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Sri Amarnath Finance Ltd.

BSE: 538863 Sector: Financials
NSE: N.A. ISIN Code: INE985Q01010
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Sri Amarnath Finance Ltd. (SRIAMARNAFIN) - Director Report

Company director report

Dear Shareholders

Your Board of Directors feel privileged to present the 31st Director'sReport of the Company together with the Audited Financial Statements for the financialyear ended on March 31 2016.

1. FINANCIAL PERFORMANCE

The salient features of company's financial results for the year under review alongwith the figures of previous years are as follows:

Particulars 31st March 2016 31st March 2015
Profit/(Loss) after depreciation 2953808 2260082
Less: Provisions as per RBI Act
Contingent Provision for Standard Assets 284138 599465
Provision for Loss Assets - (2500000)
Profit/(Loss)before Tax 2669670 4160617
Less: Provision for Taxation
Current tax 740650 523063
Deferred Tax Asset 12879 (91738)
Profit/(Loss) alter Tax 1916141 3729292
Add: Balance bought forward from last year 1431432 (1428311)
Surplus available for appropriation
Less: Appropriations
Fixed Assets written off - (142038)
Transfer to reserve Fund u/s 45(IC) of RBI Act 1934 (383228) (727511)
Surplus Carried to Balance Sheet 2964345 1431432

2. INFORMATION ON STATUS OF AFFAIRS OF THE COMPANY

During the financial year 2015-16 the company has recorded revenue of Rs. 38892442/-.The Company has earned a net profit of Rs. 1916141/- during the as compared to profit ofRs. 3729292/- in the last year. The Directors are optimistic about the futureperformance of the Company.

3. DIVIDEND

The Company did not recommend any dividend for the year.

4. CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the financialyear 201516.

5. NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR

Your Company does not have any subsidiary joint Venture or associate Company

6. DETAILS OF DEPOSITS COVERED UNDER CHAPTER V OF COMPANIES ACT 2013

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 and as such noamount on account of principal or interest on public deposits was outstanding as on thedate of the Balance Sheet.

As of the end of March 31 2016 an amount of NIL matured deposits remained unclaimed.

7. RBI GUIDELINES:

The company continues to fulfill all the norms and standards laid down by the ReserveBank of India for the Non Banking Financial Company.

8. NBFC REGISTRATION

The Company has been registered with Reserve bank of India as Non Banking FinanceCompany vide registration No. B-14.01224 dated 4th January 2003

9. CREDIT RATING

The directors of the Company are happy to report that the company get its membershipcertificate from all CICs i.e. Credit Information Bureau (India) Limited (CBIL) EquifaxCredit Information Services Private Limited (ECIS) Experian Credit Information Company ofIndia Private Limited CRIF High Mark Credit Information Services Private Limited. A soundrating/upgrade in a challenged business environment speaks volumes about the Company'sperformance and its systems & processes.

10. EXPOSURE TO REAL ESTATE:

The following are details of loan provided to the companies engaged in real estatebusiness during the financial year 2015-16:

Sr. No Name of Borrower Amount as on 31.03.2016
1. Alisa Infratech Private Limited 13296000
2. Icon Realcon Private Limited 73265205
3. WM Developers Private Limited 61242546
4. BRK Infotech & Developers Private Limited 66039169

11. DEMATERIALIZATION OF SHARES :

The Company has connectivity with NSDL & CDSL for dematerialization of its equityshares. The ISIN No INE985Q01010 has been allotted for the company. Therefore theinvestors may keep their shareholding in the electronic mode with their depositoryParticipant. 67.99% of the Company's paid-up Share Capital is in dematerialized form as on31st march 2016 and balance 32.01% in physical form.

12. THE DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVERESIGNED DURING THE YEAR-

Mr. Surender Kumar Jain (DIN 00530035) Executive Director of the Company who retiresby rotation in accordance with the provisions of Section 152 of the Companies Act 2013 atthe ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Mr. Parveen Kumar is appointed as Chief Finance Officer and Ms. Bhawana Tuli isappointed as Company Secretary of your Organization.

13. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions contained in Section 134 (5) of the Companies Act 2013your Directors based on the representation received from the Operating Management andafter due enquiry confirm that :

i) In the preparation of the annual accounts for the financial year ended on March 312016 the applicable Accounting Standards have been followed and there are no materialdepartures from the same;

ii) The selected accounting policies were applied consistently and the Directors madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2016 and of the profit of theCompany for that period.

iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

iv) The annual accounts have been prepared on a 'going concern' basis.

v) The Internal financial controls have been laid by the Company and such financialcontrols are adequate and were operating effectively.

vi) Proper systems had been devised in compliance with the provision of the allapplicable laws and such systems were adequate and operating effectively.

14. EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT-9 as on March 31 2016 is attached as Annexure-Ato this Report.

15. CORPORATE GOVERNANCE REPORT

Your Company has been practicing the principles of good Corporate Governance over theyears and it is a continuous and ongoing process. A report on the Corporate Governance asrequired under Regulation 24 34(3) and 54(f) read with Schedule V of Securities ExchangeBoard of India (Listing Obligation and Disclosure Requirements) Regulations 2015 is givenin this Report as Annexure-B.

Details on number of Meetings of Board and Committees and composition of variousCommittees of the Board including their Terms of Reference are in the annexed CorporateGovernance Report.

16. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under the SEBI (ListingObligations and Disclosure Requirements) regulations 2015 is annexed as Annexure-C andforms part of the Directors' Report.

17. NUMBER OF MEETINGS OF THE BOARD

During the year Six (6) meetings of the Board of Directors were held. For furtherdetails please refer Report on Corporate Governance.

18. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.

During the year under consideration there were no such instances.

19. INDEPENDENT DIRECTORS DECLARATION

Presently the Company has two Independent and Non- Executive Directors namely Mr.Rajesh Singal and Mr. Sujan Mal Mehta who have given declaration that they meet theeligibility criteria of independence as provided in sub-section (6) of Section 149. Forfurther details please refer Annexure-D of Report on Corporate Governance.

20. DISCLOSURE ON THE NOMINATION AND REMUNERATION POLICY OF THE COMPANY PURSUANT TOSECTION 134(3) (e) AND SECTION 178 (3)

The Board of the Directors had framed the policy which lays down a framework inrelation to Remuneration of Directors Key Managerial Personnel and Senior Management ofthe Company. This policy also lays down criteria for selection and appointment of BoardMembers. The Remuneration Policy is disclosed on the Company's websitehttp://www.sriamarnathfinance.in

The Remuneration Policy is annexed to the Corporate Governance Report.

21. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM:

In pursuant to the provision of section 177(9) & (10) of the Companies Act 2013the company had formulated a Whistle blower policy to establish a vigil mechanism forDirectors and employees of the Company to report concerns about unethical behavior actualor suspected fraud or violation of the Company' s code of conduct or ethics policy. TheWhistle Blower policy is available on website of the Companyhttp://www.sriamarnathfinance.in

22. AUDITOR AND AUDITOR'S REPORT

M/s Vinod Vishal & Co. Chartered Accountants (Firm Registration No. 09112N) wasappointed as the Statutory Auditor of the Company in the 30th Annual GeneralMeeting till the conclusion of 35th Annual General Meeting. Your consent isrequired for ratification of their appointment to hold office from the conclusion of theensuing Annual General Meeting till the conclusion of the next Annual General Meeting onremuneration to be fixed by the Audit Committee and approve by Board of Directors of theCompany.

There are no qualifications reservations or adverse remarks or disclaimers made by theM/s Vinod Vishal & Co. Chartered Accountants the Statutory Auditor in their reportfor the Financial Year ending on March 31 2016 under review.Auditors' Report is annexedherewith and forms a part of Annual report.

23. SECRETARIAL AUDIT

Secretarial Audit of the Company has been undertaken by M/s Astik Tripathi &Associates a firm of Company Secretaries in Practice. The Report of the Secretarial AuditReport is included as Annexure- E and forms an integral part of this report.Secretarial Audit Report does not contain any qualification reservation or adverseremark.

24. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE STATUTORY AUDITORS AND THE SECRETARIAL AUDITORS IN THEIR REPORTS

There were no qualifications reservations or adverse remarks made by the StatutoryAuditors or Secretarial Auditors in their report.

25. INTERNAL AUDITOR

The Company has appointed M/s. R Garg & Company as an Internal Auditor of theCompany for the financial year 2015-16. M/s. R Garg & Company placed the internalaudit report to the company which is self explanatory and need no comments.

26. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of loans guarantees and investments covered by the provisions of section 186of the Companies Act 2013 are given in the notes to the financial statements.

27. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES.

The Particulars or arrangements with related parties for the financial year 2015-16 areannexed herewith as "Annexure- F' to the financial statements in form AOC-2.The details of related party disclosures also form part of the notes to the financialstatements.

28. TRANSFER TO RESERVES

During the year under review your Company has transferred a sum of Rs. 383228/- tothe reserves from the profits of the Company in accordance with the provisions of section45IC of the Reserve Bank of India.

29. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Companyoccurred from the end of the Financial Year 2015-16 till the date of this report. Furtherthere was no change in the nature of business of the Company.

30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO

The company does not fall under the industries covered by the companies (Accounts)Rules 2014. Hence the requirement of disclosure in relation to the conservation ofenergy technology absorption foreign exchange earnings & outgo are not applicable toit.

Particulars Current Year (2015-16) Previous Year (2014-15)
A Conservation of Energy NIL NIL
B Technology Absorption NIL NIL
C F oreign Exchange Earning and Outgo NIL NIL

31. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHE COMPANY

The assets of the company are adequately insured against the loss of fire riotearthquake terrorism loss of profit etc other risks which considered necessary by themanagement. The company has been addressing the various risks impacting the company andthe policy of the company on Risk Management is provided as part of Management Discussionand Analysis Report which forms part of this Annual Report.

32. CORPORATE SOCIAL RESPONSIBILITY POLICY

The provisions of Section 135 of companies Act 2013 are not applicable on yourCompany.

33. EVALUATION BY BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the applicable provisions of the Companies Act 2013 and Regulation 15 ofthe Listing Regulations the Company has devised the policy for performance evaluation ofthe

Independent Directors Board Committees and other individual Directors which includescriteria for performance evaluation of non-executive directors and executive directors.

The evaluation of all the directors and Board as a whole was conducted based on thecriteria and framework adopted by the Board. More details regarding evaluation processhave been provided under Corporate Governance Report which forms part of this AnnualReport.

34. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.

35. DISCLOSURE UNDER THE SEXUALHARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The company has in place an Anti-Sexual Harassment Policy in line with the requirementsof Section 22 and Section 28 of The Sexual Harassment of Woman at the Workplace(Prevention Prohibition and Redressal) Act 2013. Internal Complaint Committee has beenset up to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2015-16.

No. of complaint received during the financial year 2015-2016 : 0
No of Complaints disposed off : 0

36. HEALTH SAFETY AND ENVIRONMENT PROTECTION

The company has complied with all applicable environmental law and labour laws. TheCompany has been complying with the relevant laws and has been taking all necessarymeasures to protect the environment and maximize worker protection and safety.

37. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the period under review there were no significant and material orders passed bythe regulators/ courts or tribunals that would impact going concern status of the Companyand its future operations.

38. NON-BANKING FINANCIAL COMPANIES AUDITOR'S REPORT (RBI) DIRECTIONS 2008:

Pursuant to the Non-Banking Financial Companies' Auditors' Report (Reserve Bank)Directions 2008 a report from the Statutory Auditors to the Board of Directors has beenreceived by your Company. This report has certified that the Company has complied with allthe directions and prudential norms as prescribed under the RBI Act 1934.

39. CAPITAL FUND TO RISK WEIGHTED ASSETS:

Percentage to capital funds to the risk weighted assets/exposures

Particulars (in %)
Tier-I Capital 130.73%
Tier-II Capital 0.34%
Total 131.07%

40. PARTICULARS OF EMPLOYEES

None of the employee was drawing in excess of the limits as described by the CompaniesAct 2013 and rules made there under which needs to be disclosed in the Directors Report.

41. PARTICULARS OF EMPLOYEES PURSUANT TO THE SECTION 197 (12) OF COMPANIES ACT AND RULE5(1) 5(2) AND 5(3) OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is furnished hereunder:

Name Designatio n Remuner ation paid during 2015-16 % increase in remunerat ion over financial year 201516 Ratio of the remuneration of each Director to median remuneration of employees Comparison of the Remuneration of the KMP against the performance of the Company for Financial Year 2015-16
1. Priti Jain Managing Director Nil Nil Nil Nil
2. Surender Kumar Jain Director Nil Nil Nil Nil
3. Rakesh Kapoor Director Nil Nil Nil Nil
4. Manish Kapoor Director Nil Nil Nil Nil
5. Rajesh Singal Director Nil Nil Nil Nil
6. Sujan Mal Mehta Director Nil Nil Nil Nil
7. Bhawana Tuli* Company Secretary 105484 NA NA* Profit before tax is 2669670
8. Parveen Kumar** Chief F inance officer 155000 NA NA** Profit before tax is 2669670
9 Rajat Gupta# Company Secretary 79491 Nil NA# Nil

*As appointed during the financial year w.e.f. 13h November 2015 ** Asappointed during the financial year w.e.f 27th January 2016 # As ceased tocompany secretary w.e.f. 23rd July 2015

The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

Not Applicable as the company has not paid any remuneration to any Directors directorduring the financial year 2015-16 and The KMPs are being appointed during the financialyear 2015-16.

The percentage increase in the median remuneration of employees in the FinancialYear:-381%

Salary increases in this financial year is due to increase in number of employees.

The number of permanent employees on the rolls of company: 5(five).

The explanation on the relationship between average increase in remuneration andcompany performance: Salary increases in this financial year are due to increase innumber of employees. The remuneration paid by the company was not directly based on theperformance of the company.

Variations in the market capitalization of the company price earnings ratio as at theclosing date of the current financial year and previous financial year and Percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer.

Particulars March 31 2016 (in Cr.) March 31 2015 %age Change
Market Capitalization (in Cr) 7.04 7.04 No changes
Price Earnings Ratio 37.11 19.05 +94.74%

The Company came up with initial public offering in 1988 and issued shares at par. Ason 31st March 2016 market price of the share is Rs 7.05/-.

Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point outexceptional circumstances for increase in the managerial remuneration (if any):

Salary increases in this financial year is due to increase in number of employees.There is no direct nexus between increases in the salary with the performance of thecompany further the Company has paid no remuneration to its Directors during thefinancial year 2015-16.

The key parameters for any variable component of remuneration availed by the Directors:

Not Applicable as the Company has paid no remuneration to its Directors during thefinancial year 2015-16.

The ratio of the remuneration of the highest paid Director to that of the employees whoare not Directors but receive remuneration in excess of the highest paid Director duringthe year:

Not Applicable as the Company has paid no remuneration to its Directors during thefinancial year 2015-16.

Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company hereby affirm that the remuneration paid is as per the as per theRemuneration Policy for Directors Key Managerial Personnel and other Employees.

Statement of Particulars of Employees pursuant to the Section 197 (12) of Companies Actand Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014

a) Details of the employees employed throughout the Financial Year was in receipt ofremuneration for that year which in the aggregate was not less than sixty lakh rupees

Nil

b) Details of the employees employed for a part of the Financial Year and was inreceipt of remuneration for any part of that year at a rate which in the aggregate wasnot less than five lakh rupees per month;

Nil

c) If employed throughout the Financial Year or part thereof and was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the Managing Director or WholetimeDirector or Manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the Company.

Nil

42. OTHER INFORMATION

a) Disclosure of composition of audit committee

Details regarding composition of the Audit Committee is given in the CorporateGovernance Report.

b) Board Committees

The Corporate Governance Report also includes details of the various Committees of theBoard.

c) Sweat Equity Shares Employee Stock Option

The Company has not issued any Sweat Equity Shares and had not provided any StockOption Scheme to the employees during the period under review.

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation for the valuable support andco-operation received from sub-brokers business associates vendors bankers financialinstitutions investors stakeholders registrar and share transfer agent other businessaffiliates and media.

The Board places on record its sincere appreciation towards the Company's valuedclients for the support and confidence reposed by them in the organization and thestakeholders for their continued co-operation and support to the company and looks forwardto the continuance of this supportive relationship in future.

Your Directors also place on record their deep sense of appreciation for the devotedservices of the employees during the year under review.

By order of the Board of Directors

For SRI AMARNATH FINANCE LIMITED

PRITI JAIN RAKESH KAPOOR
MANAGING DIRECTOR DIRECTOR
DIN: 00537234 DIN: 00216016
Dated: 10th August 2016
Place: New Delhi