themselves for
reappointment. The details of their re-appointment together with nature
of their expertise in specific functional areas and names of the
companies in which they hold office as Director and/or the
Chairman/Membership of Committees of the Board, are provided in the
Notice of the ensuing Annual General Meeting.
CODE OF CONDUCT
The code of conduct for all board members and senior management of the
Company has been laid down and is being complied in words and spirit.
The declaration on compliance of code of conduct signed by Chairman &
Managing Director of the Company is included as a part of this annual
report.
SECRETARIAL AUDIT
Pinakin Shah & Co., Practicing Company Secretary conducted Secretarial
Audit pursuant to provisions of Section 383A of the Companies Act,
1956, for the financial year 2012-13. Pinakin Shah & Co. has submitted
the Report confirming compliance with the applicable provisions of
Companies Act, 1956 and other rules and regulations issued by
SEBI/other regulatory authorities for corporate law.
STATUTORY DISCLOSURES:
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Particulars required to be furnished by the Companies (Disclosure of
particulars in the Report of Board of Directors) Rules 1988:
Part A and B pertaining to conservation and technology absorption are
not applicable to the Company. However the Company endeavored to
conserve energy consumption wherever feasible.
The Company has neither used nor earned any foreign exchange during the
year under review.
PARTICULARS OF EMPLOYEES:
The information as required under Section 217(2A) of the Companies
Act.1956 read with Companies (particulars of employees'' amendment)
Rules, 1988 as amended from time to time is nil.
DIRECTOR''S RESPONSIBILITY STATEMENT:
Pursuant to sub-Section (2AA) of Section 217 of Companies Act''1956 the
Board of Directors of the Company hereby State and confirm that: in the
preparation of Annual Accounts, the applicable accounting standards
have been followed along with proper explanation relating to material
departures; 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 end of the financial year and of the
profit of the Company for the period; the Directors have taken proper
and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 1956 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.
Cash Flow
A Cash Flow statement for the year ended March 31, 2013 is attached to
the Balance Sheet.
AUDITORS AND AUDITORS'' REPORT:
The auditors M/s J. T. Shah & Co., Chartered Accountants, Ahmedabad
holds office until the conclusion of the Next Annual General Meeting
and they have intimated the Company in writing of their willingness to
be reappointed as auditors of the Company for the financial year
2013-14. The Company has received certificate from them to the effect
that the appointment if made, would be within prescribed limits under
Section 224 (1 -B) of the Companies Act, 1956.
FIXED DEPOSITS
The Company has not invited or accepted any deposits from the public.
However it has accepted unsecured loan from its directors. The Company
has made all compliances in terms of Non-Banking Financial Companies
(Reserve Bank) Directions, 1998.
INSURANCE
The Company''s assets are adequately insured against major risks.
"A" ORDINARY SHARES
12,75,760 CCD allotted on 18/04/2012 are due for conversion into one
Ordinary Equity Share of Rs. 10/- each per CCD or for one "A" Ordinary
Shares of Rs. 10/- each per CCD or partly in Ordinary Equity Shares and
partly in "A" Ordinary Shares at the option of investor. As per clause
28A of the listing agreement executed with BSE, class "A" Ordinary
Shares should not have any superior right as regards to dividend and
accordingly an amendment in resolution passed by way of postal ballot
on 19/12/2011 is proposed and a notice to that respect under Rule 5 (d)
of Companies (Passing of resolution By Postal Ballot) Rules 2011 is
issued.
ACKNOWLEDGMENTS
The Company has received excellent co-operation from its bankers and
financial institutions viz. IDBI Bank Ltd., State Bank of India, State
Bank of Patiala, HDFC Bank Ltd, SIDBI, NABARD, AXIS Bank Ltd., ICICI
Bank Ltd, United Bank of India, Development Credit Bank Ltd., Ananya
Finance for Inclusive Growth Private Limited, MAS Financial Service
Ltd., Reliance Capital Ltd., The Sarvodaya Commercial Co-op Bank Ltd.,
and The Ahmedabad District Co-op Bank Ltd. The Company looks forward to
the continued co-operation from its Bankers in future as well.
The Company puts on record its appreciation for the dedication of its
staff members and the co-operation of its stake holders received during
the period under review.
For and on behalf of the Board
Place: Ahmedabad.
Date: 25/07/2013 CHINUBHAIR. SHAH
CHAIRMAN
Mar 31, 2012
The Directors have pleasure in presenting the Twentieth Annual Report
along with the audited accounts of the company for the year ended 31st
March, 2012.
FINANCIAL RESULTS
PARTICULARS Year Ended Year Ended
31st March, 2012 31st March, 2011
(Rupees) (Rupees)
Income from operations 15,50,29,007 11,42,25,134
Profit before Interest,
& Depreciation 10,27,06,133 7,02,73,840
Less
Interest 5,61,94,476 4,26,44,135
Depreciation 10,38,109 9,10,477
5,72,32,585 4,35,54,612
PROFIT BEFORE
TAXATION 4,54,73,548 2,67,19,228
Provision for
Taxation (14,700,000) (91,00,000)
Deferred Tax Assets (164,001) 5,13,953
PROFIT AFTER TAXATION 3,06,09,547 1,81,33,181
Add: Balance Brought
Forward from Previous
year 3,87,82,266 2,81,02,031
PROFIT AVAILABLE FOR
APPROPRIATIONS 6,93,91,813 4,62,35,212
APPROPRIATIONS
Dividend 32,61,280 32,61,280
Tax on Dividend 5,28,980 37,90,260 5,41,666 38,02,946
Transfer to General
Reserve 15,50,000 NIL
Transfer to Special
Reserve 62,00,000 36,50,000
PROFIT & LOSS A/C
SURPLUS 5,78,51,553 3,87,82,266
FINANCIAL PERFORMANCE
For the year under review,
- Gross income rose to Rs.1550.29 lacs as compared to Rs. 1142.25 lacs
in the previous year showing the growth of 35.72%.
- The Profit Before Taxes for the year is Rs. 454.74 lacs as compared
to Rs. 267.19 lacs in the previous year showing the growth of 70.19%.
- The net profit for the year is Rs. 306.10 lacs versus Rs. 181.33 lacs
in the previous year showing the increase of 68.81%.
APPROPRIATIONS
Dividend
The Board has recommended a dividend of Rs. 0.80 per equity share
(previous year dividend Rs. 0.80 per equity share) of fully paid up
face value of Rs. 10/-, amounting to Rs. 32,61,280/-(previous year
dividend Rs. 32,61,280/-). The tax on distributed profits payable on
this dividend is Rs. 5,28,980/- (previous year Rs. 5,41,666/-) making
the aggregate distribution to Rs. 37,90,260/- lacs (previous year Rs.
38,02,946/-). The proposed dividend would be tax free in the hands of
the shareholders.
Transfer to Reserves
According to Companies (Transfer of Profits to Reserves) Rules, 1975,
the Board has recommended a transfer of Rs. 15,50,000/- to the general
reserve and an amount of Rs. 62,00,000/- lacs transfer to Special
Reserve as required by Section 45-IC of the Reserve Bank of India Act,
1934.
SHARE CAPITAL
During the year, the following changes were effected in the Share
Capital of your Company:-
i) Change in Authorised Share Capital
The Authorised Share Capital of your Company was subdivided into
1,12,50,000 Equity Shares of Rs.10/- each and 37,50,000 'A Ordinary
Share of Rs.10/- each by the creation of 37,50,000 'A Ordinary Share of
Rs.10/- each.
ii) Increase in Issued and Paid up Share Capital
a) The following securities were issued on a preferential basis to RIF
NorthWest 2 during the financial year:
- 13,58,130 Ordinary Equity Shares of face value 10/- each at a premium
of Rs 46.95 per equity share;
- 12,75,760 10% Compulsorily Convertible Debentures [CCD] of face value
of Rs 56.95 per CCD with a right exercisable by the CCD holder to
subscribe for one Ordinary Equity Share of 10/- each per CCD; or for
one 'A' Ordinary Share of Rs 10/- each per CCD.
An application money for above securities was received on 28/12/2011.
b) The following securities were issued on a preferential basis to
promoters of the Company during the financial year:
- 4,28,329 Warrants of face value of Rs 28/- per warrant with a right
exercisable by the warrant holder to subscribe for one Ordinary Equity
Share of 10/- each per warrant.
In principal approval from BSE for listing of above securities was
received on 12/04/2012 and thereafter the allotment was finalized on
16/04/2012 i.e. after close of the accounting year. Issued and
Subscribed Share Capital of your Company,as on 31stMarch, 2012,
remained the same and stands increased to Rs.: 54,347,290/- divided
into 54,34,729 Equity Shares of Rs. 10/- each on 16/04/2012.The new
Equity Shares rank pari passu with the existing Equity Shares of your
Company.
LISTING OF SHARES
The Company's share continues to remain listed with The Stock Exchange,
Mumbai, where the share is actively traded. BSE vide its letter no
DCS/PREF/BS/FIP/307/20112-13 dated 30/07/2012 has approved listing of
13,58,129 equity shares of Rs 10/- each allotted at a premium of Rs
46.95 per equity share to RIF North West 2.
SUBSIDIARY COMPANY
Your Company has incorporated its wholly owned subsidiary M/s Namra
Finance Limited on 27/03/2012. An application has been made to RBI for
NBFC registration. The Company has invested Rs 199.90 lacs as its
initial capital. The Company is not required to attach the Balance
Sheet, Profit and Loss Account and other documents of the subsidiary
company as it has not closed its first accounting year.
MANAGEMENT DISCUSSION & ANALYSIS
Management Discussion and Analysis have been reviewed by the Audit
Committee and the same is forming a part of this Annual Report.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the listing agreement, a report on corporate
governance along with auditors' certificate of its compliance is
included as part of the annual report.
DIRECTORS
The clause 153 read with clause 154 of Articles of Association of the
Company provide that at least two-thirds of our Directors shall be
subject to retirement by rotation. One third of these retiring
Directors must retire from office at each Annual General Meeting of the
shareholders. A retiring Director is eligible for re-election.
Shri K. D. Shah, Mrs.Rita J Patel and Shri Aakash Patel will retire by
rotation and being eligible, offer themselves for reappointment. The
details of their re-appointment together with nature of their expertise
in specific functional areas and names of the companies in which they
hold office as Director and/or the Chairman/Membership of Committees of
the Board, are provided in the Notice of the ensuing Annual General
Meeting.
Mr Aditya Bhandari was appointed as additional Director on 10/02/2012
and will vacate his office at the ensuing Annual General Meeting. The
Company has received notice from certain members seeking his
re-appointment. The Board recommends his re-appointment.
CODE OF CONDUCT
The code of conduct for all board members and senior management of the
company has been laid down and is being complied in words and spirit.
The declaration on compliance of code of conduct signed by Chairman &
Managing Director of the Company is included as a part of this annual
report.
SECRETARIAL AUDIT
Pinakin Shah & Co., Practicing Company Secretary conducted Secretarial
Audit pursuant to provisions of Section 383A of the Companies Act,
1956, for the financial year 2011-12. Pinakin Shah & Co., has submitted
the Report confirming compliance with the applicable provisions of
Companies Act, 1956 and other rules and regulations issued by
SEBI/other regulatory authorities for Corporate law.
STATUTORY DISCLOSURES:
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Particulars required to be furnished by the Companies (Disclosure of
particulars in the Report of Board of Directors) Rules 1988:
Part A and B pertaining to conservation and technology absorption is
not applicable to the Company. However the Company endeavored to
conserve energy consumption wherever feasible.
The Company has neither used nor earned any foreign exchange during the
year under review.
PARTICULARS OF EMPLOYEES:
The information as required under Section 217(2A) of the Companies
Act.1956 read with Companies (particulars of employees' amendment)
Rules, 1988 as amended from time to time is nil.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to sub-Section (2AA) of Section 217 of Companies Act'1956 the
Board of Directors of the Company hereby State and confirm that:
- in the preparation of Annual Accounts, the applicable accounting
standards have been followed along with prop
- 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 end of the financial year and of the profit of the
Company for the period;
- the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 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. Cash Flow
A Cash Flow statement for the year ended March 31, 2012 is attached to
the Balance Sheet.
AUDITORS AND AUDITORS' REPORT:
The auditors M/s J. T. Shah & Co., Chartered Accountants, Ahmedabad
holds office until the conclusion of the Next Annual General Meeting
and they have intimated the company in writing of their willingness to
be reappointed as auditors of the Company for the financial year
2012-13. The Company has received certificate from them to the effect
that the appointment if made, would be within prescribed limits under
Section 224 (1-B) of the Companies Act, 1956.
The notes on accounts referred to in the Auditors' Report are
self-explanatory and comments on Auditors' Report are as under:
Comments and replies:
1. Strengthening of internal control system:
The company has appointed M/s. Dharmesh Parikh & Co., Ahmedabad as
Internal Auditor and also has its own internal control department. Both
of them look into in the system and procedures and conduct regular
audits of the entire operations, which includes disbursement and
recovery of loans. The company has also engaged IntelleCash Consulting
to assess, evaluate, and rehaul the current systems and procedures for
the Company's Microfinance operations.
2. Payment of Advance Tax:
It is always Endeavour of the company to pay all taxes regularly.
However there was delay in depositing advance income tax as it was
difficult to predict performance of Company in Micro Finance Segment
due to uncertainty of policy on sector at macro level. It was difficult
to measure profitability due to announcement of acceptance of Malegam
Committee Recommendations by RBI and the RBI December 2, 2011
Microfinance Directions Circular.
3. Fraud by employees of the Company:
Employee fraud is an inherent risk in the business the company operates
in, since all Micro Finance transactions are cash-based.The services of
all such employees involved have been terminated and the company has
taken legal action. The outstanding balance (net of recovery)
aggregating Rs 2.87 lacs has been written off. The company has
recovered an amount of Rs 1.95 lacs against a total fraud of Rs 4.82
lacs. To mitigate this risk to a large extent, the management has put
in place several preventive control measures such as procuring
indemnity bond from every field staff, with personal guarantee of a
third person. Company performs reference checks of all employees and
conducts field investigation of their residence. Every bank transaction
(deposit/ withdrawal) is executed by a minimum of two staff. Cash is
deposited in the bank daily and minimal cash remains overnight at the
branch offices. Surprise visits are conducted by managerial employees
and audit executives to verify cash balances at branch and with field
employees. Demand-Collection-Disbursement reconciliation occurs daily
and the summary is reported to upper management daily. Company has also
procured Fidelity (fraud) Insurance and Cash Transit Insurance on all
employees to further mitigate risk.
FIXED DEPOSITS
The Company has not invited or accepted any deposits from the public.
The Company has made all compliances in terms of Non-Banking Financial
Companies (Reserve Bank) Directions, 1998. Even though the company
remained as Category 'A' (Deposit accepting) NBFC, it has not invited
or accepted any deposits from the Public. The Company has made all the
compliances in terms of Non-Banking Financial Companies (Reserve Bank)
Directions, 1998.
INSURANCE
The Company's assets are adequately insured against major risks.
ACKNOWLEDGMENTS
The Company has received excellent co-operation from its bankers and
financial institutions viz. IDBI Bank Ltd., State Bank of India, State
Bank of Patiala, HDFC Bank Ltd., SIDBI, NABARD, AXIS Bank Ltd., ICICI
Bank Ltd., United Bank of India, Development Credit Bank Ltd., Ananya
Finance for Inclusive Growth Private Ltd., MAS Financial Service Ltd.,
The Sarvodaya Commercial Co-op Bank Ltd., and The Ahmedabad District
Co-op Bank Ltd. The Company looks forward to the continued co-operation
from its Bankers in future as well.
We sincerely thank INCOFIN Investment Management and RIF NorthWest 2
for their investment and the trust they have reposed in us.
We also thank the Reserve Bank of India, our regulator, for all the
co-operation extended for the year under review.
The Company puts on record its appreciation for the dedication of its
staff members and the Co-operation of its stake holders received during
the period under review.
For and on behalf of the Board
Place: Ahmedabad.
Date : 07/08/2012 CHINUBHAI R. SHAH
CHAIRMAN
Mar 31, 2010
The Directors have pleasure in presenting the Eighteenth Annual Report
along with the audited accounts of the company for the year ended 31st
March, 2010.
FINANCIAL RESULTS
Year Ended Year Ended
PARTICULARS 31st March 2010 31st March 2009
(Rupees) (Rupees)
Income from operations 5,60,78,652 4,38,89,203
Profit before Interest, & 2,66,43,458 2,66,43,458
Non cash charges, Less
Interest 193,80,802 155,30,185
Depreciation 7,23,938 2,01,04,740 6,15,018 1,61,45,203
PROFIT BEFORE TAXATION 37,00,000 1,04,98,255
Provision for Taxtion 37,00,000 35,83,000
Deferred Tax Assets 3,81,205 16,102
PROFIT AFTER TAXATION 78,81,148 68,99,153
Prior Period Items NIL NIL
Excess/(Short) Provision for NIL NIL
earlier year
Add : Balance Brought Forward
From previous year 2,62,82,534 1,93,83,381
PROFITS AVAILABLE FOR 3,26,63,682 2,62,82,534
APPROPRIATIONS
APPROPRIATIONS
Interim/Final
Dividend 2,445,960 NIL
Tax on Dividend 4,15,691 28,61,651 NIL NIL
Transfer to General
Reserve NIL NIL NIL
Transfer to Special
Reserve 17,00,000 15,00,000
Profit & Loss A/c
Surplus 3,09,63,682 2,47,82,534
TOTAL 3,26,63,682 2,62,82,534
DIVIDEND
Your Directors are pleased to announce the Final Dividend for the
financial year 2009-10 at the Rate of Rs. 0.60/- per Share.
FINANCIAL PERFORMANCE
In the year under review, the board is pleased to announce record
levels on income and profits, and an unprecedented growth rate.
- Gross income rose to Rs. 560.79 lacs as compared to Rs. 438.89 lacs
in the previous year showing the growth of 28%.
- The Profit Before Taxes for the year is Rs. 119.62 lacs as compared
to Rs. 104.98 lacs in the previous year showing the growth of 14%.
- The net profit for the year is Rs. 78.81 lacs versus Rs. 68.99 lacs
in the previous year showing the increase of 14%.
The board and management of Arman have always worked diligently towards
creating long-term shareholder value and to use the principles of sound
corporate governance to run the day-to-day affairs of the business. We
would like to assure you that your Board will continue to uphold these
traditions and strive to capitalise on right opportunities and manage
the risk carefully.
DIRECTORS:
In accordance with Section 257 of the Companies Act, 1956 and Articles
of Association of the Company, Shri Jayendra Patel, Shri Kaushik D.
Patel and Shri Aakash Patel, the directors of the company retire by
rotation & being eligible offer themselves for re-appointment. Your
Directors recommend to reappoint them as Directors of the company.
Shri Amit Manakiwala, has resigned as Whole Time Director w e. f.
14.10.2009 but continued as Ordinary Director on the Board.
Shri Nilesh Trivedi, the Independent Director on the Board of the
company has resigned as Director w. e. f. 10-01-2010 and Shri Lokesh
Kumar Singh is appointed as Independent Director on the Board w. e. f.
28-01-2010. Shri Lokesh Kumar Singh was appointed as additional
Director and his term is expiring on ensuing Annual General meeting and
accordingly your directors recommend to appoint him as regular director
on the Board.
The term of Shri Jayendra Patel as Vice Chairman & Managing Director is
expiring on 31-08-2010. Your Directors recommend to approve his
reappointment as Vice Chairman & Managing Director for further period
of three years on a remuneration as specified in the Notice calling
Annual General Meeting.
With the increase in the work load of the company, Shri Aalok Patel,
the Director of the company has been appointed as Executive Director w.
e. f. 01-07.2010 for a period of five years by the Board of Directors
and your directors recommend to approve his appointment as Executive
Director for period of five years on a remuneration as specified in the
Notice calling Annual General Meeting.
Brief resume of the Directors retiring by rotation at the ensuing
Annual General Meeting, nature of their expertise in specific
functional area and name of the companies in which they hold the
directorship and the Membership/Chairmanship of the Committees of the
Board, as stipulated under the clause 49 of the Listing Agreement of
the Stock Exchanges, are given in the section on Corporate Governance
elsewhere in this Annual Report.
AUDITORS:
M/s J. T Shah & Co., Chartered Accountants, Ahmedabad were appointed as
Auditors of the Company in the Seventeenth Annual General Meeting to
hold the office till the conclusion of the Eighteenth Annual General
Meeting. The said Auditors retire at the conclusion of the ensuing
Annual General meeting and being eligible offer themselves for
re-appointment. The Auditors have furnished to Company, the requisite
certificate under Section 224 (1) of the Companies Act, 1956. Your
Directors recommend to reappoint them as Auditors of the company.
STATUTORY COMPLIANCES:
A. PARTICULARS OF EMPLOYEES:
The particulars of employees covered under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as Amended are given hereunder.
GROSS QUALI EXPERI DATE OF LAST
NAME DESIGNATION REMUNE FICA ENCE APPOIN AGE EMPLOY
RATION TIONS TMENT MENT
There is no employee drawing a salary of more than Rs. 24,00,000/- p.a.
for the whole of the year or Rs. 2,00,000/- p.m. for the part of the
year.
B. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The Company has no activities relating to conservation of energy or
technology absorption. The Company has no foreign exchange outgo. The
Company has not earned any foreign exchange during the year.
C. DEPOSITS:
The Company does not hold any public deposits and has not accepted any
public deposits from public during the year. The Company has made all
compliances in terms of Non-Banking Financial Companies (Reserve Bank)
Directions, 1998.
D. AUDITORS REPORT:
The notes on accounts referred to in the Auditors Report are
self-explanatory and therefore do not call for any further comments.
E. DEMATERIALISATION OF COMPANYS EQUITY SHARES:
Pursuant to Securities & Exchange Board of Indias (SEBI) circular No.
SMDRP/POLICY/ CIR-23/2000 DTD. 29th May 2000, the companys shares are
traded in the compulsory DEMAT mode with effect from December 26, 2000
by all investors. Accordingly the equity shares of the company can be
held in electronic form with any depository participant ("DP") with
whom the member/investors have their Depository account. The ISIN No
allotted to the equity shares of the company is INE109C01017.
F. SHARE PHYSICAL AND ELECTRONIC TRANSFER AGENTS:
Your directors are pleased to inform you that pursuant to Securities &
Exchange Board of Indias (SEBI) circular No. D&CC/FITTC/CIR-15/2002
DTD. 27.12.2002, the company has appointed M/s Sharepro Services
(India) Pvt. Ltd., Ahmedabad for physical and electronic transfer of
shares of the company w.e.f. 30th of April 2010 and members are
requested to send their transfer and demat/remat requests to them at
the address below.
Sharepro Services (India) Pvt. Ltd.
416-420, 4th Floor, Devnandan Mall,
Opp. Sanyash Ashram, Ellisbridge,
Ahmedabad - 380006
G. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed:
(i) That in the preparation of the accounts for the financial year
ended 31st March 2010, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgement and estimates that were
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 or loss of the Company for the year under review;
(iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting frauds and other
irregularities;
(iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2010 on a `Going Concern basis.
H. CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE:
Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement with the Stock Exchange, Mumbai forms part of the
Annual Report. The Certificate from the Auditors of the company
confirming compliance of conditions of Corporate Governance as
stipulated in clause 49 of the listing agreement is attached to this
report.
I. COMPLIANCE CERTIFICATE:
Compliance Certificate as required u/s 383A of the Companies Act, 1956
from Balvantsinh J. Vaghela, the Company Secretary in Practice forms
part of the Annual Report.
J. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as stipulated under Clause 49 of
the Listing Agreement with the Stock Exchange, Mumbai forms part of the
Annual Report. The same is attached to this report.
K. RIGHT ISSUE OF EQUITY SHARES
Your Directors are pleased to inform you that the Board of Directors
intends to come out with the Right Issue of 48,91,920 equity shares
each of Rs. 10/- each at the price of Rs. 15/- per share (Including the
premium of Rs. 5/- each) in the ratio of 6 shares for each 5 shares
held by the members of the company, subject to the approval of
respective authorities. Separate communication in this respect will be
sent to the members in due course of time. Your director recommends the
resolution for your approval which interalia gives power to the Board
to alter the size and the price of the issue.
ACKNOWLEDGMENTS:
The Company has received very good co-operation from its bankers viz.
The Sarvodaya Commercial Co-op Bank Ltd, HDFC Bank Ltd, The Ahmedabad
District Co-op Bank Ltd, ICICI Bank Ltd, Small Industries Development
Bank of India, AXIS Bank Ltd., IDBI Bank Ltd., United Bank of India,
State Bank of India, State Bank of Patiala and the Indusind Bank Ltd.
The Company looks forward to the continued co-operation from its
Bankers in future also.
The Company puts on record its appreciation for the dedication of its
staff members and the Co-operation of its valued customers and
shareholders received during the period under review.
For and on behalf of the Board
Place: Ahmedabad.
Date : 12th July, 2010 CHINUBHAI R. SHAH
CHAIRMAN
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