Arman Financial Services Ltd

The Board of Directors of the Company with immense pleasure present their 31^s* Director's Report together with the Audited Financial Statement for the year ended on March 31, 2023

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:

2. OPERATIONS

Your Company continues to engage in the business of Asset Finance, MSME and Microfinance. The Parent Company, Arman Financial Services Limited, is engaged in 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.

Consolidated Performance Highlights

• AUM was T1,942.93 Crores in FY 2022-23 as compared to T1,233.22 Crores in FY 2021-22, increased by 58%.

• Disbursement was T1,766.75 Crores in FY 2022-23 as compared to Rs.1,023.29 Crores in FY 2021-22, increased by 73%.

• Total income was T423.91 Crores in FY 2022-23 as compared to T235.01 Crores in FY 2021-22, increased by 80%.

• Profit before taxes was T124.95 Crores in FY 2022-23 as compared to T45.52 Crores in FY 2021-22, increased by 174%.

• Profit for the year attributable to owners of the Company was T93.81 Crores in FY 2022-23 as compared to T31.72 Crores in FY 2021-22, increased by 196%.

• The basic Earning Per Share was Til0.47 as compared to T37.36, increased by 196%.

• The diluted Earning Per Share was T107.28 as compared to T37.35, increased by 187%.

Standalone Performance Highlights

• AUM was T315.29 Crores in FY 2022-23 as compared to T211.22 Crores in FY 2021-22, increased by 49%.

• Disbursement was Rs.281.86 Crores in FY 2022- 23 as compared to Rs.183.18 Crores in FY 2021- 22, increased by 54%.

• Total income was Rs.96.14 Crores in FY 2022-23 as compared to Rs.66.22 Crores in FY 2021-22, increased by 45%.

• Profit before taxes was T37.59 Crores in FY 2022-23 as compared to Rs.21.30 Crores in FY 2021-22, increased by 77%.

• Profit for the year attributable to owners of the Company was Rs.28.36 Crores in FY 2022-23 as compared to Rs.16.23 Crores in FY 2021-22, increased by 75 %.

• The basic Earnings Per Share was T33.40 as compared to T19.12, increased by 75%.

• The diluted Earnings Per share was Rs.33.02 as compared to Rs.19.12, increased by 73%.

3. DIVIDEND

In order to conserve capital, the Directors of your Company do not recommend any dividend payment at the ensuing Annual General Meeting ("AGM").

The Dividend Distribution Policy of the Company approved by the Board is in line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Policy has been uploaded on the website of the Company at https://armanindia.com/policvncode. aspx -> Dividend Distribution Policy.

4. APPROPRIATIONS

The Company proposes to transfer T568.00 Lakhs (previous year Rs.325 Lakhs) to Special Reserve created u/s 45—IC of the Reserve Bank of India Act, 1934 ("RBI Act"). The Company has also transferred T10.00 Lakhs (previous year T10.00 Lakhs) to the general reserve.

5. COST RECORDS

The Company is not required to maintain cost records as per the provisions of Section 148(1) of the Companies Act, 2013.

6. 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 director's report.

7. CREDIT RATING & GRADING

During the year under review, Acuite reviewed the ratings on various bank facilities and debt instrument of the Company and it's subsidiary. Acuite has reaffirmed its rating for long term bank facility and debt instruments to "ACUITE A-"; (A minus; outlook stable).

CARE has also reaffirmed its rating for various Non-Convertible Debentures ("NCDs") at "CARE BBB+"; stable (Triple B plus; outlook stable). The Grading of Namra Finance Limited (WOS) was also upgraded to 'MFI V (MFI one) by CARE Advisory Research & Training Limited during the year 2022-23.

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 to the provisions of the SEB (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations"). The said policy is available at the Company website at the link https://armanindia.com/policvncode.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.

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

9. INVESTMENT IN SUBSIDIARY

During the year under review, the Company has further invested Rs.80.00 Crore in Namra Finance Limited (wholly owned subsidiary) by subscribing 80,00,000 Lakhs equity shares of Rs.10/- each at the rate of Rs.100.00 per share (including premium of Rs.90.00 per share). Total investment in wholly owned subsidiary stood at Rs.185.63 Crore.

10. SURRENDERED RBI CATEGORY "A" LICENSE

The Board of Directors of the Company in its meeting held on Feb 23, 2023, has voluntarily decided to convert it's license from "Deposit taking" to "Non- Deposit taking" after considering the fact that from the inception of the Company in the year 1992, the Company has neither solicited nor received any public deposits and merely holding the deposit taking license was neither a business necessity nor serving the Company's best interests. RBI has accepted Company's request for convert itself from "Deposit taking" to "Non-Deposit taking" and has issued a new license of Non Deposit Taking NBFC (NBFC -ICC) dated May 12, 2023.

11. UNCLAIMED DIVIDENDS.SHARES

During the year Company has transferred unclaimed dividend for the year 2014-15 of Rs.3,52,038/- to Investor Education and Protection Fund (IEPF) pursuantto provision of Section 124of the Companies Act, 2013 which remained unclaimed for a period of more than seven years.

Members desirous of claiming their shares and dividend which have been transfered to the IEPF, may refer to the refund procedure, as detailed on www.iepf.gov.in. Underlying shares on which dividend has remained unclaimed from FY 2015-16 onwards, will beduefortransferto I EPF account during the year and individual notices to that effect has been 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.

12. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY

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.

13. 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.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the Board is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.

The Board of Directors consists of 9 (Nine) members, of which 4 (Four) are Independent Directors and 1 (One) is a Nominee Director. The Board also comprises of 2 (two) women Directors, including 1 (one) Independent Director. In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Aakash Patel [DIN- 02778878] and Mrs. Ritaben Patel [DIN- 00011818] will retire by rotation at the ensuing AGM and being eligible, offer themselves for reappointment.

The terms and conditions of appointment of Independent Directors are available on the website of the Company at https://armanindia.com/ policvncode.aspx -> Policy for Appointment of Independent Director. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold highest standards of integrity

a) Key Managerial Personnel (KMP)

The Board has identified the following officials as Key Managerial Personnel pursuant to 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

15. MEETING OF THE BOARD & AUDIT COMMITTEE

The Board during the financial year 2022-23 met 6 (six) times and Audit Committee met 4 (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.

16. 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.

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:

• Level of skill, knowledge and core competence of individual.

• Functions, duties and responsibilities.

• Company's performance and achievements.

• Compensation of peers and industry standard.

The Company may if the need arise, strike a balance between the fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goal. The Nomination & Remuneration Committee of Board of Directors shall recommend periodic revision in the remuneration of Executive Directors to the Board and the Board shall fix their remuneration taking into consideration above factors as also ceiling limits prescribed under the Companies Act, 2013 and other statutes. The same shall also be approved by the shareholders where required.

Remuneration to Non-Executive Directors

Non-Executive Directors are paid sitting fees for each meeting of the Board and Committees of Directors attended by them. They are also given the traveling and other expenses they incur for attending to the Company's affairs, including attending Committee, Board 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 and the annual revision thereof has been delegated to the Managing Director and Joint Managing Director of the Company, based on Company performance, individual performance evaluation, recommendations of respective functional heads and other factors having a bearing.

If there is any specific regulatory requirement for fixation / revision of remuneration of KMP or any other employee, by the Board or any committee, then the same shall be done in compliance thereof.

18. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuantto 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.

19. DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a policy for prevention, prohibition and redressal of sexual harassment at workplace. Further, the Company has constituted an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, where complaints in the nature of sexual harassment can be registered. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity. There were no complaints / cases filed / pending with the Company during the financial year.

20. 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 March 31, 2023, 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 March 31, 2023 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.

21. SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

22. DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have submitted the declaration of independence, pursuant to the provisions of Section 149(7) oftheActand Regulation 25(8) of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1) (b) of the SEBI Listing Regulations and they are not aware of any circumstance or situation, which exist

or may be reasonably anticipated, that could impair or impact his / her ability to discharge his / her duties with an objective independent judgment and without any external influence.

23. FAMILIARIZATION PROGRAMME

The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details relating to the familiarization programme are available on the website of the Company at https://armanindia.com/ policvncode.aspx -> Familiarization Programme For ndependent Directors.

a) Statutory Auditors

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 and the rules made thereunder and RBI requirements, the Members at their 29^,h AGM held on September 29, 2021, has appointed M/s Talati & Talati LLP, Chartered Accountants, (Firm Registration No. 110758W/W100377), as the Statutory Auditors of the Company for a term of three years, i.e., from the conclusion of 29^,h AGM till the conclusion of the 32^nd AGM.

The Auditors' Report to the Members for the year under review is unmodified. The Notes to the Accounts referred to in the Auditors' Report are self- explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.

b) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has appointed M/s GKV & Associates, Practicing Company Secretary (Membership No.: F12366 and Certificate of Practice No.: 19866) to undertake the Secretarial Audit of the Company for the financial year 2022-23.

Further, in terms of the provisions of Regulation 24A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Circular No. CIR/ CFD/CMD1/27/2019 dated February 8, 2019 issued by SEBI, M/s GKV & Associates has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI regulations and circulars / guidelines issued thereunder.

The Secretarial Audit Report is appended as "Annexure-3" to this Report. There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.

25. 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://armanindia. com/policvncode.aspx -> Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions

26. RISK MANAGEMENT FRAMEWORK

The Company has constituted a Risk Management Committee in terms of the requirements of Regulation 21 of the Listing Regulations and has also adopted a Risk Management Policy. The details of the Risk Management Committee are disclosed in the Corporate Governance Report

The Company has a risk management framework and Board members are periodically informed about the proceedings of the Risk Management Committee to ensure management controls risk by means of a properly designed framework. The Board is kept apprised of the proceedings of the meetings of the Risk Management Committee. The Company, as it advances towards its business objectives and goals, is often subjected to various risks.

Risk Management is at the core of our business and ensuring we have the right risk-return trade-off in line with our risk appetite is the essence of our Risk Management while looking to optimize the returns that go with that risk.

27. 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. Further, the Company has been conducting management audit report by an external agency. The Internal Audit Report and Management Audit Report, along with auditor's recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board, nternal 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.

28. INTERNAL FINANCIAL CONTROL

The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based onthe internal control criteria established bythe Company considering the essential components of internal control, stated in the Guidance Note on Audit of Internal Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India.

29. INTERNAL AUDIT

The Company has in place an adequate internal audit framework to monitor the efficacy of internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent and reasonable assurance on the adequacy and effectiveness of the organization's risk management, internal control and governance processes. The framework is commensurate with the nature of the business, size, scale and complexity of its operations The audit plan is approved by the Audit Committee, which regularly reviews compliance to the plan

30. PERFORMANCE EVALUATION

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

Manner of Evaluation

The Nomination & Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board as a whole, individual directors and its various Committees is being made.

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

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

31. 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. GKV& Associates, Practicing Company Secretary, confirming the level of compliance is attached and forms a part of the Board's Report.

32. DEPOSITORY SYSTEM

The Company's Equity Shares are compulsorily tradable in electronic form. As on March 31,2023, out of the Company's total equity paid-up share capital comprising of 84,92,334 Equity Shares, only 1,48,810 (1.75%) Equity Shares were in physical form and the remaining capital was in dematerialised.

As per SEBI notification No. SEBI/LAD-NRO/ GN/2018/24 dated June 8, 2018 and further amendment vide notification No. SEBI/LAD-NRO/

GN/2018/49 dated November 30, 2018, requests for effecting transfer of securities is not processed from April 1,2019 unless the securities are held in the dematerialised form with the depositories.

Further, transmission or transposition of securities held in physical or dematerialised form is also effected only in dematerialised form. Therefore, Members holding securities in physical form are requested to take necessary action to dematerialize their holdings.

33. WHISTLE BLOWER POLICY

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://armanindia. com/policvncode.aspx -> Whistle Blower Policy

34. GREEN INITIATIVE

n 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.

35. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) of the Act, the Annual Return in form MGT-7 for the Company for the financial year 2022-23 is available on the website of the Company at https://armanindia. com/OtherReports.aspx Rs.Page = Annual-return -> Annual Return 2022-23

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 during the year (previous year also Nil) while the expenditure in foreign currency by the Company during the year was USD equivalent of Rs.28,87,500 (previous year: Nil) towards due diligence fees.

* Authorized Share Capital:

During the year under review, the authorized share capital of the Company was reclassified to 1,40,00,000 ordinary equity shares of the Company of the face value of Rs.10/- each aggregating to Rs.14,00,00,000/- and 10,00,000 Optionally Convertible Redeemable Preference Shares of Rs.10/- each aggregating to Rs.1,00,00,000/-.

* Paid up Share capital:

As on March 31, 2023, the Company's paid-up Equity Share Capital was Rs.8,49,23,340/- divided into 84,92,334 Equity Shares of Rs.10/- each and Optionally Convertible Redeemable Preference Shares capital was Rs.31,09,720/- divided into 3,10,972 Optionally Convertible Redeemable Preference Shares.

• 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.

Debentures (CCDs)

Your Company has issued and allotted 6,24,388 Unsecured Compulsorily Convertible Debentures ("CCDs") of Rs.1,230/- each aggregating T76.80 cr. on September 28, 2022 on a private placement basis to various investors pursuant to shareholder's approval obtained in Extra Ordinary General meeting of the Company held on September 15,2022.

The CCDs shall carry a coupon of 15% (fifteen percent) simple interest per annum calculated on the basis of a 365 (three hundred sixty five) day year and the actual number of days elapsed. These CCDs will be converted into 6,24,388 ordinary equity shares of Rs.10/- each on the earlier of following events:

a) the Investor electing to convert the CCDs into equity shares by issuing a conversion notice to the Company; and

b) the date of expiry of 18 (eighteen) months from the date of allotment of CCDs ("Conversion Date")

• Issue of Optionally Convertible Redeemable Preference Shares (OCRPS)

Your Company has issued and allotted 3,10,972 Optionally Convertible Redeemable Preference Shares ("OCRPS") of Rs.10/- each at a premium of Rs.1,220/- per shares aggregating Rs.38.25 cr. on September 28, 2022 on a private placement basis to various investors pursuant to shareholder's approval obtained in Extra Ordinary General meeting of the Company held on September 15,2022.

The OCRPS shall carry a cumulative right of dividend at a fixed amount of Rs.123/- (Indian Rupees One Hundred and Twenty Three only) per annum out of the profits of the Company and the payment of such dividend shall have priority over any dividend rights of the equity shares of the Company.

The OCRPS will either:

a) be convertible into equivalent of 3,10,972 equity shares of the face value of Rs.10/- each of the Company, at a conversion price of Rs.1,230/- per equity share (including a premium of Rs.1,220/- per share) at the option of the allottee within a period not exceeding 18 months from the date of allotment of OCRPS; or

b) be redeemed at a price of Rs.1,230/- per OCRPS at the option of the allottee if the allottee chooses not to convert the OCRPS.

* Employees Stock Option Plan

There has been no material change in the ESOP Schemes during the year under review. The ESOP Scheme is in compliance with the SEB (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBSE Regulations").

During the financial year under the review, the Company has allotted 750 ordinary equity shares of T10/- each on May 17, 2022 to the eligible employees of the Company/ Subsidiary Company pursuant to 'Arman Employee Stock Option Plan 2016'. Particulars of Employee Stock Options granted, vested, exercised and allotted are given in "Annexure-4".

38. CORPORATE SOCIAL RESPONSIBILITY

In accordance with Section 135 of the Act, your Company has constituted a Corporate Social Responsibility ("CSR") Committee. The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy ("CSR Policy") indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy is available on the website of the Company at https://armaninclia.com/policvncode. aspx-> Corporate Social Responsibility Policy.

Further, the details including Composition of the CSR Committee, the CSR Policy and the CSR Report are given at "Annexure-5".

39. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

Your Company forms part of the top 1000 listed entities on BSE Limited and National Stock Exchange of India Limited as on March 31, 2023. Accordingly, pursuant to Regulation 34 (2) (f) of SEBI Listing Regulations, Company is reguired to submit a Business Responsibility Sustainability Report ("BRSR") as a part of the Annual Report. The Company's BRSR describing the initiatives taken by the Company is uploaded on the website of the Company at https://armanindia.com/OtherReports. aspx Rs.Page=BRSR -> BRSR 2022-23.

40. 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.

41. 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.

42. DETAILS OF FRAUDS REPORTED BY THE AUDITORS

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

43. 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.

44. PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

There was no proceeding initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 during the financial year under review.

45. DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS

The Company has not made any such valuation during the FY23.

46. 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.