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Directors Report of Arman Financial Services Ltd.

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