Arman Financial Services Ltd.
|BSE: 531179||Sector: Financials|
|NSE: ARMANFIN||ISIN Code: INE109C01017|
|BSE 00:00 | 21 Oct||566.85||
|NSE 00:00 | 21 Oct||565.50||
|Mkt Cap.(Rs cr)||481|
|Mkt Cap.(Rs cr)||481.26|
Arman Financial Services Ltd. (ARMANFIN) - Director Report
Company director report
The Board of Directors of the Company with immense pleasure present their 27thDirector's Report together with the Audited Financial Statement for the year ended onMarch 312019.
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
(Amount in Rs)
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.
Though FY19 was a very challenging year for the entire NBFC sector due to the liquiditycrisis the Company has grown consolidated AUM by 62% and has managed to generate a recordprofit. The AUM of the company increased from 1423.59 crores to 1684.70 crores.Consolidated disbursements totaled 1790 crores compared to 1542 crores the previous yeara 46% increase. The impact of demonetization which resulted in increased loan losses inFY18 is behind us and we are poised to grow considerably in the coming years. The
Company has received an Equity infusion from a SAIF Partners managed fund during theyear which will increase the equity base of the Company by 156.67 Crores on a fullydiluted bases.
Income from operations during the year under review was 1141.06 crores against 178.02crores for the previous year resulting in an increase of 80.80%. Earnings before Interest& Taxes (EBIT) for the current year is 193.47 crores (144.04 crores in previous year)thereby resulting in increase of 112.23%. Net Profit after Taxes amounted to 121.33 crores(17.30 crores in previous year) thereby resulting in increase of 192% in the fiscal year.The basic earning per share is 130.74 (Previous year 110.21) thereby resulting in increaseof 201.07%.
Your Directors are pleased to recommend a Dividend of 11.40/- net of tax (Previous Year11.00/-) per equity share of 110/- each (i.e. 14%) for the year ended March 31 2019subject 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 ofIndia Act 1934: C 12800000/-
Transfer to general reserve: C1000000/-
5. 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 director's report.
6. 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 upgraded its rating for long term bank facility to "CARE BBB+";stable (Triple B plus; outlook stable). CARE also affirmed its rating on theNon-Convertible Debentures ("NCD") at "CARE BBB+"; stable (Triple Bplus; outlook stable). The Grading of Namra Finance Limited (WOS) has also improved from'MFI 2' (MFI two) to 'MFI 2+' (MFI two plus) by CARE during the current fiscal.
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 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^ Policy For 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 attachedhereunder as per "Annexure-1" as required under section 129 (3) of the CompaniesAct 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.
8. UNCLAIMED DIVIDEND & SHARES
During the year Company has transferred unclaimed dividend for the year 2010-11 of C303557/- to Investor Education and Protection Fund pursuant to provision of Section 124of the Companies Act 2013 which remained unclaimed for a period of more than seven years.
Further during the year 15810 shares on which dividend had remained unclaimed forlast 7 years were transferred to Investor Education & Protection Fund in accordancewith the Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 after complying due procedure. Members desirous of claiming theirshares and dividend may refer to the refund procedure for claiming the aforementionedamounts/shares transferred to the IEPF Authority as detailed on
9. 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.
10. 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.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors consists of 8 members of which 3 are Independent Directors and1 is a Nominee Director. The Board also comprises of one women Director. In accordancewith the Articles of Association of the Company and pursuant to the provisions of Section152 of the Companies Act 2013 Mr. Aakash Patel [DIN-02778878] and Mr. Jayendrabhai Patel[DIN-00011814] will retire by rotation at the ensuing AGM and being eligible offerthemselves for reappointment.
During the year Mr. Chinubhai R. Shah (DIN-00558310) Chairman & IndependentDirector of the Company has given his resignation from the office of Directorship citinghealth issue w.e.f. 25.05.2018. The Board had accepted his resignation and placed onrecord its appreciation & deep gratitude for the valuable guidance and foruninterrupted leadership for last 24 years and acknowledged his integrity fairnessleadership keen insight and prudent judgment as a member of the Board. Mr. Shah passedaway shortly thereafter on 06.06.2018 at his home in Ahmedabad. He was a visionary and astrong leader - astute generous and charismatic. He will be greatly missed by all of theArman family.
During the year 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 Companywith SAIF Partners India V Limited and provision of Article of Association of the Company.
During the year Mr. Alok Prasad (DIN: 00080225) was appointed as an Additional Director(Independent) by the Board of Directors to hold the office from 01.08.2018 till theconclusion of 26th Annual general Meeting.
The Shareholders of the Company by way of ordinary resolution at the 26th AnnualGeneral Meeting has confirmed his appointment for a period of 5 years with effect from01.08.2018.
Mr. Kaushikbhai D. Shah (DIN- 00024305) was appointed as an Independent Director at the22nd Annual General Meeting held on September 24 2014 for a period of five years andaccordingly he holds office upto September 23 2019. Considering his knowledge vastexperience skillset in respective fields and significant contribution and guidance madeby him during last 25 years the Board has on the recommendation of the Nomination andRemuneration Committee and subject to approval of members at the ensuing Annual Generalmeeting re-appointed him as an Independent Director for another term of 5 years notliable to retire by rotation. Mr. Kaushikbhai D. Shah has given declaration that hecontinues to meet the criteria of independence as laid down under Section 149(6) of theCompanies Act 2013 and rules made thereunder and under the SEBI LODR Regulation. Based ondisclosure provided by him he is not disqualified from being appointed as Director undersection 164 of the Companies Act 2013 and is independent from the management.
Mr. Aalok Patel (DIN-02482747) was appointed as an Executive Director & C.F.O. ofthe Company for a period of 5 years w.e.f. July 01 2015 by the shareholders of theCompany in the 23rd Annual General Meeting of the Company. Thereafter he relinquished hisposition as a CFO w.e.f. May 25 2018 however he continued his position as an ExecutiveDirector.
After considering his valuable contribution to the Company Board has appointed him asa Joint Managing Director for a period of 5 years with effect from August 21 2019. Hisappointment is subject to approval of Members and other concerned authorities if any.
d) 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 - C.F.O. (w.e.f. 26.05.2018)
4) Mr. Jaimish G. Patel - Company Secretary & Compliance Officer
12. MEETING OF THE BOARD & AUDIT COMMITTEE
The Board during the financial year 2018-19 met 7 (seven) times and Audit Committee met5 (five) 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.
13. 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.
14. 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 as qualification experience performance responsibilitiesshouldered 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 andCommittee 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 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 Act 2013 read with Rule 5(2) and 5(3) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136(1) of the CompaniesAct 2013 the Report and Accounts are being sent to the Members and others entitledthereto excluding the information on employees' particulars which is available forinspection by the Members at the Registered office of the Company during business hours onworking days of the Company up to the date of the ensuing Annual General Meeting. If anyMember is interested in obtaining a copy thereof such Member may write to the CompanySecretary in this regard.
16. 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 nocomplaints/cases filed/ pending with the Company during the financial year.
17. 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 March 31 2018 theapplicable accounting standards had been followed along with proper explanation relatingto 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 March 31 2019 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.
18. 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) (Amendment)Regulations 2018.
19. 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 Pinakin Shah & Co. a firm of Company Secretaries in practice toconduct the Secretarial Audit of the Company for the financial year 2018-19. 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 31 2019 is annexed as "Annexure-3B" and a Certificateregarding
status of Directors as required under schedule V para C Clause 10(i) of SEBI LODRRegulation is also annexed.
20. 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) Regulations2015. There are no materially significant related party transactions made by the Companywith Promoters Directors or Key Managerial Personnel etc. which may have potentialconflict with the interest of the Company at large or which warrants the approval of theshareholders. Accordingly no transactions are being reported in Form AOC-2 in terms ofSection 134 of the Act read with Rule 8 of the Companies (Accounts) Rules 2014. Howeverthe details of the transactions with Related Party are provided in the Company's financialstatements 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 For Materiality Of Related Party Transactions
21. RISK MANAGEMENT
Periodic assessments to identify the risk areas are carried out and management isbriefed on the risks in advance to enable the Company to control risk through a properlydefined plan. The risks are classified as financial risks operational risks and marketrisks. The risks are taken into account while preparing the annual business plan for theyear. The Board is also periodically informed of the business risks and the actions takento manage them. The Company has formulated a policy for Risk management with the followingobjectives:
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 identifyrisks and associated opportunities and to respond them with effective actions.
Identify access and manage existing and new risks in a planned and coordinatedmanner with minimum disruption and cost to protect and preserve Company's human physicaland financial asset.
22. 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.
23. INTERNAL FINANCIAL CONTROL
The Company has laid down certain guidelines processes and structure which enablesimplementation of appropriate internal financial controls across the organisation. Suchinternal financial controls encompass policies and procedures adopted by the Company forensuring the orderly and efficient conduct of business including adherence to itspolicies safeguarding of its assets prevention and detection of frauds and errors theaccuracy and completeness of accounting records and the timely preparation of reliablefinancial information. Appropriate review and control mechanisms are built in place toensure that such control systems are adequate and are operating effectively. Because ofthe inherent limitations of internal financial controls including the possibility ofcollusion or improper management override of controls material misstatements in financialreporting due to error or fraud may occur and not be detected. Also evaluation of theinternal 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 thepolicies or procedures may deteriorate.
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.
24. CORPORATE SOCIAL RESPONSIBILITY
The Company does not meet the criteria of Section 135 of Companies Act 2013 read withthe Companies (Corporate Social Responsibility Policy) Rules 2014 so there is norequirement to constitute Corporate Social Responsibility Committee for the FY 2018-19.
25. ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of its Audit Committee & Nomination & Remuneration Committee.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution and independence of judgment to safeguard the interest of theCompany and its minority shareholders. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the NonIndependent Directors was carried out by the Independent Directors.
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 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 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:
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-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 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: C 2750000/- Earnings in foreign currency: Nil
31. SHARES & SHARE CAPITAL
Buy Back of Securities:
The Company has not bought back any of its securities during the year under review.
The Company has not issued any Sweat Equity Shares during the year under review.
No Bonus Shares were issued during the year under review.
Issue of Compulsorily Convertible Debentures (CCDs)
Your Company has issued and allotted 1666667 Unsecured Compulsorily ConvertibleDebentures ("CCDs") of 1300/- each aggregating 150 crores on April 12 2018pursuant to shareholder's approval obtained in Extra Ordinary General meeting of theCompany held on March 29 2018
These CCDs will be converted into 1890417 ordinary equity shares of 110/- each on afollowing manner:
a. 1666667 CCDs will be converted into 1666667 ordinary equity shares; and
b. up to a maximum of 223750 ordinary equity shares of the Company will be issued atthe option of the holder of the CCDs upon the conversion of the aggregate accrued butunpaid coupon (net of withholding taxes in India and interest paid in cash) on such CCDs.
Employees Stock Option Plan
During the financial year under the review there has been no change in the AuthorisedCapital of the Company. However the paid-up Equity Share Capital of the Company as onMarch 31 2019 was ?69522980/- as compared to ?6'92'46'530 in the previous year. Theincrease in share capital is due to the issue and allotment of 27645 Ordinary EquityShares to the eligible employees of the Company / Subsidiary Company pursuant to'ArmanEmployee Stock Option Plan 2016'. Further the Company has granted 9000 and 2500 stockoptions to the eligible employees of the Company / Subsidiary Company on 25.05.2018 and13.10.2018 respectively. Particulars of
Employee Stock Options granted vested exercised and allotted during the year aregiven in "Annexure-5".
32. 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.
33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's discussion and analysis forms a part of this annual report and is annexedto the Board's report.
34. SCHEME OF ARRANGEMENT
On April 04 2018 the Company entered into an investment agreement with SAIF PartnersIndia V Limited (Investment Agreement). Pursuant to this Investment Agreement SAIF hadinvested 1500000100/- in the Company on April 12 2018 by issuance of CompulsorilyConvertible Debentures (CCDs). Pursuant to Clause 5.3.3 of the Investment Agreement theCompany is required to extinguish its 1204474 Class 'A' Ordinary Equity Shares (Class'A' Equity) from the Equity Share Capital of the Company in accordance with relevantapplicable laws. This Class 'A' Equity bears inferior voting rights than the OrdinaryEquity Shares (Ordinary Equity). Each Class 'A' Equity has one vote per one lakh shares.
The Board of Directors in its meeting held on October 13 2018 have 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. Pursuant to the scheme the Company will extinguish its1204474 Class 'A' Ordinary Equity Shares (Class 'A' Equity) from the Equity ShareCapital and will allot 782908 Ordinary Equity Shares of 110/- each to the holder ofClass "A" Ordinary Equity Shares.
The Company has filed the Scheme along with other documents as per checklist onNovember 05 2018 with BSE Limited ("BSE") and National Stock Exchange of IndiaLimited ("NSE"). The Company has received no objection certificate from BSE andNSE on March 12 2019. The Company has
also filed the Scheme with Hon'ble National Company Law Tribunal ("NCLT")Ahmedabad bench on March 29 2019 for its approval. The Company has obtained theshareholder's approval in the NCLT convened meeting held on July 22 2019 and now thescheme is pending before the NCLT for final approval.
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 theircooperation and support and look forward to their continued support in future.
FORM NO. AOC-1
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES
Pursuant to first provision of Section 129(3) of the Companies Act 2013 read withRule 5 of the Companies (Accounts) Rules 2014 Part "A" - Subsidiaries
1. There is no subsidiary which is yet to commence operation
2. No Subsidiary is liquidated or sold during the year.
Part "B" - Associates and Joint Ventures: None
PARTICULARS OF REMUNERATION
Information in terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014:
i). The ratio of the remuneration of each director to the median remuneration of theemployees for the financial year 2018-19:
* upto May 25 2018
# w.e.f. August 012018 @ w.e.f. April 12 2018
Note: Sitting Fees paid to Non-Executive Directors; Independent Directors and NomineeDirector are classified as remuneration to Directors.
ii. The percentage increase in remuneration of each Director CFO CEO CS in thefinancial year:
* upto May25 2018 ' w.e.f. August 012018 @ w.e.f. April 12 2018
iii. The percentage increase in the median remuneration of employees in the financialyear 2018-19: 05.56%
iv. There were 424 employees on the rolls of Company as on March 31 2019.
v. 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 out if thereare any exceptional circumstances for increase in the managerial remuneration:
The Average salaries of the employees of the Company were increased by 5.56% while theKMP's remuneration increased by 6.23% in the current year. Annual increments to KMPs ifany are decided by the Nomination and Remuneration Committee within the salary scaleapproved by the members and are effective from April 1 of each year. There was noexceptional circumstance for increase for managerial personnel in the last financial year.
vi. Affirmation that the remuneration is as per the remuneration policy of the Company:
It is affirmed that the remuneration is as per the Remuneration Policy of the Company.