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Arman Financial Services Ltd.

BSE: 531179 Sector: Financials
NSE: ARMANFIN ISIN Code: INE109C01017
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VOLUME 2053
52-Week high 1135.00
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P/E 113.10
Mkt Cap.(Rs cr) 810
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OPEN 902.30
CLOSE 965.50
VOLUME 2053
52-Week high 1135.00
52-Week low 514.50
P/E 113.10
Mkt Cap.(Rs cr) 810
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Arman Financial Services Ltd. (ARMANFIN) - Director Report

Company director report

The Board of Directors of the Company with immense pleasure present their 28thDirectors' Report together with the Audited Financial Statement for the year ended onMarch 312020.

You are our valued partners in the Company and we are happy to share our vision ofgrowth with you. Our guiding principles are a blend of optimism and conservatism whichhas 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

(Rs in Lakhs)

Particulars

Consolidated

Standalone

2019-20

2018-19

2019-20

2018-19

Total Revenue

21514.70

13958.26

7010.17

4837.85

Profit Before Interest and Depreciation

14216.82

9505.02

4496.50

3147.96

Finance Charges

8759.37

5833.69

2202.74

1569.32

Depreciation

79.84

48.44

11.15

10.99

Net Profit Before Tax

5377.61

3622.89

2282.62

1567.66

Current Tax

1423.40

977.10

516.10

297.10

Deferred Tax (Asset)/Liability

(195.00)

(23.74)

(58.04)

8.60

Sort/(Excess) provision of income tax of earlier year

(2.78)

26.35

0.78

26.35

Net Profit After Tax

4152.00

2643.18

1823.77

1235.60

Basic Earnings Per Share (In Rs.)

55.80

38.09

24.51

17.81

2. OPERATIONS

Your Company continues to engage in the business of Asset Finance MSME andMicrofinance. The Parent Company Arman Financial Services Limited is engaged in AssetFinance viz. two-wheeler finance and MSME; while the Microfinance business is managedthrough Arman's wholly owned subsidiary Namra Finance Limited. The financial statementsof both Arman and Namra as well as the consolidated financials of Arman are includedwithin the Annual Report.

Consolidated Performance Highlights

• AUM was I860 crores in FY 2019-20 as compared to 1685 crores in FY 2018-19grown by 26%.

• Disbursement was 1874 crores in FY 2019-20 as compared to 1784 crores in FY2018-19 grown by 12%.

• Total income was 1215.15 crores in FY 2019-20 as compared to 1139.58 crores inFY 2018-19 grown by 54%.

• Impairment on financial instruments was 120.0 crore which included acontingency provision of Rs 6.68 crore for COVID-19 and an accelerated write-off of 13.94crores for the Pre-COVID NPAs.

• Profit before taxes was 153.77 crores in FY 201920 as compared to 136.22 croresin FY 2018-19 grown by 48%.

• Profit for the year attributable to owners of the Company was 141.52 crores inFY 2019-20 as compared to 126.43 crores in FY 2018-19 grown by 57%.

• The basic Earning Per Share was 155.80 as compared to 138.09 grown by 46%.

Standalone Performance Highlights

• AUM was 1238 crores in FY 2019-20 as compared to 1201 crores in FY 2018-19grown by 19%.

• Disbursement was 1220 crores in FY 2019-20 as compared to 1194 crores in FY2018-19 grown by 14%.

• Total income was 170.10 crores in FY 2019-20 as compared to 148.38 crores in FY2018-19 grown by 45%.

• Impairment on financial instruments was 16.69 crore which included acontingency provision of Rs 2.20 crore for COVID-19 and an accelerated write-off of 11.54crores for the Pre-COVID NPAs.

• Profit before taxes was 122.82 crores in FY 201920 as compared to 115.68 croresin FY 2018-19 grown by 45%.

• Profit for the year attributable to owners of the Company was 118.23 crores inFY 2019-20 as compared to 112.35 crores in FY 2018-19 grown by 48%.

• The basic Earning Per Share was 124.51 as compared to Rs.17.81 grown by 38%.

3. DIVIDEND In order to conserve capital to deal with the uncertain economicenvironment arising due to the outbreak of the COVID-19 pandemic the Directors of yourCompany do not recommend any dividend payment at the ensuing Annual General Meeting("AGM").

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 ofIndia Act 1934: 1365 lakhs.

• Transfer to general reserve: 110 lakhs

5. IMPACT OF THE COVID-19 PANDEMIC

The Board of Directors are of the view that the Indian NBFCs and Banking sector will beadversely impacted due to the disruption caused by the pandemic though a bunch ofmeasures have been taken by the regulator to tide over the impact of the pandemic. TheCOVID-19 pandemic has intensified into a global crisis driving the nation to enforcelock-down of all economic activity for the last few months. We remain committed to thehealth and safety of our employees and their families as well as business continuity tosafeguard the interests of our customers lenders and other stakeholders. The impact ofthe pandemic on our business performance is outlined in the Financials and under theManagement and Discussion Analysis Report.

6. MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments that would affect financial position ofthe Company from the end of the financial year of the Company to which the financialstatements relate and the date of the directors' report.

7. CREDIT RATING & GRADING

During the year under review Credit Analysis and Research Limited ('CARE') reviewedthe ratings on various bank facilities and debt instrument of the Company and itssubsidiary. CARE reaffirmed its rating for long term bank facility to "CAREBBB+"; stable (Triple B plus; outlook stable). CARE also reaffirmed its rating on theNon-Convertible Debentures ("NCD") at "CARE BBB+"; stable (Triple Bplus; outlook stable). The Grading of Namra Finance Limited (WOS) was also reaffirmed 'MFI2+' (MFI two plus) by CARE during the year 2019-20.

8. SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES

The Company has one wholly owned subsidiary named 'Namra Finance Limited' as on date.During the year no changes took place in the group corporate structure of your Company.The Company has formulated a policy for determining 'material' subsidiaries pursuant tothe provisions of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 ("SEBI LODR Regulations"). The said policy is available at theCompany website at the link https://www.armanindia.com/ corporategovernance.aspx ^ PolicyFor Material Subsidiary.

The consolidated financial statements presented by the Company include financialinformation 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.

Further pursuant to Section 136 of Companies Act 2013 financial statements of theCompany consolidated along with relevant documents and separate audited accounts inrespect of subsidiary are available on the website of the Company.

9. UNCLAIMED DIVIDEND & SHARES

During the year Company has transferred unclaimed dividend for the year 2011-12 of1264433/- to Investor Education and Protection Fund (IEPF) pursuant to provision ofSection 124 of the Companies Act 2013 which remained unclaimed for a period of more thanseven years.

Members desirous of claiming their shares and dividend which have been transfered tothe IEPF may refer to the refund procedure as detailed on www. iepf.gov.in. Underlyingshares on which dividend has remained unclaimed from FY 2012-13 onwards will be due fortransfer to IEPF account during the year and individual notices to that effect has beensent to concerned shareholders. Shareholders who have not yet encashed theirunclaimed/unpaid amounts are requested to correspond with the Company's Registrar andTransfer Agents at the earliest to avoid transfer of dividend and underlying shares toIEPF.

10. LOANS GUARANTEES AND INVESTMENTS

Except the loans guarantees and investments made in subsidiary Company there were noother loans guarantees or investments made by the Company under Section 186 of theCompanies Act 2013 during the year under review and hence the said provision is notapplicable.

11. PUBLIC DEPOSITS

During the year under review your Company has not accepted or renewed any Depositwithin 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 ofdeposits which are not in compliance with Chapter V of the Companies Act 2013 is notapplicable.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors consists of 9 (Nine) members of which 4 (Four) are IndependentDirectors and 1 (One) is a Nominee Director. The Board also comprises of 2 (two) womenDirectors (including 1 (one) Independent Director). In accordance with the Articles ofAssociation of the Company and pursuant to the provisions of Section 152 of the CompaniesAct 2013 Mrs. Ritaben Patel [DIN- 00011818] and Mr. Aalok Patel [DIN-02482747] willretire by rotation at the ensuing AGM and being eligible offer themselves forreappointment.

a) Appointment

Ms. Geeta Haresh Solanki (DIN: 08212773) has been appointed as an Additional Director(Independent) for a period of five years with effect from April 01 2020 subject toapproval of shareholders in the ensuing AGM. Brief resume of her forms part of the Noticeof the ensuing AGM.

b) Reappointment

Mr. Ramakant Nagpal (DIN- 00073205) was appointed as an Independent Director w.e.f.August 24 2015 for a period of five years and accordingly he holds office up to August23 2020. Considering his knowledge vast experience skillset in respective fields andsignificant contribution and guidance made by him during last 5 years the Board has onthe recommendation of the Nomination and Remuneration Committee and subject to approval ofmembers at the ensuing Annual General meeting re-appointed him as an Independent Directorupto the period he attains the age of 75 on July 02 2024 not liable to retire byrotation. Mr. Nagpal has given declaration that he continues to meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and rules madethereunder and under the SEBI LODR Regulation. Based on disclosure provided by him he isnot disqualified from being appointed as Director under Section 164 of the Companies Act2013 and is independent from the management.

c) Key Managerial Personal (KMP)

The Board has identified the following officials as Key Managerial Personnel pursuantto Section 203 of the Companies Act 2013:

1) Mr. Jayendrabhai B. Patel - Vice Chairman & Managing Director and C.E.O.

2) Mr. Aalok J. Patel - Joint Managing Director

3) Mr. Vivek A. Modi - Chief Financial Officer

4) Mr. Jaimish G. Patel - Company Secretary & Compliance Officer

13. MEETING OF THE BOARD & AUDIT COMMITTEE

The Board during the financial year 2019-20 met 6 (six) times and Audit Committee met 4(four) times. All the recommendations made by the Audit Committee during the year wereaccepted by the Board. The details of the constitution and meetings of the Board and theCommittees held during the year are provided in the Corporate Governance Report whichforms part of this Annual Report.

14. NOMINATION AND REMUNERATION COMMITTEE

As per the Section 178(1) of the Companies Act 2013 the Company has constitutedNomination and Remuneration Committee details of which are provided in the CorporateGovernance Report which forms part of this Annual Report.

15. REMUNERATION POLICY

Remuneration to Executive Directors

The remuneration paid to Executive Directors is recommended by the Nomination andRemuneration Committee and approved by Board in the Board meeting subject to thesubsequent approval of the shareholders at the ensuing Annual General Meeting and suchother authorities as may be required. The remuneration is decided after consideringvarious factors such:

• Level of skill knowledge and core competence of individual.

• Functions duties and responsibilities.

• Company's performance and achievements.

• Compensation of peers and industry standard.

Remuneration to Non-Executive Directors

Non-Executive Directors are paid sitting fees for each meeting of the Board andCommittees of Directors attended by them. They are also given the traveling and otherexpenses they incur for attending to the Company's affairs including attending CommitteeBoard and General meetings of the Company.

Remuneration of KMP (Excl. MD) & Other Employees

The authority to structure remuneration for KMP (Excl. M.D.) & other employees andthe annual revision thereof has been delegated to the Managing Director and Joint ManagingDirector of the Company based on Company performance individual performance evaluationrecommendations of respective functional heads and other factors having a bearing.

16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuant to Section 197(12) read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnishedhereunder as per "Annexure-2".

However the information required pursuant to Section 197(12) of the Companies Act2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of the Company will be providedupon request. In terms of Section 136(1) of the Companies Act 2013 the Report andAccounts are being sent to the Members and others entitled thereto excluding theinformation on employees' particulars which is available for inspection by the Members atthe Registered office of the Company during business hours on working days of the Companyup to the date of the ensuing Annual General Meeting. If any Member is interested inobtaining a copy thereof such Member may write to the Company Secretary in this regard.

17. DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

As per Section 4 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 your Company has constituted an Internal ComplaintsCommittee for redressal of complaints against sexual harassment. There were no complaints/ cases filed / pending with the Company during the financial year.

18. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-

a) In the preparation of the annual accounts for the year ended on 31st March 2020the applicable accounting standards had been followed along with proper explanationrelating to material departures;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2020 and of the profitand loss of the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care 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;

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 theCompany and that the financial controls are adequate and are operating effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

19. DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1 )(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

20. AUDITORS AND AUDIT REPORTS

a) Statutory Auditors

M/s Samir M. Shah & Associates Chartered Accountants (FRN: 122377W) were appointedas a Statutory Auditors of the Company with the approval of members at the 25th AnnualGeneral Meeting to hold office till the conclusion of the 30th Annual General Meetingsubject to ratification of their appointment at every Annual General Meeting ('AGM').However as per Companies (Amendment) Act 2017 effective from May 07 2018 the provisionsrelating to ratification of the appointment of Statutory Auditors at every AGM is notrequired 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 notcontain 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 hasappointed M/s Pina kin Shah & Co. a firm of Company Secretaries in practice toconduct the Secretarial Audit of the Company for the financial year 2019-20. TheSecretarial Audit Report is annexed herewith as "Annexure-3". The SecretarialAudit Report does not contain any qualification reservation or adverse remarks.

Pursuant to Regulation 24A of SEBI LODR Regulations a Secretarial Compliance Reportfor the year ended March 312020 is annexed as "Annexure- 3B" and a Certificateregarding status of Directors as required under schedule V para C Clause 10(i) of SEBILODR Regulation is also obtained.

21. RELATED PARTY TRANSACTIONS

All the related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations

2015. There are no materially significant related party transactions made by theCompany with Promoters Directors or Key Managerial Personnel etc. which may havepotential conflict with the interest of the Company at large or which warrants theapproval of the shareholders. Accordingly no transactions are being reported in FormAOC-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 inthe 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 innature. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink https://www. armanindia.com/corporategovernance.aspx --> Policy on Materiality ofRelated Party Transactions and Dealing With Related Party Transactions.

22. RISK MANAGEMENT

The Board has adopted the Risk Management Policy in order to identify assess monitorand manage risk throughout the Company. Risk is an integral part of any business andsound risk management is critical for the success of any organization. The Company and itssubsidiary have a risk management framework and Board members are informed about riskassessment and minimization procedures and periodical review to ensure management controlsrisk by means of a properly designed framework.

23. INTERNAL CONTROL SYSTEM

The Company has in place adequate systems of Internal Control to ensure compliancewith 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 controlsystems. The Audit Reports of Internal Auditor along with their recommendations andimplementation contained therein are regularly reviewed by the Audit Committee of theBoard. Internal Auditor has verified the key internal financial control by reviewing keycontrols impacting financial reporting and overall risk management procedures of theCompany and found the same satisfactory. It was placed before the Audit Committee of theCompany.

24. INTERNAL FINANCIAL CONTROL

The Company has in all material respects an adequate internal financial controlssystem and such internal financial controls were operating effectively based on theinternal control criteria established by the Company considering the essential componentsof internal control stated in the Guidance Note on Audit of Internal Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India

25. PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act and the SEBI Listing Regulations theBoard has carried out an annual evaluation of its own performance performance of theDirectors individually and the Committees of the Board.

Manner of Evaluation

The Nomination & Remuneration Committee and the Board have laid down the manner inwhich formal annual evaluation of the performance of the Board as a whole individualdirectors and its various Committees is being made.

It includes circulation of evaluation response / feedback sheet separately forevaluation of the Board and its Committees Independent Directors / Non-ExecutiveDirectors / Managing Director / Chief Executive Officer / Chairperson of the Company.

The evaluation of Board as a whole individual directors and its various Committees isbeing carried out by the Nomination & Remuneration Committee of the Company andsubsequently it gives the report of evaluation to the Board review.

26. CORPORATE GOVERNANCE

We strive to maintain high standards of Corporate Governance in all our interactionswith our stakeholders. The Company has conformed to the Corporate Governance code asstipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. A separate section on Corporate Governance along with a certificate from the M/sPinakin Shah & Co.

Practicing Company Secretary confirming the level of compliance is attached and formsa part of the Board's Report.

27. WHISTLE BLOWER POLICY

The Company has implemented a Whistle Blower Policy whereby employees and otherstakeholders can report matters such as generic grievances corruption misconductillegality and wastage / misappropriation of assets to the Company. The policy safeguardsthe whistle blowers to report concerns or grievances and also provides direct access tothe Chairman of the Audit Committee. The details of the Whistle Blower Policy areavailable 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 AnnualReport / Notice of AGM in electronic mode to those shareholders whose Email Ids areregistered with the Company and / or the Depository Participants. Your Directors arethankful 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 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is 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 particularsregarding conservation of energy technology absorption and other particulars as requiredby the Companies (Accounts) Rules 2014 are not applicable.

B. Foreign exchange earnings and outgo

The details of foreign exchange earnings and outgo during the year under review givenbelow:

Expenditure in foreign currency:

'37.80 lakhs

Earnings in foreign currency:

Nil

31. SHARES & SHARE CAPITAL

• Authorized Share Capital:

During the year under review the authorised share capital of the Company wasreclassified pursuant to implementation of scheme of arrangement as approved by Hon'bleNCLT vide it's order dated November 18 2019 as under:

Pre-Arrangement Authorized Capital

Amount (in Rs.)

Post-Arrangement Authorized Capital

Amount (in Rs.)

11250000 Ordinary Equity Shares of '10/- each

112500000

15000000 Ordinary Equity Shares of '10/- each

150000000

3750000 Class 'A' Ordinary Equity Shares of '10/- each

37500000

--

--

Total

150000000

Total

150000000

• 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.

• Allotment of Shares pursuant to conversion of Compulsorily ConvertibleDebentures (CCDs)

During the year under review your Company has issued and allotted 1890417 ordinaryequity shares of '10/- each upon conversion of 1666667 Compulsorily ConvertibleDebentures ("CCDs") on October 112019 as under:

a) 1666667 ordinary equity shares of the Company were issued upon the conversion offace value of the CCDs (i.e. '500000100/- (Indian Rupees Fifty Crores One HundredOnly)) at a conversion price of 1300/- (Indian Rupees Three Hundred Only) per ordinaryequity share; and

b) 223750 ordinary equity shares of the Company were issued at the option of theholder of the CCDs upon the conversion of the aggregate accrued but unpaid coupon (net ofwithholding taxes in India and interest paid in cash) on such CCDs not exceeding'67125000/- (Indian Rupees Six Crores Seventy One Lakhs Twenty Five Thousand Only) ata conversion price of '300/- (Indian Rupees Three Hundred Only) per ordinary equity share.

The above allotment was made as per the special resolution passed by the shareholdersof the Company in the extra ordinary general meeting held on March 29 2018 andIn-principal approval granted by both the stock exchanges.

• Employees Stock Option Plan

During the financial year under the review the Company has allotted 28995 ordinaryequity shares of '10/- each and 750 ordinary equity shares of '10/- each on September 122019 and February 11 2020 respectively to the eligible employees of the Company/Subsidiary Company pursuant to 'Arman Employee Stock Option Plan 2016' Particulars ofEmployee Stock Options granted vested exercised and allotted during the year are givenin "Annexure-5".

• Shares allotted / extinguished pursuant to Scheme of Arrangement

The Board of Directors in its meeting held on October 13 2018 had approved the Schemeof Arrangement ("Scheme") between Company and its shareholders forreorganization of share capital of the Company by way of consolidation of differentclasses of equity shares pursuant to Section 230 read with Section 66 of the CompaniesAct 2013 and rules made thereof.

The said scheme was approved by ordinary equity shareholders Class "A"ordinary equity shareholder secured & unsecured creditors Non-Convertible Debentureholder and Compulsorily Convertible Debenture holder of the Company. Further both thestock exchanges had also given their noobjection on March 12 2019 pursuant to Regulation37 of the SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015.

The Scheme has been sanctioned by the Hon'ble National Company Law Tribunal AhmedabadBench vide it's order dated November 18 2019. The Scheme is now effective upon filing ofthe certified copy of order of the NCLT sanctioning the

Scheme with the Registrar of Companies Gujarat at Ahmedabad by way of filing requirede-forms with Ministry of Corporate Affairs' portal.

Pursuant to the said scheme the Company had extinguished its 1204474 Class 'A'Ordinary Equity Shares (Class 'A' Equity) from the Equity Share Capital and has allotted782908 Ordinary Equity Shares of '10/- each to the holder of Class "A"Ordinary Equity Shares.

32. CORPORATE SOCIAL RESPONSIBILITY

Composition of the Corporate Social Responsibility (CSR) Committee the CSR Policy andthe CSR Report are given at "Annexure-6".

33. CODE OF CONDUCT

The Code of Conduct for all Board members and Senior Management of the Company havebeen laid down and are being complied with in words and spirit. The compliance ondeclaration of Code of Conduct signed by Managing Director & CEO of the Company isincluded as a part of this Annual Report.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's discussion and analysis forms a part of this annual report and is annexedto the Board's report.

35. DETAILS OF FRAUDS REPORTED BY THE AUDITORS

During the year under review neither the Statutory Auditor nor the Secretarial Auditorhave reported to the Audit Committee under Section 143(12) of the Companies Act 2013 anyinstances of fraud committed against the Company by its officers or employees.

36. ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNAL

There is no significant material order passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

37. GRATITUDE & ACKNOWLEDGEMENTS

The Board expresses its sincere thanks to all the employees customers suppliersinvestors lenders regulatory / government authorities and stock exchanges for theirco-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 Aalok Patel
Date: August 29 2020 (Vice Chairman & Managing Director) (Joint Managing Director)
Place: Ahmedabad DIN: 00011814 DIN: 02482747

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