Moneycontrol Be a Pro
Get App
SENSEX NIFTY
Arman Financial Services Directors Report, Arman Financial Reports by Directors
YOU ARE HERE > MONEYCONTROL > MARKETS > FINANCE - LEASING & HIRE PURCHASE > DIRECTORS REPORT - Arman Financial Services

Arman Financial Services

BSE: 531179|NSE: ARMANFIN|ISIN: INE109C01017|SECTOR: Finance - Leasing & Hire Purchase
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Nov 21, 11:30
552.00
11.8 (2.18%)
VOLUME 37
LIVE
NSE
Nov 21, 11:25
546.55
5.7 (1.05%)
VOLUME 1,328
Directors Report Year End : Mar '18    Mar 16

Dear Members,

The Directors have pleasure in presenting the 26th Director’s 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 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.

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 Company’s 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 ‘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 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 “Annexure-1” 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 Company’s 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 it’s 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 “Annexure-2”.

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.

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. 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 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. Auditor’s 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 “Annexure-3”. 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 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://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 “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.

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 Board’s 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 Company’s website at the link: https://www.armanindia.com/corporategovernance. aspx --> Whistler Blower Policy

28. 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.

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 “Annexure-4” 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 (“CCDs”) 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 shareholder’s 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 ‘Arman Employee Stock Option Plan 2016’. Particulars of Employee Stock Options granted during the year are given in “Annexure-5”. Further, the Company has granted 9,000 stock options to the eligible employees of the Company / Subsidiary Company on 25.05.2018.

- Reclassification of ‘promoter and promoter group category’ to ‘public category’

Mr. Amit Rajnikant Manakiwala, Mrs. Himani Amit Manakiwala and Mr. Maulik Amit Manakiwala existing promoters have requested the Company to reclassify them from ‘promoter and promoter group category’ to ‘public category’ 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 ‘promoter and promoter group category’ to ‘public category’.

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

Management’s discussion and analysis forms a part of this annual report and is annexed to the Board’s 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

Source : Dion Global Solutions Limited
Quick Links for armanfinancialservices
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.