· SECTION NO. CONTENT PAGE NO. I DEFINITIONS & ABBREVIATIONS Definitions 1 Conventional/General...

SECTION NO. CONTENT PAGE

NO.

I DEFINITIONS & ABBREVIATIONS

Definitions 1

Conventional/General Terms 1

Issue Related Terms 2

Company/Industry Related Terms 4

Abbreviation 5

II RISK FACTORS

Forward Looking Statements 8

Risk Factors 9

III INTRODUCTION

Summary 21

Summary of Financial Information 25

The Issue 27

General Information 28

Capital Structure 36

Objects of the issue 44

Statement of Tax Benefits 46

IV ABOUT THE ISSUER COMPANY

Key Industry Regulation and Policies 55

Our History and Corporate Matters 63

Our Management 68

Our Promoters and Promoter Group 84

V FINANCIAL INFORMATION

Auditor’s Report for year ended March 31, 2010 90

Limited Review Report – Financial Statements 118

Material Developments 122

Stock Market Data For Equity Shares of the Company 123

Accounting Ratios & Capitalisation Statement 124

VI LEGAL AND OTHER INFORMATION

Outstanding Litigations and Material Developments 125

Government and other Approvals 172

VII OTHER REGULATORY AND STATUTORY DISCLOSURES 173

VIII OFFERING INFORMATION

Terms of the Issue 183

Issue Procedure 188

IX MAIN PROVISIONS OF ARTICLES OF ASSOCIATION 212

X OTHER INFORMATION

Material Contracts and Documents for Inspections 276

Declarations 278

1

SECTION I-DEFINITIONS AND ABBREVIATIONS

Definitions

TERMS DESCRIPTION

“Arman Financial Services

Limited“ or “AFSL” or “the

Company” or “Our Company” or “Issuer” or “we” or “us” or “our”

Arman Financial Services Limited, a Public Limited Company

incorporated under the provisions of Companies Act, having its

registered office at 502-503, Sakar III, Opp. High Court, Off. Ashram Road, Ahmedabad - 380014 Gujarat, India.

Conventional/General Terms

TERMS DESCRIPTION

Act or Companies Act The Companies Act, 1956 or any statutory modifications or re-

enactment thereof from time to time

AGM Annual General Meeting

ASBA Application Supported by Blocked Amount

Depositor A depository registered with SEBI under the SEBI (Depositories and

Participant) Regulations, 1996 as amended from time to time

Depositories Act The Depositories Act, 1996 as amended from time to time

Depository A Depository registered with SEBI under the SEBI (Depositories &

Participant) Regulations, 1996 as amended from time to time

Depository Participant/DP A depository participant as defined under the Depositories Act

DP ID Depository Participant’s identity

EGM Extra Ordinary General Meeting

Guidelines / SEBI Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 and

subsequent amendments thereto

ISIN

International Securities Identification Number allotted by the

Depository

IT Act The Income Tax Act, 1961 and amendments thereto

Indian GAAP Generally Accepted Accounting Principles in India

KMP Key Management Personnel of Arman Financial Services Limited

Non Resident A person resident outside India, as defined under FEMA

NOC No Objection Certificate

NRE Account Non-Resident External Account

NRO Account Non-Resident Ordinary Account

Overseas Corporate

Bodies /OCBs

A company, partnership, society or other corporate body owned

directly or indirectly to the extent of at least 60% by NRIs, including

overseas trusts in which not less than 60% of beneficial interest is

irrevocably held by NRIs directly or indirectly as defined under

Foreign Exchange Management (Deposit) Regulations, 2000. OCBs are not allowed to invest in this Issue

Person or Persons Any individual, sole proprietorship, unincorporated association,

unincorporated organization, body corporate, corporation, company,

partnership, limited liability company, joint venture or trust or any

other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as the context requires

SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 and subsequent

amendments thereto

SEBI ICDR The SEBI (Issue of Capital and Disclosure Requirements)

Regulations, 2009 and any amendments thereto

Securities Act US Securities Act, 1933 and subsequent amendments thereto

Takeover Code Securities and Exchange Board of India (Substantial Acquisition of

2

Shares and Takeovers) Regulations, 1997

Wealth-Tax Act The Wealth-Tax Act, 1957 and amendments thereto

UIN Unique Identification Number

Issue Related Terms

TERMS DESCRIPTION

Allotment Unless the context otherwise requires, the issue and the allotment of

Equity Shares, pursuant to the issue

Allottee The successful applicant to whom the Equity Shares are being / have been allotted

Applicant Any prospective investor who makes an application for Equity Shares

in terms of this Draft Letter of Offer

Application Forms The Forms in terms of which the Investors shall apply for the Equity

Shares of the Company

Application Money The aggregate of monies payable on application by the Applicant,

being the aggregate money payable at Rs.10/- per share towards the

entitlement of Equity Shares

Application Supported by

Blocked Amount/ ASBA

The application (whether physical or electronic) used by an Investor

to make an application authorizing the SCSB to block the amount

payable on application in their specified bank account

ASBA Investor An applicant who intends to apply through ASBA process and:

� holds the shares of our Company in dematerialized form as on

the record date and has applied for entitlements and / or

additional shares in dematerialized form;

� has not renounced his/her entitlements in full or in part;

� is not a renounce;

� is applying through a bank account maintained with SCSBs.

Bankers to the Company IDBI Bank

Bankers to the Issue The Bankers to the Issue being [●]

BSE

Bombay Stock Exchange Limited where the Equity Shares of our Company are presently listed

Business Day

Any day, other than Saturday or Sunday, on which commercial banks

are open for business

CAF/ Composite Application

Form

The form used by an Investor to make an application for allotment

of Equity Shares

Companies Act /

the Act

The Companies Act,1956 as amended from time to time

Consolidated Certificate

In case of holding of Rights Equity Shares in physical form, the

Company would issue one certificate for the Rights Equity Shares

allotted to one folio

Controlling Branches

Such branches of the SCSBs which coordinate applications under the

Issue by the ASBA Investors with the Registrar to the Issue and the

Stock Exchanges and a list of which is available at http://

www.sebi.gov.in

Designated Branches

Such branches of the SCSBs which shall collect CAF from ASBA

investor and a list of which is available on http:// www.sebi.gov.in

Depositories Act The Depositories Act,1996 as amended

Depository A depository registered with SEBI under the SEBI (Depositories and

Participants) Regulations,1996 as amended from time to time

Depository

Participant/DP

A depository participant as defined under the Depositories Act

3

Designated Stock

Exchange

Bombay Stock Exchange Limited

DLOF/ Draft letter

of offer

The Draft Letter of Offer dated [●] as filed with SEBI

Eligible Equity Shareholder(s)

A holder(s) of Equity Shares as on the Record Date

Equity Share(s) or Share(s) Equity Share of our Company having a face value of Rs. 10/- each

unless otherwise specified in the context thereof

Equity Shareholders /

Shareholders / Members

Equity shareholders whose names appear as Beneficial owners as per

the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of the

Company in respect of the shares held in physical form at the close of

business hours on the Record Date i.e. [●] and to whom this issue is

being made

First Applicant The Applicant whose name appears first in the Application Form

FY/ Financial year/Fiscal Year The period of 12 months beginning on 1st April and ending on 31st

March of that particular year, unless otherwise stated.

Investor(s) The Equity Shareholders of our Company on the Record Date i.e. [●]

and renounces

Issue/ Rights Issue The issue of 48, 91,920 Equity Shares of Rs.10/- each for cash at

premium of Rs. 5/- (Issue Price Rs.15/-) on rights basis to existing

Equity Shareholders of the Company in the ratio of 6(Six) Equity

Shares for every 5(Five) Equity Shares held on [●] (Record Date)

aggregating not more than Rs. 733.79/-lacs as per this Draft Letter of Offer

Issue Closing Date [●]

Issue Opening Date [●]

Issue Period The period between the Issue opening date and the Issue closing date

inclusive of both the days and during which prospective applicants can

submit their application Forms

Issue Price Rs. 15/- per Equity Shares

Lead Manager or Lead

Manager to the Issue

Lead Manager to this Issue, in this case being Nirbhay Capital

Services Private Limited

Legal Advisors Legal Advisors for the Issue being Amit R Gajjar, Advocates and

Solicitors

Letter of Offer/ LOO/ Offer

Document

The Letter of Offer dated [●] circulated to the Equity Shareholdersand

filed with the Stock Exchanges containing inter alia the Issue price

and the number of equity shares to be issued and other incidental

information.

Listing Agreement The equity listing agreements signed between the Company and the

Stock Exchanges

Non Resident A person who is NRI, FII or a person not resident in India

OCB / Overseas

Corporate Body

A company, partnership, society or other corporate body owned

directly or indirectly to the extent of at least 60% by NRIs, including

overseas trusts in which not less than 60% of beneficial interest is

irrevocably held by NRIs directly or indirectly as defined under

Foreign Exchange Management (Transfer or Issue of Security by a

Person Resident Outside India) Regulations, 2000

Promoters Shall mean jointly Mr. Jayendra B. Patel, Mr. Amit R. Manakiwala &

Mrs. Rita J. Patel

Promoter Group Promoters, Promoter Group Entities and Promoter Group Individuals

Promoter Group Entities 1. Namra Holding & Consultancy Services Private Limited

2. J. B. Patel & Co.

3. B.M.Patel & Co.

4

4. A Square Enterprise

5. Jayendra B. Patel (HUF)

Promoter Group Individuals

Mrs. Rita J Patel, Late Mr. Bhailalbhai Patel, Late Mrs. Pushpaben

Patel, Late Mr. Mahendra Patel, Late Mr. Jitendra Patel, Mr.

Aakash J Patel, Mr. Aalok J Patel, Mrs. Himani Amit Mankiwala,

Late Mr.Rajinikant Mankiwala, Late Mrs. Sagunaben Mankiwala,

Mr. Maulik Manakiwala, Mrs. Bansari Parikh, Mr. Jayendra B

Patel, Mr. Amit R Manakiwala, Mrs. Purnima Parikh, Mrs. Gita

Mehta, Ms. Shreni Choksi, Mrs. Mita Parikh, Mrs. Ami Shah

Promoter Group Companies Unless the context otherwise requires, refer to those companies

mentioned in the section titled “Our Promoters And Promoter Group”

on page no. 84 Of this Draft Letter of Offer

Record Date [●]

Renounces A person who has acquired rights entitlement from equity

Shareholders

Rights Entitlement The no. of equity shareholders that a shareholder is entitled to in

proportion to his/her shareholding in the Company as on the record

Date

Rights Issue/

Present Issue

The issue of 48, 91,920 Equity Shares of Rs.10/- each at the Issue

Price by the Company pursuant to this Draft Letter of Offer

Registrar/ Registrar to the

Issue

Sharepro Services (India) Private Limited

SAF Split Application Forms

Stock Exchanges The BSE and JSE where our equity shares are presently listed

Company/Industry Related Terms

TERMS DESCRIPTION

AFC Asset Finance Company

AIFIs All India Financial Institutions

Allotment Unless the context otherwise requires, the issue and the allotment of

Equity Shares, pursuant to the Issue

Allottee The applicants to whom the Equity Shares are being / have been allotted

Articles/Articles of

Association/ AoA

Articles of Association of Arman Financial Services Limited

Auditors The statutory auditors of our Company i.e. J.T. Shah & Co.,

Ahmedabad

Average Total Assets Average of opening and closing balance of Total Assets for the fiscal

Board/ Board of Directors Board of Directors of our Company which term shall include a

committee of the Board

CAMP Customer Asset Management Process

CAGR Compounded Annual Growth Rate

CARE Credit Analysis and Research Agency

CRAR Capital to Risk-weighted Assets Ratio

CST Central Sales Tax

Directors Any or all director(s) of the Company, as the context may require

Equity Share(s)

The equity share(s) of the Company having a face value of Rs. 10, inter

alia including such equity shares of the Company outstanding and fully-

paid up, as on the Record Date, unless otherwise specified in the

context thereof

Ex-Promoters/erstwhile Mr. G M Shah

5

Promoters/Old Promoter

Gross NPAs Total of overdue and future receivables (excluding securitized assets) as reduced by unmatured finance charges on NPAs

Group Companies Companies falling under the category of “Companies under the Same

Management” within the meaning of Section 370(1B) of the Companies

Act, 1956, the Promoter Group Companies and the Business ventures

promoted by Promoters

Gross Spread Difference between the Total Income earned by us and interest

expenditure incurred by us for the fiscal / period measured as a

percentage of our Average Total Assets

HRD Human Resource Development

ICRA Investment Information and Credit Rating Agency Limited

KYC Know Your customer

M-Cril Micro Finance Credit Rating Agency

Memorandum or MOA Memorandum of Association of Arman Financial Services Limited

MICR Magnetic Ink Character Reader

NBFC In terms of the Section 45-l (f) read with Section 45-I(c) of the RBI Act,

1934, the principal business of NBFC is that of receiving deposits or

that of a financial institution, such as lending, investment in securities,

hire purchase finance or equipment leasing

Net NPAs Gross NPAs net of total provisions

NHAI National Highways Authority of India

NOF Net Owned Funds

Registered Office The Registered office of the Company situated at 502-503, Sakar III,

Opp. High Court, Off Ashram Road, Ahmedabad 380014 Gujarat,India.

SICA Sick Industrial Companies Act

SHG Self Help Group

Stock Exchange Bombay Stock Exchange Limited and Jaypur Stock Exchange Limited

YOY Year On Year

YTM Yield To Maturity

Abbreviation

TERMS DESCRIPTION

AGM Annual General Meeting

AS Accounting Standards, as issued by the Institute of Chartered

Accountants of India

ASE Ahmedabad Stock Exchange Limited

AY Assessment Year

B. Com. Bachelor of Commerce

BSE Bombay Stock Exchange Limited

CA/FCA Chartered Accountant/Fellow of Chartered Accountant

CAF Composite Application Form

CAR Capital Adequacy Ratio

CDSL Central Depository Services (India) Limited

CIN Company Indetification Number

Cr Pc Criminal Procedure Code

CS/FCS Company Secretary/Fellow of Company Secretary

CY Calendar Year

DIN Director Identification Number

6

DP Depository Participant

DPN Demand Promissory Note

DSE Designated Stock Exchange

ECS Electronic Clearing Service

EGM Extra Ordinary General Meeting

EPS Earnings Per Share

FCNR Account Foreign Currency Non Resident Account

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999 read with rules and regulations there under and amendments thereto

FERA Foreign Exchange Regulation Act, 1973 now repealed by FEMA.

FI Financial Institution

FII (s) Foreign Institutional Investors registered with SEBI under applicable

laws

FIR First Information Report

GDP Gross Domestic Production

GIR Number General Index Registry Number

GOI Government of India

HR Human Resource

HUF Hindu Undivided Family

ICAI Institute Of Chartered Accountants of India

ICDR SEBI (Issue of Capital and Disclosure Requirements) Regulations,

2009

ICSI Institute Of Company Secretaries of India

IDBI Industrial Development Bank of India

JLG Joint Liability Group

JSE Jaipur Stock Exchange Limited

LM Lead Manager

MIS Management Information System

MOU Memorandum of Understanding

NA Not Applicable

NAV Net Assets Value

NBFC Non Banking Financial Company

NEFT National Electronic Fund Transfer

NPA/NPAs Non Performing Asset

NR Non Resident

NRE Account Non Resident External Account

NRI(s) Non Resident Indians

NRO Account Non Resident Ordinary Account

NSDL National Securities Depository Limited

P.A. Per Annum

P/E Ratio Price Earning Ratio

PAN Permanent Account Number

PAT Profit After Tax

PBDT Profit Before Depreciation and Tax

PBIDT Profit Before Interest, Depreciation and Tax

PBT Profit Before Tax

PVT Private

RBI The Reserve Bank of India

RoC Registrar of Companies, Gujarat

RONW Return on Net worth

7

Rs./ ` Rupees

RTGS Real time gross Settlement

SCB Scheduled Commercial Banks

SCN Show cause notice

SCRR Securities Contracts (Regulations) Rules, 1957 as amended from time

to time

SCSB Self Certified Syndicate Bank(s)

SEBI Securities and Exchange Board of India

SEBI Act Securities and Exchange Board of India Act, 1992 as amended

SEBI Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI, as

amended from time to time

SEBI Takeover

Regulations

Securities and Exchange Board of India (Substantial Acquisition of

Shares and Takeover) Regulations, 1997, as amended

Sq.ft Square Feet

TAN Tax Deduction Account Number

US$ or USD or Dollars Refers to the lawful currency of the United States of America

UTI Unit Trust of India

U/s Under Section

V/s Versus

w.e.f. With effect from

8

SECTION II- RISK FACTORS

FORWARD LOOKING STATEMENTS

This Draft Letter of Offer contains certain “forward-looking statements”. These forward looking

statements can generally be identified by words or phrases such as “aim”, “anticipate”, “believe”,

“expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will

pursue” or other words or phrases of similar import. Similarly, statements that describe the objectives,

plans or goals also are forward-looking statements. All forward looking statements are subject to risks,

uncertainties and assumptions about the Company that could cause actual results to differ materially

from those contemplated by the relevant forward-looking statements. Important factors that could cause

actual results to differ materially from the expectations include, among others:

• General economic and business conditions in the markets in which we operate and in the

national economic conditions;

• Company’s ability to successfully implement the strategy, growth and expansion plans and

technological changes;

• Changes in the value of Rupee and other currency changes;

• Changes in political and social conditions in India, the monetary policies of India and other

countries, inflation, deflation, recession, unanticipated fluctuation in interest rates, foreign

exchange rates, equity prices or other rates or price changes in the Indian and international

interest rates and its impact on financial market;

• Changes in laws and regulations relating to the industry in which we operate;

Increasing competition or other factors affecting the industry segments in which our Company operates.

For a further discussion of factors that could cause our actual results to differ, please refer to the chapter

titled “Risk Factors” beginning on pages no 9 of this draft Letter of Offer. By their nature, certain market

risk disclosures are only estimates and could be materially different from what actually occurs in the

future. As a result, actual future gains or losses could materially differ from those that have been

estimated.

Neither our Company, nor our Directors and officers nor the Lead Manager nor any of their respective

affiliates have any obligation to update or otherwise revise any statements reflecting circumstances

arising after the date hereof or to reflect the occurrence of unanticipated events, even if the underlying

assumptions do not come to fruition. In accordance with SEBI /Stock Exchange requirements, our

Company and the Lead Manager will ensure that investors in India are informed of material

developments until the time of the grant of listing and trading permission by the Stock Exchange for the

Equity Shares being offered through this Issue.

9

RISK FACTORS

An investment in our Equity Shares involves a high degree of risk. You should carefully consider each of

the following risk factors and all other informations set forth in this Draft Letter of Offer, including the

risks and uncertainties described below, before making an investment in our Equity Shares. The risks and uncertainties described below are not the only risks that the Company currently faces. Additional risks

and uncertainties not presently known to the Company or that the Company currently believes to be

immaterial may also have an adverse effect on the Company’s business, results of operations and

financial condition. If any or some combinations of the following risk or other risks that are not currently

known or believed to be material, actually occur, our business, financial condition and results of

operations could suffer, the trading price of our Equity Shares could decline and you may lose all or part

of your investment. In making an investment decision with respect to the issue contemplated herein, you

must rely on your own examination of the Company and the terms of such issue including the merits and

risks involved. Unless specified or quantified in the relevant risk factors below, we are not in a position

to quantify the financial or other implications of any of the risks described in this section.

INTERNAL RISKS:

1. We are involved in a number of legal proceedings.

Our Company is involved in various Criminal, Civil & Tax related litigations which are at different

stages of adjudications in various forums. All criminal and civil cases have been filed by the company

while the tax cases have been filed by and against the company. No assurance can be given as to

whether these matters will be resolved in favour of or against our Company and/or these entities, nor

can an assurance be given that no further liability will arise out of these or future claims. A summary of the said pending litigations /demands /claims / notices and proceedings initiated against and by our

Company are given as below:

Sr.

No

Particulars Cases Filed

By the

Company

Cases Filed

Against the

Company

Total No. of

cases/disputes

Approx. amount involved

where quantifiable (Rs. in

lacs)

1 Criminal

Laws

148 - 148 60.01

2 Tax Laws 3 3 6 56.62

3 Civil Laws 22 - 22 8.26

For more information please refer to “Outstanding Litigations and Material Developments”

commencing on page no. 125 of this Draft Letter of Offer.

2. Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash

flows, working capital requirements, capital expenditures and lender consents and there can be no

assurance that we will be able to pay dividends in the future.

We currently intend to invest our future earnings, if any, to fund our growth. The amount of our future

dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. In addition, any dividend payments we make are subject to

the prior consent of our lenders pursuant to the terms of the agreements we made with them. So, there can

be no assurance that we will be able to pay dividends in the future.

3. To ascertain the credit worthiness of our customers, we depend on our internal analysis and on the

information or representations made by the third parties, which may be materially incorrect,

incomplete or misleading. Any such misleading information may cause financial loss to the

Company.

10

In ascertaining credit worthiness of our prospective customers, we largely depend on internal analysis

made by our field executives or by the manager at the branch level. Though we take all possible steps to

adhere to KYC norms, we may fail while assessing genuiness of our customers. Any failure on their

part to honour their commitments may have an adverse impact on our business, financial condition and

operations, as we continue to rely on the information which may be or may not be true.

4. Our Company has entered into agreements for credit facilities that contain customary restrictive

covenants, placing certain limitations on our Company.

Our Company has availed credit facilities from various banks for which appropriate agreements have

been entered into. By virtue of these agreements we are bound by certain restrictive covenants. These

restrictive covenants, inter alia, require us to take the prior consent of the lenders for amending our

capital structure, creating a charge on our assets, undertaking mergers or amalgamations, expansion or

diversification of our business and the like.

In the event that we breach a restrictive covenant, our lenders could deem us to be in default and seek

early repayment of loans or increase our interest rates in certain circumstances. Our ability to execute

expansion plans, including our ability to obtain additional financing on terms and conditions acceptable

to us, could be severely and negatively impacted as a result of these restrictions and limitations. Our

failure to comply with any of these covenants could result in an event of default, which could accelerate

our need to repay the related borrowings and trigger cross-defaults under other borrowings. An event of

default would also affect our ability to raise new funds or renew maturing borrowings as needed to

conduct our operations and pursue our growth initiatives.

5. We face competition from both public and private sector banks which may adversely affect our

profitability.

With the entry of public and private sector banks, the competition has become very acute. Such banks

have access to low cost funds, wider network as compared to us. Though we are presently able to offer

competitive rates to our customers, we may not be able to do so in future. We may also not be able to

retain our customers. Such high competition may reduce our income and profits and adversely affect

our business and our financial performance.

6. We may be, in the future, enter into strategic alliances, investments, partnerships and acquisitions.

This may harm our business, dilute your ownership interest and cause us to incur debt.

As part of our growth strategy, we may enter into strategic alliances, make strategic investments,

establish partnerships and/or make acquisitions relating to ancillary businesses, technologies etc. We

may not be able to identify suitable investment opportunities, partners or acquisition candidates. If we

do identify suitable investment opportunities, partners or acquisition candidates, we may have difficulty

in accurately assessing the candidates, risks, placing an accurate valuation on it and we may be unable

to negotiate terms commercially acceptable or favourable to us or complete those transactions at all.

Any potential acquisition, alliance or joint venture could involve a number of specific risks, including

diversion of management's attention, higher costs, unanticipated events or circumstances, legal

liabilities, failure of the business of the acquired company, fall in value of investments and amortization

of acquired intangible assets, some or all of which could have a material adverse impact on our

business, financial condition and results of operations.

7. Possible Delay in Deployment of Funds will affect the profitability of our Company.

The funds are being raised for facilitating the objects mentioned under “Objects of the Issue” beginning on page no. 44 of this Draft Letter of Offer. However there can be a possible delay in deployment of

funds due to unforeseen circumstances. All these factors may suitably affect the deployment of funds

and thereby profitability of our Company.

11

8. Our inability to make payments towards our financial indebtedness could adversely affect our

financial condition and results of operations.

We are financially indebted to the tune of Rs. 1835.81 Lacs to various financial institutions as on 31st

March, 2010. Although we have been regular in making payments against these loans, we however do

not assure that we would be regular in doing so in near future as we may not generate cash sufficient to

enable us to service our debt and make periodic repayments towards it as a result of certain internal

factors as well as unforeseen factors. Any defaults made in servicing the debt as well as the repayments

may invoke legal proceedings against us together with financial penalties which may adversely affect

our financial condition.

9. Our success to a large extent depends upon our core management team and skilled personnel and

our ability to attract and retain such persons.

Many of the core management and skilled personnel of our Company have a decade or more of relevant

industry experience and they have been integral to the growth of our Company. Our success largely

depends on the core management team and skilled personnel who oversee the day-to-day Operations,

strategy and growth of our business. The Promoters of the Company have expertise and have vast

exposure in financial services. If one or more members of our core management team are unable or

unwilling to continue in their present positions, such persons may be difficult to replace and our

Company’s operations may be affected. In addition, our success in expanding our business will also

depend, in part, on our ability to attract, retain and motivate appropriately qualified skilled personnel.

Our failure to successfully attract and retain our core management team and skilled personnel could

adversely affect our operations.

10. Major fraud, lapses of internal control or system failures could adversely impact Company’s

business.

Our Company is vulnerable to risk arising from the failure of employees to adhere to approved

procedures, system controls, fraud, system failures, information system disruptions, communication

systems failure and interception during transmission through external communication channels or networks Failure to protect fraud or breach in security may adversely affect our Company’s operations

and financial performance. Our reputation could also be adversely affected by significant fraud

committed by our employees, agents, customers or third parties.

11. Our Company may incur losses in future financial years due to the internal & external risk

factors.

Every business is averse to risk and may incur loss in future due to various factors inherent to them

being internal and external risk factors. Our industry is exposed to economic scenario in the Country as

well as developments in financial service industry. Any slow-down phase in the economic growth may

have a negative impact on the financial service industry including other industries and our Company

could also be impacted by the same. Downturns or disruptions in the securities markets could reduce

transaction volumes, cause a decline in the business or adversely impact our profitability and ability to

sustain our present rapid growth rate.

12. Our failure to manage growth effectively may adversely impact our business.

Our ability to grow depends primarily upon our ability to manage key issues such as increasing market

share, selecting and retaining skilled manpower, maintaining an effective technology platform that may

be continually upgraded, developing a knowledge base to face emerging challenges, and ensuring a high standard of customer service. The inability of our Company to effectively manage any of these

issues may adversely affect our Company’s business and future financial performance.

12

13. The Issuer has unsecured debt that is repayable on demand.

The Issuer has availed certain unsecured loans and repayment of these loans may be called by lenders at

any time. In such event, we would need to find alternative sources of financing, which may not be

available on commercially reasonable terms or at all. This may have an adverse effect on our business operations and financial condition.

14. If we cannot secure the additional capital we need to fund our operations on acceptable terms or

at all, our business will suffer.

Our business requires significant capital. We have historically relied on significant equity issuances,

Credit facilities from the various Banks as well as cash flow from operations to fund our operations,

capital expenditures and expansion.

Expanding our geographic footprint and extending new proprietary and distributed product and service

offerings to our members will have an impact on our long-term capital requirements, which are expected

to increase significantly.

Our ability to obtain additional capital is subject to a variety of uncertainties, including our future

financial position, the continued success of our core loan products, our results of operations and cash

flows, any necessary government regulatory approvals, contractual consents, general market conditions

for capital-raising activities, and economic, political and other conditions in India and elsewhere. In

addition, adverse developments in the Indian and world credit markets may significantly increase our

debt service costs and the overall costs of our borrowings. We may not be able to secure timely

additional financing on favorable terms, or at all. The terms of any additional financing may place limits on our financial and operating flexibility. Any new securities we issue could have additional rights,

preferences and privileges than those available to our shareholders. Any such issuances of equity and

securities convertible into equity would dilute the holding of Equity Shareholders. If we are unable to

obtain adequate financing or financing on terms satisfactory to us, if and when we require it, our ability

to grow or support our business and to respond to business challenges could be limited and our business

prospects, financial condition and results of operations would be materially and adversely affected.

15. Loans due within one year account for all of our interest income, and a significant reduction in

short term loans may result in a corresponding decrease in our interest income.

All of the loans we issue are due within one year of disbursement. The relatively short-term nature of our

loans means that our long-term interest income stream is less certain than if a portion of our loans were

for a longer term. In addition, our members may not obtain new loans from us upon maturity of their

existing loans, particularly if competition increases. The potential instability of our interest income could

materially and adversely affect our results of operations and financial position.

16. Contingent liabilities could adversely affect our financial condition.

As of 31st

March, 2010 we had contingent liabilities in the following amounts, as disclosed in our

financial statements:

• Disputed Demand of Income Tax Rs. 58.70 Lacs (Previous year Rs.58.70 Lacs) (Against which

the Company has paid Rs. 11.00 Lacs [Previous year Rs.11.00 Lacs] under protest which are

shown as advances)

If any time we must recognize a material portion of these contingent liabilities, it would have a material

adverse effect on our business, financial condition and results of operations.

17. Our Branch Managers and other employees may be the target of violent crimes which may be

adversely affect our business, operations, and ability to recruit and retain employees.

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We believe that the potential for crimes like theft & robberies is highest in the more remote villages we

serve, where our Branch Managers may be forced to transport cash further due to the lack of local

banking facilities. To the extent that our employees are subject to violent attacks, theft or robbery in the

course of their duties, our ability to service such areas will be adversely affected and our employee

recruiting and retention efforts may be curtailed which would negatively impact our expansion and growth.

18. A failure of our operational systems or infrastructure, or those of third parties, could impair our

liquidity, disrupt our businesses, cause damage to our reputation and result in losses.

Our business is highly dependent on our ability to process a large number of transactions. Our financial,

accounting, data processing or other operating systems and facilities may fail to operate properly or

become disabled as a result of events that are wholly or partially beyond our control, adversely affecting

our ability to process these transactions. Additionally, shortcomings or failures in our internal processes

or systems could lead to an impairment of our financial condition, financial loss, disruption of our

business and reputational damage.

Our ability to operate and remain competitive will depend in part on our ability to maintain and upgrade

our information technology systems on a timely and cost-effective basis. Our failure to maintain or

improve or upgrade our management information systems in a timely manner could materially and

adversely affect our competitiveness, financial position and results of operations.

We may also be subject to disruptions of our operating systems, arising from events that are wholly or

partially beyond our control including, for example, computer viruses or electrical or telecommunication

service disruptions, which may result in a loss or liability to us.

19. If we fail to maintain effective internal control over financial reporting in the future, the accuracy

and timing of our financial reporting may be adversely affected.

We have taken steps intended to enhance our internal controls commensurate to the size of our business,

primarily through the formation of a designated internal audit team with additional technical accounting

and financial reporting experience. However certain matters such as fraud and embezzlement cannot be eliminated entirely given the cash nature of our business. If we fail to enhance our internal controls to

meet the demands that will be placed upon us as a listed company, we may be unable to report our

financial results accurately and prevent fraud. While we expect to remediate any such issues, we cannot

assure you that we will be able to do so in a timely manner, which could impair our ability to accurately

and timely report our financial position, results of operations or cash flows.

20. Microcredit lending poses unique risks not generally associated with other forms of lending in

India, and, as a result, we may experience increased levels of Non-performing loans and related

provisions and write-offs that negatively impact our results of operations.

Our core mission of Micro Lending Operations is to provide loans to fund the small businesses and other

income generating activities of our members. Our members are typically poor and illiterate women living

in rural India, who have limited sources of income, savings and credit histories and who cannot provide

us with any collateral or security for their borrowings. As a result, our members pose a higher risk of

default than borrowers with greater financial resources and more established credit histories and

borrowers living in urban areas with better access to education, employment opportunities, and social

services. In addition, we rely on non-traditional guarantee mechanisms in connection with our loan

products, which are generally secured by informal individual and group guarantees, rather than tangible

assets. As a result, our loan products pose a higher degree of risk than loans secured with physical

collateral. Due to the precarious circumstances of our members and our non-traditional lending practices we may, in the future, experience increased levels of non-performing loans and related provisions and

write-offs that negatively impact our business and results of operations.

14

21. We require certain statutory and regulatory approvals for conducting our business and our failure

to obtain or retain them in a timely manner, or at all, may adversely affect our operations.

As a Category “A” NBFC, we are subject to regulation by Indian governmental authorities, including

the Reserve Bank of India, or RBI. Regulations stipulated by RBI require us to maintain a minimum capital adequacy of 12% and make provisions in respect of NPAs. The laws and regulations governing

us could change in the future and any such changes could adversely affect our business, our future

financial performance and in turn the price at which our Equity Shares are traded at BSE, by requiring a

restructuring of our activities, increasing costs or otherwise.

We require certain approvals, licenses, registrations and permissions for operating our business,

including registration with the RBI as a NBFC. For Approvals to carry on our Business refer to section

“Government and other Approvals” beginning on page no. 172 of this Draft Letter of Offer. Further,

such approvals, licenses, registrations and permissions must be maintained/renewed over time,

applicable requirements may change and we may not be aware of or comply with all requirements all of

the time. Additionally, we may need additional approvals from regulators to introduce new insurance and

other fee based products to our members. In particular, we are required to obtain a certificate of

registration for carrying on business as a NBFC that is subject to numerous conditions.

Additionally, we are required to make various filings with the RBI, the Stock Exchanges, the RoC and

other relevant authorities pursuant to the provisions of RBI regulations, Companies Act and other

regulations. If we fail to comply with these requirements, or a regulator claims we have not complied,

in meeting these requirements, we may be subject to penalties and compounding proceedings.

22. If we are unable to protect our trade names, others may be able to use our trade names to compete

more effectively.

We have not yet obtained trademark registrations for our corporate name Arman Financial Services

Limited and our logo. As a result, we may not be able to prevent the use of our name or variations

thereof by any other party, nor ensure that we will continue to have a right to use it. We further cannot

assure you that our goodwill in such brand name or logo will not be diluted by third parties due to our

failure to obtain the trademarks, which in turn would have a material adverse effect on our reputation, goodwill, business, financial condition and results of operations.

23. Delisting of Securities listed on Jaipur Stock Exchange may impact on financial position of the

Company.

The equity shares of the company are listed on BSE and JSE. There has not been any trading in the

Equity shares since long on JSE. We have already made application for delisting of our securities listed

on JSE vide Special resolution passed in the AGM held for the financial year 2004. But said Stock

Exchange has not delisted our securities yet and company has not paid any listing fees from date of

application of the same and said matter is pending since last 6 years. In future, we may be required to

pay listing fees as demanded by JSE if and when they delist our securities as per norms of the Listing

Agreement entered by us which could impact on financial position of our company.

24. The proposed objects of the issue for which funds are being raised have not been appraised by

any bank or financial institution. Any inability on our part to effectively utilize the Issue proceeds

could adversely affect our financials.

The objects of the issue for which part of the fund are being raised have not been appraised by any bank

or financial institution. In the absence of such independent appraisal, the requirement of funds raised

through this issue, as specified in the section titled “objects of the issue” are based on the company’s estimates and deployment of these funds is at the discretion of the management and the Board of

Directors of the company and will not be subject to monitoring by any independent agency. Any

inability on our part to effectively utilize the Issue proceeds could adversely affect our financials.

15

25. Our insurance coverage may not adequately protect it against certain operating hazards and

this may have a material adverse effect on the company’s business.

We have taken insurance policiy to cover fire, earthquake for its registered office as we believes that the insurance cover all those risks , there can be no assurance that any claim under

the insurance policies maintained by the company will be honored fully, in part or on time. To the

extent that the company suffers loss or damage that is not covered by insurance or which exceeds the

insurance coverage, the results of operations or cash flows may be affected.

26. Seasonality of the business may have an adverse impact on our business.

Our business operations and the banking industry may be affected by seasonal trends in the Indian

economy. Generally, the period from October to March is the peak period in India for retail economic

activity. This increased, or seasonal, activity is the result of several holiday periods, improved weather

conditions and crop harvests. We generally experience higher volumes of business during this period.

Any significant event such as unforeseen floods, earthquakes, political instabilities, epidemics or

economic slowdowns during this peak season would materially and adversely affect our results of

operations and growth. During these periods, we may continue to incur operating expenses, but our

income from operations may be delayed or reduced.

27. The trading price of our Equity Shares may be subject to volatility and you may not be able to sell

your Equity Shares at or above the Issue Price.

The trading prices of publicly traded securities may be highly volatile. Factors affecting the trading price of our Equity Shares will include:

• variations in our operating results;

• announcements of new products, strategic alliances or agreements by us or by our competitors;

• increases and decreases in our member base;

• recruitment or departure of key personnel;

• changes in the estimates of our operating results or changes in recommendations by any securities

analysts that elect to research and report on our Equity Shares ;

• market conditions affecting the financial and microfinance sector, our members income generating

activities and the economy as a whole; and

• Adoption or modification of regulations, policies, procedures or programs applicable to our business.

In addition, if the stock markets experience a loss of investor confidence, the trading price of our Equity

Shares could decline for reasons unrelated to our business, financial condition or operating results. The

trading price of our Equity Shares might also decline in reaction to events that affect other companies in

our industry even if these events do not directly affect us.

Each of these factors, among others, could materially affect the price of our Equity Shares.

28. Future issuances of Equity Shares or future sales of Equity Shares by our Promoters and certain

shareholders, or the perception that such sales may occur, may result in a decrease of the market price

of our Equity Shares.

In the future, we may issue additional equity securities for financing and other general corporate

purposes. In addition, our Promoters and certain shareholders may dispose of their interests in our Equity

Shares directly, indirectly or may pledge or encumber their Equity Shares. Any such issuances or sales or

the prospect of any such issuances or sales could result in a dilution of shareholders’ holding or a

negative market perception and potentially in a lower market price of our Equity Shares.

16

29. A failure of our operational systems or infrastructure, or those of third parties, could impair our

liquidity, disrupt our businesses, cause damage to our reputation and result in losses.

Our business is highly dependent on our ability to process a large number of transactions. Our financial,

accounting, data processing or other operating systems and facilities may fail to operate properly or become disabled as a result of events that are wholly or partially beyond our control, adversely affecting

our ability to process these transactions. Additionally, shortcomings or failures in our internal processes

or systems could lead to an impairment of our financial condition, financial loss, disruption of our

business and reputational damage.

Our ability to operate and remain competitive will depend in part on our ability to maintain and upgrade

our information technology systems on a timely and cost-effective basis. Our failure to maintain or

improve or upgrade our management information systems in a timely manner could materially and

adversely affect our competitiveness, financial position and results of operations.

We may also be subject to disruptions of our operating systems, arising from events that are wholly or

partially beyond our control including, for example, computer viruses or electrical or telecommunication

service disruptions, which may result in a loss or liability to us.

30. The imposition of an interest-rate ceiling, may adversely affect our operating results and

financial position.

As a Category ‘A’ NBFC, we are subject to regulation by Indian governmental authorities, including

the Reserve Bank of India, or RBI. A number of states in India have enacted laws to regulate money

lending transactions. These state laws establish maximum rates of interest that can be charged by a person lending money. For unsecured loans, these maximum rates typically range from 12.0% to 15.0%

per annum.

The RBI, however, has not established a ceiling on the rate of interest that can be charged by a NBFC in

the microfinance sector. Currently, the RBI requires that the board of all NBFCs adopt an interest rate

model taking into account relevant factors such as the cost of funds, margin and risk premium. It is

unclear whether NBFCs are required to comply with the provisions of state money lending laws that

establish ceilings on interest rates. In the event that the government of any state in India requires us to comply with the provisions of their respective state money lending laws, or imposes any penalty against

us, our Directors or our officers, including for prior non-compliance, our business, results of operations

and financial condition may be adversely affected.

31. Future issuances or sales of the Equity Shares could significantly affect the trading price of

the Equity Shares.

Any future issuance of Equity Shares by our Company or the disposal of Equity Shares by any of the

Company’s major shareholders or the perception that such issuance or sale if occur may significantly

affect the trading price of the Equity Shares.

32. In absence of lock in requirements for Promoter in the rights issue, Promoter or Promoter

Group may offload part of their holding/ shareholding allotted in Rights Issue in the market.

Since the promoter’s shares are not under lock-in, the Promoter or Promoter Group are free and may

offload part of their shareholding in the secondary market, which may cause the price to be very volatile

or may cause the price to decline.

33. Company has not appointed Company Secretary as Compliance Officer in compliance with

Clause 47 of Listing Agreement entered with the BSE.

Clause 47 of the Listing Agreement requires Company Secretary should be a Compliance Officer of the

Company. Pursuant to Section 383A of the Companies Act, 1956, every Company having paid up share

17

capital of Rs. 5 crores require to appoint Whole Time Company Secretary. Presently paid up capital of

the company is below of Rs. 5 crores, therefore company is not in default under Companies Act.

Company has appointed Mr. Aalok J Patel, the director of the Company as the Compliance Officer for

the proposed Rights Issue. However company has not received any notice from BSE for this. On

completion of this rights issue its paid up capital will exceed Rs. 5 crores and Company will have to appoint Whole time Company Secretary as the Compliance Officer of the Company.

34. Promoters and Promoter Group of the Company pledged 12,39,212 shares with IDBI Bank.

Promoters and Promoter Group of the issuer Company have pledged 12,39,212 equity shares (30.41%

of total paid up capital of the company) with IDBI Bank Ltd, C G Road Branch, Ahmedabad (Lender)

in respect of credit facilites availed by the Company. If there is any defult in repayment of said Loan or

payment of interest, Pledged Equity Shares upto value of outstanding amount, will be transfer in favour

of the said Lender, which may cause adverse effect on the present Shareholding of Promoter &

Promoter Group.

EXTERNAL RISKS

35. We are subject to fluctuations in interest rates and other market risks, which may materially and

adversely affect our financial condition and results of operations. Our business substantially depends on interest income from operations. Market risk refers to the

probability of variations in our interest income or in the market value of our assets and liabilities due to

interest rate volatility. Changes in interest rates affect our interest income and the volume of loans we

issue. Increases in short-term interest rates could increase our cost of borrowing and adversely affect our

profitability. When interest rates rise, we must pay higher interest on our borrowings while interest

earned on our assets does not rise as quickly because our loans are issued at fixed interest rates. Interest rate increases could result in adverse changes in our interest income, reducing our growth rate and the

value of our financial assets.

The market value of a security with a fixed interest rate generally decreases when the prevailing interest

rates rise, which may have an adverse effect on our earnings and financial condition. In addition, we may

incur costs (which, in turn, will impact our results) as we implement strategies to reduce future interest

rate exposure. The market value of an obligation with a floating interest rate can be adversely affected

when interest rates increase. Increases in interest rates may reduce gains or require us to record losses on

sales of our loans and, as a result, adversely affect our financial condition.

36. Tax rates applicable to Our Company may increase and may have an adverse impact on our

business.

The tax rates including surcharge and education cess applicable to us for fiscal 2011 are 33.99%. Any

increase in the tax rates may have an adverse impact on our business and results of operations and we

can provide no assurance as to the extent of the impact of such changes.

37. The repeal of or changes in the regulatory policies that currently encourage financial institutions

to provide capital to the microfinance sector could adversely impact the cost and availability of capital.

The RBI requires domestic commercial banks operating in India to maintain 40.0% of their loan advances, or a credit equivalent amount of off-balance sheet exposure, whichever is higher, as priority

sector advances. These include advances to agriculture, including self help groups, or SHGs, and joint

liability groups, or JLGs, of individual farmers, small enterprises, retail trade, microcredit, education

loans and housing loans. In addition, the RBI also requires 18.0% of the loan advances to be applied

towards the agriculture sector and 10.0% towards the weaker sections, which are defined to include small

farmers owning less than five acres and artisans whose individual credit limit does not exceed Rs.

50,000.00. When banks are unable to meet these requirements, they often rely on specialized institutions, including Micro Finance Institutions, or MFIs, to provide them with access to qualifying advances

18

through lending programs and loan assignments. These bank requirements result in significant funding

for the microfinance sector. To the extent that changes in bank regulations eliminate or reduce banks

requirements for priority sector advances, less capital would be available to MFIs. In such event, our

access to funds and the cost of our capital would be negatively impacted, and our results of operations

and financial condition would be adversely affected.

38. Natural disasters, terrorist attacks, pandemic diseases or other catastrophic events could adversely

impact our business and results of operations and financial condition.

Our registered office, branch offices and the majority of our infrastructure, including administrative,

sales, and other personnel are located in India. A substantial portion of our operations and most of our

members are located in the areas of rural India that are particularly vulnerable to the effects of natural

calamities such as floods or drought. In the event that an earthquake, terrorist attack or other catastrophe

were to destroy any part of our facilities, destroy or disrupt vital infrastructure systems or interrupt

operations for any extended period of time, our business, financial condition and operating results would

be adversely affected. In addition, to the extent that such occurrences and the adverse economic

conditions caused by them reduced our members’ income levels and their ability to repay loans made by

us, our loan repayments would decline and our results o f operations, ability to raise new capital at

acceptable rates and overall financial condition would be adversely affected. Pandemic disease, caused

by a virus such as H5N1, or the avian flu virus, or H1N1, the swine flu virus, could have an adverse

effect on our business. The potential impact of such a pandemic on our results of operations and financial

position is highly speculative, and would depend on numerous factors, including: the regions of the

world most affected; the effectiveness of treatment of the infected population; our insurance coverage

and related exclusions; the possible macroeconomic effects of a pandemic on our asset portfolio; the

effect on lapses and surrenders of existing policies, as well as sales of new policies; and many other variables.

39. All of our revenue is derived from business in India and a decrease in economic growth in India

could cause our business to suffer.

We derive all of our revenue from our operations in India and, consequently, our performance and the

quality and growth of our business are dependent on the health of the economy of India. This economy has sustained growth over the five years ended fiscal 2010 with an average real gross domestic product

growth rate of approximately 8.5%. However, the Indian economy may be adversely affected by factors

such as adverse changes in liberalization policies, social disturbances, terrorist attacks and other acts of

violence or war, natural calamities or interest rates changes, which may also affect the microfinance

industry. Any such factor may contribute to a decrease in economic growth in India which could

adversely impact our business and financial performance.

40. Political instability or changes in the Government in India or in the Government of the states

where we operate could cause us significant adverse effects.

We are incorporated in India and all of our operations, assets and personnel are located in India.

Consequently, our performance and the market price and liquidity of the Equity Shares may be affected

by changes in exchange rates and controls, interest rates, government policies, taxation, social and ethnic

instability and other political and economic developments affecting India. The central government has

traditionally exercised, and continues to exercise, a significant influence over many aspects of the

economy. Our business, and the market price and liquidity of the Equity Shares may be affected by

interest rates, changes in central government policy, taxation, social and civil unrest and other political,

economic or other developments in or affecting India. Since 1991, successive central governments have

pursued policies of economic liberalization and financial sector reforms. However, there can be no

assurance that such policies will be continued. A significant change in the central government‘s policies, in particular, those relating to the microfinance industry in India, could adversely affect our business,

financial condition and results of operations and could cause the price of our Equity Shares to decline.

19

41. Lack of sufficient power, information technology infrastructure, or physical infrastructure could

limit or disrupt our operations and cause substantial adverse effects.

Any disruption in basic infrastructure, or the failure of the central, state, or local governments of India to

improve the existing infrastructure could negatively impact our ability to continue developing our products and delivering them to our members. This may result in additional costs for us and have an

adverse effect on our business, financial condition and results of operations.

PROMINENT NOTES:

1. The issue of 48, 91,920 Equity Shares of Rs.10/- each for cash at premium of Rs. 5/- (Issue

Price Rs.15/-) on rights basis to existing Equity Shareholders of the Company in the ratio of

6(Six) Equity Shares for every 5(Five) Equity Shares held on [●] (Record Date)

2. Investors are free to contact the Lead Manager to the Issue for any clarification, complaint or

information pertaining to the Issue. The Lead Manager to the Issue and the Company shall

make all information available to the public and investors at large and no selective or

additional information would be made available for a section of the investors in any manner

whatsoever.

3. The net worth of the company was Rs.783.29 Lacs as of March 31, 2010 as per the audited

financial statements. The book value per equity share was Rs.19.21 as at March 31, 2010. For

Further information, see the beginning, section “Financial Information – Auditors Report” on

page no.90.

4. The Company its Promoters / Directors, Company’s Associates or Group companies have not

been prohibited from accessing the Capital Market under any order or direction passed by

SEBI. The Promoters, their relatives, Issuer, group companies, associate companies are not

declared as willful defaulters by RBI / Government authorities and there are no violations of

securities laws committed in the past or pending against them.

5. The Lead Manager to the Offer and the Company shall update this Draft Letter of Offer and keep the investors / public informed of any material changes till listing of the Equity Shares

offered in terms of this Draft Letter of Offer and commencement of trading.

6. In the event of over-subscription, allotment shall be made as set out in para titled “Basis of

Allotment” on page no. 205 and shall be made in consultation with the Designated Stock

Exchange i.e. BSE. The Registrar to the Issue shall be responsible to ensure that the basis of

allotment is finalized in a fair and proper manner as set out therein.

7. No loans and advances have been granted to our Directors.

8. There were no transactions in the securities of Company during preceeding 6 months which

were financed directly or indirectly by the Promoters, their relatives, their group companies or

associates or by the entities directly or indirectly through other persons.

9. No loans and advances have been made to any person(s) / companies in which Directors are

interested except as stated in the Auditors Report’s – Notes to accounts. For details please refer

“Financial Information - Auditors Report” starting from Page no.90 of this Draft Letter of

Offer.

10. The details of transaction by the issuer with other group companies during the last year are disclosed in the section “Financial Information-Auditors Report” starting on page no. 90 of this

Draft Letter of Offer.

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11. The Company has changed its name from Arman Lease & Fianance Limited to Arman

Financial Services Limited and received fresh certificate of incorporation from the Registrar of

Companies, Gujarat, Dadra & Nagar Haveli dated on November 27, 2008. The main objects of

the Issuer Company remain same and have not changed.

12. There are no relationships with statutory auditors to the Company other than auditing and

certification of financial statements.

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SECTION III – INTRODUCTION

SUMMARY

SUMMARY OF INDUSTRY

Economic Conditions

Recovery in the global economy picked up momentum in the fourth quarter of 2009. The speed of

recovery, however, remains significantly divergent. The projections for global output for 2010

generally point to consolidating recovery, led by the Emerging Market Economies (EMEs). The WTO

projects world trade to stage a strong recovery in 2010.

Concerns about domestic output growth are now subdued as the recovery is getting more broad-based.

This is the result of a rebound in industrial output, better prospects for the Rabi crop and continuing

resilience of the services sector. Current data suggest increasing levels of capacity utilization in recent

months. Subject to normal monsoons, output growth during 2010-11 is expected to gain further

momentum.

The risks to the overall global macroeconomic environment have, however, increased because of large

public debt in advanced economies, on the back of concerns relating to reduction in potential output,

high unemployment rates, impaired financial systems and premature exit from the policy stimulus.

Closer home, the improvement in global macroeconomic conditions is reflected in the turnaround in

India’s exports and the return of capital flows. With stronger recovery in EMEs driven largely by

domestic demand, improving exports and return of capital flows, EMEs face the risks of inflation and

asset price build up.

Growth Outlook

Support for sustained momentum in growth can be expected from all three major components, viz.,

agriculture, industry and services. Nevertheless, apart from monsoon related uncertainty, other

downside risks to growth need to be recognized. 1. Private consumption demand needs to improve significantly to support the growth momentum. 2. Global recovery, despite gaining strength, is expected

to remain fragile, which has implications for exports. 3. The exit from fiscal stimulus and the growth-

supportive monetary policy, unless calibrated carefully, could impact the growth process. Finally, the

domestic saving rate has exhibited some decline, led by significant decline in public sector savings.

This has adverse implications for the potential growth of the economy.(Source-Reserve Bank of India)

Non-Banking Financial Company

The global economy was hit by a severe credit crisis beginning in 2008 which converted into a

recession for many countries across the world. Indian economy was also affected by the same due to its

global linkages. However it recovered much faster than the global economy and the impact was also not

as severe as that of developed countries. During September 2008 the crisis led to a liquidity crunch in

financial markets and impacted the financial institutions in India. This review considers the impact on

NBFC sector, its current position and presents an outlook on the same. The data is for 19 CARE rated

NBFCs which cover more than 40% of the entire NBFC sector (excluding development financial

institutions, brokers and microfinance institutions) (Source –Reserve Bank of India)

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Microfinance in India

By definition in India Micro-finance refers to small savings, credit and insurance services extended to

socially and economically disadvantaged segments of society. In the Indian context terms like "small

and marginal farmers", " rural artisans" and "economically weaker sections" have been used to broadly define micro-finance customers. (Source-Lok Capital Report)

Demand for Microfinance

Our country has a population of 116.60 Crores and a population growth rate of 1.548%.About 71% live

in rural areas, while 29% live in urban areas. India’s diverse economy encompasses traditional village

farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of

services. Services are a major source of economic growth, accounting for more than half of India’s

output with less than one third being the labor force. Slightly more than half of the work force is in

agriculture, leading the government to articulate a rural economic development programmer that

includes creating basic infrastructure to improve the lives of the rural poor and boost economic

performance.

The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing

poverty by about 10 percentage points. India achieved 8.5% GDP growth in 2006, 9.0% in 2007 and

7.3% in 2008, 6.5% in 2009. Decreases because of Global finance crisis are to be expected. The 2010

GDP is expected to be 7.2% thereby significantly expanding the manufacturing processes. Microfinance

is not a charity.

Around 300 million people or about 60 million households are living below the poverty line. It is further estimated that of these households, only about 20 percent have access to credit from the formal

sector and other percentage of people do not access credit the from the formal sector, they access

finance from the unorganized sector .The segment of the rural population above the poverty line but not

rich enough to be of interest to the formal financial institutions also does not have good access to the

formal financial intermediary services, including savings services.(Source –Bharat Microfinance

Report)

Trends in the Microfinance Industry

Microfinance in India is playing an important role in poverty alleviation and is widely credited for its

success both nationally and internationally. India’s labor force-Agriculture (60%), Industry (12%) and

services (28%) clearly indicate that even today agriculture is a major employment generator. However,

in terms of contribution to GDP, agriculture contributes only 17.2%, whereas industry (29.1%) and

services (53.7%) contribute much more.

From the above, it is evident that though there is scope for employment generation in agriculture, there

is a significant shift to services and industries, suggesting that there has been a migration of population

towards urban locations. With 25% of the population still living below the poverty line and an

unemployment rate of 6.8%, life in urban locations throughout the country is going to be more difficult.

Hence to meet this challenge, the Microfinance sector is reaching out to more of the urban poor. Thus there is a significant shift towards urban microfinance. (Source- www.sa-dhan.net)

Current Challenge in the Microfinance Industry

Microfinance is effectively moving towards a banking type of sector through gradual evolution. Clients

are aspiring for large credits for doing scaled up economic activity. Since RBI is stipulating higher

CAR norms, MFIs need to bring in capital to meet this growing demand of the clients. We need to link the clients with market and technologies. The need for this group is indeed costly as they are scattered

23

and tend to use only tiny loans. Designing of the right products for clients is still a great challenge. To

cope with the growing needs the industry is expanding fast and as a result competent human resources

is increasingly becoming an issue.

Demand for Credit

In terms of demand for micro-credit, there are three segments:

1. Market segment, those who are landless and are engaged in agricultural work on a seasonal

basis, and manual laborers in forestry, mining, household industries, construction and transport.

2. Market segment is small and marginal farmers and rural artisans, weavers and those self-

employed in the urban informal sector as hawkers, vendors, and workers in household

microenterprises.

3. Market segment is of small and medium farmers who have gone in for commercial crops such

as surplus paddy and wheat, cotton and others engaged in dairying, poultry, fishery, etc. Among

non-farm activities, this segment includes those in villages and slums, engaged in processing or

manufacturing activity, running provision stores, repair workshops, tea shops, and various

service enterprises. (Source-www.basixindia.com)

Further, many more women were willing to work. This has been corroborated by the results of a survey

done by the National Sample Survey Organization (NSSO), 43rd round, which has revealed that there is

a vide variety of work which rural women combine with household work. In the NSSO survey it has

also been estimated that a large percentage of rural women in the age group of 15 years and above, who

are usually engaged in household work, are willing to accept work at household premises (29.3

percent), in activities such as dairy (9.5 percent), poultry (3 percent), cattle rearing, spinning and

weaving (3.4 percent), tailoring (6.1 percent) and manufacturing of wood and cane products etc. Amongst the women surveyed, 27.5 percent rural women were seeking regular full-time work, and 65.3

percent were seeking part-time work. To start or to carry on such work, 53.6 percent women wanted

initial finance on easy terms, and 22.2 percent wanted working capital facilities.

SUMMARY OF BUSINESS

ARMAN FINANCIAL SERVICES LIMITED (Erstwhile Arman Lease & Finance Limited) was

originally incorporated on 26th November, 1992 as Private Limited Company under the name and style

of Arman Lease & Finance Private Limited and was converted into Public Limited Company vide fresh

Certificate of incorporation dated December 22, 1993. Later on, changed its name to Arman Financial

Services Limited and received fresh Certificate of incorporation on November 27, 2008 from the

Registrar of Companies.

Arman is one of the few Category ’A’ Non Banking Finance Company (NBFC) in the state of Gujarat

which is registered with Reserve Bank of India. Arman finance services Ltd is a listed non banking

financing company that had recently ventured into the microfinance field.

The main objects of the company consist of providing a wide spectrum of financial services both Fund

based and Non Fund Based activities such as Lease / Hire Purchase Finance, Micro Finance, Bill

Discounting, Investment in Primary and Secondary market, Merchant Banking, Portfolio Management,

Loan Syndication etc. The Company undertakes the financial service activities like two wheeler, three

wheeler financing, micro financing and personal financing. Arman also plans to render financial

services to people by acting as intermediary for banks and financial institutions in the cities, towns,

villages of India.

24

Arman has operated in three major segments, Micro Finance, Vehicle loans like Two Wheeler/

Commercial Vehicle / Four Wheeler financing with the hypothecation of new and used vehicles,

Personal Loans and Business loans to various corporate for short term working capital requirement.

However the company has moved away from business segment because of the inherent risk involved

and has continued to operate in a safer more obedient and more profitable two wheeler / commercial

vehicle segment and in personal loan, micro finance segment.

Credit Rating

The Company was originally rated by ICRA, the noted rating agency and it was assigned credit rating

of `7’ which was indicative of safe borrowing from the Bank.

The Company has been rated Four times over the last 5 years by a noted rating agency called M-Cril

from Gurgaon and it has come out with flying colours every time. The last rating received by the

company in March, 2010 is Alfa Minus, which is an investment grade and indicates a positive view

point of the future prospect of the Company.

The Company has also been rated by Crisil in the year 2009-10 and it has received ‘BB’ stable rating.

25

SUMMARY OF FINANCIAL INFORMATION

The summary financial information presented below should be read in conjunction with the section

titled “Auditor’s Report for year ended March 31, 2010” on 115.

For J. T. SHAH & COMPANY

CHARTERED ACCOUNTANTS

(J. J. SHAH) For & On behalf of Board Of Directors

PARTNER

Place: Ahmedabad Jayendra Patel Amit Manakiwala

Date: 12/07/2010 Vice Chairman & Director

Managing Director

ARMAN FINANCIAL SERVICES LIMITED

AUDITED BALANCE SHEET AS AT 31ST MARCH, 2010

P A R T I C U L A R S Schedule 31/03/2010 31/03/2009

No. Rs. Rs.

SOURCES OF FUNDS

1. Shareholders' Funds :

(a) Share Capital 1 40,766,000 40,766,000

(b) Reserves and Surplus 2 37,562,587 32,543,090

78,328,587 73,309,090

2. Loan Funds :

(a) Secured Loans 3 183,581,457 93,857,179

(b) Unsecured Loans 4 9,907,999 4,035,000

193,489,456 97,892,179

3. Deferred Tax Liability (Net) 1,318,282 937,076

Total….. 273,136,325 172,138,345

APPLICATION OF FUNDS

1. Fixed Assets

Gross Block 5 13,578,115 11,656,611

Less : Depreciation 3,565,398 3,509,962

10,012,717 8,146,649

2. Investments 6 200,000 Nil

3. Current Assets, Loans & Advances

(a) Current Assets 7 43,531,118 26,559,245

(b) Loans & Advances 8 226,675,576 140,417,700

270,206,694 166,976,945

4. Less : Current Liabilities & Provisions

(a) Current Liabilities 9 3,935,457 2,502,285

(b) Provisions 10 3,347,629 482,965

7,283,086 2,985,250

Net Current Assets 262,923,608 163,991,695

273,136,325 172,138,345

Notes to Accounts 15

As per our report of even date attached

26


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

P A R T I C U L A R S Schedule Rupees 31/03/2010 31/03/2009

No. Rs. Rs.

INCOME

1. Income from Operations 11 56,078,652 43,889,203

2. Other Income 12 25,950 108,831

56,104,602 43,998,034

EXPENDITURE

1. Administrative & Other Expenses 13

24,037,508 17,354,576

2. Interest 14 19,380,803 15,530,185

3. Depreciation 5 723,938 615,018

44,142,248 33,499,779

PROFIT BEFORE TAXATION 11,962,353 10,498,255

Less : Provision for Taxation

-- Current Tax (3,700,000) (3,500,000)

-- Fringe Benefit Tax Nil (83,000)

-- Deferred Tax Assets/ (Liability) (381,206) (16,102)

PROFIT AFTER TAXATION 7,881,148 6,899,153

Excess / (Short) Provision of Earlier Years Nil Nil

7,881,148 6,899,153

Add : Balance B/F from last year 24,782,534 19,383,381

PROFIT AVAILABLE FOR APPROPRIATION 32,663,682 26,282,534

Proposed Dividend 2,445,960 Nil

Corporate Dividend Tax thereon 415,691 Nil

Tranfer to Special Reserve as per Sec

45(IC) of RBI Act

1,700,000 1,500,000

BALANCE CARRIED TO BALANCE SHEET 28,101,031 24,782,534

Basic and Diluted Earning Per Shares 1.93 1.69


As per our report of even date attached.



For & On behalf of Board of Directors

(J. J. SHAH)

PARTNER


Date: 12/07/2010 Vice Chairman & Director

Managing Director

27

THE ISSUE

The Board of Directors of the Company had pursuant to a resolution passed under Section 81(1) of the

Companies Act at its meeting held on June 17, 2010. Further, the Shareholders of the Company have at

the AGM held on September 06, 2010 authorized this Issue.

The following is a summary of the Issue. This summary should be read in conjunction with, and is

qualified in it’s entirely by, more detailed information in the chapter titled “Terms of the Issue”

beginning on page no. 183 of this Draft Letter of Offer.

For further details regarding the terms of this issue see “Terms of the Issue” on page no. 183 of this


Issue Opens on Last date for request for split

application forms

Issue closes on

[●] , 2010 [●] , 2010 [●] , 2010

Equity Shares Offered this Issue 48,91,920

Rights Entitlement for the Issue 6:5 i.e. Six Equity Shares are offered for every

Five Equity Share held by the Shareholders of the

Company as on the Record Date

Record Date [●]

Issue Price per share Rs. 15/- per share

Premium per share Rs. 5/- per share

Face Value per share Rs. 10/- per share

Equity Shares outstanding prior to the Issue 40,76,600

Equity Shares outstanding after the Issue 89,68,520

Use of the Issue Proceeds Please refer Chapter to the title “Objects of the

Issue” on Page no. 44 of this Draft Letter of Offer.

Payment Terms for the Issue The entire Issue Price of Rs. 15/- per share is

payable on application

Market Lot and Trading Lot The Market lot and Trading lot for the Equity

Share is 1 (One) and the multiple of 1(One).

Ranking of the Equity Shares The Equity Shares shall be subject to the

Memorandum and Articles of Association of the

Company and shall rank Pari-passu in all respects

including dividends with the existing Equity

Shares of the Company.

Security Codes : 531179

ISIN: INE109C01017

28

GENERAL INFORMATION

Dear Equity Shareholder(s),

The Board of Directors at their meeting held on June, 17, 2010 had decided to make the offer to the

existing shareholders of the Company on Rights basis with a right to renounce. Accordingly a

resolution in respect of this rights issue was passed by the shareholders of the Company at the Annual

General Meeting of the Company held on September, 06, 2010 and authorized the Board of Directors to

decide on terms of the issue and also to take steps to give effect to the said resolution. The Board of

Directors at their meeting held on June17, 2010 have decided to make the following offer to the existing

shareholders of the company:

ISSUE OF 48,91,920 EQUITY SHARES OF RS.10/- EACH AT PREMIUM OF RS. 5 PER

SHARE (ISSUE PRICE OF RS. 15) AGGREGATING TO AN AMOUNT RS. 733.79 LACS ON

RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF THE COMPANY IN

THE RATIO OF 6 (SIX) EQUITY SHARE FOR EVERY 5 (FIVE) EQUITY SHARE (I.E. 6:5)

HELD ON [●] (THE RECORD DATE). THE ISSUE PRICE IS 1.5 TIMES OF THE FACE

VALUE OF THE EQUITY SHARE.

IMPORTANT

• This Offer is applicable only to those Equity Shareholders whose names appear as beneficial owners

as per the list to be furnished by the Depositories in respect of the Equity Shares held in the electronic

form and in the Register of Members of our Company in respect of the Equity Shares held in physical

form as on [●], 2010, i.e. Record Date fixed in consultation with the Designated Stock Exchange i.e.

BSE.

• Your attention is drawn to the “Risk Factors” appearing on page no. 9 of this Draft Letter of Offer.

• Please ensure that you have received the Composite Application Form (“CAF”) with this Draft Letter

of Offer. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar

will issue a duplicate CAF on the request of the Shareholder who should furnish the registered folio

number/DP ID/client ID number and his/her full name and address to the Registrar. Please note that

those applicants who are making the application in the duplicate CAF should not utilize the original

CAF for any purpose including renunciation, even if it is received/ found subsequently. In case the

original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of the

duplicate CAF and the original CAF will be ignored.

• Please read this Draft Letter of Offer and the instructions contained herein and in the CAF carefully,

before filling in the CAF. The instructions contained in the CAF are an integral part of this Draft Letter

of Offer and must be carefully followed. Applications are liable to be rejected if they are not in conformity with the terms of the Draft Letter of Offer or the CAF.

• All enquiries in connection with this Draft Letter of Offer or CAF should be addressed to the

Registrars to the Issue, Sharepro Services (India) Private Limited quoting the Registered Folio

Number/Depository Participant (DP) Number, Client ID Number and the CAF Number as mentioned in

the CAF.

• The Issue will be kept open for a minimum period of 15 days. If extended, it will be kept open for a

maximum period of 30 days.

• The Issue proceeds will be kept in separate bank account(s) and our Company will not have any

access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary

evidence that the minimum subscription of 90% of the Issue has been received by our Company. If our

Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall

29

be refunded to the applicants within 15 days from the date of closure of the Issue. Promoters of the

company have given an undertaking vide letter dated September 30, 2010 to subscribe to the

unsubscribed portion of this Rights Issue.

DETAILS OF THE ISSUER COMPANY

Name of the Company Arman Financial Services Limited

Registered Office 502-503 Sakar III,

Opp. Old High Court,

Off. Ashram Road,

Ahmedabad; Gujarat – 380014

Tel: +91-79-30005000; 91-79-27541989, 91-79-

27543899

Fax: +91-79-27543666,91-79-27541738

Registration No. 018623

Corporate Identification No.(CIN): L55910GJ1992PLC018623

Contact Person & Compliance Officer Mr. Aalok J Patel

Arman is one of the few Category À’ Non Banking Finance Company (NBFC) in the state of Gujarat

which is registered with Reserve Bank of India vides Certificate of Registration No. 01.00066 under

section 45-IA of the Reserve Bank of India Act, 1934 issued on November 6,1998 to our company by

Reserve Bank of India, Department of Non-Banking Supervision, Ahmedabad Regional Office and last

renewed on December 17, 2008. As per this classification the Company is eligible to accept public

deposit and is regularly scrutinized by RBI.

In line of the expansion plans, the company decided to come out with public issue in the year 1995 and

was listed on the Bombay Stock Exchange Limited (BSE), Ahmedabad stock Exchange(ASE), Jaipur

Stock exchange(JSE).

The Company voluntarily applied & delisted from the Ahmedabad Stock Exchange (ASE) in the

March, 2005. Company has passed Special resolution in the AGM held on 27th September, 2004 for the

purpose of delisting of our securities from Jaipur Stock Exchange (JSE) and looking for the approval of

delisting application from JSE.

ADDRESS OF REGISTRAR OF COMPANIES

Our Company is registered with the ROC, Gujarat, situated at the following address:

Registrar of Companies, Gujarat, Dadra & Nagar Haveli,

“ROC Bhavan”, Opp Rupal Park Society, Behind Ankur Bus Stop,

Naranpura, Ahmedabad – 380 013.

BOARD OF DIRECTORS

NAME OF THE DIRECTOR CATEGORY-DESIGNATION

Mr. Chinubhai R Shah Chairman & Independent Director

Mr. Jayendra B Patel Vice Chairman & Managing Director

Mr. Amit R Manakiwala Non-Executive Director

Mr. Kaushik D Shah Independent Director & Non- Executive Director

Mr. Lokeshkumar Singh Independent Director & Non- Executive Director

Mrs. Rita J Patel Non- Executive Director

Mr. Aalok J Patel Executive Director

Mr. Aakash J Patel Non- Executive Director

30

Please refer the section “Our Management” for brief profile of other directors and section “Our

Promoters and Promoter Group” for brief profile of promoter directors on page no. 68 and 84

respectively of this Draft Letter of Offer.

CONTACT PERSON & COMPLIANCE OFFICER

Mr. Aalok J Patel

Contact Person & Compliance Officer

Arman Financial Services Ltd

502-503 Sakar III, Opp. Old High Court,

Off. Ashram Road, Ahmedabad, Gujarat – 380014

Tel: +91-79-30005000; 91-79-27541989, 91-79-27543899

Fax: +91-79-27543666, 91-79-27541738

Email: [email protected]

Website: www.armanindia.com

Note: Investors are advised to contact the Registrar to the Issue/Compliance Officer in case of any pre

issue/post issue related problems such as non-receipt of Draft Letter of Offer/Abridged letter of offer/composite application form/allotment advice/share certificate(s)/ refund orders.

BANKERS TO THE COMPANY

IDBI BANK LIMITED

IDBI Complex,

Nr. Lal bunglow, Off. C.G.Road,

Ahmedabad.

Tel.:+91-079-26563911

Fax: +91-079-26400814

Website: www.idbi.com

Contact Person: Mrs. Divya Shah

BANKER TO THE ISSUE

[●]

SELF CERTIFIED SYNDICATE BANKS

The lists of banks which have been notified by SEBI to act as SCSB for the ASBA Process are provided

on http://www.sebi.gov.in. For details on designated branches of SCSB collecting the CAF, please refer

the above mentioned SEBI link.

REFUND BANKERS TO THE ISSUE

[●]

ISSUE MANAGEMENT TEAM

LEAD MANAGER TO THE ISSUE

NIRBHAY CAPITAL SERVICES PRIVATE LIMITED

201, Maruti Crystal, Opp. Rajpath Club,

S.G.Highway, Bodakdev, Ahmedabad 380054 Tel.: +91-079-26870649

Fax: +91-079-26870228

Website: www.nirbhaycapital.com

Investor Grievance Email - [email protected]

31


Contact Person: Mr. Himanshu Nadiyana

REGISTRAR TO THE ISSUE

SHAREPRO SERVICES (INDIA) PRIVATE LIMITED

13 AB Samhita Warehousing Complex,

2nd

Floor, Sakinaka Telephone, Exchange Lane,

Off Andheri-Kurla Road, Sakinaka, Andheri (E), Mumbai – 400072

Tel.: +91-22-67720300, Fax: +91-22-28591568


Website: www.shareproservices.com

Contact Person: Mr. V.Kumaresan/Mr.Ganesh Rane

LEGAL ADVISOR TO THE COMPANY

AMIT R. GAJJAR

83/988 Panchvati Apartment,

Sola Road, Naranpura, Ahmedabad- 380063

Tel.: +91-079-27493829, +91- 98252 04994(M)

Fax: +91-079-27493829


Contact Person: Mr. Amit R. Gajjar

STATUTORY AUDITORS OF THE COMPANY

J.T. Shah & Co. Chartered Accountants 201-202,

Lalita Complex, 352/3 Rasala Marg, Navrangpura, Ahmedabad - 380009

Tel: +91-79-26444440,

Fax: +91-79-26444440


Contact Person: Mr. Jignesh J Shah

CREDIT RATING

As this is an Issue of Equity Shares on rights basis to the existing shareholders, there is no requirement

of credit rating for this Issue.

IPO GRADING

This is being a Rights Issue, no grading is required.

INTER SE ALLOCATION OF RESPONSIBILITIES

Since Nirbhay Capital Services Private Limited is the sole LM for this Issue, all the Issue related

activities are handled by Nirbhay Capital Services Private Limited.

32

THE PRINCIPAL TERMS OF THE LOANS AND ASSETS CHARGED AS SECURITY

DETAILS OF SECURED LOANS AS AT 30-06-2010

Name of

Lenders

Loan

Type

Sanction

Amt

(Rs. in

lacs)

Outstanding

Amt Repayment

Interest

Rate

Security

HDFC Bank

Ltd. (TL II)

Term Loan

From

Banks 250 29.17 36 Months 12.00%

Hypothecation Of

Book Debts With

Margin Of 10%

HDFC Bank

Ltd. (TL III )

Term Loan

From

Banks 50 12.50 36 Months 12.50%

Hypothecation Of

Book Debts With

Margin Of 10%

HDFC Bank

Ltd. (TL IV )

Term Loan

From

Banks 150 125.00 18 Months 12.50%

Cash Collateral

@10% On Amount

Finance &

Hypothecation Of

Book Debts With

Margin Of 10%

AXIS Bank

Ltd (iii)

Term Loan

From

Banks 300 272.73 36 Months 12.00%

Cash Collateral @5% On Amount Finance

& Hypothecation Of

Book Debts.

UNITED

BANK OF

INDIA

Term Loan

From

Banks 500 378.80 36 Months 12.00%

Cash Collateral

@15% On Amount

Finance &

Hypothecation Of

Book Debts With

Personal Guarantee

Of Directors

SIDBI (ii)

Term Loan

From

Financial

Institutions 200 72.60 36 Months 12.00%

Cash Collateral

@15% On Amount

Finance &

Hypothecation Of

Book Debts With

Personal Guarantee

Of Directors

SIDBI (iii)

Term Loan

From

Financial


Cash Collateral

@15% On Amount

Finance &

Hypothecation Of

Book Debts With

Personal Guarantee

Of Directors

SIDBI (iv)

Term Loan

From

Financial


Cash Collateral

@15% On Amount

Finance & Hypothecation Of

Book Debts With

Personal Guarantee

Of Director

33

Name of

Lenders

Loan

Type

Sanction

Amt

(Rs. in

lacs)

Outstanding

Amt Repayment

Interest

Rate

Security

ANANYA FINANCE

FOR

INCLUSIVE

GROWTH

PVT.LTD.

Term Loan

From

Financial


Cash Collateral @15% On Amount

Finance &

Hypothecation Of

Book Debts

ANANYA

FINANCE

FOR

INCLUSIVE

GROWTH

PVT.LTD.

Term Loan

From

Financial


Cash Collateral

@15% On Amount

Finance &

Hypothecation Of

Book Debts

HDFC Bank

Ltd.

Working

Capital 50 38.78 C.C. Limit 13.50%

Cash Collateral

@10% On Amount

Finance &

Hypothecation Of

Book Debts With

Margin Of 10%

IDBI

Working

Capital 800 291.88 C.C. Limit 12.75%

Cash Collateral

@10% On Amount

Finance &

Hypothecation Of

Book Debts With Margin Of 25%With

Personal Guarantee

Of Director

STATE

BANK OF

PATIALA

Working

Capital 300 294.10 24 Months 12.25%

Cash Collateral

@10% On Amount Finance &

Hypothecation Of

Book Debts With

Personal Guarantee

Of Director

STATE

BANK OF INDIA

Working Capital 500 423.93 24 Months 13.25%

Equitable Mortgage

Of Office Premises

& Hypothcation Of

Book Debts With

Margin Of 25%

With Personal

Guarantee Of Directors

HDFC Bank

Ltd.

Vehicle

Loan From

Bank 15 13.04 60 Months 8.50%

Hypothecation Of

Vehicle

2253.02

34

DETAILS OF UNSECURED LOANS AS AT 30/06/2010

(Rs. In Lacs)

PARTICULARS AMOUNT EFFECTIVE COST

P.A.

REPAYMENT

SCHEDULE

From Directors and relatives

A

126.27 18.00% 12 Months

From Directors and relatives B

6.00 15.00% 12 Months

132.27

MONITORING AGENCY

As the size of the Issue does not exceed Rs. 50,000 lacs, appointment of a monitoring agency is not

required.

EXPERTS

The Company has not obtained any expert opinions.

CONSENT OF LENDERS

The Company has obtained the NOC from the Bankers from which the borrowings have been affected

against the movable and immovable properties of the Company.

IMPERSONATION

Attention of the applicants is specifically drawn to the provisions of Sub-Section (1) of Section 68A of

the Companies Act, 1956 which is reproduced below: "Any person who-

(a) Makes in a fictitious name an application to a Company for acquiring, or subscribing for, Any

shares therein, or

(b) Otherwise induces a Company to allot or register any transfer of shares therein to him, or Any other

person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five

years."

UNDERWRITTEN/STANDBY SUPPORT

The present Rights Issue is not underwritten and our Company has not made any standby arrangements

for the Issue.

However, the Promoters have confirmed vide their Letter of Intent dated September 30, 2010 that they intend to subscribe to the full extent of their entitlement in the Issue. The Promoters intend to apply for

additional Equity Shares in the Issue such that at least 90% of the Issue size is subscribed. As a result of

this subscription and consequent allotment, the Promoters may acquire Equity Shares over and above

their entitlement in the Issue, which may result in their shareholding in the Company being above their

current shareholding.

DEBENTURE TRUSTEES

This being an Issue of Equity Shares, appointment of Trustees is not required.

APPRAISING ENTITY

None of the objects of the issue has been apprised by any entity.

35

LISTING

The existing Equity Shares of the Company are listed on Bombay Stock Exchange Limited (BSE). The

Company has received “in-principle” approvals from BSE for listing of securities being offered through

this Draft Letter of Offer vide letter no. [●] dated [●] respectively. For the purpose of this Issue, the

Designated Stock Exchange is BSE.

The Company has filed delisting application to the JSE. Therefore, The Company will not file Listing

Application to the Said Stock Exchange.

MINIMUM SUBSCRIPTION

If our Company does not receive the minimum subscription of 90% of the Issue on the date of the

closure of the Issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the Issue. If there is delay in the refund of subscription by more than 8 days after our

Company becomes liable to pay the subscription amount (i.e. 15 days after closure of the Issue), our

Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of

section 73 of the Companies Act,1956.

In case the permission to deal in and for an official quotation of the Equity Shares is not granted by

BSE, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance of this Draft Letter of Offer and if such money is not repaid within eight days after the day

from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under sub-section

(2) and (2A) of section 73 of the Companies Act, 1956.

ISSUE SCHEDULE

The subscription will open upon the commencement of the banking hours and will close upon the close

of banking hours on the dates mentioned below:

Issue Opens On : [●]

Last date for receiving request for Split Forms [●]

Issue Closes On: [●]

DECLARATION BY THE BOARD ON CREATION OF SEPARATE ACCOUNT

The Board of Directors declares that funds received against this issue will be transferred to a separate

bank account other than the Bank account referred to in sub-section (3) of the Section 73 of the Companies Act.

36

CAPITAL STRUCTURE

The share capital of the Company as on the date of filing of this Draft Letter of Offer with SEBI

is set forth below:

(Rs. In Lacs)

Details of changes in the Authorised Share Capital of our Company since inception are as follow:

Aggregate Value Aggregate Value

at nominal value

( Rs. In lac )

at Issue Price

A) AUTHORIZED SHARE CAPITAL

1,50,00,000 Equity Shares of Rs. 10 each 1500.00

B)

ISSUED, SUBSCRIBED AND PAID UP

SHARE CAPITAL BEFORE THE ISSUE

40,76,600 Equity Shares of Rs. 10 each 407.66

C)

PRESENT ISSUE IN TERMS OF THIS

DRAFT LETTER OF OFFER

48,91,920 Equity Shares of Rs. 10 each at a

premium of Rs. 5 per Equity Share 489.19 733.79

D)

ISSUED, SUBSCRIBED AND PAID UP

SHARE CAPITAL EQUITY CAPITAL

AFTER THE ISSUE

89,68,520 Equity Shares fully paid up of Rs. 10

each 896.85

E) SHARE PREMIUM ACCOUNT

Before the Issue -

After the issue 244.60

Sr.

no Particulars of Increase

Date of

Meeting

1 The Authorised Share Capital of our company was increased from Rs. 15,00,000

divided into 1,50,000 Equity Share Of Rs.10 each to 30,00,000 divided into

3,00,000 Equity Share Of Rs.10 each.

03/05/1993

2 The Authorised Share Capital of our company was increased from Rs.

30,00,000 divided into 3,00,000 Equity Share Of Rs.10 each to 50,00,000 divided into 5,00,000 Equity Share Of Rs.10 each

22/08/1994


50,00,000 divided into 5,00,000 Equity Share Of Rs.10 each to 5,00,00,000

divided into 50,00,000 Equity Share Of Rs.10 each

14/10/1994


5,00,00,000 divided into 50,00,000 Equity Share Of Rs.10 each to 15,00,00,000

divided into 1,50,00,000 Equity Share Of Rs.10 each

06/09/2010

37

1. Equity share capital history of our Company:

(Rs. In Lacs)

Date of

Allotment of

Equity

Shares

No.of

Equity

Shares

fully paid

up

Face

Value

(Rs.)

Issue

Price

(Rs.)

Cumulative

number of

Equity

Shares

Cumulative

Issued

Capital

(Rs.InLacs)

Cumulative

Share

Premium

(Rs.)

Nature of

Payment

Reasons for

Allotment

November

26, 1992

200 10 10 200 0.02 Nil Cash Subscriber to

Memorandum

of our

Company

March 20,

1993

135330 10 10 135530 13.553 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

August 28,

1993

4010 10 10 139540 13.954 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

October 29,

1993

59340 10 Nil 199080 19.908 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

November

20 , 1993

47500 10 10 246380 24.638 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

July 05,

1994

1060 10 10 247440 24.744 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

September

14, 1994

800 10 10 248240 24.824 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

October 06,

1994

248840 10 10 497080 49.708 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

38

October 25,

1994

10 10 10 497090 49.709 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

November

15, 1994

700 10 10 497790 49.779 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

March 31,

1995

414208 10 10 911198 91.120 Nil Cash Further

Allotment to

Promoters and

Promoter

Group

September

27, 1995

3164602 10 10 4076600 407.66 Nil Cash Initial Public

Issue

1. The shareholding pattern of the Promoter & Promoter Group is as detailed below including

details of lock-in, pledge of and encumbrance on such shares as on 30.06.2010:

Particulars

No. of

equity

shares

As a % of

total no.

of shares

Shares

pledged or

otherwise

encumbered

Pledged

share as %

of total no.

of shares

a) Promoters

Amit R Manakiwala 162,600 3.99 - -

Ritaben Jayendra Patel 229810 5.64 229810 5.64

Jayendra Bhailal Patel 213072 5.23 213072 5.23

SUB – TOTAL 605482 14.86 442882 10.87

b) Immediate relatives of promoters

(Spouse, Parent, Child, Brother,

Sister):

Aakash J Patel 233140 5.72 233140 5.72

Himaniben Manakiwala 50000 1.23 - -

Maulik Manakiwala 300 0.01 - -

Aalok J Patel 201790 4.95 201790 4.95

SUB – TOTAL 485230 11.91 434930 10.67

c) Company in which 10% or more

of the share capital is held by the

promoter/his immediate relative,

firm or HUF in which the promoter

or his immediate relative is a

member.

Namra Holdings & Consultancy Pvt

Ltd

165400 4.06 165400 4.06

39

SUB – TOTAL 165400 4.06 165400 4.06

d) Company in which the Company

mentioned in © above holds 10% or

Fmore of the share capital

SUB – TOTAL 0 0.00 - -

e) HUF in which aggregate share of

the promoter and his immediate

relatives is equal or more than 10%

of the total.

Jayendra Bhailal Patel (HUF) 196000 4.81 196000 4.81

Persons Acting in Concert 0 0.00 - -

SUB – TOTAL 196000 4.81 196000 4.81

GRAND TOTAL (a+b+c+d+e) 1452112 35.64 1239212 30.41

• Notes on Pledged shares.

The Above 12, 39,212 equity Shares pledged on dated 13/09/2010 & 16/09/2010 with IDBI Bank, C G

Road Branch, Ahmedabad and Company has complied all the compliances related to said Pledged

Shares. (As per resolution passed in the meeting of Board of Directors dated 12/07/2010)

2. Details of the transactions in Equity Shares by the Promoter/Promoter Group during the last

one Year.

There have been no transactions in the Equity Shares by the Promoter/Promoter Group in the last one

year from the date of this Draft Letter of Offer, except the following.

Sr.

no

Date of

Transaction

Particulars Nature of

Transaction

No. of

shares

Price at which

shareswere

purchased

transferred

1 29/09/2009 Jayendra Patel Buy 10 8.10



4 01/10/2009 Jayendra Patel Sell 3 7.85







11 10/06/2010 Namra Holdings &

Consultancy Pvt Ltd

Sell 18000 27.86

12 11/06/2010 Namra Holdings &

Consultancy Pvt Ltd

Sell 20000 29.21

40

Notes:

A. The Promoters and Promoter Group have confirmed by letter dated September 30, 2010

that they intend to subscribe to the full extent of their Rights Entitlement in the Issue. The

Promoters and Promoter Group also intend to subscribe either by themselves or any other

entities selected by them to any unsubscribed portion of the Issue such that 100% of the

issue is subscribed. This subscription and acquisition of additional Equity Shares by the

Promoters and Promoter Group, if any, will not result in change of control of the

management of the Company and shall be exempt in terms of proviso to Regulation

3(1)(b)(ii) of the SEBI Takeover Code. The Promoters and Promoter Group shall subscribe

to such unsubscribed portion as per the relevant provisions of the law. Allotment to the

Promoters and Promoter Group of any unsubscribed portion over and above their Rights

Entitlement shall be done in compliance with the Listing Agreement and other applicable

laws prevailing at that time relating to continuous listing requirements. The Company is in compliance with Clause 40A of the Listing Agreement and is required

to maintain public shareholding of at least 25% of the total number of its listed Equity

Shares.

B. The issuer Company has duly complied with the following compliances during the last

financial year.

1. Provision of the listing agreement with respect to reporting and compliance under

clause 35,40A,41&49.

2. Provision of the SEBI(Substantial Acquisition of Shares and Takeover) Regulation,

1997 with respect to reporting in terms of regulation 8(3) pertaining to disclosure with

respect to change in shareholding and regulation 8(A) pertaining to the disclosure of

pleaded shares.

3. Provisions of the SEBI (prohibition of insider trading) Regulation, 1992 with respect to

reporting in terms of regulation 13.

3. Shareholding pattern of Our Company as on 30.06.2010 is given below.

Shareholders No.of

Share

holder

Total

No.of

Shares

Total No.

of Shares

held in

Demateria

lized Form

Total

Shareh

olding

as a %

of total

No. of

Shares

Total

Shareh

olding

as a %

of total

No. of

Shares

Shares

pledged

or

otherwis

e

encumbe

red

Shares

pledge

d or

otherw

ise

encum

bered

As a %

of

(A+B)

As a %

of

(A+B+

C)

Number

of

Shares

As a

% of

Total

No of

Shares

(A) Share Holding of

Promoter and

Promoter Group

1 Indian

a Individual/HUF 10 1286712 1286712 31.56 31.56 1073812 26.35

b Bodies Corporate 1 165400 165400 4.06 4.06 165400 4.06

Sub-Total(A)(1) 11 1452112 1452112 35.62 35.62 1239212 30.41

2 Foreign

a Individual 0 0 0 0 0 - -

41

b Bodies Corporate 0 0 0 0 0 - -

Sub Total (A) (2) 0 0 0 0 0 - -

Total Shareholding

of Promoter and

Promoter Group

(A)= (A)(1)+(A)(2)

11 1452112 1452112 35.62 35.62 1239212 30.41

(B) Public

shareholding

1 Institutions

a Mutual Funds/UTI 0 0 0 0 0 - -

b Financial Institutions

/ Banks

0 0 0 0 0 - -

c Foreign Institutional

Investors

0 0 0 0 0 - -

d Foreign Mutual

Fund

0 0 0 0 0 - -

Sub-Total (B)(1) 0 0 0 0 0

2 Non-institutions

a Bodies Corporate 117 412409 361,709 10.12 10.12 - -

b Individuals - -

i. Individual

shareholders holding nominal share

capital up to Rs. 1

lacs.

5604 1261900 670,060 30.95 30.95 - -

ii. Individual

shareholders holding

nominal share

capital in excess in

excess of Rs. 1 lacs.

17 805595 805,595 19.76 19.76 - -

c Any Others

Non Resident

Individuals

16 144584 108,084 3.55 3.55 - -

Foreign Company 0 0 0 0 0 - -

Trusts 0 0 0 0 0 - -

Sub-Total (B)(2) 5754 2624488 1945448 64.38 64.38 - -

Total public

shareholding (B)=

(B)(1)+(B)(2)

5754 2624488 1945448 64.38 64.38 - -

TOTAL (A)+(B) 5765 4076600 3397560 100.00 100.00 1239212 30.41

(C) Shares held by

Custodians and

against which

Depository

Receipts have been

issued

- - - - -

Total (A)+(B)+(C) 5765 4076600 3397560 100.00 100.00 1239212 30.41

42

4. Details of share holders holding more than one percent of the share capital of our Company

as 30.06.2010 is as follows:

Sr.

No.

Name No. of

Shares

% of Share

Capital

(A) Promoter and Promoter Group

1 Jayendra B Patel 213072 5.23

2 Amit R Manakiwala 162,600 3.99

3 Ritaben J Patel 229810 5.64

4 Aakash J Patel 233140 5.72

5 Himaniben Manakiwala 50000 1.23

6 Aalok J Patel 201790 4.95

7 Namra Holdings & Consultancy Pvt Ltd. 165400 4.06

8 Jayendra Bhailal Patel – HUF 196000 4.81

(B) Others

1. Babulal Dugar 135121 3.31

2. Amrav Dugar 180000 4.42

3. kanchan Vinodkumar Dugar 85000 2.09

4. Shree Rajendra jain 85000 2.09

5. Bharti Rajendra jain 81000 1.99

6. Vinod kumar Dugar 62261 1.53

7. Kiritkumar Vrajaratna Parikh 47150 1.16

8. MPSE Securities Limited 41262 1.01

5. Our Company/Promoters/Directors/Lead Merchant Bankers has not entered into buyback or similar

arrangements for purchase of securities issued by the Company. 6. Present issue being a rights issue, as per regulation 34C of the SEBI (ICDR) Regulations, 2009.

7. Our equity shares are of face value of Rs.10/- At any given time there shall be only one

denomination for the shares of the Company and the disclosures and accounting norms specified by

SEBI from time to time will be complied with.

8. The Company has not made any public offering of its Equity Shares in the two years immediately

preceding the date of filing this Draft Letter of Offer.

9. Total number of shareholders of the Company as of June 30, 2010 was 5765. 10. The present Issue being a rights Issue, as per extant SEBI (ICDR) Regulations, 2009, the

requirement of Promoters’ contribution and lock-in are not applicable.

11. The Company has not issued any Equity Shares or granted any options under any scheme of

employees’ stock option or employees’ stock purchase.

12. Equity shares of the Company are being traded in compulsory dematerialized mode. The equity

shares of the company are of face value of Rs.10/- and marketable lot is 1 (one). At any given time

there shall be only one denomination for the shares of the Company and the disclosures and

accounting norms specified by SEBI from time to time will be complied with.

13. No further issue of capital by way of issue of bonus shares, preferential allotment, rights issue or

public issue or in any other manner which will affect the equity capital of the Company, shall be

made during the period commencing from the filing of this Draft Letter of Offer with the SEBI and

the date on which the securities issued under the Draft Letter of Offer are listed or application

moneys are refunded on account of the failure of the Issue.

14. As of the date of this Draft Letter of Offer, the Lead Manager and its associates do not hold any

Equity Shares in the Company.

43

15. Company has not made and issued any Equity Shares or securities linked to Equity Shares in

relation to acquisition, merger or joint venture or as consideration for such acquisition, merger or

joint venture, or for regulatory compliance or such other scheme of arrangement.

16. The issue will remain open for a minimum of 15 days. However, the Board of Directors will have

the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.

17. In the event of Oversubscription, an extent of 10% of the net offer to the public can be retained for

the purpose of rounding off to the nearer multiple of minimum allotment lot.

18. The present issue being a rights issue, provisions of promoters’ contribution and lock-in are not

applicable.

19. There has been no Share split that has occurred in respect of the Equity Shares of the Company.

20. The Company has till date not reduced its share capital.

21. As on date of filing this Draft Letter of Offer, the entire share capital of the company is fully paid-

up. There is no partly paid up share in the company.

22. The Company has not issued any shares otherwise than for cash during last 3 years.

23. The Company has not issued any warrant, option, convertible loan, debenture or any other

securities convertible at a later date into equity, which would entitle the holders to acquire further

Equity Shares of the Company.

24. The Issue has been authorised by the Board of Directors in their meeting held on June 17, 2010

under Section 81 of the Companies Act and approved by Shareholders in the Annual General

Meeting held on September 06, 2010.

44

OBJECTS OF THE ISSUE

We intends to deploy the net proceeds from the Issue of Rs. [●] Lacs after meeting Issue expenses of

approximately Rs. [●] Lacs to augment its capital base in line with its growth strategy.

The main objects clause of our Memorandum of Association and the objects incidental and ancillary to

the main objects enable us to undertake the activities for which the funds are being raised by us in the

Issue. Further, we confirm that the activities we have been carrying out until now are in accordance

with the objects clause of our Memorandum of Association.

Requirement and source of Fund

Requirement of Fund

The details of the Net Proceeds are summarised in the table below:

(Rs. in Lacs)

Sr. No. Particulars

(a) Augment our capital base to meet our capital adequacy

requirements arising out of growth in our business

[●]

(b) Estimated Issue related expenses [●]

Net Proceeds of the Issue [●]

As there is no project to be implemented, the Net Proceeds will be used to augment our capital base to

meet our future capital requirements arising out of growth in our business. Therefore, excluding the

amount to be raised through proposed Rights issue, there is no requirement of firm arrangements of

finance through verifiable means towards 75%.

Our fund requirements and deployment and deployment thereof are based on internal management

estimates and have not been appraised by any bank or financial institutions.

a) Augment our capital base to meet our capital adequacy requirements arising out of growth in our

business

As we are engaged in the business of non-banking finance business, we are seeking to strength our

capital base to support the future growth in our assets and comply with the capital adequacy

requirements applicable to us.

b) Estimated Issue related expenses

The total expenses of the Issue are estimated to be approximately Rs. [●] Lacs. The Issue related expenses include, among others, Issue management fees, Registrar fees, printing and distribution

expenses, fees of the legal counsels, advertisement, listing fees to the Stock exchanges etc

The estimated Issue expenses are set forth in the table below:

S.

No.

Activity Expense Estimated

Expanses*

(Rs. in Lacs)

% of the Issue

Expenses*

% of total

Issue Size*

1 Fees of the Lead Manager [●] [●] [●]

2 Fees to the Registrar to the Issue [●] [●] [●]

3 Fees to the Legal advisors & Auditors [●] [●] [●]

4 Advertising and Publicity Expenses [●] [●] [●]

5 Printing, Postage, Stationery Expenses [●] [●] [●]

6 Contingency, Stamp duty, Listing Fees,etc) [●] [●] [●]

45

Total Estimated Issue Expenditure [●] [●] [●]

*Will be incorporated after finalisation of the Issue Price.

Sources of fund

The stated Objects of the Issue are proposed to be financed entirely from the Net Proceeds of the Issue.

Interim Use of Funds

Pending utilization of issue proceeds, the management, in accordance with the policies set up by the

Board, will have the flexibility in deploying the proceeds received from the present Issue and during

this period the company intends to temporarily invest the funds in interest/dividend bearing liquid

instruments including money market mutual funds, deposits with banks for the necessary duration. Such

investments would be in accordance with investment policies approved by the Board from time to time.

Monitoring of Utilization of Funds

The Audit Committee of the Board will monitor the utilization of the Issue proceeds. Furthermore,

pursuant to clause 49 of the Listing Agreement, we shall disclose to the Audit Committee, the uses and

application of funds under the heads as specified above, on a quarterly basis as a part of the quarterly

declaration of financial results.

Further, on an annual basis, the Company shall prepare a statement of funds utilized for purposes other

than those stated in the Offer Document, if any, and place it before the Audit Committee. Such

disclosure shall be made only till such time that the full money raised through this Issue has not been

fully spent. This statement shall be certified by the statutory auditors of the Company. The Audit

Committee shall make appropriate recommendations to the Board to take up steps in this matter. Our

Company shall inform material deviations in the utilisation of Issue proceeds to the stock exchanges

and shall also simultaneously make the material deviations/adverse comments of the Audit Committee public through advertisement in newspapers.

No part of the proceeds of the Issue will be paid by us as consideration to our Promoters, our Directors,

key management personnel or companies promoted by our Promoters except in the usual course of

business.

46

STATEMENT OF TAX BENEFITS

To

The Board of Directors

Arman Financial Services Limited

502-503 Sakar III,

Opp Old High Court,

Off Ashram Road,

Ahmedabad – 380014 (Gujarat)

Sub: Statement of Tax Benefits

Dear Sirs,

We hereby certify that the enclosed annexure states the tax benefits available to Arman Financial

Services Limited (the “Company”) and to the Shareholders for the Company under the provisions of the

Income Tax Act, 1961 and other direct tax laws presently in force in India. Several of these benefits are

dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax

laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon

fulfilling such conditions, which based on business imperatives the Company faces in future, the

Company may or may not choose to fulfill.

The benefits discussed in enclosed annexure are not exhaustive. This statement is only intended to

provide general information to the investors and is neither designed nor intended to be a substitute for

professional tax advice. In view of the individual nature of the tax consequences and changing tax laws,

each investor is advised to consult his own tax consultant with respect to specific tax implications

arising out of their participation in the issue, particularly in view of the fact that there could be different

interpretations of legislation.

Unless otherwise specified, sections referred to in the annexure are sections of Income Tax Act, 1961.

All the provisions set out in the annexure are subject to conditions specified in the respective sections.

We do not express any opinion or provide any assurance as to whether:

- The Company or its shareholders will continue to obtain these benefits in future; or

- The conditions prescribed for availing the benefits have been or would be met with.

The contents of this annexure are based on information, explanations and representations obtained from

the Company and on the basis of our understanding of the business activities and operations of the

Company. While all reasonable care has been taken in preparation of this statement, we accept no

responsibility for any errors or omissions therein or for any loss sustained by any person who relies on

it.

FOR, J. T. SHAH & COMPANY


PLACE: AHMEDABAD

DATED: 24.09.2010

(J. T. SHAH)

PARTNER

[M.No.3983]

47

ANNEXURE TO THE CERTIFICATE DATED 14.09.2010

BENEFITS UNDER THE INCOME TAX ACT, 1961

GENERAL PROVISIONS:

A: TO THE COMPANY:

1. Dividends earned are exempt from tax in accordance with and subject to the provisions of section

10(34) read with section 115-O of the Act. However, as per section 94(7) , losses arising from

sale/ transfer of shares, where such shares are purchased within three months prior to the record

date and sold within three months from the record date, will be disallowed to the extent such loss

does not exceed the amount of dividend claimed exempt.

2. The company is eligible to exemption under section 10(34) in respect of income by way of

dividend received from other Domestic Companies. However, as per section 94(7), losses arising

from the sale/ redemption of units purchased within three months prior to the record date (for

entitlement to receive income) and sold within nine months from the record date, will be

disallowed to the extent such loss does not exceed the amount of income claimed exempt.

3. Income by way of interest, premium on redemption or other payment on notified securities,

bonds, certificates issued by the Central Government is exempt from tax under section 10(15) in

accordance with and subject to the conditions and limits as may be specified in notifications.

4. The company is eligible to exemption under section 10(35) in respect of income by way of

dividend received from mutual fund specified under section 10(23D) and other specified under

takings / companies. However, as per section 94(7), losses arising from sale/ transfer of shares,

where such shares are purchased within three months prior to the record date and sold within

three months from the record date, will be disallowed to the extent such loss does not exceed the

amount of dividend claimed exempt.

5. The Company is eligible to exemption under section 10(36) in respect of Long Term Capital Gain

arising from transfer of an ‘Eligible Equity Share in a company purchased or after the first day of

March, 2003 and before the first day of March, 2004 (both days inclusive) and held for a period

of 12 months or more.

6. In accordance with the provisions of section 10(38) the long-term gains arising on the transfer of

securities in a transaction entered into in a recognized Stock Exchange in India and such

transaction is chargeable to Securities Transaction Tax Under Chapter VII of the finance (No.2)

Act, 2004, shall be exempt from income tax.

7. The long-term capital gains accruing to the company otherwise than as mentioned in 4 above,

shall be chargeable to tax in accordance with and subject to the provisions of section 112 as

follows :

a) @ 20% (Plus applicable surcharge, Cess and Higher Education Cess) after deducting from

the sale proceeds the indexed cost of acquisition or

b) In the case of certain listed shares, securities and units, in a transaction not entered into in a

recognized stock exchange, if long term capital gain is computed without indexation @

10% (plus applicable surcharge, Cess and Higher Education Cess)

48

8. The company is eligible to claim exemption in respect of tax on long-term capital gains [(not

covered by section 10(36) & 10(38)] under section 54EC if the amount of capital gains is invested

in certain specified bonds / securities subject to the fulfillment of the conditions specified in the

said section.

9. In accordance with Section 111A, the tax on capital gains arising from the transfer of a short term asset being an equity share in a company or a unit of an equity oriented fund, is chargeable to tax

at the rate of 15% (plus applicable surcharge and education cess), where such transaction is

chargeable to Securities Transaction Tax. And if the provisions of Section 111A are not

applicable to the short term capital gains, in case of non chargeability to Securities Transaction

Tax, then the tax will be chargeable at the rate of 30% (plus applicable surcharge and education

cess) as applicable.

10. The company will be entitled to claim depreciation allowance at the prescribed rates on tangible

and intangible assets under section 32.

11. Under section 36(1) (vii), any bad debt or part thereof written off as irrecoverable in the accounts

is allowable as a deduction from the total income.

12. Under section 36(1) (viii) of the Act, subject to the conditions specified therein, a deduction is

allowable in respect of an amount not exceeding 20% of the profits derived from eligible business

[viz., providing long-term finance for industrial or agricultural development or development of

infrastructure facility in India or development of housing in India] provided such amount is

transferred to a special reserve account created and maintained for this purpose. Provided that

where the aggregate of the amounts carried to such reserve account from time to time exceeds

twice the amount of the paid up share capital and general reserves, no further deduction shall be

allowable in respect of such excess.

13. The amount of tax paid under Section 115 JB by the company for any assessment year beginning

on or after 1st April 2006 will be available as credit for ten years succeeding the Assessment Year

in which MAT credit becomes allowable in accordance with the provisions of Section 115JAA.

14. In case of loss under the head “Profit and Gains from Business or Profession”, it can be set-off

against other income and the excess loss after set-off can be carried forward for set-off - against

business income of the next seven Assessment Years.

15. The unabsorbed depreciation, if any, can be adjusted against any other income and can be carried

forward indefinitely for set-off against the income of future years.

16. Section 14A of the Act restricts claim for deduction of expenses incurred in relation to incomes

which do not form part of the total income under the Act. Thus, any expenditure incurred to earn

tax exempt income is not tax deductible expenditure.

Section 115-O

Tax rate on distributed profits of domestic companies (DDT) is 15%, the surcharge on Income tax is at

7.50 %, and the Education & Higher Education Cess is at 3%.

Tax Rates

The tax rate is 30%. The surcharge on Income tax is at 7.50 %, and the Education & Higher Education

Cess is at 3%.

49

B: TO THE SHAREHOLDERS OF THE COMPANY:

I. RESIDENTS

1. Under section 10(32) of the IT Act, any income of a minor child clubbed in the total income of

the parent under section 64(1A) will be exempt from tax to the extent of Rs. 1500/- per minor

child.

2. Members will be entitled to exemption, under section 10(34) in respect of the income by way of

dividend received from the company. However, as per section 94(7) , losses arising from sale/

transfer of shares, where such shares are purchased within three months prior to the record date

and sold within three months from the record date, will be disallowed to the extent such loss

does not exceed the amount of dividend claimed exempt.

3. The long-term capital gains accruing to the members of the company on sale of the company’s

shares in a transaction entered into in a recognized stock exchange in India and chargeable to

Securities Transaction Tax would be exempt from tax as per the provisions of section 10(38).

4. The short –term capital gains accruing to the members of the company on sale of the

company’s shares in a transaction entered into in a recognized stock exchange in India and

chargeable to Securities Transaction Tax would be chargeable to tax @ 15% [plus applicable

surcharge and education cess] as per the provisions of section 111A.

5. As per the provisions of section 2, the long-term capital gains accruing to the members of the

company from the transfer of the shares of the company, otherwise than as mentioned in point 3

above, shall be charged to tax.

a. @ 20% (plus applicable surcharge and education cess) after deducting from he sale

proceeds the Indexed cost of acquisition or

b. b) @ 10% (plus applicable surcharge and education cess) after deducting from the sale

proceeds the cost of acquisition without indexation.

6. The members are entitled to claim exemption in respect of tax on long term capital gains under

section 54EC, if the amount of capital gains is invested in certain specified bonds / securities

subject to the fulfillment of the conditions specified in the said section.

7. Individuals or HUF members can avail exemption under section 54F by utilization of the sales consideration for purchase/construction of a residential house within the specified time period

and subject to the fulfillment of the conditions specified in those sections.

8. Under section 36(1)(xv) of the Act, securities transaction tax paid by a shareholder in respect of

taxable securities transactions entered into in the course of its business, would be allowed as a

deduction if the income arising from such taxable securities transactions is included in the

income computed under the head “Profits and gains of business or profession”.

9. Section 14A of the Act restricts claim for deduction of expenses incurred in relation to incomes

which do not form part of the total income under the Act. Thus, any expenditure incurred to

earn tax exempt income is not tax deductible expenditure.

50

10. As per the provision of Section 71(3), if there is a loss under the head “Capital Gains”, it cannot

be set-off with the income under any other head. Section 74 provides that the short term capital

loss can be set-off against both Short term and Long term capital gain. But Long term capital

loss cannot be set-off against short term capital gain. The unabsorbed short term capital loss can

be carried forward for next eight assessment years and can be set off against any capital gains in subsequent years. The unabsorbed long term capital loss can be carried forward for next

eight assessment years and can be set off only against long term capital gains in subsequent

years.

11. As per the provision of Section 56 (2)(vi) if an individual or HUF receives any property, which

includes shares, without consideration, the aggregate fair market value of which exceeds Rs

50,000, the whole of the fair market value of such property will be considered as income in the

hands of the recipient. Similarly, if an individual or HUF receives any property, which includes

shares, for consideration which is less than the fair market value of the property by an amount

exceeding Rs 50,000, the fair market value of such property as exceeds the consideration will

be considered as income in the hands of the recipient. However provision of their section are

not applicable under certain circumstances subject to fulfillment of specified conditions

12. Tax Rates

For Individuals, HUFs, BOI and Association of Persons:

Slab of income (Rs.) Rate of tax (%)

0- 160,000 Nil

160,001 – 500,000 10%

500,001 – 8,00,000 20%

800,001 and above 30%

Notes:

i. In respect of women residents below the age of 65 years, the basic exemption limit is

Rs.190000.

ii. In respect of senior citizens resident in India, the basic exemption limit is Rs.240000.

iii. Education cess will be levied at the rate of 3% on income tax.

II. NON-RESIDENTS

1. Under section 10(32) any income of a minor child clubbed in the total income of the parent under section 64(1A) will be exempt from tax to the extent of Rs.1500 per minor child.

2. Non-resident members will be entitled to exemption, under section 10(34), in respect of the

income by way of dividend received from the company. However, as per section 94(7) , losses

arising from sale/ transfer of shares, where such shares are purchased within three months prior

to the record date and sold within three months from the record date, will be disallowed to the

extent such loss does not exceed the amount of dividend claimed exempt.

3. The long-term capital gains accruing to the members of the company on sale of the Company’s


Securities Transaction Tax would be exempt from tax as per the provisions of section 10(38).

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4. In accordance with section 48, capital gains arising out of transfer of capital assets being shares

in the company shall be computed by converting the cost of acquisition, expenditure in

connection with such transfer and the full value of the consideration received or accruing as a

result of the transfer into the same foreign currency as was initially utilized in the purchase of

the shares and the capital gains computed in such foreign currency shall be reconverted into Indian currency, such that the aforesaid manner of computation of capital gains shall be

applicable in respect of capital gains accruing/arising from every reinvestment thereafter in, and

sale of, shares and debentures of, an Indian company including the Company.

5. The short-term capital gains accruing to the members of the company on sale of the Company’s


Securities Transactions Tax would be chargeable to tax @ 15% [plus applicable surcharge and

education cess] as per the provisions of section 111A.

6. As per the provisions of section 112 the long-term capital gains accruing to the members of the

company from the transfer of the shares of the company, otherwise than as mentioned in point 3

above, shall be charged to tax.

a) @ 20% (Plus applicable surcharge and education cess) after deducting from the sale

proceeds the indexed cost of acquisition or

b) @ 10% (Plus applicable surcharge and education cess) after deducting from the sale

proceeds the cost of acquisition without indexation.

7. The members are entitled to claim exemption in respect of tax on long-term capital gains under

sections 54EC, if the amount of capital gains is invested in certain specified bonds / securities

subject to the fulfillment of the conditions specified in those sections.

8. Individuals or HUF members can avail exemption under section 54F by utilization of the sale

consideration for purchase/construction of a residential house within the specified time period

and subject to the fulfillment of the conditions specified therein.

9. Under the provisions of section 90(2), if the provisions of the Double Taxation Avoidance

Agreement [DTAA] between India and the country of residence of the non-resident are more

beneficial, then the provisions of the DTAA shall be applicable.

10. Non-Resident Indians (as defined in section 115C(e)), being shareholders of an Indian

Company have the option being governed by the provisions of Chapter XII-A, which inter-alia

entitles them to the following benefits in respect of income form shares of an Indian Company

acquired, purchased or subscribed to in convertible foreign exchange.

a. As per provisions of section 115E and subject to the conditions specified therein, long-

term capital gains arising on the transfer of Company’s shares will be charged to

Income tax @ 10% (plus applicable surcharge and education cess.).

b. As per the provisions of section 115F and subject to the fulfillment of the conditions

specified therein, the Long Term Capital gains arising on the transfer of Company’s

shares shall be exempted from income tax entirely/ proportionately if all or a portion of

the net consideration is invested within 6 months of the date of transfer in specified

assets as defined in section 115C (f) or any savings certificates referred to in section

10(4B). The amount so exempted shall, however, be chargeable to tax as long term

capital gains under the provisions of section 115F(2) if the specified assets are

52

transferred or converted in to money within three years from the date of acquisition

thereof a as specified in the said section.

c. As per the provision of section 115G, Non-resident Indians are not obliged to file a

return of income under section 139(1), if their only source of income is income form

investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of

Chapter XVII-A.

d. Under section 115H, where a Non-Resident Indian, in relation to any previous year,

becomes assessable as a resident in India in respect of the total income of any

subsequent year, he / she may furnish to the Assessing Officer a declaration in writing,

along with his/ her return of income under section 139 for the assessment year for which he/she is so assessable, to the effect that the provisions of the Chapter XII-A

shall continue to apply to him/her in relation to such income for that assessment year

until the transfer or conversion (otherwise than by transfer into money of such assets.

e. As per the provision of section 115-I, when a Non Resident Indian, elects not to be

governed by the provision of Chapter XII-A, then his/her total income shall be

computed and charged in accordance with other provisions of the Income Tax

Act,1961.

III. FOREIGN INSTITUTIONAL INVESTORS

1. Income by way of dividend received on shares of the company is exempt under section 10(34)

of the IT Act. However, as per section 94(7) , losses arising from sale/ transfer of shares, where

such shares are purchased within three months prior to the record date and sold within three

months from the record date, will be disallowed to the extent such loss does not exceed the

amount of dividend claimed exempt.

2. The long-term capital gains accruing to the members of the company on sale of the company’s

shares in a transaction entered into in a recognized stock exchange in India and the transaction

is chargeable to Securities Transaction Tax, would be exempt from tax as per the provisions of

section 10(38).

3. The short-term capital gains accruing to the members of the company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India and chargeable to

Securities Transaction Tax would be chargeable to tax @ 15% (plus applicable surcharge and

education cess) as per the provisions of section 111A.

4. Under section 115AD (1)(b)(ii), income by way of Short Term capital Gain arising from the

transfer of shares (otherwise than as mentioned in 4 above) held in the company for a period of

less than 12 months will be taxable @ 30% (plus applicable surcharge and education cess).

5. Under section 115AD (1)(b)(iii) income by way of Long Term Capital Gain arising from the

transfer of shares (otherwise than as mentioned in 2 above) held in the company will be taxable

@ 10% ((plus applicable surcharge and education cess). It is to be noted here that the benefits

of indexation and foreign currency fluctuation protection as provided by section 48 of the Act

are not available to Foreign Institutional Investors.

6. Long Term Capital Gains on sale of shares of the company by the members shall be exempt

from income tax if such gains are invested in bonds/equity shares specified in section 54EC

respectively subject to the fulfillment of the conditions specified in those sections.

53

7. Under the provisions of section 90(2), if the provisions of the Double Taxation a voidance

agreement [DTAA] between India and the country of residence of the non-resident are more

beneficial, then the provisions of the DTAA shall be applicable.

8. Under section 196D (2) of the Income-tax Act, 1961, no deduction of tax at source will be made in respect of income by way of capital gain arising from the transfer of securities referred

to in section 115AD.

9. Under section 36(1)(xv) of the Act, securities transaction tax paid by a shareholder in respect of

taxable securities transactions entered into in the course of its business, would be allowed as a

deduction if the income arising from such taxable securities transactions is included in the

income computed under the head “Profits and gains of business or profession”.

IV. MUTUAL FUNDS

Under section 10(23D) of the Act, exemption is available in respect of income (including

capital gains arising on transfer of shares of the Company) of a Mutual Fund registered under

the Securities and Exchange Board of India Act, 1992 or such other Mutual fund set up by a

public sector bank or a public financial institution or authorized by the Reserve Bank of India

and subject to the conditions as the Central Government may specify by notification.

V. BENEFITS TO THE VENTURE CAPITAL COMPANIES/FUNDS

As per the provisions of section 10(23FB), any income of Venture Capital Company/Fund

registered under the Securities and Exchange Board of India Act, 1992 or Regulations made

there under, would be exempt from Income Tax, subject to conditions specified.

VI. BENEFITS UNDER THE WEALTH TAX ACT, 1957,

‘Asset’ as defined under section 2(ea) of the Wealth Tax Act, 1957 does not include shares in

Companies and hence, shares are not liable to wealth tax.

VII. BENEFITS UNDER THE GIFT-TAX ACT, 1958

1. Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Any gift of shares

of the Company is not liable to gift-tax. However, in the hands of the Donee the same will be treated as income unless the gift is from a relative as defined under Explanation to Section 56 (2)

(vi) of Income-tax Act, 1961.

Notes:

• The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a

summary manner only and is not a complete analysis or listing of all potential tax consequence

of the purchase, ownership and disposal of equity shares :

• The above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available

to the Company and to the shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the

conditions prescribed under the relevant tax laws :

54

• This statement is only intended to provide general information to the investors and is neither

designed nor intended to be a substitute for a professional tax device. In view of the individual

nature of tax consequences, the changing tax laws, each investor is advised to consult his or her

or their own tax consultant with respect to the specific tax implications arising out of their

participation in the issue :

• In respect of non-residents, the tax rates and the consequent taxation, mentioned above shall be

further subject to any benefits available under the Double Taxation Avoidance Agreement, if

any, between India and the country in which the non-resident has fiscal domicile; and

• The stated benefits will be available only to the sole/first named holder in case the shares are

held by joint shareholders

FOR J. T. SHAH & COMPANY


PLACE: AHMEDABAD

DATED: 24.09.2010

(J. T. SHAH)

PARTNER

[M.No.3983]

55

SECTION IV-ABOUT THE ISSUER COMPANY

KEY INDUSTRY REGULATION AND POLICIES

The following description is a summary of the relevant regulations and policies as prescribed by the

central / state governments that are applicable to the Company in India. The information detailed in this

chapter has been obtained from publications available in the public domain. The regulations set out

below are not exhaustive, and are only intended to provide general information to the investors and are

neither designed nor intended to be a substitute for professional legal advice.

Introduction

The Company is incorporated under the Companies Act, 1956 and complies with the provisions of the

said Act and the rules made by the Central Government along with the administrative instructions given

by the Government authorities from time to time.

Arman is one of the few Category À’ Non Banking Finance Company (NBFC) - Asset Finance Company -`D’ in the state of Gujarat which is registered with Reserve Bank of India vide Certificate of

Registration No. 01.00066 under section 45-IA of the Reserve Bank of India Act, 1934 issued on 6th

November, 1998 to our company by Reserve Bank of India, Department of Non-Banking Supervision,

Ahmedabad Regional Office.

As per the RBI Act, a financial institution has been defined as a company which includes a non-banking

institution carrying on as its business or part of its business the financing activities, whether by way of

making loans or advances or otherwise, of any activity, other than its own and it is engaged in the

activities of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by the

Government of India or other local authorities or other marketable securities of like nature, leasing,

hire-purchase, insurance business, chit business but does not include any institution whose principal

business is that of carrying out any agricultural or industrial activities or the sale/purchase/construction

of immovable property.

Any company which carries on the business of a non-banking financial institution as its principal

business is to be treated as an NBFC. Since the term 'principal business' has not been defined in law, the

RBI has clarified through a press release (Ref. No. 1998-99/1269) in 1999, that in order to identify a

particular company as an NBFC, it will consider both the assets and the income pattern as evidenced

from the last audited balance sheet of the company to decide its principal business. The company will

be treated as an NBFC if its financial assets are more than 50 per cent of its total assets (netted off by

intangible assets) and income from financial assets should be more than 50 per cent of the gross

income. Both these tests are required to be satisfied as the determinant factor for principal business of a

company.

With effect from 1997, NBFCs were not permitted to commence or carry on the business of a non-

banking financial institution without obtaining a Certificate of Registration (CoR). Further, with a view

to imparting greater financial soundness and achieving the economies of scale in terms of efficiency of operations and higher managerial skills, the RBI has raised the requirement of minimum net owned

fund from Rs. 2.5 million to Rs. 20 million for the NBFC which commences business on or after April

21, 1999. Further, every NBFC is required to submit to the RBI a certificate, from its statutory auditor

within one month from the date of finalization of the balance sheet and in any case not later than

December 30th of that year, stating that it is engaged in the business of non-banking financial

institution requiring it to hold a CoR.

1. Regulation of NBFCs registered with the RBI

NBFCs are primarily governed by the RBI Act, 1934 (“RBI Act”), the Non-Banking Financial (Deposit

Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, (“APD

56

Directions”), the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank)

Directions, 1998, (“Public Deposit Directions”), the Non-Banking Financial (Non-Deposit Accepting

or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (“Non- Deposit Accepting

NBFC Directions”), and the provisions of the Non- Banking Financial Companies Prudential Norms

(Reserve Bank) Directions, 1998. In addition to these regulations, NBFCs are also governed by various circulars, notifications, guidelines and directions issued by the RBI from time to time.

2. Types of Activities that NBFCs are permitted to carry out

Although by definition, NBFCs are permitted to operate in similar sphere of activities as banks, there

are a few important, key differences. The most important distinctions are:

(i) an NBFC cannot accept deposits repayable on demand – in other words, NBFCs can only accept

fixed term deposits. Thus, NBFCs are not permitted to issue negotiable instruments, such as cheques

which are payable on demand; and

(ii) NBFCs are not allowed to deal in foreign exchange, even if they specifically apply to the RBI for

approval in this regard.

3. Types of NBFCs:

Section 45-IA of the RBI Act makes it mandatory for every NBFC to get itself registered with the

Reserve Bank in order to be able to commence any of the aforementioned activities.

Further, an NBFC may be registered as a deposit accepting NBFC (“NBFC-D”) or as a non-deposit accepting NBFC (“NBFC-ND”).

NBFCs registered with RBI are further classified as:

(i) asset finance companies;

(ii) investment companies; and/or

(iii) loan companies and/or

(iv) infrastructure finance companies

Our Company has been classified as an NBFC-D and is further classified as an “asset finance

company”. An asset finance company is an NBFC whose principal business is to finance physical assets

supporting productive / economic activity, such as automobiles, tractors, lathe machines, generator sets,

earth moving and material handling equipments, moving on own power and general purpose industrial

machines.

4. Regulatory Requiresments of an NBFC under the RBI Act

Net Owned Fund

Section 45-IA of the RBI Act provides that to carry on the business of a NBFC, an entity would have to

register as an NBFC with the RBI and would be required to have a minimum net owned fund of Rs.

2,00,00,000 (Rupees two crore only). For this purpose, the RBI Act has defined “net owned fund” to

mean:

(a) the aggregate of the paid-up equity capital and free reserves as disclosed in the latest balance sheet

of the company, after deducting (i) accumulated balance of losses, (ii) deferred revenue expenditure,

and (iii) other intangible assets; and

(b) further reduced by the amounts representing,

57

(1) investment by such companies in shares of (i) its subsidiaries, (ii) companies in the same group, (iii)

other NBFCs, and

(2) the book value of debentures, bonds, outstanding loans and advances (including hire purchase and

lease finance) made to, and deposits with (i) subsidiaries of such companies; and (ii) companies in the same group to the extent such amount exceeds 10% of (a) above.

Reserve Fund

In addition to the above, Section 45-IC of the RBI Act requires NBFCs to create a reserve fund and

transfer therein a sum of not less than 20% of its net profits earned annually before declaration of

dividend. Such sum cannot be appropriated by the NBFC except for the purpose as may be specified by

the RBI from time to time and every such appropriation is required to be reported to the RBI within 21

days from the date of such withdrawal.

Maintenance of liquid assets

The RBI through notification dated January 31, 1998, as amended has prescribed that every NBFC shall

invest and continue to invest in unencumbered approved securities valued at a price not exceeding the

current market price of such securities an amount which shall, at the close of business on any day be not

less than 10% in approved securities and the remaining in unencumbered term deposits in any

scheduled commercial bank; the aggregate of which shall not be less than 15% of the public deposit

outstanding at the last working day of the second preceding quarter.

5. Obligations of NBFC-D under the Public Deposit Directions

The RBI’s Public Deposit Directions governs the manner in which NBFCs may accept and/or hold

public deposits. The Public Deposit Directions places the following restrictions on NBFCs in

connection with accepting public deposits:

1. Prohibition from accepting any demand deposits: NBFCs are prohibited from accepting any public

deposit which is repayable on demand.

2. Ceiling on quantum of deposits: A NBFC which is classified as an asset finance company, (a) having

net owned funds of Rs. 25,00,000/- (Rupees twenty five lac only) or more, and, (b) having complied

with all prudential norms relating to the capital adequacy ratio of not less than fifteen percent as per last

audited balance-sheet, may, accept or renew public deposits not exceeding one and one-half times of its

net owned funds or public deposit up to Rs. 10,00,00,000/- (Rupees ten crore), whichever is less.

Further, an asset finance company, (a) having net owned funds Rs. 25,00,000/- (Rupees twenty five lac

only) or more, (b) having complied with all the prudential norms, and (c) having obtained minimum

investment grade credit rating from a notified credit rating agency, may, accept or renew public

deposits not exceeding four times of its net owned funds.

3. Downgrading of credit-rating: In the event that the credit rating issued by a credit rating agency

recognised by RBI, for an asset finance company is downgraded below the minimum specified

investment grade, with respect to the relevant credit rating agency, the NBFC must (a) forthwith stop

accepting public deposit, (b) report the position of the credit rating within fifteen working days to the

RBI, and, (c) reduce, within three years from the date of such downgrading of credit rating, the amount

of excess public deposit to nil or the appropriate extent as permitted under the Public Deposit

Directions, by repayment as and when such deposit falls due or otherwise.

4. Ceiling on rate of interest: An NBFC cannot invite or accept or renew public deposit at a rate of interest exceeding twelve and half per cent per annum. Such interest may be paid or compounded at

rests which shall not be shorter than monthly rests.

58

5. Minimum lock-in period: An NBFC is prohibited from granting any loan against a public deposit or

make premature repayment of a public deposit within a period of three months from the date of

acceptance of such public deposit.

6. Obligations of NBFC-D under the APD Directions

NBFC-Ds are required to comply with prescribed capital adequacy ratios, single and group exposure

norms, and other specified prudential requirements prescribed under the APD Directions. Some of the

important obligations are as follows:

i) Income Recognition: NBFC-Ds are required to follow recognised accounting principles in

connection with recognition of income. Income including interest/discount or any other

charges on NPA is recognised only when it is actually realised. Any such income

recognised before the asset became nonperforming and remaining unrealised must be

reversed. With respect to hire purchase assets, where instalments are overdue for more than

12 months, income shall be recognised only when hire charges are actually received. Any

such income taken to the credit of profit and loss account before the asset became non-

performing and remaining unrealised, must be reversed.

ii) ii) Asset Classification and provisioning of assets: Every NBFC-D is required to, after

taking into account the degree of well defined credit weaknesses and extent of dependence

on collateral security for realisation, classify its lease/hire purchase assets, loans and

advances and any other forms of credit into the following classes, namely:

• Standard assets

• Sub standard assets

• Doubtful assets and

• Loss assets

Further, an NBFC-D must, after taking into account the time lag between an account becoming

nonperforming, its recognition as such, the realisation of the security and the erosion over time in the

value of security charged, make provision against sub-standard assets, doubtful assets and loss assets in

the manner prescribed by RBI.

iii) Loans against NBFC’s own shares prohibited: No NBFC-D can lend against its own shares, as of

July 1, 2008. Any outstanding loan granted by a NBFC-D against its own shares on the date of

commencement of these Directions shall be recovered by the NBFC as per the repayment schedule.

iv) NBFC failing to repay public deposit prohibited from making loans and investments: A NBFC-D

which has failed to repay any public deposit or part thereof in accordance with the terms and conditions

of such deposit, cannot grant any loan or other credit facility by whatever name called or make any

investment or create any other asset as long as such default exists.

v) Exposure to capital-markets: Every NBFC-D with total assets of Rs. 100 crore and above according

to the previous audited balance sheet, must submit a monthly return within a period of 7 days of the

expiry of the month to which it pertains in the prescribed form to the Regional Office of the Department

of Non-Banking Supervision of the RBI.

vi) Capital Adequacy: Every NBFC-D shall maintain a minimum CAR consisting of Tier I and Tier II

capital which must not be less than twelve per cent of its aggregate risk weighted assets on balance sheet and of risk adjusted value of off-balance sheet items. The total of Tier II capital of any NBFC-D,

at any point of time, must not exceed one hundred per cent of Tier I capital.

vii) Disclosure Requirements: Every NBFC-D is required to separately disclose in its balance sheet the

provisions made in accordance with the applicable prudential norms prescribed by the RBI without

59

netting them from the income or against the value of assets. Further, the provisions must be distinctly

indicated under separate heads of account as under:

• provisions for bad and doubtful debts

• provisions for depreciation in investments

Such provisions shall not be appropriated from the general provisions and loss reserves held if any, by

the NBFC-D and for each year shall be debited to the profit and loss account. The excess of provisions

if any, held under the heads general provisions and loss reserves may be written back without making

adjustment against them.

viii) Monthly Return: Every NBFC with total assets of Rs.100 crore and above according to the

previous 21 days audited balance sheet, is required to submit a monthly return within a period of 7 days

of the expiry of the month to which it pertains in the prescribed format to the Regional Office of the

Department of Non-Banking Supervision of the RBI.

ix) Fair Practices Code: The RBI has framed the fair practice guidelines, to promote good and fair

practices by setting minimum standards to be adhered to by NBFCs in dealing with customers. These

guidelines require NBFCs to ensure that they meet the commitments and standards specified therein for the products and services they offer and in the procedures and practices their staff follows, their

products and services meet relevant laws and regulations in letter and spirit, and their dealings with

customers rest on ethical principles of integrity and transparency. Further, the said guidelines prescribe

the requirements in connection with information to be provided and disclosures to be made by NBFCs

to their customers. Accordingly, the guidelines require NBFCs to provide information on interest rates,

common fees and charges, provide clear information explaining the key features of their services and

products that customers are interested in, provide information on any type of product and service offered, that may suit the customer’s needs, tell the customers about the various means through which

products and services are offered, and provide more information on the key features of the products,

including applicable interest rates / fees and charges.

x) KYC Guidelines: NBFCs have been advised to follow certain customer identification procedure for

opening of accounts and monitoring transactions of suspicious nature for the purpose of reporting it to

appropriate authority, (“KYC Norms”). Accordingly, NBFCs have been advised to ensure that a proper

policy framework on ‘know your customer’ and anti-money laundering measures is formulated and put

in place with the approval of the RBI. The KYC Norms also require that while preparing operational

guidelines NBFCs may keep in mind to treat the information collected from the customer for the

purpose of opening of account as confidential and not divulge any details thereof for cross selling or

any other purposes. NBFCs may, therefore, ensure that information sought from the customer is

relevant to the perceived risk, is not intrusive, and is in conformity with the guidelines issued in this regard. Any other information from the customer should be sought separately with his /her consent and

after opening the account.

Rating of Financial Product

As per RBI Circular dated February 4, 2009 all NBFCs with assets size of Rs. 10,000 lacs and above is

required to furnish at the regional office of the RBI under whose jurisdiction the registered office of the

NBFC is functioning, information relating to the downgrading and upgrading of assigned rating of any financial products issued by them within 15 days of such change.

Norms for excessive interest rates

RBI through its circular dated May 24, 2007 directed all NBFCs to put in place appropriate internal

principles and procedures in determining interest rates and processing and other charges. In addition to

the aforesaid instruction RBI has issued a circular dated January 2, 2009 and a master circular on Fair

Practices Code dated July 1, 2009 for regulating the excessive rates of interest charged by the NBFCs. The aforementioned circular and the master circular stipulate that the board of each NBFC shall adopt

60

an interest rate model taking into account the various relevant factors such as cost of funds, margin and

risk premium etc. The rate of interest and the approach for gradation of risk and the rationale for

charging different rates of interest for different categories of borrowers shall be required to be disclosed

to the borrowers in the application form and communicated explicitly in the sanction letter. Further, the

same is also required to be made available on the company’s website or be published in the relevant newspapers and is required to be updated in the event of any change therein. Further, the rate of interest

would have to be annualized rates so that that the borrower is aware of the exact rates that would be

charged to the account.

7. Corporate Governance

Pursuant to RBI circular (DNBS.PD/CC 94/03.10.042/2006-07) dated May 8, 2007, the RBI has

proposed certain corporate governance guidelines for the consideration of all NBFC–D with an asset

size of Rs. 20 crore or more. The guidelines recommend that such NBFCs constitute an Audit

Committee, a Nomination Committee (to ensure that fit and proper persons are nominated as directors

on their respective boards) and a Risk Management Committee to institute risk management systems.

The guidelines have also issued instructions relating to credit facilities to directors, loans and advances

to relatives of the directors of the said NBFCs or to the directors of other companies and their relatives

and other entities, timeframe for recovery of such loans, etc. Such NBFCs are also required to frame

internal corporate governance guidelines based on the guidelines issued by the RBI on May 8, 2007.

8. Accounting Standards & Accounting policies

Subject to the changes in Indian Accounting Standards and regulatory environment applicable to a

NBFC we may change our accounting policies in the future and it might not always be possible to determine the effect on the Profit and Loss account of these changes in each of the accounting years

preceding the change.

In such cases our profit/ loss for the preceding years might not be strictly comparable with the profit/

loss for the period for which such accounting policy changes are being made.

9. Reporting by Statutory Auditor

The statutory auditor of the NBFC-D is required to submit to the Board of Directors of the company a

report inter-alia certifying that the Directors have passed the requisite resolution(s), has complied with

the prudential norms relating to income recognition, accounting standards, asset classification and

provisioning for bad and doubtful debts as applicable to it. In the event of non-compliance, the statutory

auditors are required to directly report the same to the RBI.

10. Other Regulations

Applicable Foreign Investment Regime

FEMA Regulations

Foreign investment in India is governed primarily by the provisions of the FEMA which relates to

regulation primarily by the RBI and the rules, regulations and notifications thereunder, and the policy

prescribed by the Department of Industrial Policy and Promotion (DIPP), GoI which is regulated by the

FIPB.

The RBI, in exercise of its power under the FEMA, has notified the Foreign Exchange Management

(Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (“FEMA

Regulations”) to prohibit, restrict or regulate, transfer by or issue of security to a person resident outside India. As laid down by the FEMA Regulations, no prior consent and approval is required from

the RBI, for FDI under the “automatic route” within the specified sectoral caps. In respect of all

industries not specified as FDI under the automatic route, and in respect of investment in excess of the

61

specified sectoral limits under the automatic route, approval may be required from the FIPB and/or the

RBI.

Foreign Direct Investment

FDI in an Indian company is governed by the provisions of the FEMA read with the FEMA Regulations

and the Foreign Direct Investment Policy (“FDI Policy”) by the DIPP. FDI is permitted (except in the

prohibited sectors) in Indian companies either through the automatic route or the approval route,

depending upon the sector in which FDI is sought to be made. Under the automatic route, no prior

Government approval is required for the issue of securities by Indian companies/ acquisition of

securities of Indian companies, subject to the sectoral caps and other prescribed conditions. Investors

are required to file the required documentation with the RBI within 30 days of such issue/ acquisition of

securities.

Under the approval route, prior approval from the FIPB or RBI is required. FDI for the items/ activities

that cannot be brought in under the automatic route (other than in prohibited sectors) may be brought in

through the approval route. Further:

(a) As per the sector specific guidelines of the Government of India, 100% FDI/ NRI investments are

allowed under the automatic route in certain NBFC activities subject to compliance with guidelines of

the RBI in this regard.

(b) Minimum Capitalisation Norms for fund based NBFCs:

(i) For FDI up to 51% - US$ 0.5 million to be brought upfront

(ii) For FDI above 51% and up to 75% - US $ 5 million to be brought upfront

(iii) For FDI above 75% and up to 100% - US $ 50 million out of which US $ 7.5 million to be brought upfront and the balance in 24 months

(c) Minimum capitalization norm of US $0.5 million is applicable in respect of all permitted non fund

based NBFCs with foreign investment

(d) Foreign investors can set up 100% operating subsidiaries without the condition to disinvest a

minimum of 25% of its equity to Indian entities, subject to bringing in US$ 50 million as at (b) (iii) above(without any restriction on number of operating subsidiaries without bringing in additional

capital)

(e) Joint ventures operating NBFC’s that have 75% or less than 75% foreign investment will also be

allowed to set up subsidiaries for undertaking other NBFC activities, subject to the subsidiaries also

complying with the applicable minimum capital inflow i.e. (b) (i) and (b)(ii) above.

Where FDI is allowed on an automatic basis without FIPB approval, the RBI would continue to be the

primary agency for the purposes of monitoring and regulating foreign investment. In cases where FIPB

approval is obtained, no approval of the RBI is required except with respect to fixing the issuance price,

although a declaration in the prescribed form, detailing the foreign investment, must be filed with the

RBI once the foreign investment is made in the Indian company. The foregoing description applies only

to an issuance of shares by, and not to a transfer of shares of, Indian companies. Every Indian company

issuing shares or convertible debentures in accordance with the RBI regulations is required to submit a

report to the RBI within 30 days of receipt of the consideration and another report within 30 days from

the date of issue of the shares to the non resident purchaser.

Laws relating to Employment

Shops and Establishments legislations in various states

The provisions of various Shops and Establishments legislations, as applicable, regulate the conditions

of work and employment in shops and commercial establishments and generally prescribe obligations

62

in respect of inter alia registration, opening and closing hours, daily and weekly working hours,

holidays, leave, health and safety measures and wages for overtime work.

Labour laws

The Company is required to comply with various labour laws, including the Minimum Wages Act,

1948, the Payment of Bonus Act, 1965, the Payment of Wages Act, 1936, the Payment of Gratuity Act,

1972 and the Employees’ Provident

Funds and Miscellaneous Provisions Act, 1952

Laws relating to Intellectual Property

The Trade Marks Act, 1999 and the Copyright Act, 1957 inter alia govern the law in relation to

intellectual property, including brand names, trade names and service marks and research works.

In addition to the above, the Company is required to comply with the provisions of the Companies Act,

1956, the Foreign Exchange Management Act, 1999, various tax related legislations and other

applicable statutes.

63

OUR HISTORY AND CORPORATE MATTERS

The Company was incorporated as Private Limited Company on November 26, 1992 under the

Companies Act, 1956 as Arman Lease and Finance Private Limited by the Registrar of Companies,

Gujarat, and Dadra & Nagar Haveli. The Company subsequently became Public Limited Company and

the name of the Company was changed to Arman Lease and Finance Limited and received fresh certificate of registration dated December 22, 1993 from Registrar of Companies, Gujarat,Dadra and

Nagar Haveli. The name of the company was further changed to Arman Financial Services Limited and

new certificate of registration was issued by Registrar of Companies, Gujarat, Dadra and Nagar Haveli

on November 27, 2008.

HISTORY OF COMPANY

Presently Mr. Jayendra B Patel, Mr. Amit R. Manakiwala and Mrs. Rita J Patel are the promoters of our

Company. Our Company was initially promoted by Mr. G M Shah, Mr. Amit R. Manakiwala and Mrs. Rita J Patel. Currently, Mr. G. M. Shah has retired and is enjoying retirement in Banglore. Mr. Shah’s

experiences and background has helped Arman Financial Services Limited immensely in early years of

operations. Initially the Company was in the business of leasing and hire purchase of machinery,

equipments, Vehicles to corporate as well as other clients. The major thrust of the business was on

financing plant and machinery to business houses. The company after obtaining category III

registration, started underwriting in a few issues, This being just the starting of this activity, it had been

very cautious in selecting the issues to be underwritten. The Company was also engaged in the

syndication of Inter Corporate Fund for some of its Clients.

In line of the expansion plans, the company decided to come out with public issue in the year 1995 and

was listed on the Bombay Stock Exchange Limited (BSE), Ahmedabad stock Exchange (ASE), Jaipur

Stock exchange (JSE). Our company has received overwhelming response from the public.

The Company voluntarily applied & delisted from the Ahmedabad stock Exchange (ASE) in the March,

2005. Company has passed Special resolution in the AGM held on 27th September, 2004 for the purpose

of delisting of our securities from Jaipur Stock Exchange (JSE) and looking for the approval for

delisting application from JSE.

Arman is one of the few Category À’ Non Banking Finance Company (NBFC) in the state of Gujarat

which is registered with Reserve Bank of India vide Certificate of Registration No. 01.00066 under section 45-IA of the Reserve Bank of India Act, 1934 issued on 6th November, 1998 to our company by

Reserve Bank of India, Department of Non-Banking Supervision, Ahmedabad Regional Office. As per

this classification the Company is eligible to accept public deposit and is regularly scrutinized by RBI.

The Company has not accepted public deposit but has maintained category ‘A’ as it provides self check

and credit worthiness to its image.

The Company was originally rated by ICRA, the noted rating agency and it was assigned credit rating

of `7’ which was indicative of safe borrowing from the Bank.

The Company has been rated Four times over the last 5 years by a noted rating agency called M-Cril

from Gurgaon and it has come out with flying colours every time. The last rating received by the company in March, 2010 is Alfa Minus, which is an investment grade and indicates a positive view

point of the future prospect of the Company.

The Company has also been rated by Crisil in the year 2009-10 and it has received ‘BB’ stable rating.

At present Arman has an exposure and enjoys credit facilities with HDFC, AXIS Bank, IDBI Bank,

United Bank of India, State Bank of Patiala along with SIDBI, SBI and Ananya Finance.

64

PRESENT ACTIVITIES

Presently, Arman operates in three major segments namely, Micro Finance, Vehicle loans (Two

Wheeler/ Commercial Vehicle/ Four Wheeler financing with the hypothecation of new and used

vehicles) and Personal & Business short term loans to various corporate. However the company has

moved away from the personal loan business segment because of the inherent risk involved and has continued to operate in more profitable Two Wheeler / Commercial Vehicle and Micro Finance

segment.

Arman has gained rich experience in two and three wheeler segment with all its clientele based in

Ahmedabad. The company also began its micro finance operation in early 2009.

CHANGE IN REGISTERED OFFICE

The Registered Office of the Company was situated at “Pushpak”, Khanpur, Ahmedabad- – 380 001 at

the time of incorporation. The said registered office was changed to 502-503, Sakar III, Opp. Old High

Court, Off. Ashram Road, Ahmedabad- 380014 Gujarat w.e.f. 23rd October,1997.

MAJOR EVENTS:

• Other than as disclosed in “Capital Structure” on page no. 36 of this Draft Letter of offer, the

Company has not issued any capital in the form of equity.

• For details on number of members of our Company refer to page no. 36 of the “Capital

Structure” section.

OUR MAIN OBJECTS

The main objects of the company as enunciated in the Memorandum Of Association of the Company

consist of providing a wide spectrum of financial services both Fund based and Non Fund Based

activities such as Lease / Hire Purchase Finance, Micro Finance, Bill Discounting, Investment in

Primary and Secondary market, Portfolio Management, Loan Syndication etc

Our main objects are as follows: (As set out in the Memorandum and Articles of Association of our Company)

Year Achievement

1992 The Company was incorporated with the name of “Arman Lease & Finance Private

Limited”.

1993 Conversion from Private Limited to Public Limited Company and Consequently

changed the name to “Arman Lease & Finance Limited”.

1993 Arman Lease & Finance Limited has certified by ICRA, and assigned credit rating

’7’ which indicated safest borrowing from the bank.

1995 Company came out with Initial Public Offer and listing of Equity shares of the company on Bombay Stock Exchange Limited, Ahmedabad Stock Exchange

Limited & Jaipur Stock Exchange Limited.

1998 The Company was registered as Non Banking Finance Company with the Reserve

Bank Of India.

2008 The name of the Company changed from Arman Lease & Finance Limited to Arman

Financial Services Limited.

65

1. To carry on and undertake the business of leasing finance, hire purchase, bill discounting, and

to finance lease and hire purchase operation of the kinds, purchasing, selling, hiring, or letting

on hire and financing all kinds plants and machinery and equipments that the company may

think fit and to assist in financing of all and every kind and description of hire purchase and

deferred payment or similar transaction and to subsidies finance or assist in subsidizing or

financing the sale and maintenance of any goods, article or commodities of all and every kind

and description upon any terms whatsoever and to finance the purchase of all forms of

immovable and movable property including lands and building, plant and machinery,

equipments, films, ships, air-crafts, automobiles, computers, and all consumer commercial and

industrial items or rights and to lease them in any manner whatsoever including resale thereof

regardless of whether the property purchased and leased or hired be new and/or used.

2. To advance, deposit or lend money, securities and properties to or with any company, body

corporate, firm, person or association whether falling under the same management or otherwise,

in accordance with and to extant permissible under the provisions contained in Sections 370

and 372 of the companies Act, 1956 with or without any securities and on such terms as may be

determined from time to time and to carry on business of money lending. However, the

company shall not carry on the business of banking as defined under the Banking Regulation

Act, 1949.

3. To carry out financing operation and perform financial services including factoring, project

finance, consultancy, credit reporting, credit collectors, underwriters, registrars, brokers with

provisions for computer services.

4. To provide a leasing advisory consultancy services to other entities and/or form the leasing arm

of other entities.

5. To carry on the business of providing Microfinance Services (mainly Non Banking Financial

Services as permitted by the Reserve Bank of India), financing to targeted to the poor men and

women in generating and enhancement of livelihoods, business development, employment

generation, the economic and development activities of poor men and women through term

loans, collateral free credit, other forms of credits, thrift and savings, insurance (subject to the

rules and regulations prescribed by the Insurance Regulatory and Development Authority

and/or Reserve Bank of India, Non-Banking Finance Companies Rules, as applicable to

insurance Business) and other financial services, rendering financial services to people by

acting as intermediary for banks and financial institutions, providing finance to agricultural

related activities, provide / arrange finance / financial services for rural and urban housing

development related activities and to carry on and undertake the business of research,

consultancy, technical assistance and training in the field of livelihood promotion, development

of micro/community development finance and other financial services, as intermediary for

other companies or organizations, resource center institutions.

6. Subject to the Provision of Foreign Exchange Management Act, the direction of Reserve Bank

of India and other applicable laws in force, to carry on in India or elsewhere the business of

Full-fledged and/or Restricted Money Changers and Authorized Dealers of all foreign

currencies and to buy, sell and deal in foreign currencies of all kinds and types, whether in the

form of coins, banks notes or travelers cheque, to conduct transactions of all types and

descriptions in foreign currencies and to convert foreign currencies in Indian Rupees and vice

66

versa, to represent National and International bankers, Investment bankers, Indian and Foreign

Investment and Other Institutions, to advise and guide on foreign currencies accounts, to

arrange for and provide commercial, economic and financial information/reports to importers,

exporters, both foreign and India and to undertake money market purchase/sale of foreign

currencies, stock and other all kinds of securities and portfolio management.

AMENDMENTS IN MEMORANDUM OF ASSOCIATION

Date Amendments

May 03,

1993

Alteration of Capital clause of Memorandum by increase in authorized capital

from Rs. 1,50,000 divided into 15,000 equity shares of Rs. 10 each to Rs.

30,00,000 divided into 3,00,000 equity shares of Rs. 10 each

September

30, 1993

Name of the company was changed from Arman Lease and Finance Private

Limited to Arman Lease & Finance Limited.

August 22, 1994

Alteration of Capital clause of Memorandum by increase in authorized capital from Rs. 30,00,000 comprising 3,00,000 equity shares of Rs.10/- each to

50,00,000 comprising 5,00,000 equity shares of Rs.10/- each

October 14,

1994


from Rs. 50,00,000 lacs comprising of 5,00,000 equity shares of Rs. 10 to Rs.

5,00,00,000 comprising 50,00,000 equity shares of Rs.10/- each

September

25, 2008

Change of name of the Company from Arman Lease and Finance Limited to

Arman Financial Services Limited.

September

30,2008

Addition of sub clause 5 after sub clause 4 in the main object clause III of

Memorandum Of Association – Foreign Exchange Dealing business

September

30,2008

Addition of sub clause 5 after sub clause 4 in the main object clause III of

Memorandum Of Association –Micro Financing and Financial Services

September

06, 2010


from Rs. 5,00,00,000 comprising 50,00,000 equity shares of Rs.10/- each to Rs.

15,00,00,000 comprising 1,50,00,000 equity shares of Rs.10/- each

SUBSIDIARIES OF OUR COMPANY

We do not have any subsidiary company.

MATERIAL AGREEMENTS:

As on date of filling this Draft Letter of Offer with SEBI, there are no material agreements with any

other company or entity.

JOINT VENTURE AGREEMENTS:

As on date of filling this Draft Letter of Offer with SEBI, there are no joint venture agreements with

any other company or entity.

SHAREHOLDER’S AGREEMENTS

We have not executed any Shareholder’s Agreement.

STRATEGIC PARTNER & FINANCIAL PARTNER

67

The Company does not have any Strategic Partner & Financial Partner as on the date of filing of this


OTHER AGREEMENTS

Besides agreements entered into normal course of business, we have not entered into any other

agreement.

68

OUR MANAGEMENT

As per Article Clause No. 127 of the Articles of Association, the Company shall have a minimum of

three (3) and a maximum of twelve (12) Directors.

The details of the board of directors of the company are given below:

Name, Fathers’ Name,

Address, Qualification, Date

of Appointment, Occupation,

Nationality and Term of

Appointment

Age

(Ye

ars)

Director

Identificat

ion

Number

Other Directorship

Mr. Chinubhai R Shah

S/o Ramanlal K. Shah

Address:

402, Heritage Crescent

b/h. Prahladnagar Garden, Nr.

Jain Derasar,

S. G. Highway,

Ahmedabad – 380051

Gujarat

India

Designation: Chairman &

Independent Director

Qualification:

M. A. LL.M. (Gold Medalist)

C.S., DLP, DTP, Life Fellow

AIMA

Date of appointment: 18.10.1994

Occupation: Management

Consultant/ Company Director

Nationality: Indian

Term: Liable to retire by

rotation

73 00558310 1. Adani Power Limited

2. Apollo Hospital

International Limited

3. Cadila Pharmaceuticals

Limited

4. Doshion Limited

5. GSEC Limited

6. Gujarat NRE Coke

Limited

7. Gulmahor Green-Golf &

County Club Limited.

8. Meghmani Organics

Limited

9. Nirma Limited

10. Saline Area Vitalization

Enterprise Limited

11. Abellon clean Energy

Limited

12. Meghmani Finechem

Limited

13. Shilp Gravures Limited

Mr. Jayendra B Patel

S/o Bhailalbhai M Patel

Address:

29, Sujan Bungalows

Shreyas Tekra, Ambawadi,

Ahmedabad – 380015

Gujarat, India

Designation: Vice Chairman

59 00011814

NIL

69

and Managing Director

Qualification: B.Sc., B. S.

Date of Appointment:

28.08.1995

Occupation: Business

Nationality: Indian

Term: For a period of 3 years

w.e.f. 27st July, 2010

Mr. Amit R Manakiwala

S/o Rajnikant J Mankiwala

Address:

4, Matangi Society, Udayan

Marg, EllisBridge,, Ahmedabad

– 380006, Gujarat, India

Designation:Non-excutive- Director

Qualification: B.Com.


26.11.1992


Nationality- Indian


rotation

56 00011810

NIL

Mr. Kaushik D Shah

S/o Dhirajlal Shah

Address:

25,Akashneem Bungalows,

Opp. Nehru Foundation,

Vastrapur, Ahmedabad.-

380054,Gujarat, India

Designation:

Independent Director

Qualification:

B. COM., LL.B., F.C.A


05.07.1994

Occupation: Chartered

Accountant

63 00024305 1. Amol Decalite Limited

2. W. H. Brady & Co. Limited

3. Brady Services Pvt. Ltd.

4. Global Trade Cracker Limited

5. Brady & Morris Engg. Co.

Limited

70

Nationality: Indian.


Rotation

Mrs. Rita J Patel

D/o Rajnikant Manakiwala

Address:

29,Sujan Bunglows,

ShreyasTekra Ambawadi,

Ahmedabad-380015

Gujarat, India

Designation:

Non Executive Director

Qualification: B. A.


26.11.1992


Nationality: Indian


Rotation

60 0011818 Namra Holdings & Consultancy

Services Pvt. Ltd.

Mr. Aakash J Patel

S/o: Jayendra B. Patel

Address :

990, Massachusetts AVE APT 23, Arlington, MA, 02476, USA

Designation: Non Executive

Director

Qualification: Post Graduate

With M.B.A.


24/10/2000

Occupation: Consultancy

Nationality: U.S.A.


rotation

30 02778878 NIL

Mr. Aalok J Patel

S/o Jayendra B Patel

25 02482747

NIL

71

Address:

29 Sujan Banglow,

Shreyas Tekra Ambawadi,

Ahmedabad 380015, Gujarat,

India

Designation: Executive

Director

Qualification: MS in

Accounting and Finance, C.P.A.

Date of Appointment

:30/01/2007


Nationality: U.S.A

Term: For a period of 5 Years

of 1st July , 2010

Mr. Lokesh Kumar Singh

S/O Suresh Chandra

Address :

5/82, Vipul Khand, Gomtinagar,

Nr.PrakashNetraKendra,

Lucknow – 226010, Uttar Pradesh,

India

Designation: Independent

Director

Qualification:

B.Tech (Chemical Technology),

P.G. in Rural Management

Date of Appointment

:28/01/2010


Nationality: Indian


rotation

30 02299205 1. Sanchetna Financial Services

Pvt. Ltd.

2. Samridhi Agri Products Pvt.

Ltd.

72

BIOGRAPHY OF OUR DIRECTORS

Mr. CHINUBHAI R. SHAH holds a degree in M. A. LL.M. (Gold Medalist), C.S., DLP, DTP,Life

Fellow AIMA. He has been chairman of Arman Financial Services Ltd. since 18th October 1994. He

has more than 30 years of Senior Managerial and board level experience in the corporate sector. He

Served as Professor of Law & Management at Gujarat University and IIM, Ahmedabad, for more

than 25 years. He is connected with many other institutes at various positions like (i) Member, Board

of Governer IIM, Ahmedabad [1992-97] (ii) President , GCCI, Ahmedabad [2004-05] (iii) President,

AIMA, New Delhi [1991-92] (iv) President, ICSI, New Delhi [19F-79] (vi) Member, Primary

Market Advisory Committee, SEBI, Bombay [1992-2003], (vii) Member of Direct Taxes Advisory

Committee, Ministry of Finance, New Delhi [1992-93]

MR. JAYENDRA B. PATEL holds a degree in B.Sc. & B.S. He is one of the promoters of Arman Financial Services Ltd. He holds the post of Vice-Chairman and Managing Director and was

appointed on August 28, 1995. He is having vast business experience of almost 20 years with

Arman. He had completed his education in USA and then after returned to India and joined family

Business. He extended his business in the field of finance and electrical and consecutively he

devoted his fulltime attention to Arman Financial Services Ltd. At present he is involved into the

day-to-day financial and investments decisions of the company.

MR. AMIT R. MANAKIWALA is B.Com Graduate. He is the director of our company. He is

looking after the Finance, accounts, audit, recovery and other day-to-day administration of the

company. He has been associated with businesses like real estate development, manufacturing of

electrical accessories like fluorescent lamps, starter etc. and having an experience of almost two

decades with Arman.

MRS. RITA J. PATEL is Economics Graduate. She is Non Executive Director of our company.

She has Banking qualifications from First National Bank of Chicago, USA. She has worked

experience with various US banks like First National Bank of Chicago, Golf Mill Bank, Morton

Grove Bank in various capacities for more than a decade.

MR. KAUSHIK D. SHAH holds degree in B.Com, LLB, F.C.A. He is Independent Director of our

company. He was a chairman of the I.C.A.I. Ahmedabad for 86-88.He was Vice Chairman of the

Western India Regional Council of the I.C.A.I. for the year 1989-90. He was President of All

Gujarat Federation of Tax Consultants for the year 99-2000, Member of the Executive Committee of

GCCI 99-2000, Chairman of Taxation Committee of GCCI for the year 99-2000 to 2004-05,

Treasurer Cum Joint Secretary of GCCI for the year 2005-06. He is Trustee of the Sadanand Trust

which is actively engaged in social activities all over India like flood, famine, draught relief etc. He

has written a book – “Controversies in Direct Tax Laws”. He also writes Articles in Journal 0020 of

Chartered Accountants Association, Ahmedabad.

MR. LOKESH KUMAR SINGH is a Chemical Engineer. He has studied PGDRM from IRMA. He

is an Independent Director of our company. He has the great experience & knowledge of area in

terms of the demographics, socio economic status and functioning of various Microfinance

organizations which is beneficial to our company. He worked in SKS Microfinance Pvt. Ltd. (India’s

largest NBFC-MFI) & was part of its core leadership team when the organization was undergoing

pan India expansion. He spearheaded the expansion in Karnataka, Maharashtra, UP, Rajasthan,

Jharkhand, Bihar, Chhattisgarh, Orissa, Delhi, Uttarakhand and West Bengal. He is Co-founder of

Sanchetna Financial Services Pvt. Ltd. and SAMRIDHI.

73

MR. AALOK J. PATEL is having double master’s degree in Accounts and Finance from U.S.A.

Graduated in the top trench of his class (93%). He also received the designation of “Magna Cum

Laude” (“with great honor”) He is Executive Director of our company. He is a Certified Public

Accountant, (CPA) from the U.S.A. He has over 3 years of experience working as an independent

auditor for one of the World’s largest accounting firm, KPMG. He was President of the local chapter

of National Accounting & Finance Honours Society and Treasurer of Sigma Alpha Epsilon. He has

also received numerous awards including the Financial Executives International student of the year

award and the Drake Faculty Award. He is also a visiting professor of accounting at H.L. College of

Commerce, Ahmedabad.

MR. AAKASH J. PATEL is M.B.A. (IT). He is Non-Executive Director of our company. He had

held challenging employment position since 1999 in the corporate world. Mr. Patel was a project

consultant to a Multi National Fortune 500 Corporation viz. Hewlett Packard in Boston, U.S.A. He

also worked over 4 years in a world-renowned consulting company called Deloitte Consulting – PLC

in Boston, U.S.A. He currently works at a H.R. Consultancy Firm, Softscape Inc., Boston, U.S.A.

RELATIONSHIP AMONG DIRECTORS OF THE COMPANY

There is no relationship between any of the directors of our company except as mentioned below.

Mr. Jayendra B Patel is husband of Mrs. Rita J Patel.

Mr. Aakash J Patel & Mr. Aalok J Patel are sons of Mr. Jayendra B Patel & Mrs. Rita J Patel.

Mr. Amit R Manakiwala is brother of Mrs. Rita J Patel.

NUMBER OF EQUITY SHARES HELD BY THE BOARD OF DIRECTORS:

Name of Directors Number of shares held

Mr. Chinubhai R Shah 200

Mr. Jayendra B Patel 213072

Mr. Amit R Manakiwala 162600

Mr. Kaushik D Shah NIL

Mrs. Rita J Patel 229810

Mr. Aakash J Patel 233140

Mr. Aalok J Patel 201790

CHANGE IN BOARD OF DIRECTORS DURING THE LAST THREE YEARS

INTEREST OF DIRECTORS

All the Directors of the company may be deemed to be interested to the extent of fees, if any,

payable to them for attending meetings of the Board and reimbursement of expenses. All the

directors may also be deemed to be interested to the extent of equity shares, if any, already held by

them and /or by their friends/relatives in the Company that may be subscribed for or allotted to them

in the present offer and also to the extent of any dividend payable to them and other distributions in

Sr.

No

Name Date of

Appointment

Date of

cessation

Reason

1 Nilesh Trivedi -------- 10-01-2010 Resignation

2 Lokesh kumar Singh 28-01-2010 -------- Appointment

74

respect of the said equity shares. All the directors may also be deemed to be interested to the extent

of normal transactions, if any, with the company. The Directors may also be regarded as interested in

the equity shares, if any, held or that may be allotted to the companies, firms and trust in which they

are interested as directors, members, partners and or trustees. Directors may be deemed to be

interested to the extent of remuneration paid/payable to them.

Borrowing Powers of Board of Director

As per the Articles of Association of the Company (Article Clause No.78) the Board of Directors of

the company may, from time to time at its discretion, subject to the provisions of sections 292 and

293 of the companies act, raise or borrow, either from the directors or from banks and financial

institutions and secure the payment of any sum of money for the purposes of the Company.

The Board of Directors is empowered to borrow up to the amount that may exceed our aggregate of

the paid up share capital and free reserves, that is to say, reserves no set apart for any specific

purpose, provided that the total amount of money/monies borrowed at any time shall not exceed Rs.

100 crores.

Compensation of the Directors

The compensation paid by the Company to the Directors for the Fiscal year ended on 2010 is as

below.

Details of remuneration to Directors for the year

The aggregate value of salary and perquisites including commission payable for the year ended 31st

March, 2010 to the Managing Director/Whole time Directors is as follows:

Mr. Jayendra Patel, Vice Chairman & Managing Director and Mr. Amit Manakiwala, Whole Time

Director, The aggregate value of salary and perquisites paid was Rs. 8, 89,980/-.

Compensation of Non-Executive Directors

The Company pays sitting fees to all the Non-Executive Directors at the rate of Rs. 5000/- for

attending each meeting of the Board and Committee thereof respectively. The sitting fees paid for

the year ended 31st March, 2010 to the said Directors are as follows:-

Sr

No.

Name of the Director Sitting Fees (Rs.)

1 Mr. Chinubhai R. Shah Rs. 52,000/-

2 Mr. Kaushik D. Shah Rs. 52,000/-

3 Mrs Rita J. Patel Rs. 40,000/-

4 Mr. Amit R. Mankiwala Rs. 5,000/

We also confirm that

• We have not entered into any arrangement or understanding with our major shareholders,

customers, suppliers, or others, pursuant to which our Directors were selected as a Director

or member of our senior management.

• We do not have any service contracts entered with our Directors that provides for any

benefits upon termination of employment, except as mentioned below:

75

TERMS OF APPOINTMENT & COMPENSATION OF VICE-CHAIRMAN CUM

MANAGING DIRECTOR

Our Company has re-appointed Mr. Jayendra B Patel as Managing Director & Vice Chairman with

effect from July 27, 2010.

Terms of Appointment of our Managing Director

The members of our Company in Annual General Meeting held on September 6, 2010, 2010

approved the re-appointment of Mr. Jayendra B Patel as the Vice- Chairman & Managing Director

of the Company for a period of three (3) years starting from July 27, 2010.

Name Mr.Jayendra B Patel

Designation VICE-CHAIRMAN CUM MANAGING DIRECTOR

Period 3 years w.e.f.27st July, 2010 to 26

st July, 2013

Board

Meeting Date

July 12, 2010

Remuneration 1. Salary: Rs 50,000/- p.m. in the scale of Rs 50,000-10,000-90,000

2. Allowances: Such amount as the Board may determine subject to a

Ceiling as referred under Para 1 (B) of Section II of Schedule XIII of the

Companies Act, 1956. The allowances may be paid by way of Perquisites/

Performance Linked variable Pay / Long Term Incentive Compensation

including sweat equity / bonus / Commission on profits etc.

Perquisites

Salary and allowances will include payment made by way of perquisites

which shall be evaluated at actual cost to the Company and where it is not

possible to ascertain the actual cost, such perquisites shall be evaluated as

per Income -tax Rules, 1962, and it may include followings.

(i) The Company shall reimburse expenditure incurred towards electricity,

fuel Charges, water charges and all other expenses for the upkeep and

maintenance of his residence.

(ii )Leave Travel Expenses: For self and family (which shall include spouse,

dependent children and parents) in accordance with the Rules applicable to

the Company.

(iii)The Company shall also provide and maintain a car and telephones for

official use.

(iv) Payment of Club fees for two clubs and all actual entertainment

expenses at the club reasonably incurred in or about the business of the

Company shall be reimbursed.

(v)Medical expenses for self and family, which shall include spouse,

dependant children and parents, at actual, shall be reimbursed.

(Vi) The Managing Director shall also be a beneficiary of the Group

Medical Insurance and the Personal Accident Insurance Policies taken by

the Company for the Management Staff of the Company.

Other Terms

and

Conditions

• Company's contribution to provident fund not exceeding such percentage

of the salary as may be fixed by the Central Government from time to time

and to gratuity, superannuation fund as per the rules of the Company.

• Leave in accordance with the policies applicable to Management Staff of

the Company & Also encashment of leave standing to his credit as per

76

applicable policies for Mgt. staff. The Managing Director shall not be

eligible to receive sitting fees for attending meetings. The aggregate of the

remuneration and perquisites as aforesaid in any financial year shall not

exceed the limits prescribed from time to time under Sections 198 and 309

of the Act read with Schedule XII to the said Act or any statutory

modifications or re-enactment thereof for the time being in force, or

otherwise as may be permissible at law.

Terms of Appointment of our Executive Director The members of our Company in Annual General Meeting held on September 6, 2010, 2010

approved the appointment of Mr. Aalok J Patel as the Executive Director of the Company.

Name Mr. Aalok J. patel

Designation Executive Director

Period 5 Year of July 1, 2010 to June 30, 2015

Board

Meeting Date

July 12, 2010

Remuneration 1. Salary: Rs 20,000/- p.m. in the scale of Rs 20,000-5,000-40,000

2. Allowances: Such amount as the Board may determine subject to a

Ceiling as referred under Para 1 (A) of Section II of Schedule XIII of the

Companies Act, 1956. The allowances may be paid by way of Perquisites/

Performance Linked variable Pay / Long Term Incentive Compensation

including sweat equity / bonus / Commission on profits etc.

Perquisites

Salary and allowances will include payment made by way of perquisites

which shall be evaluated at actual cost to the Company and where it is not

possible to ascertain the actual cost, such perquisites shall be evaluated as

per Income -tax Rules, 1962, and it may include followings.

(i) The Company shall reimburse expenditure incurred towards electricity,

fuel Charges, water charges and all other expenses for the upkeep and

maintenance of his residence.

(ii )Leave Travel Expenses: For self and family (which shall include spouse,

dependent children and parents) in accordance with the Rules applicable to

the Company.

(iii)The Company shall also provide and maintain a car and telephones for

official use.

(iv) Payment of Club fees for two clubs and all actual entertainment

expenses at the club reasonably incurred in or about the business of the

Company shall be reimbursed.

(v)Medical expenses for self and family, which shall include spouse,

77

dependant children and parents, at actual, shall be reimbursed.

(Vi) The Executive Director shall also be a beneficiary of the Group Medical

Insurance and the Personal Accident Insurance Policies taken by the

Company for the Management Staff of the Company.

Other Terms

And

Condition

• Company's contribution to provident fund not exceeding such percentage of the salary as may be fixed by the Central Government from time to time

and to gratuity,superannuation fund as per the rules of the Company.

• Leave in accordance with the policies applicable to Management Staff of

the Company & Also encashment of leave standing to his credit as per

applicable policies for Management staff. The Executive Director shall not

be eligible to receive sitting fees for attending meetings. The aggregate of

the remuneration and perquisites as aforesaid in any financial year shall not

exceed the limits prescribed from time to time under Sections 198 and 309 of the Act read with Schedule XII to the said Act or any statutory modifications

or re -enactment thereof for the time being in force, or otherwise as may be

permissible at law.

Corporate Governance

We have complied with the requirements of the applicable regulations, including the listing agreement

entered in to with the Stock Exchange and the SEBI Regulations, in respect of corporate governance

including constitution of the Board and Committees thereof. The corporate governance framework is based on an effective independent Board, separation of the Board’s supervisory role from the executive

management team and constitution of the Board Committees, as required under law.

We have a Board constituted in compliance with the Companies Act and listing agreement to be entered

in to with the Stock Exchange and in accordance with best practices in corporate governance. The

Board functions either as a full Board or through various committees constituted to oversee specific

operational areas. Our executive management provides the Board detailed reports on its performance periodically.

The Company pursuant to the clause 49 of the Listing Agreement with the Stock Exchange furnishes

its report on the code of Corporate Governance as under.

Company's philosophy on Corporate Governance

Arman Financial Services Limited¸ the company believes in conducting its affairs in a fair,

transparent and professional manner and maintaining the good ethical standards in its dealing with

all its constituents. The Company is committed to follow good Corporate Governance practices and

policies which include having professional Directors on the Board, adopting pragmatic policies and

effective systems and procedures and subjecting business processes to audits and checks measuring

upto required standards.

The driving force behind the Company's management is “Tomorrow's progress today” and baked by

a culture of “High-Tech and Quality”. The company quality policy is “To satisfy customer needs and

retain leadership by delivering quality services through Continuous improvement by motivated

employees”. The philosophy on Corporate Governance is an important tool for shareholder

protection and maximization of their long term values. The cardinal principles such as independence,

accountability, responsibility, transparency, fair and timely disclosures, credibility etc serve as the means of implementing the philosophy of Corporate Governance in letter and spirit. The company

78

confirms & exceeds wherever possible the prevalent mandatory guidelines on Corporate

Governance.

Board of Directors ('Board')

Size of the Board

As on the date, the Board consist of 8 (Eight) Directors including Independent, Executive and Non-

Executive Directors.

Responsibilities

The Board members are expected to attend and participate in all the Board meetings and Committee

meetings in which they are members. The Board of Directors’ responsibilities include reviewing

corporate performance, ensuring adequate availability of financial resources and reporting to

shareholders. The Board members ensure that their other responsibilities do not materially impact

their responsibility as a Director of the Company. The Board constantly evaluates the contribution of

its members and recommends their reappointment to its shareholders.

Composition of Board of Directors

The Board of Directors consists of 8 (Eight) directors are as follows

Name of Director Designation Category

Mr. Chinubhai R. Shah Chairman ID

Mr. Jayendra B Patel Vice-Chairman & Managing

Director

ED

Mr. Kaushik D. Shah Director ID

Mr. Aakash J Patel Director NED

Mr. Aalok J Patel Director ED

Mr. Lokesh kumar Singh Director ID

Smt. Ritaben J. Patel Director NED

Mr. Amit R Manakiwala Director D

D: Director, ID: Independent Director, ED: Executive Director, NED: Non Executive Director,

WTD: Whole Time Director.

Board Committees

The guidelines in respect of corporate governance are applicable to the Company as our shares are

listed on the BSE. The Company has complied with the requirements of Corporate Governance

contained in the Equity Listing Agreement, particularly those relating to composition of Board of

Directors, constitution of committees such as Audit Committee, Share Transfer & Investor Relations

Committee, etc.

In accordance with the relevant provisions of the Companies Act, 1956, the Listing Agreement and

the RBI Guidelines the Board has set up the following Committees:

(i) Audit Committee

(ii) Shareholders'/Investors' Grievance Committee

(iii) Project Advisory Committee

(iv) Share Allotment & Transfer Committee

(v) Remuneration Committee

79

The Company has the following standing Committees of the Board.

(i) Audit Committee

The constitution of Audit Committee also meets with the requirements under Section 292A of the Companies Act, 1956 and Para 9A of the Non-Banking Financial Companies Prudential Norms

(Reserve Bank of India) Directions, 1998.

The Chairman of the audit Committee is Mr. K D Shah

Sr.

No.

Name of

Director

Designation in

Committee

Nature of Directorship

1 Mr. K. D. Shah Chairman Non executive & Independent director

2 Mr. C.R. Shah Member Non executive & Independent director

3 Mrs. Rita Patel Member Non executive director

The terms of reference stipulated by the Board of Directors to the Audit Committee are, as contained

in Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956, as follows:

a) To Monitor Company's financial reporting process and the disclosure of its financial information.

b) Recommending the appointment and removal of external auditors, audit fee and for payment for

any other services.

c) Reviewing with management the quarterly, half-yearly and annual financial statements before

submission to the Board focusing primarily on (i) any changes in accounting policies and

practices, (ii) major accounting entries based on exercise of judgment by management, (iii)

qualifications in draft audit report, (iv) the going concern assumption, (v) compliance with

accounting standards (vi) compliance with Stock Exchange and legal requirements concerning

financial statements and (vii) any related party transactions i.e. transactions of the Company of

material nature, with promoters or the management, their subsidiaries or relatives etc. that may

have potential conflict with the interests of Company at large.

d) Reviewing with the management, external and internal auditors, the adequacy and compliance of

internal control systems.

e) Reviewing the adequacy of internal audit functions.

f) Discussions with internal auditors any significant findings and follow up there on.

g) Reviewing the findings of any internal investigations by the internal auditors into matters where

there is suspected fraud or irregularity or a failure of internal control systems of a material nature

and reporting the matter to the Board.

h) Discussions with external auditors before the audit commences, nature and scope of audit as well as post-audit discussions to ascertain any area of concern.

i) Reviewing the Company's financial and risk management policies.

j) To look into the reasons for substantial defaults in the payment to the depositors, debenture

holders, shareholders (in case of non payment of declared dividends) any creditors. During the

year, the Committee met 4 times. The Statutory Auditors and the Internal Auditors of the

Company were also invited to attend the Audit Committee meetings. All the Committee members

were present at all the meetings.

(ii) Shareholders'/Investors' Grievance Committee

The Board of Directors of the Company has constituted a Shareholders'/ Investors' Grievance

Committee, comprising of Mr. C.R. Shah, Chairman, Mr. K.D. Shah & Mr. Jayendra Patel. The

Committee, inter alia, approves issue of duplicate certificates, overseas & reviews all matters

connected with the securities transfers. The Committee also looks into redressed of shareholder's

complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends,

etc. The Committee overseas the performance of the Registrar and Transfer Agents, & recommends

80

measures for overall improvement in the quality of investor services. The Board of Directors has

delegated the power of approving transfer of securities to the Managing Director and the Executive

Director. In pursuance of the Securities and Exchange Board of India (Prohibition of Insider

Trading) Regulations, 1992 (duly amended), the Board has approved the "Code of conduct for

Prevention of Insider Trading" and authorized the Committee and monitor the various requirements as set out in the Code. Mr. Alok J. Patel, the Director has been appointed as a Compliance Officer.

The total number of complaints received and replied to the satisfaction of shareholders during the

year under review, was 1(One). Outstanding complaints as on 31st March, 2010 were Nil. No

requests for dematerialization were pending for approval as on 31 March, 2010.

(iii) Project Advisory Committee

The Board of Directors of the Company has constituted a Project Advisory Committee, comprising

of Mr. Jayendra Patel, Mr. Amit Manakiwala, Mr. Sanjay Sinha, DGM, SIDBI and Mr. Nrupesh

Shah, CA. The Committee, inter alia, reviews the Project performance of SIDBI approved Micro

Financing Project and recommends the approval and disbursement of SIDBI Term loans.

(iv) SharesAllotment & Transfer Committee

The Board of Directors of the Company has constituted a Share Allotment & Transfer Committee,

comprising of Mr. Jayendra Patel, Chairman and Mr. Amit Manakiwala, the member. The

Committee, inter alia, reviews and approves the transfer/transmission/demat of equity shares of the

company as submitted by Share pro Services (India) Pvt. Ltd.,The Registrar and Transfer Agent of

the company.

(v) Remuneration Committee

The Board of Directors of the Company has constituted a Remuneration Committee, comprising of

Mr. K D Shah, Chairman, Mr. Lokesh kumar Singh and Mrs. Rita Patel, the members. The

Committee, inter alia, reviews and approves the remuneration payable to Executive Directors of the

Committee. The Committee met once in the year and recommended the reappointment of Mr. Amit

Manakiwala for a period of five years for the financial year ended on 2010. However Mr. Amit Manakiwala has resigned as Whole Time Director w. e. f. 14.10.2009 and continued as ordinary

Director on the Board.

BOARD PROCEDURE

The Board of Directors meets at least once in every quarter. The Agenda for the meeting together

with the relevant notes are circulated in advance. The minutes of the meeting are confirmed and

approved in the subsequent Board Meeting. The Company confirms that all material information has

been disclosed to the Board of Directors.

DECLARATION OF RESULTS

The Company declares the Quarterly results within the expected time and the same have been

reported to the Stock Exchange as per the Listing Agreement. The Un-audited/Audited quarterly

results were declared and published in the National Dailies and in Regional Newspapers as per

Clause 41 of the Listing Agreement.

COMPLIANCE WITH LISTING AGREEMENT

The Company is listed on BSE & JSE. Presently, Equity Shares of the Company are listed and traded on BSE. The Company has already made application for delisting of its securities to the JSE

and approval of the same is still awaited.

The Company has complied with the requirements under the Listing Agreement of the BSE. It has

paid the requisite annual listing fee to the BSE for the period 2009

been initiated by the Stock Exchange against our Company or its Directo

Organization Structure

Details of Key Managerial Personnel

Our Company is managed by its Board of Directors, assisted by qualified professionals, with vast

experience in the field of production/engineering/distribution/m

Key Managerial Personnel

The day-to-day management of our Company is looked after by Mr. Jayendra B Patel, Managing

Director. He is assisted by a team of qualified professionals

management personnel who are in the permanent employment of our Company is as follows:

Aalok J.Patel Executive Director

R.J.Patel Non

Executive Director

Aakash J. Patel Non Executive Director

Kshitij Thakur H.R. &

Administration

2 Executives

Gaurav Jethwa

Finance Managre (JLG)

65 Executives

Aakash J.Patel

Executive Director

Name

Designati

on

Date of

Joining

Age

(years)

Rambabu

Agarwal

Marketi

ng &

Business

develop

ment

16/09/

1999

36

has complied with the requirements under the Listing Agreement of the BSE. It has

paid the requisite annual listing fee to the BSE for the period 2009-2010. No disciplinary action has

been initiated by the Stock Exchange against our Company or its Directors since the date of listing

Details of Key Managerial Personnel


experience in the field of production/engineering/distribution/marketing/finance and corporate laws.

day management of our Company is looked after by Mr. Jayendra B Patel, Managing

a team of qualified professionals in our company. The profile of the key


C.R.Shah Chairman &

Independent

Director

Board Of Directors

Aakash J. Patel Non Executive Director

J.B.Patel Vice

Chairman & MD

Gaurav Jethwa

Finance Managre (JLG)

65 Executives

Atul Patel Accounts &

Finance Manager

9 Executives

R ambabu Agrawal Business

Development Manager

45 Executives

Prashant Modi Collection manager

10 Executives

Lokesh Singh Independent

Director

K.D.Shah Independent

Director

Aakash J.Patel Non

Executive Director

(years)

Qualific

ation

Total

Experie

nce

years

Previous

Employm

ent

Salary

for

Financi

al Year

2009-10

(Rs. in

Lacs)

Functions

B.Com,

C. A.

15 Uma

Petro

Product

s India

Pvt.

Ltd.

5.12 He is responsible for

business development

and specializes in

identifying new

acquisition

opportunities and

81

has complied with the requirements under the Listing Agreement of the BSE. It has

2010. No disciplinary action has

rs since the date of listing.


arketing/finance and corporate laws.

day management of our Company is looked after by Mr. Jayendra B Patel, Managing

The profile of the key


Prashant Modi Collection

10 Executives

A.R.Mankiwala Director

He is responsible for

business development

and specializes in

identifying new

opportunities and

82

All the above mentioned key managerial personnel are permanent employees of our Company. The

remuneration of each of key managerial personnel includes salary, bonus, Company’s contribution to

Provident Fund, Leave Travel Allowance/Concession, medical expenses and value of other facilities

preparation of strategic

business plan apart

from handling select

strategic corporate

initiatives

Gaurav

Jethwa

Micro

financ

e

Manag

er

(JLG)

07/09

/2009

24 Post

Grad

uate

Diplo

ma in

Rural

Mana

geme

nt

3 Spanda

na

Sphoor

ty

Financ

e

Limite

d.

2.2 He develops and

rollsout JLG based

Micro finance Program

and prepares manual to

design and develop

various loan products,

recruits brand and

territory level staff.

Atul

Patel

Accou

nts

and

Financ

e

Manag

er

16/02

/1998

39 B.Com

., C.A.

Inter

18 Vadilal

Industr

ies

Limite

d

1.9 His responsibilities

includes preparation of

accounts, bank

information and

reports, co ordinating

of loan syndication and,

insurances, preparation

of budgets and

interaction with

auditorsa and handling

the overall financial

aspect of the company.

Prashant

Modi

Collec

tion

manag

er

15/04

/2000

36 B.Co

m.

17 Modi

Hoover

Internati

onal

1.5 He is well versed with

all the procedures

related to collection

work. He has a team of

Tele-Callers, Bucket

wise collection

executives, seizures and

others.

Mr.

Kshitij

Thakur

HR &

Admin

Manag

er

09/07

/2010

25 PGDM

Rural

Manage

ment

3 Rural

Urban

Innova

tive

Social

Enter

--- He is responsible for

the management of

human resources of the

Company.

83

inclusive of accommodation as may be applicable in such case. We have not offered any profit

sharing plan to our Key Managerial Personnel.

Changes in the Key managerial personnel during the last three years

Name Date of

Appointment

Date of Cessation Reason for Change

Mr. Gaurav Jethva 07/09/2009 - Appointment

Mr. Kshitij Thakur 09/07/2010 - Appointment

Payment or Benefit (Non-Salary Related) to our officers

Except as stated in this Draft Letter of Offer, no amount or benefit has been paid or given or is

intended to be paid or given during the preceding years to any of our officers except for the normal

remuneration paid to Directors, officers or employees since the incorporation of our Company. For

further information please see the section “Financial Information – Auditors Report” starting on page no. 90. None of the beneficiaries of loans, advances and sundry debtors are related to the

Company’s Directors.

There is no arrangement or understanding with major shareholders, customers, suppliers or any other

person pursuant to which any person has been selected as Director or Member of Senior

Management.

Shareholding of Key Managerial Personnel in our Company

None of the key managerial personnel are holding any shares of the company.

Bonus or Profit sharing Plan for the Key Managerial Personnel

Our Company does not have any bonus or profit sharing plan for its Key Managerial Employees.

Employee Stock Option Scheme (ESOS)/ Employees Stock Purchase Scheme (ESPS)

As on the date of filing this Draft Letter of Offer with SEBI, our Company has not issued any Equity

Shares under any scheme of employee’s stock option or employee’s stock purchase.

Relation between any director and Key Managerial Personnel

None of the Key Managerial Personnel have any relationship with the promoters or the directors of

the Company

Employees

There are no payment or benefits is given to the officers of the Issuers Company during the

immediately preceding two years and nor the Company indent to pay any such non-salary related

payments or benefits.

84

OUR PROMOTERS AND PROMOTER GROUP

Our Individual Promoters of the Company are:

1. Mr. Jayendra B. Patel

2. Mr. Amit R. Manakiwala

3. Mrs. Rita J. Patel

We confirm that the Permanent Account Number, Bank Account Numbers, Passport Number have been

submitted to the Stock Exchange at the time of filing of the Draft Letter of Offer.

Interest of Promoters & Directors

All the Promoters may be deemed to be interested to the extent of Remuneration and reimbursement of

expenses, if any, payable to them. The Directors may also be deemed to be interested to the extent of

the shares, if any, held by them or by the relatives or by firms or companies of which any of them is a

partner and a Director/ Member respectively and the shares if any, out of the present Offer that may be

subscribed for and allotted to them or their relatives or any Company in which they are Directors /

members or firms in which they are partners.

Name of the

Promoter

Mr. Jayendra B. Patel Mr. Amit R Manakiwala Mrs. Rita J. Patel

Driving License

No.

CJ01-191012-03 GJ01/910236/01 GJ01-191013-03

Passport No. A 1661955 F 4352228 F5786155

Permanent

Account No.

ABBPP2876K ABEPM2717P ABOPP5894N

Voter Identity

No.

GJ/11/068/027983 GJ/11/068/201384 GJ/11/068/028141

Name of Bank &

Branch

I.D.B.I Bank,

C.G. Road.

H.D.F.C. Bank Ltd,

Navrangpura.

I.D.B.I Bank,

C.G. Road.

Bank Account

No.

009104000194303 00061300019865 009104000196635

85

Common Pursuits and Interests of Promoters

The Promoters of our Company are interested to the extent of their shareholding in us and the dividend

they are entitled to receive, if declared, by our Company.

Except as stated otherwise in this Draft Letter of Offer, we have not entered into any contracts,

agreements or arrangements during the preceding two years from the date of this Draft Letter of Offer

in which the Promoters are directly or indirectly interested and no payments have been made to them in

respect of the contracts, agreements or arrangements which are proposed to be made with them other

than in the normal course of business.

Further, except as disclosed in this section titled “Our Promoters and Promoter Group” on page no. 84

,our Promoters do not have any interest in any venture that is involved in any activities similar to those

conducted by us which could result in any conflict of interest. For further information please see the

section “Financial Information –Auditors Report” on page no.90 of the Draft Letter of Offer.

Interest in the property of Company

The promoters do not have any interest in any property acquired by our Company within two years

preceding the date of this Draft Letter of Offer or proposed to be acquired by our Company.

Group Companies of promoters and Entities

The companies that are part of the Promoter Group have been provided below. The Companies that form part of the Promoter Group includes:

(i) any body corporate in which ten per cent or more of the equity share capital is held by the promoter

or an immediate relative of the promoter or a firm or Hindu Undivided Family in which the promoter or

any one or more of his immediate relative is a member.

(ii) any body corporate in which a body corporate as provided in (a) above holds ten percent or more, of

the equity share capital.

(iii) any Hindu Undivided Family or firm in which the aggregate shareholding of the promoter and his

immediate relatives is equal to or more than ten per cent of the total; and a company promoted by our

Promoters.

Apart from those mentioned below, there are no other Companies promoted by our Promoter or where

in any of our Promoter controlling interest has such that they can be our Group Companies.

DETAILS OF OUR PROMOTER GROUP ENTITIES

FINANCIAL INFORMATION OF OUR GROUP COMPANIES/ENTITIES

GROUP COMPANIES:

NAMRA HOLDING & CONSULTANCY SERVICES PRIVATE LIMITED

Corporate Information

Namra Holding & Consultancy Services Private Limited was incorporated under the Companies Act,

1956 on 02/06/1999. It has its registered office at Ground Floor, Pushpak Building, Khanpur,

Ahmedabad, Gujarat Main activities of the company are to carry on the business of Manufacturers’

86

representatives, agents, traders, dealers, exporters, importers of all kinds, Investment and Management

Consultancy etc.

Shareholding pattern as on March 31, 2010

Particulars No of Shares % of shareholding

Mrs. Ritaben J. Patel 1700 17%

Mr. Aakash Patel 720 7.2%

Mr. Jayendrabhai Patel 4560 45.6%

Mr. Chinubhai Shah 10 0.1%

Mr. Jayendra Patel 3000 30%

Mrs. Himani Manakiwala 10 0.1%

Total 10000 100%

Board of Directors

The following are the Board of Directors as on March 31, 2010.

Name Designation

Mrs. Rita Patel Director

Mr. Mahesh Shankarlal Panchal Director

Financial Information:

(Rs in Lacs)

Year Ended March 31 2010 2009 2008

Total Income 0.58 0.63 1.73

Profit / (Loss) after Tax (PAT) 0.00 0.03 0.15

Equity Share Capital 1.00 1.00 1.00

Reserve(excluding revaluation reserve) 2.40 2.40 2.37

Earning per share (EPS) (Rs.) - 0.30 1.46

Net Assets Value (NAV) per share (Rs.) 6.92 7.92 7.88

Source: Audited Financial Statements

Note: Face value of each equity shares is Rs.10/-.

CO-OWNERSHIP FIRM:

1. J. B. PATEL & CO.

J.B. Patel & Co. was established as a Co-Ownership firm on March20, 2001. Its Office is situated at

Pushpak Building, Khanpur, Ahmedabad; Gujarat-380001 Main activity of the Firm is to generate

income from renting properties.

Profit / Loss sharing pattern as on March 31, 2010:

(Rs in Lacs)

Name of partner Percentage of Profit & Loss

Mrs. Kalavatiben J Patel 16.66%

Mr. Jayendra B Patel 16.66%

Mrs. Ritaben J Patel 16.67%

87

Mr. Bhushan M Patel 16.67%

Mrs. Kamlaben S Patel 12.50%

Mrs. Kosha Jitendra Patel 16.67%

Mrs. Pallaviben M Patel 4.17%

Total 100%


(Rs in Lacs)


Total Income 31.25 36.53 16.22


Partner's Capital 24.78 20.67 13.10

Reserve(excluding revaluation reserve) NIL NIL NIL


PARTNERSHIP FIRM:

1. B.M.PATEL & CO.

B.M.Patel & Co. was established as a Partnership firm under the Partnership Act, 1932 on 25th

February, 2001. Its Office is situated at Pushpak Building, Khanpur, Ahmedabad - 380001 Gujarat.

Main activities of the Firm are to carry on the business of renting properties etc.


(Rs in Lacs)


Mr. Jayendra Bhailal patel 20%

Mrs. Pallaviben Mahendra patel 20%

Mr.Amit Rajnikant Manakiwala 40%

Mr.Dhanvir Jitendra Patel 10%

Mr.Bhartendu Jitendra patel 10%

Total 100%


(Rs in Lacs)





Partner’s Capital 4.30 7.08 8.30

Reserve(excluding revaluation

reserve)

Nil Nil Nil

88

2. A SQUARE ENTERPRISE

A Square Enterprise was established as a Partnership firm under the Partnership Act, 1932 on July18,

2004. Its Office is situated at Pushpak Building, Khanpur, Ahmedabad, Gujarat-380001 Main activities

of the Firm are to carry on the business of Bill Collection for various Companies.


(Rs in Lacs)


Mr. Jayendra B Patel 10%

Mr. Aalok J Patel 30%

Mr. Amit R Manakiwala 10%

Mr. Anang M Shah 25%

Mrs. Amiben A Shah 25%

Total 100%


(Rs in Lacs)

Year Ended March

31

2010 2009 2008

Total Income - 0.29 -

Income after Tax - - -

Proprietor’s Capital - 0.94 1.12

Reserve - - -


HINDU UNDIVIDED FAMILIES:

JAYENDRA B. PATEL HUF

Jayendra Patel HUF is a Hindu Undivided Family, represented by its karta Mr. Jayendra B. Patel

The financials for the last 3 years are given below:

(Rs in Lacs)

Particular 2010 2009 2008


Capital Account ------- -------- --------

Interest/Rent Income 1.83 1.77 1.83

Net Surplus 1.83 1.77 1.83

Source: Audited Financial Statements.

None of our Group Companies and Associate Companies has any business interest in our Company

Declaration

We confirm that our Promoters and Promoter Group entities, including relatives of the Promoters, have

confirmed that they have not been detained as willful defaulters by RBI or any government authority

and there are no violations of securities laws committed by any of them in the past or any such

proceedings are pending against any of them. Additionally, none of the Promoters or Promoter Group

89

Entities or Persons in Control of Body corporate forming part of our Promoter Group has been

restrained from accessing capital markets for any reasons by the SEBI or any other authorities.

The Company is not a sick Company within the meaning of Sick Industries Companies (Special

Provision) Act, 1985 or under winding up nor have any BIFR proceedings initiated against it.

Defunct Promoter Group Companies

None of the Promoter Group companies has been struck off as a defunct company by any Registrar of

Companies in India and no application was made to the Registrar of Companies for striking off the

name of any of the group company during the five years preceding the date of filing draft Letter of

Offer with the Board.

For details relating to Litigations involving the Promoters and Promoter Group Entities please refer

“Outstanding Litigations and Material Developments” on page no. 125 of this Draft Letter of Offer.

None of our group Companies and associate Concerns are involved in same business line of finance.

None of our group company had related business transaction with our company which had significance

on the financial performance of the company.

There has been no disassociation of our Promoters in the last three years from the companies / firms

during the last three years.

90

SECTION V- FINANCIAL INFORMATION

Auditor’s Report for year ended March 31, 2010

To,

The Members of

ARMAN FINANCIAL SERVICES LIMITED Ahmedabad

We have audited the attached Balance Sheet of Arman Financial Services Ltd. as at 31st March,

2010, the Profit & Loss Account and also Cash Flow Statement for the year ended on that date annexed

thereto (herein after referred to as financial statements). These financial statements are the

responsibility of the Company's Management. Our responsibility is to express an opinion on these

financial statements based on our audit.

1. We conducted our audit in accordance with auditing standards generally accepted in India. Those

Standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements. An audit also

includes assessing the accounting principles used and significant estimates made by management,

as well as evaluating the overall financial statement presentation.We believe that our audit provides

a reasonable basis for our opinion.

2. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of

India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the

Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

3. Further to our comments in the Annexure referred in para 3 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge

and belief were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company

so far as appears from our examination of those books; (iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this

report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt

with by this report comply with the accounting standards referred to in sub-section (3C) of

section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors and taken on record by

the Board of Directors, we report that none of the directors is disqualified as on 31st March

2010 from being appointed as directors in terms of clause (g) of sub-section (1)of section

274 of the Companies Act 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to

us, the said accounts, read together with the notes thereon, give the information required by

the Companies Act, 1956, in the manner so required and give a true and fair view in

conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st

March, 2010

(b) In the case of the Profit and Loss Account, of the Profit of the Company for the year

Ended on that day: and

(c) In the case of the Cash flow Statement, of the Cash Flow for the year ended on that

Date



(REGISTRATION NO. 109616W)

PLACE: AHMEDABAD

DATED: 12.07.2010 (J. J. SHAH)

(J. J. SHAH)

PARTNER

[M. No. 45669]

91

ANNEXURE

Referred to in paragraph 3 of our report of even date for the year ended 31st March 2010

1) In respect of Fixed Assets:

a. The Company has maintained proper records showing full particulars including quantitative

details and situation of fixed assets.

b. As per the information and explanations given to us, all the fixed assets have been physically verified by the management during the year. We are informed that no material

discrepancies were noticed on such verification.

c. During the year, the Company has not disposed off any major/substantial part of the fixed

assets.

2) In respect of its Inventories:

a. The inventory has been physically verified during the year by the management. In our

opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are

reasonable and adequate in relation to the size of the Company and the nature of its

business.

c. On the basis of our examination of the records of inventory, we are of opinion that the

Company is maintaining proper records of inventory. No discrepancies were noticed on

verification between the physical stocks and books records.

3) In respect of loans, secured or unsecured, granted or taken by the company to/from companies,

firms or other parties covered in the register maintained under section 301 of the Companies Act,

1956 : a. During the year under audit, there are twelve parties covered in the register maintained

under section 301 of the Companies Act, 1956 from whom the company has taken loans.

The year end balance is amounting to Rs. 99.07 Lacs and the maximum amount involved

during the year was Rs. 124.35 Lacs.

b. In our opinion and according to the information and explanations given to us, in case of

loans taken during the period, the rates of interest, wherever applicable and other terms

and conditions are not prima facie prejudicial to the interest of the company.

c. There are no stipulated terms for repayment of loans taken by the company from the

companies/ firms / parties listed in the register maintained under section 301 of the

Companies Act, 1956. Hence we are not able to give comment on para (iii) (c) & (d) of the

Companies (Auditor’s Report) Order, 2003.

d. As per the information and explanation given to us, the Company has not granted any loan

to any of the companies, firms and other parties covered under section 301 of the

Companies Act, 1956 hence clause no (iii)(e) to (iii)(g) of para 4 are not applicable.

4) In our opinion and according to the information and explanations given to us, the internal control

system for purchase of fixed assets and for sanction, disbursements and recovery of loans given

by the Company are adequate and commensurate with the size of the Company and present nature

of its business. During the course of audit we have not observed any continuing failure to correct

major weakness in internal controls.

5) In respect of contract or arrangements covered under Section 301 of the Companies Act, 1956:

a. Based on the audit procedures applied by us and according to the information and

explanations provided by management, we are of the opinion that the contract or

arrangements that need to be entered into the register maintained under section 301 have

been so entered.

b. In our opinion and according to the information and explanations given to us, the

transactions made in pursuance of contracts or arrangements entered in the registers

maintained under section 301 of the Act, in respect of any party during the year have been

92

made at prices which are reasonable having regard to prevailing market prices at the

relevant time.

6) During the year, the Company has not accepted any deposits from the public within the meaning

of provisions of Sections 58A and 58AA and relevant other provisions of the Companies Act,

1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8) As informed to us, the maintenance of cost records have not been prescribed by the Central

Government under section 209(1) (d) of the Companies Act, 1956, for the year under review.

9) In respect of Statutory Dues:

a. According to the records of the Company, the Company is regular in depositing with

appropriate authorities undisputed statutory dues including provident fund, employee’s state

insurance, income-tax, sales-tax, wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it except there is a short fall in payment of Advance

Tax.

b. According to the information and explanations given to us, no undisputed amounts payable

in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty and Excise

Duty were outstanding, as at 31st March, 2010 for a period of more than six months from the

date they became payable.

c. According to the records of the Company, the dues of sales tax, income tax, customs, wealth-tax, excise duty, cess which have not been deposited on account of disputes and the forum

where the dispute is pending are as under:

Name of the

Statute

Nature of the

Dues

Period to which

the amount

relates (A.Y.)

Amount

(Rs. In

Lacs)

Forum where

dispute is pending

Income Tax

Act, 1961 Income Tax 2001-2002 2.99

Income Tax

Appellate Tribunal

Income Tax

Act,1961 Income Tax 2001-2002 5.35

Income Tax

Appellate Tribunal

Income Tax

Act, 1961 Income Tax 2002-2003 4.11

Income Tax

Appellate Tribunal

Ahmedabad

Income Tax

Act, 1961 Income Tax 2002-2003 6.04

Income Tax

Appellate Tribunal

Income Tax

Act, 1961 Income Tax 2005-2006 0.83

Income Tax

Appellate Tribunal

Total…. 19.32

10) The company has no accumulated losses and has not incurred any cash losses during the

financial period under review or in the immediately preceding financial year.

11) In our opinion and according to the information and explanations given to us, the company has

not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12) The Company has not granted any loans and advances by way of pledge of Shares, Debentures

and other securities.

13) The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual benefit Fund /

Societies are not applicable to the Company.

14) In respects of shares, securities, debentures and other investments dealt or traded by the

company, proper records are maintained in respect of transactions and contracts and timely

entries have been made therein. All the investments are held by the Company in its own name.

93

15) As per the information provided to us, The Company has not given any guarantee for loans

taken by others from bank or financial institutions.

16) In our opinion, and according to the information and explanations given to us, on overall basis,

the term loans have been applied for the purpose for which they were obtained.

17) According to the information and explanations given to us and on an overall examination of the

balance sheet of the company, we report that the no funds raised on short-term basis have been

prima-facie used for long-term investment.

18) During the year, the Company has not made any preferential allotment of shares to parties and

companies covered in the register maintained under section 301 of the Companies Act, 1956.

19) The Company has not issued any Debentures and therefore the question of creating the

securities in respect thereof does not arise.

20) During the year, the Company has not raised any money by way of Public issues.

21) Based upon the audit procedures performed and information and explanations given by the

management, we report that no fraud on or by the Company has been noticed or reported during

the course of our audit.




PLACE: AHMEDABAD

DATED: 12.07.2010 (J. J. SHAH)

(J. J. SHAH)

PARTNER

[M. No. 45669]

94

AUDITOR'S REPORT

To,



Ahmedabad

In terms of Reserve Bank of India, Department of Financial Companies Notifications No. DFC117/DG

(SPT)-98 dated 31st January, 1998, we report that:

1) The Company has received Registration Certificate, as provided in Section 451A of the

ReserveBank of India Act, 1934 (2 of 1934) from Reserve Bank of India on 06.11.1998.

2) The Company has not accepted any public deposits during the year ended on 31-03-2010.

3) The Company complied with the prudential norms relating to income recognition, accounting

standards, assets classification and provisioning for bad and doubtful debts and concentration of the

Credit/investments as specified in the direction issued by the Reserve Bank. 4) Capital Adequacy Ratio as disclosed in the return submitted to the Reserve Bank of India in terms

of the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 has

been correctly determined and such ratio in compliance with the minimum Capital to Risk Assets

Ratio prescribed by the Reserve Bank of India.

5) The Company has furnished half yearly Return on Prudential Norms to Reserve Bank of India

within time prescribed to the Non-Banking Financial Companies Prudential Norms (Reserve Bank)

Directions, 1998. 6) The Company has furnished return on Deposits to Reserve Bank of India within time prescribed in

the First Scheduled to the Non-Banking Financial Companies Prudential Norms (Reserve Bank)

Directions, 1998.

7) The Company has not accepted any public deposits and hence sub clause no. (ii), (iii), (vi) and (ix)

of Clause 3 (B) of the said Notification are not applicable to the company.




PLACE: AHMEDABAD

DATED: 12.07.2010 (J. J. SHAH)

(J. J. SHAH)

PARTNER

[M. No. 45669]

95




(J. J. SHAH)

PARTNER


Date: 12/07/2010 Vice Chairman Director

& Managing Director


BALANCE SHEET AS AT 31ST MARCH, 2010

P A R T I C U L A R S Schedule 31/03/2010 31/03/2009

No. Rs. Rs.

SOURCES OF FUNDS

1. Shareholders' Funds :

(a) Share Capital 1 40,766,000 40,766,000

(b) Reserves and Surplus 2 37,562,587 32,543,090

78,328,587 73,309,090

2. Loan Funds : (a) Secured Loans 3 183,581,457 93,857,179

(b) Unsecured Loans 4 9,907,999 4,035,000

193,489,456 97,892,179

3. Deferred Tax Liability (Net) 1,318,282 937,076

Total….. 273,136,325 172,138,345

APPLICATION OF FUNDS

1. Fixed Assets

Gross Block 5 13,578,115 11,656,611 Less : Depreciation 3,565,398 3,509,962

10,012,717 8,146,649

2. Investments 6 200,000 Nil

3. Current Assets, Loans & Advances

(a) Current Assets 7 43,531,118 26,559,245

(b) Loans & Advances 8 226,675,576 140,417,700

270,206,694 166,976,945

4. Less : Current Liabilities & Provisions (a) Current Liabilities 9 3,935,457 2,502,285

(b) Provisions 10 3,347,629 482,965

7,283,086 2,985,250

Net Current Assets 262,923,608 163,991,695

273,136,325 172,138,345



96


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

P A R T I C U L A R S Schedule Rupees 31/03/2010 31/03/2009

No. Rs. Rs.

INCOME

1. Income from Operations 11 56,078,652 43,889,203

2. Other Income 12 25,950 108,831

56,104,602 43,998,034

EXPENDITURE

1. Administrative & Other Expenses 13

24,037,508 17,354,576

2. Interest 14 19,380,803 15,530,185

3. Depreciation 5 723,938 615,018

44,142,248 33,499,779

PROFIT BEFORE TAXATION 11,962,353 10,498,255


-- Current Tax (3,700,000) (3,500,000)

-- Fringe Benefit Tax Nil (83,000)

-- Deferred Tax Assets/ (Liability) (381,206) (16,102)

PROFIT AFTER TAXATION 7,881,148 6,899,153

Excess / (Short) Provision of Earlier Years Nil Nil

7,881,148 6,899,153

Add : Balance B/F from last year 24,782,534 19,383,381

PROFIT AVAILABLE FOR APPROPRIATION 32,663,682 26,282,534

Proposed Dividend 2,445,960 Nil

Corporate Dividend Tax thereon 415,691 Nil

Tranfer to Special Reserve as per Sec

45(IC) of RBI Act

1,700,000 1,500,000

BALANCE CARRIED TO BALANCE SHEET 28,101,031 24,782,534

Basic and Diluted Earning Per Shares 1.93 1.69


As per our report of even date attached.




(J. J. SHAH)

PARTNER



& Managing Director

97


'CASH FLOW STATEMENT FOR THE YEAR ENDED 31st March, 2010

NOTE

1) The above Cash Flow Statement has been prepared under the "Indirect Method" set out in

Accounting Standard – 3 issued by the Institute of Chartered Accountants of India

YEAR YEAR

ENDED ENDED

31/03/2010 31/03/2009

A: Cash from Operating Activities :

Net Profit before Taxation and 11,962,353 10,498,255

Adjustment For :

Depreication 723,938 615,018

NPA Provisions(Net) 3,013 8,049

Loss/ (Profit) on Sale of Investments Nil (525)

Loss on Sale of Fixed Assets 177,398 Nil

Interest Paid 19,380,803 15,530,185

Dividend Income (25,950) (108,306)

20,259,202 16,044,421

Operating Profit Before Working

Capital changes : 32,221,555 26,542,676

Adjustment For :

Inventory (116,507) 1,006,972

Trade and Other Receivables (86,039,364) 12,385,675

Trade Payables 1,357,666 686,128

(84,798,205) 14,078,774

Cash Generated From Operations (52,576,650) 40,621,450

Income Tax Paid (4,728,233) (4,826,943)

Fringe Benefit Tax Paid - (84,464)

Interest Paid (19,380,803) (15,530,185)

(24,109,035) (20,441,592)

(76,685,685) 20,179,858

B: Cash Flow From Investment Activities

Purchase of Fixed Assets (3,174,404) (214,179)

Sale of Fixed Assets 407,000 Nil

Purchase of Investments (200,000) Nil

Sale of Investmensts Nil 1,500

Dividend Received 25,950 108,306

Net Cash from Investment Activities (2,941,454) (104,373)

C: Cash Flow From Financing Activities

Proceeds From Long Term Borrowings 107,500,000 12,352,000

Repayment of Long Term Borrowings (58,263,300) (25,584,525)

Proceesd From Short Term Borrowings 50,452,578 4,580,752

Repayment of Short Term Borrowings (4,016,495) (8,279,152)

Dividend Paid Nil (480)

Net Cash from Financing Activities 95,672,783 (16,931,405)

Net Increase in Cash & Cash

Equivalents

16,045,644 3,144,081

Cash & Cash Equivalents at the

Beginning

19,401,890 16,257,809

Cash & Cash Equivalents at the End 35,447,534 19,401,890

98

2) Cash and cash equivalents at the end includes Rs. 74,590 /- (Prev. Year Rs.74,590/-) in respect of

unclaimed dividends which are not available for use by the Company.

3) Cash and cash equivalent at the end includes Rs. 3,44,07,818/- (Previous year Rs. 1,90,83,102/- )

in respect of Fixed Deposits pledged with the banks which are not available for use by the company





(J. J. SHAH)

PARTNER



& Managing Director

99


SCHEDULES "1 TO 15" FORMING THE PART OF FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31st MARCH, 2010

P A R T I C U L A R S

As at As at

31/03/2010 31/03/2009

Rs. Rs.

SCHEDULE -1

SHARE CAPITAL :

Authorised Capital :

5,000,000 (Prev. Year 5,000,000) Equity Shares of 50,000,000 50,000,000

Rs. 10/- each

Issued, Subscribed & Paid up Capital :

4,076,600 (Prev. Year 4,076,600) Equity Shares of

Rs. 10/- each fully paid up 40,766,000 40,766,000

Total….. 40,766,000 40,766,000

SCHEDULE - 2

RESERVES AND SURPLUS :

a. General Reserve :

Balance as per last Balance Sheet 625,556 625,556

b. Special Reserve

Balance as per last Balance Sheet 7,135,000 5,635,000

Add: Transferred from Profit & Loss A/c. 1,700,000 1,500,000

8,835,000 7,135,000

c. Profit and Loss Account 28,102,031 24,782,534

Total….. 37,562,587 32,543,090

SCHEDULE - 3

SECURED LOANS :

a. Term Loans from Banks 100,448,826 53,452,390

(secured against specific book debts and

personal guarantee of one of the Director )

b. Term Loans from Financial Institutions 21,085,142 19,680,000

(Secured by Hypothication of hypothicated assets

and also by personal guarantee of some of the Directors )

c. Working Capital Loans form Banks 60,680,191 20,192,613

(Secured by way of Mortgage of Office Premises, specific Book debt

and also by personal guarantee of some of the Directors )

d. Vehicle Loan from Bank 1,367,299 532,176

(Secured by hypothecation of Vehicle)

Total….. 183,581,457 93,857,179

SCHEDULE - 4

UNSECURED LOANS :

a. From Directors & their Relatives 9,907,999 4,035,000

Total….. 9,907,999 4,035,000

100

SCHEDULE – 5

FIXED ASSETS :

As at As at

P A R T I C U L A R S 31/03/10 31/03/09

Rs. Rs.

SCHEDULE - 6

INVESTMENTS :

Long Term Investments (Non Trade) :

Unquoted

a. 8000 Shares (P.Y. Nil) of Sarvodaya Commercial Co-op Bank Ltd. 200,000 Nil

of Rs. 25/- each fully paid up

Total….. 200,000 Nil

As at As at

P A R T I C U L A R S 31/03/10 31/03/09

Rs. Rs.

SCHEDULE - 7

CURRENT ASSETS :

(Considered Good unless otherwise stated)

STOCK IN TRADE :

(As Certified by Directors)

a. 150 Shares (Prev. Year 150) of Ausom Enterprise Ltd. (Formerly

(known as Core Emblich Ltd.) of Rs. 10/- each fully paid up 2,532 1,373

b. 400 Shares (Prev. Year 400) of Rolta India Ltd.

of Rs. 10/- each fully paid up 71,580 23,020

101

As at As at

P A R T I C U L A R S 31/03/10 31/03/09

Rs. Rs.

c. 100 Shares (Prev. Year 100) of Rolatainer Ltd.


d. 80 Shares (Prev. Year 80) of Silverline Ltd.

of Rs. 10/- each fully paid up 428 483

e. 32 Shares (Prev. Year 32) of Silverline Animation

Ltd. of Rs. 10/- each fully paid up 320 212

f. 660 Shares (Prev. Year 660) of Pentamedia Graphics

Ltd. of Rs. 1/- each fully paid up 1,709 911

g. 45,000 Shares (Prev. Year 20,000) of Sanara Media

Ltd. of Rs. 1/- each fully paid up 16,650 6,200

h. 800 Shares (Prev. Year 800) of Shreerama Multi Ltd.


i. 100 Shares (Prev. Year 100) of Trygen Technology

Ltd. of Rs. 10/- each fully paid up 2,030 800

j. 1 Shares (Prev. Year 1) of Reliance Capital Ltd.


k. 254 Shares (Prev. Year 127) of Reliance Ind. Ltd.


l. 70 (Prev. Year 70) of BGR Energy Ltd.


m. 27 Shares (Prev. Year 27) of Reliance Comm. Ltd.


n. 2 Shares (Prev. Year 2) of Reliance Infrastructure Ltd.


o. 27 Shares (Prev. Year 27) of Reliance Natural Resources Ltd


p. 5 Shares (Prev. Year 5) of Chola Mandalam Fin. Ltd.


q. 5 Shares (Prev. Year 5) of Ashok Leyland Fin. Ltd.


r. 5 Shares (Prev. Year 5) of First Leasing


s. 5 Shares (Prev. Year 5) of HDFC Bank Ltd.


t. 5 Shares (Prev. Year 5) of ICICI Bank Ltd.


u. 5 Shares (Prev. Year 5) of Indusind Bank Ltd.


v. 5 Shares (Prev. Year 5) of Kotak Mahindra Bank Ltd.


301,223 184,716

102

As at As at

P A R T I C U L A R S 31/03/2010 31/03/2009

Rs. Rs.

SUNDRY DEBTORS :

Unsecured, Considered good unless otherwise stated

a. Outstanding for a period exceeding six months :

Good

Secured 3,516,336 1,368,787

Unsecured 1,516,003 1,916,715

5,032,339 3,285,502

Doubtful Nil Nil Nil

5,032,339 3,285,502

b. Others :

Good

-- Secured 2,542,397 2,983,345

-- Unsecured 207,625 703,793

2,750,022 3,687,138

Doubtful Nil Nil Nil

2,750,022 3,687,138

7,782,361 6,972,640

CASH AND BANK BALANCES :

a. Cash on Hand 106,712 17,349

b. Balance with Scheduled Banks

- In Current A/c. 9,389 108,412

c. Balance with Non-scheduled Banks

- In Current A/c. 923,617 193,027

(Maximum Debit Balance at any time during

the year Rs. 56349215/- ) (Prev. Year Rs. 23642911/-)

- Fixed Deposit A/c. 34,407,816 19,083,102

(Maximum Debit Balance at any time during

the year Rs. 35229940/-) (Prev. Year Rs. 20968750/-)

35,447,534 19,401,890

Total….. 43,531,118 26,559,245

103

As at As at

P A R T I C U L A R S 31/03/2010 31/03/2009

Rs. Rs.

SCHEDULE - 8

LOANS AND ADVANCES :

Considered good unless otherwise stated

a. Secured

Loan Secured by Hypothication of Assets 136,165,484 118,897,244

(Refere Note No. 13 of the "Schedule 15")

b. Unsecured

Loans to Companies, Firms & Individuals 88,162,484 18,689,844

(Refere Note No. 14 of the "Schedule 15")

c. Advances recoverable in cash or kind or for

value to be received (Unsecured) 874,261 1,396,789

d. Deposits 1,151,134 2,252,500

e. Advances to Staff 195,800 83,143

f. Advance Income-Tax & TDS 126,413 (901,820)

Total….. 226,675,576 140,417,700

SCHEDULE - 9

CURRENT LIABILITIES :

a. Sundry Creditors 3,478,283 2,212,050

b. Security Deposits (Repayable within One Year 140,526 65,020

Rs. 65020/- (Prev. Year Rs. Nil)

c. Others 242,058 150,625

d. Unclaimed Dividend 74,590 74,590

Total….. 3,935,457 2,502,285

SCHEDULE - 10

PROVISIONS

a. Provision for Proposed Dividend 2,445,960 Nil

b. Provision for Corporate Dividend Tax on Proposed Dividend 415,691 Nil

c. Provision for NPA 485,978 482,965

Total….. 3,347,629 482,965

104

For the

year

For the

year

ended on ended on

P A R T I C U L A R S 31/03/2010 31/03/2009

Rs. Rs.

SCHEDULE - 11

INCOME FROM OPERATIONS :

a. Interest Income (TDS Rs. 304352/-) (P.Y. TDS Rs.421744/-) 55,068,001 43,128,418

b. Income from Loan 894,144 816,616

c. Share Trading Income 116,507 (55,831)

Total….. 56,078,652 43,889,203

SCHEDULE - 12

OTHER INCOME :

a. Profit on Sale of investment Nil 525

b. Dividend 25,950 108,306

Total….. 25,950 108,831

SCHEDULE - 13

ADMINISTRATIVE AND OTHER EXPENSES :

a. Payment made to Employees

(Including Director's Salary Rs. 8,89,980/- ) (Prev. Year Rs. 9,13,660/-)

- Salary and Bonus 5,533,069 4,526,836

- Staff Welfare Expenses 188,578 158,681

5,721,647 4,685,517

b. Rent, Rates and Taxes 247,749 117,373

c. Electricity Expenses 164,458 140,388

d. Security & Recovery Expenses 744,370 411,370

e. Insurance 56,611 54,849

f. Repairs to

(a) Building 20,364 158,605

(b) Plant & Machinery

Nil

Nil

(c) Others 193,212 74,475

213,576 233,080

g. Printing, Stationery & Advertisement 775,715 457,292

h. Postage & Telephone Expenses 568,120 538,816

i. Travelling, Conveyance & Vehicle Maintenance

(Including Director's Travelling Rs. 39158/-)

(P.Y. Rs. 96,433/-) 517,416

325,546

j. Legal & Professional Expenses 3,509,527 2,285,664

k. Sales Incentive Exp. 2,825,502 2,273,146

l. Marketing Expenses 3,866,314 1,735,143

m Remuneration to Auditors 221,078 113,719

105

For the

year

For the

year

ended on ended on

P A R T I C U L A R S 31/03/2010 31/03/2009

Rs. Rs.

n. Director's Sitting Fees 149,000 144,000

o. Loss on Sale of Fixed Assets 177,398 Nil

p. Bad Debts & Irrecoverables W/off (Net) 3,193,378 2,749,384

q. Provision for N.P.A. (Net) 3,013 8,049

r. Sundry Balance Written Off 845,895 931,513

s. General Expenses 236,741 149,727

Total….. 24,037,508 17,354,576

SCHEDULE - 14

INTEREST & FINANCE CHARGES

OnTerm Loans 11,741,389 11,477,350

On Other Loans and Bank Charges 7,639,414 4,052,835

Total….. 19,380,803 15,530,185

SCHEDULE - 15

Notes Forming Part of The Accounts For The Year Ended 31st March, 2010.

1. Significant Accounting Policies

(a Method of Accounting

The Company follows accrual method of accounting.

(b Revenue Recognition

(i) Interest on Loan against:

Interest on Loan against hypothecation of vehicle is recognised in the year in which the

installment falls due as per the terms of contract.

(ii) Income is not recognised in respect of Non Performing Assets, as per the guidelines for

prudential norms prescribed by the Reserve Bank of India.

(c) Fixed Assets

All the assets are stated at cost less depreciation, after taking into consideration provision for

NPA.

(d) Depreciation

The depreciation on assets for own use is provided on straight line method at the rates Specified

in Schedule XIV of the Companies Act, 1956 on Pro-rata Basis.

(e) Investments

Long Term Investments are stated at cost. Provision is made for any diminution in the market

value of the Quoted Investments. The Company does not have any Current Investments.

(f) Stock In Trade

106

Stock in Trade is valued at Lower of Cost and net realizable value. Cost is determined on

FIFO basis.

(g) Retirement Benefits

a) The Employee and Company make monthly fixed Contribution to Government of

India Employee’s Provident Fund equal to a specified percentage of the Covered

employee’s salary, Provision for the same is made in the year in which services are rendered by the employee.

b) The Liability for Gratuity to employees, which is a defined benefit plan, is

determined on the basis of actuarial Valuation based on Projected Unit Credit

method. Actuarial gain / loss in respect of the same is charged to the profit and loss

account.

(h) Borrowing Cost

Borrowing costs are capitalized as part of qualifying fixed assets when it is possible that they

will result in future economic benefits. Other borrowing costs are expensed.

(i) Provision for Taxation

Provision for taxation has been made in accordance with the tax laws and rules applicable to the

relevant assessment year.

(j) Deferred Taxation

Deferred Tax resulting from timing differences between book and tax profit is accounted for

under the liability method, at the current rates of tax, to the extent that the timing differences

are expected to crystallise.

(k) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when

there is a present obligation as a result of past events and it is probable that there will be an

outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to

the accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

(l) Transfer and recourse obligation under Debt Securitization.

The company assigns assets under securitization transactions. The assigned loans / assets are

derecognized and gains / losses are recorded on assignment of loan contracts. Recourse

obligation with respect to Debt Securitisations with other financiers is provided in books as per

past track records of delinquency / servicing of the loans of the Company.

1. Contingent liabilities not provided for: -

(a) Disputed Demand of Income Tax Rs. 58.70 Lacs (Previous year Rs.58.70 Lacs)

(Against which the Company has paid Rs. 11.00 Lacs [Previous year Rs.11.00 Lacs]

under protest which are shown as advances)

2. The disclosure in respect of Employee Benefit as defined in the Accounting Standard 15 is

given below :

107

A. The Amounts (In Rs.) Recognized In The Balance Sheet Are As Follows:

PARTICULAR

Gratuity Defined

Benefit

Obligation

31/03/2010

Gratuity Defined

Benefit

Obligation

31/03/2009

Present value of funded obligations - -

Fair value of plan assets - -

Present value of unfunded obligations 110726 95359

Unrecognized past service cost - -

Net liability 110726 95359

Amounts in the balance sheet:

Liabilities 110726 95359

Assets - -

Net liability 110726 95359

B. The Amounts (In Rs.) Recognized In The Statement Of Profit And Loss Are As Follows:

PARTICULAR

Gratuity Defined

Benefit

Obligation

31/03/2010

Gratuity Defined

Benefit

Obligation

31/03/2009

Current service cost 17585 19806

Interest on obligation 7867 5295

Expected return on plan assets - -

Net actuarial losses (gains) recognized in year (10085) 3232

Past service cost - -

Losses (gains) on curtailments and settlement - -

Total, included in 'employee benefit expense' 15367 28333

Actual return on plan assets - -

C. Changes In The Present Value Of The Defined Benefit Obligation Representing Reconciliation

Of Opening And Closing Balances Thereof Are As Follows:

PARTICULAR

Gratuity

Defined

Benefit

Obligation

31/03/2010

Gratuity Defined

Benefit

Obligation

31/03/2009

Opening defined benefit obligation 95359 67026

Service cost 17585 19806

Interest cost 7867 5295

Actuarial losses (gains) (10085) 3232

Losses (gains) on curtailments - -

Liabilities extinguished on settlement - -

Liabilities assumed in an amalgamation in the nature of

purchase

- -

Exchange differences on foreign plans - -

108

E. The Major Categories Of Plan Assets As A Percentage Of Total Plan Assets Are As Follows:

PARTICULAR

Gratuity

Defined

Benefit

Obligation

31/03/2010

Gratuity

Defined

Benefit

Obligation

31/03/2009

Government of India Securities 0.00% 0.00%

High quality corporate bonds 0.00% 0.00%

Equity shares of listed companies 0.00% 0.00%

Property 0.00% 0.00%

Insurance Company 0.00% 0.00%

F. Principal Actuarial Assumptions At The Balance Sheet Date (Expressed As Weighted

Averages):

PARTICULAR

Gratuity

Defined

Benefit

Obligation

31/03/2010

Gratuity

Defined

Benefit

Obligation

31/03/2009

Discount rate 8.25 % 7.90 %

Expected return on plan assets - -

Proportion of employees opting for early retirement - -

Annual increase in Salary costs 5.00% 5.00%

Future changes in maximum state health care benefits - -

G. Gratuity Benefit Amount for the current period are as follow

PARTICULAR 31/03/2010 31/03/2009

Defined benefit obligation 110726 95359

Plan assets - -

Benefits paid - -

Closing defined benefit obligation 110726 95359

D. Changes In The Fair Value Of Plan Assets Representing Reconciliation Of The Opening And

Closing Balances Thereof Are As Follows:

PARTICULAR

Gratuity

Defined

Benefit

Obligation

31/03/2010

Gratuity Defined

Benefit

Obligation

31/03/2009

Opening fair value of plan assets - -

Expected return - -

Actuarial gains and (losses) - -

Assets distributed on settlements - -

Contributions by employer - -

Assets acquired in an amalgamation in the nature of purchase - -

Exchange differences on foreign plans - -

Benefits paid - -

closing balance of fair value of plan assets - -

109

Surplus/(deficit) (110726) (95359)

Experience adjustments on plan liabilities (4650) -

Experience adjustments on plan assets - -

Actuarial Loss/(Gain) due to change in assumption (5435) -

Actuarial Loss/(Gain) due to participant experience (4650) -

Actuarial Loss/(Gain) on liabilities (10085) -

Net Actuarial Loss/(Gain) on liabilities (10085) -

3. Segment Reporting:

In the opinion of the management, the Company is mainly engaged in the business of providing

commercial finance. All other activities of the Company revolve around the main business, and

as such, there are no separate reportable segments.

4. Related Party Disclosures :

List of Related Parties with whom transactions have taken place during the year:

A) Key Management Personnel

Mr. Jayendrabhai Patel

Mr. Amitbhai Manakiwala

B) Relatives of Key Management Personnels

Name of Party Related party Relationship

Mrs. Ritaben J. Patel Relative of Key Management Personnel

Mr. Aakash J. Patel Relative of Key Management Personnel

Mr. Alok J. Patel Relative of Key Management Personnel

J.B.Patel HUF Key Management personnel is Karta

Raj Enterprise Key Management personnel is Proprietor

Himani Manakiwala Relative of Key Management Personnel

Maulik Manakiwala Relative of Key Management Personnel

J.B. Patel & Co. Key Management personnel is co-owner

110

Details of Transactions are as follows:

Sr. No. Nature of Transactions Key

Management

Personnels

Relatives of Key

Management

Personnel

Total

1 Expenses

Remuneration &

Perquisites

889980 Nil 889980

(913660) (Nil) (913660)

Sitting Fees 5000 40000 45000

(Nil) (40000) (40000)

Interest Paid 258740 1407470 1666210

(242682) (1319296) (1561978)

Rent Paid Nil

(Nil)

19856

(Nil)

19856

(Nil)

Professional Fees 210000

(Nil)

Nil

(Nil)

210000

(Nil)

2 Unsecured Loan

Loan taken by company

during the year

2170000 6595000 8765000

(1691484) (1950000) (3641484)

Loan Repaid by the

company during the year

2484664 3321482 5806146

(2435692) (7462407) (9898099)

Balance out standing at

31/03/2010

774076 7685988 8460064

(830000) (3005000) (3835000)

List of Transaction, out of the transaction reported in the above table, where the transaction entered

in to with single party exceeds 10 % of the total related party transactions of similar nature are as

under:

Unsecured Loan taken includes taken from Sh.Jayendra Patel Rs. 21,70,000 (P.Y. Rs. 16,91,484),

from Smt. Himani A. Manakiwala Rs. 5,25,000 (P.Y. Rs. 10,00,000), from Smt. Ritaben J. Patel

Rs. 25,50,000 (P.Y. Rs. 2,00,000), from Aakash J. Patel Rs. 15,00,000 (P.Y. Nil), from Aalok J.

Patel Rs. 13,65,000 (P.Y. Nil), from Jayendra Patel (HUF) Rs.80,000 (P.Y. Rs.Nil), Unsecured

Loan repayments includes paid to Sh.Jayendra Patel Rs. 24,84,664 (P.Y. Rs. 24,35,692), to Smt.

Himani A. Manakiwala Rs. NIL (P.Y. Rs. 19,75,000), to Smt. Ritaben J. Patel Rs. 23,20,709 (P.Y.

Rs. 21,32,800), to Aakash Patel Rs. Nil (P.Y. Rs. 13,65,543), to Aalok Patel Rs. 2,41,277 (P.Y. Rs.

13,29,436), Interest paid includes to Sh. Jayendra Patel Rs. 2,58,740 (P.Y. Rs. 2,42,682), to Sh.

Aakash Patel Rs. 3,86,585 (P.Y. Rs. 3,19,219), To Sh. Aalok Patel Rs. 3,07,798 (P.Y. Rs.

2,86,622), to Smt. Ritaben J Patel Rs. 3,49,312 (P.Y. Rs.3,54,304), to J B Patel (HUF) Rs. 1,82,789

(P.Y. Rs. 1,75,501), Balance Outstanding includes of Sh.Jayendra Patel Rs. 7,74,076 (P.Y. Rs.

8,30,000), of sh. Aakash Patel Rs. 25,32,165 (P.Y. Rs. 9,60,000), Sh.Aalok Patel Rs.18,86,535

(P.Y. Rs. 6,20,000), of Smt Ritaben Patel Rs. 10,28,603 (P.Y. Rs. 4,50,000), of J B Patel (HUF) Rs.

10,96,964 (P.Y. Rs. 9,75,000), Remuneration includes payment to Sh. Jayendra Patel Rs. 6,39,749

(P.Y. Rs. 5,54,255) and to Sh. Amit Manakiwala Rs. 2,50,231 (P.Y. Rs. 3,10,409), Sitting Fees

included paid to Smt. Ritaben Patel Rs. 40000 (P.Y. Rs. 40000) and Sh.Amitbhai R. Manakiwala

Rs. 5,000 (P.Y.Rs.Nil), Rent includes paid to Sh. J B Patel & Co. Rs. 19,856 (P.Y. Nil),

Professional Fees includes paid to Sh.Amitbhai R. Manakiwala Rs. 2,10,000 (P.Y.Rs.Nil)

111

5. Major components of deferred tax assets and liabilities arising out of timing

differences are as follows:

2009-2010

Amount Rs.

2008-

2009

Amount

Rs.

1 Deferred Tax Asset on account of

Provision for NPAs that are allowable for Tax purpose

in the year of actual loss 1,65,184 1,64,160

Provision for Gratuity 37,636 32,413

Total Deferred Tax Assets 2,02,820 1,96,572

Deferred Tax Liability on account of

Additional Depreciation on Fixed Assets for Tax

purpose due to higher tax depreciation rates. 15,21,102 11,26,851

Allowance U/s 40 (a)(ia) Nil 6,798

Total Deferred Tax Liability 15,21,102 11,33,649

Net Deferred Tax Liability 13,18,282 9,37,076

6. Earnings Per Share

2009-2010

Amount Rs.

2008-2009

Amount Rs.

Numerator used for calculating Basic and Diluted Earning Per

Share (Profit After Tax) 78,81,148 68,99,153

Weighted Average No. of Shares used as denominator for

calculating Basic and Diluted Earning Per Share

40,76,600 40,76,600

Nominal Value per Share 10 10

Basic and Diluted earning per share 1.93 1.69

7. Balances are subject to confirmation.

8. In the opinion of the Board, Current assets and loans and advances, are approximately of the

value stated, if realised in ordinary course of business.

9. Remuneration Paid to Directors is as under :

For the

Year Ended

31-3-2010

For the year

Ended

31-3-2009

Salary & Bonus 795976 821312

Perquisites 57404 43352

PF 36600 48996

Total… 889980 913660

10. Auditors' Remuneration includes :

112

For the

Year Ended

31-3-2010

For the Year

Ended

31-3-2009

Audit Fees 110300 56180

Tax Audit Fees 33090 16854

Taxation Matters 22060 11236

Certification & Others 55628 29449

Total… 221078 113719

11. As per the prudential norms of the Reserve Bank of India, provision has been made in the

accounts for the Non Performing Assets. Income is not recognised in respect of Non Performing

Assets.

12. Share Trading Income includes Rs. 1,16,507/- (P.Y. Rs. (1,22,271/-)) on account of

(diminution)/ increase in the market value of closing stock. There is no an actual sale or

purchase of shares during the year.

13. Loans Secured by Hypothecation includes Rs. 8,39,176/- (P.Y. Rs. 14,29,202/--) out standing

portfolio on which NPA provisions of Rs. 83,918/- (P.Y. Rs. 1,42,920/-) has been made.

14. Loans to Companies, Firms & Individual includes Rs. 5,04,100 /- (P.Y. Rs. 9,63,907/-) out standing

portfolio on which NPA provisions of Rs. 50,410/- (P.Y. Rs. 96,391/-) has been made.

15. Sundry Debtors includes Rs. 32,73,426/- (P.Y. Rs. 24,09,816/-) principal out standing on which

NPA provisions of Rs. 3,51,650/- (P.Y. Rs. 2,43,654/-) has been made.

16. Bad debts & Irrecoverable W/off are shown net off bad debts recovery during the year amounting

to Rs.1,40,077/- (P.Y. Rs. 1,79,641/-).

17. NPA Provision are shown net off NPA Provision written back during the year amounting to Rs.

4,08,258/-. (P.Y. 3,53,131/-).

18. Current Account with Banks includes Rs. 74,590/- (Prev. Year Rs. 74,590/-) in Unpaid Dividend

Account.

19. Loans secured by hypothecation of Assets (Vehicles) are secured by hypothecation of the Assets

(Vehicles) under finance. In opinion of the Board, the market value of the hypothecated Assets

(Vehicle) as on Balance Sheet date is more then the amount of Loan Outstanding.

20. To the extent of available information, at the year-end, there were no outstanding amounts due to

S.S.I Units in excess of Rs. 1,00,000/-.

21. (a) Particulars in respect of Opening Stock, Purchases, Sales and Closing Stock of Shares (As

Certified by Directors).

As at 31-3-2010 As at 31-3-2009

Qty. (Nos.) Value (Rs.) Qty. (Nos.) Value (Rs.)

Opening Stock 22611 184716 12611 1191687

Purchase **

25127

Nil ** 19000 Nil

Sales Nil Nil 9000 951140

Closing Stock 47738 301223 22611 184716

** Purchase includes 25127 Bonus shares received during the year (P.Y. 1000) and Nil shares

received on sub-division of shares (P.Y. 18000.)

(b) Particular of Mutual Funds purchased and sold during the financial year 2009-2010.

113

Sr.

No. Particular Purchase during the year Sold during the year

Units Value (Rs.) Units Value (Rs.)

1

HDFC Cash

Management Fund –

SPP- Dividend Plan

Nil

(1759471.17)

Nil

(1,80,50,180)

Nil

(1759471.17)

Nil

(1,80,50,180)

2

Reliance Liquid

Fund - Dividend

Plan

Nil

(1597514.68)

Nil

(3,50,67,000)

Nil

(1597514.68)

Nil

(3,50,67,000)

3

GFRD IDFC Money

Manager Fund

1439934.85

(Nil)

14522713.15

(Nil)

1439934.85

(Nil)

14522713.15

(Nil)

Total

1439934.85

(3356985.85)

14522713.15

(531,17,180)

1439934.85

(3356985.85)

14522713.15

(531,17,180)

22. As required in terms of Paragraph 13 of Non-Financial Companies Prudential Norms (Reserve

Bank) Directions, 2007, schedule to the Balance Sheet of a Non-Banking Financial Company are

annexed hereto. (Amount in Rs.)

23. Earning in foreign currency - Nil (Nil)

24. Expenditure in foreign Currency Nil (Nil)

25. Previous years' figures have been regrouped / rearranged wherever necessary so as to make them

comparable with those of the current year.

Signature to Schedules "1" to "15"


For, J. T. SHAH & COMPANY



(J. J. SHAH)

PARTNER



& Managing Director

114


(FORMERLY KNOWN AS ARMAN LEASE AND FINANCE LIMITED)

Schedule to the Balance Sheet of a Non-Banking Financial Company

[as required in terms of Paragraph 13 of Non-Banking Financial (Non Deposit Accepting or Holding)

Companies Prudential Norms (Reserve Bank) Direction, 2007]

Particular

(1) Liabilities side:

Loan and advances availed by the NBFCs

inclusive of interest accrued thereon but not paid:

(a) Debentures: Secured

Unsecured

( other than falling within

The meaning of public

deposits*)

(b) Defered Credits

(c ) Term Loans

(d) Inter-Corporate loans and borrowing

(e) Commercial Paper

(f) Public Deposits*

(g) Other Loans (specify nature)

* Please see Note 1 below

Amount

Outstanding

Amount

overdue

NIL

NIL

NIL

1229.01

NIL

NIL

NIL

705.88

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

(2) Break-up of (1)(f) above (Outstanding public

deposits inclusive of interest accrued thereon but

not paid):

(a) In the form of Unsecured debentures

(b) In the form of party / secured debentures i.e.

Debentures where there is a shortfall in the

value of security

(c ) Other Public Deposits

NIL

NIL

NIL

NIL

NIL

NIL

Assets Side:

Amount Outstanding

(3) Break-up of Loans and Advances including bills

receivable [other than those included in (4)

below]:

(a) Secured

(b) Unsecured

NIL

907.68

NIL

23.02

(4) Break-up of Leased Assets and stock on hire and

hypothecation loans counting towards EL/HP

activities

(i) Lease assets including lease rentals under

sundry debtors:

115

(a) Financial Lease

(b) Operating lease

(ii) Stock on hire including hire charges under

sundry debtors:

(a) Assets on hire

(b) Repossessed Assets

(iii) Hypothecation loans counting towards EL/HP

activities

(a) Loans where assets have been re-possessed

(b) Loans other than (a) above

NIL

NIL

NIL

NIL

NIL

1416.46

NIL

NIL

NIL

NIL

NIL

54.8

(5) Break-up of Investments :

Current Investments:

1. Quoted:

(i) Shares (a) Equity

(b) Preference

(ii) Debentures and Bonds

(iii) Units of mutual funds

(iv) Government Securities

(v) Others (please specify)

3.01

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

2. Unquoted:


(b) Preference




(v) Others (please specify) FDR

2.00

NIL

NIL

NIL

NIL

344.08

NIL

NIL

NIL

NIL

NIL

NIL

Long Term Investments:

1. Quoted:


(b) Preference





NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

(8)

2. Unquoted:


(b) Preference

NIL

NIL

NIL

NIL

116





NIL

NIL

NIL

NIL

NIL

NIL

NIL

NIL

(6) Borrower group-wise classification of all leased

assets, stock-on-hire and loans and advances

Please see Note 2 below

Category Amount net of provision

Secured Unsecured Total

1. Related Parties** NIL NIL NIL

'(a) Subsidiaries NIL NIL NIL

'(b) Companies in the same group NIL NIL NIL

'(c ) Other related parties NIL NIL NIL

2. Other than related parties 1416.46 907.68 2324.14

Total 1416.46 907.68 2324.14

(7) Investor group-wise classification of all investments

(current and long-term) in shares and securities (both quoted and unquoted):

Please see note 3 below

Category Market value/ Book value

Break-up or fair (Net of

Value of NAV Provision)

1. Related Parties** NIL NIL

'(a) Subsidiaries NIL NIL

'(b) Companies in the same group NIL NIL

'(c ) Other related parties NIL NIL

2. Other than related parties 5.01 NIL

Total 5.01 NIL

** As per Accounting Standard of ICAI (Please see Note 3)

Particular Amount

(i) Gross Non-performing Assets NIL

'(a) Related Parties NIL

'(b) Other than related parties 46.17

(ii) Net Non-performing Assets

'(a) Related Parties NIL

'(b) Other than related parties 41.37

(iii) Assets acquired in satisfaction of debts NIL

1. As defined in paragraph 2(1) (xii) of the Non Banking Financial Companies Acceptance of

Public Deposits (Reserve Bank) Directions, 1998

2. Provisioning Norms shall be applicable as prescribed in the Non-Banking Financial Companies

Norms (Reserve Bank) Directions, 1998 3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for

valuation of Investments and other assets as also assets acquired in satisfaction of debts.

117

However, market value in respect of quoted investments and break-up/fair value/NAV in

respect of unquoted investments should be disclosed irrespective of whether they are classified

as long-term or current in column (5) above

ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF SCHEDULE VI

TO THE COMPANIES ACT, 1956

Balance Sheet abstract and Company's General business Profile

(a) Registration Details

Registration No. : 18623 State Code : 04

Balance Sheet Date : 31.03.2010

(b) Capital Raised during the year (Amount in Rs. Lacs):

Public Issue : Not Applicable Rights Issue : Not Applicable

Bonus Issue : Not Applicable Private Issue : Not Applicable

(c) Position of Mobilization and Development Funds (Amount in Rs. lacs):

Total Liabilities : 2731.36 Total Assets : 2731.36

SOURCES OF FUNDS

Paid-up Capital : 407.66 Reserve and Surplus : 375.62

Secured Loans : 1835.82 Unsecured Loans : 99.08

Deferred tax Liability : 13.18

APPLICATION OF FUND

Net Fixed Assets : 100.13 Investments : 2.00

Net Current Assets : 2629.24 Misc. Expenditure : NIL

Accumulated loss : Not applicable

(d) Performance of Company (Amount in Rs. Lacs)

Total Turnover : 561.04 Total Expenditure : 441.42 Profit Before tax : 119.62 Profit After tax : 78.81

Earning per Share : 1.93 Dividend Rate -

(Annualized) Per Share : 0.60

e) Generic Names of three Product/Services of Company

(As per Monetary terms)

The Company undertakes the financial service activities like Two Wheeler, Three Wheeler Financing, ICD, Micro Financing and Personal Financing.

For & On behalf of Board

Date: 12.07.2010

Place: Ahmedabad Jayendra Patel Amit MAkiwala

Vice Chairman Director

& Managing Director

118

LIMITED REVIEW REPORT – FINANCIAL STATEMENTS

To



Ahmedabad

1. We have reviewed the accompanying unaudited Financial Statements (incorporating Profit & Loss

Account and Assets and Liabilities) of Arman Financial Services Limited (the Company) for the

period ended 30th June, 2010 for the purposes of its inclusion in the offer document prepared by the

Company in connection with its proposed Rights Issue. These financial Statements are the

responsibility of the Company's Management. Our responsibility is to issue a report on these

financial statements based on our review.

2. We conducted our review in accordance with the Standard on Review Engagement (SRE) 2400,

“Engagements to Review Financial Statements” issued by The Institute of Chartered Accountants

of India. This standard requires that we plan and perform the review to obtain moderate assurance

as to whether the financial statements are free of material misstatement. A review is limited

primarily to inquiries of company personnel and analytical procedures applied to financial data and

thus provide less assurance than an audit. We have not performed an audit and accordingly, we do

not express an audit opinion.

3. Based on our review conducted as above nothing has come to our attention that causes us to believe

that the accompanying unaudited financial statements prepared in accordance with applicable

accounting standards and other recognised accounting practices and policies has not disclosed the

information required to be disclosed in terms of Securities and Exchange Board of India (Issue of

Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI on August, 26, 2009

including the manner in which it is to be disclosed, or that it contains any material misstatement.

4. This report is intended solely for inclusion in the Offer Document in connection with the proposed

Rights Issue of the equity shares of the Company and is not to be used, referred to or distributed for

any other purpose without our prior written consent.

For J.T.Shah & Co.

Chartered Accountants

(Firm Regd. No. 109616W)

Date: 20.09.2010

Place: Ahmedabad

(J J Shah)

Partner

(M.No. 45669)

119

LIMITED REVIEWED BALANCE SHEET AS AT 30th

June, 2010

(Rs. in Lacs)

Particulars AS On 30.06.2010

I. SOURCES OF FUNDS:

1 SHAREHOLDERS' FUND

a) Share Capital 407.66

b) Reserve and Surplus 418.80

2 LOAN FUNDS:

a) Secured Loans 2253.02

b) Unsecured Loans 132.27

3 DEFERRED TAX LIABILITY(NET) 13.81

TOTAL 3225.56

II. APPLICATION OF FUNDS:

1 FIXED ASSETS

a) Gross Block 139.07

b) Less: Depreciation 37.72

c) Net Block 101.35

d) Capital Work in - Progress

2 INVESTMENTS

3 CURRENT ASSETS, LOANS AND ADVANCES

a) Inventories 2.93

b) Sundry Debtors 78.15

c) cash and Bank Balances 354.78

d) Loans and Advances 2753.98

Less: CURRENT LIABILITIES AND PROVISIONS

a) Current Liabilities 65.63

b) Provision

c) Advance received for premises

NET CURRENT ASSETS 3124.21

4 MISCELLANEOUS EXPENDITURE

(To the extent of not written off)

TOTAL 3225.56

In terms of our report of even date attached.

For, J T Shah & Co. For and on behalf of the Board of Directors

Chartered Accountants Jayendra Patel Aalok Patel

J J Shah (Vice Chairman & Managing Director) (Director)

(Partner)

Membership No.: 45669

F.R. No : 109616W

Place : Ahmedabad

Date : 20.09.2010

120

LIMITED REVIEWED FINANCIAL RESULT FOR THE PERIOD ENDED 30th

June, 2010

(Rs. in Lacs)

P A R T I C U L A R S

AS On

30.06.2010

1 INCOME

a Income from Operations 184.47

b Other Income 0.00

Total Operating Income (a+b) 184.47

2 EXPENDITURE

a Administrative & Other Expenses 52.64

b Interest 64.46

c Depreciation 2.06

Sub-Total 119.16

3 PROFIT BEFORE TAXATION 65.31


: Current Tax 21.50

: Fringe Benefit Tax 0.00

: Deferred Tax Assets/ (Liability) 0.63

4 PROFIT AFTER TAXATION 43.18

Add : Balance B/F from last year 281.01

5 PROFIT AVAILABLE FOR APPROPRIATION 324.19

Less : Proposed Dividend 0.00

Corporate Dividend Tax thereon 0.00

Transfer to Special Reserve as per Sec 45(IC) of RBI Act 0.00

6 BALANCE CARRIED TO BALANCE SHEET 324.19

7 Paid-up equity share capital (Face Value Rs.10/- each) 407.66

8 EPS for the period (Not Annualised)

1) Basic : Before Extraordinary Items (Rs.) 1.06

: After Extraordinary Items (Rs.) 1.06

2) Diluted : Before Extraordinary Items (Rs.) 1.06

: After Extraordinary Items (Rs.) 1.06

9 Public shareholding:

-Number of Shares 4076600

-Percentage of Shareholding 64.38

10 Promoter and Promoter Group Shareholding

a) Pledged / Encumbered

b) Non-Encumbered

- Number of Shares 1452112

- Percentage of Shares (as a % of total shareholding of promoter &

promoter group) 100.00

- Percentage of Shares (as a % of total share capital of the Company) 35.62

In terms of our report of even date attached.

For, J T Shah & Co. For and on behalf of the Board of Directors

Chartered Accountants Jayendra Patel Aalok Patel

J J Shah (Vice Chairman & Managing Director) (Director)

121

(Partner)

Membership No.: 45669

F.R. No : 109616W

Place : Ahmedabad Date : 20.09.2010

122

MATERIAL DEVELOPMENTS

Recent Developments

In accordance with circular no.F.2/5/SE/76 dated February 5, 1977 issued by the Ministry of Finance,

Government of India, as amended by Ministry of Finance, Government of India through its circular

dated March 8, 1977 and in accordance with sub-item (B) of item X of Part E of the SEBI Regulations,

the information required to be disclosed for the period between the last date of the financial statements

provided to the shareholders and the date preceding one month from the date of Draft Letter of Offer is

provided below:

1. Working results of the Company on a stand-alone basis for the period from April 1, 2010 to

September 30, 2010

Sl. No Particulars Amount (Rs. in Lacs)

1 Income from Operations 446.65

2 Other Income 0.02

3 Gross Profit (Excluding depreciation and taxes) 157.56

4 Provision for Depreciation 4.28

5 Provision for Taxation 51.50

6 Profit / (Loss) for the period 101.78

2. Material changes and commitments, if any, affecting the financial position of the Company

There are no material changes and commitments, which are likely to affect the financial position of the

Company since March 31, 2010 (i.e. last date up to which audited information is incorporated in the

Draft Letter of Offer).

123

STOCK MARKET DATA FOR EQUITY SHARES OF THE COMPANY

The tables set forth below are for the periods that indicate the high and low prices of the Company

Equity Shares and also the volume of trading activity. On October 01, 2010, the closing price of Equity

Shares of the Company on BSE was Rs. 30.00 (Equity Shares of face value of Rs.10 each).

1. The week end prices and current price of the Equity Shares of the Company for last four

weeks on the BSE is provided in the table below:

Week ended on Closing Price (In Rs.)

October 15, 2010 28.75

October 08, 2010 28.60

October 01, 2010 30.00

September 24, 2010 28.65

Source: www.bseindia.com;

Current Market Price

Date Open Price High Price Low Price Close Price

October 15, 2010 29.5 29.7 28.25 28.75


2. The highest and lowest prices of the Equity Shares of the Company on the BSE for last four

weeks are provided in the table below:

Price (In Rs.) Date

Highest 34.00 01.10.2010

Lowest 27.00 20.09.2010


3. The highest and lowest prices of the Equity Shares of the Company on the BSE for last Three

years are provided in the table below

Year Highest

(In Rs.)

Date Lowest

(InRs.)

Date

2007-2008 15.00 04.01.2008 3.82 23.05.2007

2008-2009 9.15 19.08.2010 4.76 24.10.2008

2009-2010 15.23 31.03.2010 6.51 23.11.2009


4. The highest and lowest prices of the Equity Shares of the Company on the BSE for the six

months preceding the date of filing of the Draft Letter of Offer are provided in the table

below

Month Highest

(In Rs.)

Date Lowest

(In Rs.)

Date

April 21.25 13.04.10 14.75 01.04.10

May 21.45 31.05.10 13.75 18.05.10

June 34.70 17.06.10 21.00 03.06.10

July 32.30 12.07.10 25.00 27.07.10

Augest 33.00 04.08.10 23.10 31.08.10

September 32.50 13.09.10 23.20 01.09.10


Issue Price : The Issue price of Rs.15/- has been arrived at in consultation between our Company

and the Lead Manager.

124

ACCOUNTING RATIOS AND CAPITALISATION STATEMENT

Accounting Ratios

The following table presents certain accounting and other ratios derived from the Company’s audited

financial statements as at and for the year ended March 31, 2010 included in ―”Financial

Information” on page no.90 of this Draft Letter of Offer.

Particulars For the Financial

Year Ended March

31, 2010

Weighted average number of equity shares for basic Earnings Per Share 4076600

Weighted average number of equity shares for diluted Earnings Per Share 4076600

Basic Earnings Per Share (Rs.) 1.93

Diluted Earnings Per Share (Rs.) 1.93

Return on Net Worth (%) 10.06%

Net Asset Value Per Share (Rs.) 19.21

The Ratios have been computed as below:

Earnings Per Share (Basic) (Rs.) Net profit attributable to Equity Shareholders (excluding

extraordinary items, if any) / Weighted Average number of

Equity Shares outstanding during the year

Earnings Per Share (Diluted) (Rs.) Net profit attributable to Equity Shareholders (excluding

extraordinary items, if any) / Weighted Average number of

Diluted Equity Shares outstanding during the year

Return On Net worth (%) Net profit attributable to Equity Shareholders (excluding

extraordinary items, if any) / Net Worth at the end of the year

(excluding revaluation reserves)

Net Asset Value per Share (Rs.) Net Worth at the end of the year (excluding revaluation

reserves)/ Net shares outstanding at the end of financial year.

Capitalization Statement (audited)

Particulars Pre Issue As At

31/03/2010

Pre Issue As At

30/06/2010

Adjusted for

the Issue*

Debt

Short term debt 99.08 132.27 [●]

Long term debt 1835.81 2253.02 [●]

Total debt (A) 1934.89 2385.29 [●]

Shareholders fund

Share Capital 407.66 407.66 [●]

Reserve & surplus 375.61 418.80 [●]

Less: P & L a/c (Debit Balance) 0 0.00 [●]

Total Share holders Fund (B) 783.27 826.46 [●]

Long term debt/Equity 2.34 2.73 [●]

Total debt/Equity 2.47 2.89 [●]

* To be included at the time of filing of the Letter of Offer.

The Ratios have been computed as below: Total Debt / Equity Ratio: (Short Term Debt + Long Term

Debt)/ Net Worth.

125

SECTION VI - LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

The Issuer Company certifies that except as stated herein, there is no:

a. Litigations against the issuer or against any other company whose outcome could have a materially

adverse effect of the position of the issuer;

b. Litigations against the directors involving violation of statutory regulations or alleging criminal offence;

c. Any criminal/ civil prosecution against the directors for any litigation towards tax liabilities.

d. Pending proceedings initiated for economic offences against the issuer or its directors along with their present status;

e. Adverse findings, if any, in respect of the issuer as regards compliance with the securities laws;

f. The past cases in which penalties were imposed by the authorities concerned on the issuer or its

directors;

g. Outstanding litigations, defaults, etc. pertaining to matters likely to affect operations and finances of the issuer, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII to

the Companies Act, 1956 (1 of 1956) etc.;

h. Pending litigations, disputes, defaults, non payment of statutory dues, over dues to banks or financial

institutions, defaults against banks or financial institutions, contingent liabilities not provided for,

proceedings initiated for economic offences or civil offences (including the past cases, if found guilty),

any disciplinary action taken by the Board or stock exchanges against the issuer or its directors;

1. Criminal Laws

a) Cases filed by the Company –

Sr.

No.

Case

No.

Institu

tion

Date

Parties Auth

ority

Subject

matter &

Relief

Sought

Amount

Involve

d ( In

Rs.)

Present

Status

Stat

us as

on

Date

Likely

Adverse

Effect on

the

Financial

of Issuer

company

1 F.I.R

No.

19806

-2009

19-

09-

2009

Kamlesh

Tuljaram

Morani V/s.

Arman

Financial Services

Limited.

(Formerly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured. Reason

"Insufficient

Funds".

Contract

no.22113

69303/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery, there is no

adverse

effect on

the

financial of

the

company

126

2 F.I.R.

No.

14163

-2009

15-

08-

2009

Truptiben

Naimesh

Shah

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract

no.222274

66397/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is

panding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

3 F.I.R.

No.

14168-2009

15-

08-

2009

Rajendra

Achalaji

Purohit V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

22115

33565/

-

Pendin

g for

hearing

Orig

inal

docume

nts

prov

ided

by

us

and

case

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

4 F.I.R.

No.

14165

-2009

15-

08-

2009

P.D.Pharma

Nikunj R

Shah V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no. 22361

45754/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

5 F.I.R.

No. 19805

-2009

19-

09-2009

Ashokbhai

Mohanbhai Chavda V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090611064

45

37616/

-

Pendin

g for hearing

Bail

able warr

ant

issu

ed

and

case

is

pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

127

6 F.I.R.

No.

19803

-2009

19-

09-

2009

Dilipbhai

Prahaladbha

i Valand V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

209070307225

72824/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us

and case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

7 F.I.R. No.

14167

-2009

15-08-

2009

Mahendrabhai Natvarlal

Gandhi V/s

Arman

Financial

Services

Limited.

(Formaly Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirzapur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds". Contract

no.2090704

07365

75984/-

Pending for

hearing

Bailable

warr

ant

issu

ed

and

case is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

8 F.I.R. No.

19802

-2009

19-09-

2009

Manubhai Kaharabhai

Parmar V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

22410

35615/-

Pending for

hearing

Original

doc

ume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

9 F.I.R.

No. 19804

-2009

19-

09-2009

Rajan

Mohanlal ShahV/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease

and Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090707077

49

51581/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the company

128

10 F.I.R.

No.

14164

-2009

15-

08-

2009

Sohanbhai

Keshaji

Chandora

v/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

209070207118

58953/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

11 F.I.R.

No.

14161-2009

15-

08-

2009

Bipinchandr

a

Vahalabhai Joshi V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090703071

62

45624/

-

Pendin

g for

hearing

Bail

able

warrant

issu

ed

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

12 F.I.R. No.

19807

-2009

19-09-

2009

Aniket Ramanlal

Chauhan

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090707076

94

55412/-

Pending for

hearing

Original

doc

ume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

13 F.I.R.

No.

14166

-2009

15-

08-

2009

Amrutbhai

Bhikhabhai

Panchal V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090708077

76

70116/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

129

14 F.I.R.

No.

00745

-2010

18-

01-

2010

Mukeshbhai

Guljarilal

Dhakad V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

209070507429

78608/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

15 F.I.R.

No.

00742-2010

18-

01-

2010

Paresh

Rameshbhai

Patel V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

1010710081

24

66231/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

16 F.I.R.

No.

01095

-2010

22-

01-

2010

Dipakbhai

Khanderav

Bhosale

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no. 2090801088

57

51741/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

17 F.I.R.

No.

00749

-2010

18-

01-

2010

Murlidhar

Pareshkuma

r Pancholi

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090805099

70

65027/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

130

18 F.I.R.

No.

00744

-2010

18-

01-

2010

Jatin

Chandubhai

Patel V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

22197/ECS/06-07

53055/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us

and case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

19 F.I.R. No.

01104

-2010

22-01-

2010

Rameshbhai Girdharibhai

Pandya V/s

Arman

Financial

Services

Limited.

(Formaly Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirzapur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds". Contract no.

2090805098

78

52567/-

Pending for

hearing

Original

doc

ume

nts

prov

ided

by us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

20 F.I.R.

No.

00752

-2010

18-

01-

2010

Bipin

Babulal

Patel V/s.

Arman

Financial

Services Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Court

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason "Insufficient

Funds".

Contract no.

1010708079

00

54873/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

21 F.I.R.

No.

00751

-2010

18-

01-

2010

Kirankumar

Amthabhai

Patel V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090803093

85

50227/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

131

22 F.I.R.

No.

00753

-2010

18-

01-

2010

Jayeshbhai

Virchandbh

ai ShahV/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

209071208572

51078/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

23 F.I.R.

No.

00747-2010

18-

01-

2010

Swaminaray

an Jewellers

V/s Arman Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090704073

18

38193/

-

Pendin

g for

hearing

Orig

inal

docume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

24 F.I.R. No.

01096

-2010

22-01-

2010

Keyur Arvindbhai

Gadhia V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

1010810011

433

49320/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

25

F.I.R.

No.

00743

-2010

18-

01-

2010

Tundaram

Ramprasad

Dhakkad

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

1010710083

79

37311/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

132

26 F.I.R.

No.

00746

-2010

18-

01-

2010

Bharti

Kirana Store

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

209070607515

27366/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is

pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

27 F.I.R.

No.

00750-2010

18-

01-

2010

Gulammuyu

ddin K

Shaikh V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090803091

66

44370/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

28 F.I.R.

No.

01100

-2010

22-

01-

2010

Jignesh

Jivanbhai

Thakor V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".


64

38108/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

29 F.I.R.

No. 01099

-2010

22-

01-2010

Haresh

Veljibhai Chauhan

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090804096

99

43522/

-

Pendin

g for hearing

Bail

able warr

ant

issu

ed

and

case

is

pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

133

30 F.I.R.

No.

01092

-2010

22-

01-

2010

Jaiminbhai

Ashwinbhai

DaveV/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s 138

Chequedish

onoured.

Reason

"Insufficient

Funds".

Contract no.

22106/ECS/05-06

33284/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

31 F.I.R.

No.

01097-2010

22-

01-

2010

Vishal

Kamleshbha

i Trivedi V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract

no.22344/E

CS/06-07

29467/

-

Pendin

g for

hearing

Orig

inal

docume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

32 F.I.R. No.

01093

-2010

22-01-

2010

Pradipbhai Mohanbhai

Patel V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

1010710083

17

35318/-

Pending for

hearing

Bailable

warr

ant

issu

ed

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

33 F.I.R.

No.

01094

-2010

22-

01-

2010

Upendrabha

i Manilal

Patel V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

2090705074

15

23186/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

134

34 F.I.R.

No.

01089

-2010

22-

01-

2010

Rajesh

Devjibhai

Parmar V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

209080309203

25238/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is

pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

35 F.I.R.

No.

01103-2010

22-

01-

2010

Nilesh

Jitendraparv

at Gosai V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

22303/ECS/

06-07

22312/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

36 F.I.R.

No.

02109

-2010

15-

02-

2010

Bhagvansin

gh Subharan

Gurjar V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".


37

32693/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

37 F.I.R.

No.

02107

-2010

15-

02-

2010

Kesarben

Rameshbhai

Parmar V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

22249

48364/

-

Pendin

g for

hearing

Origi

nal

docu

ment

s

provi

ded

by us

and

case

is

pend

ing

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

135

38 F.I.R.

No.

02102

-2010

15-

02-

2010

Pradip

Harishchand

ra Tripathi

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

101071208608

22001/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

39 F.I.R.

No.

02108-2010

15-

02-

2010

Vaishali

Rajesh Shah

V/s Arman Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22146

52134/

-

Pendin

g for

hearing

Orig

inal

docume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

40 F.I.R. No.02

103-

2010

15-02-

2010

Hamidmiya Allamiya

Shaikh

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010711084

28

65882/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

41 F.I.R.

No.

02110

-2010

15-

02-

2010

Dineshbhai

Puranbhai

Koshti V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

21840

14502/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is

pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

136

42 F.I.R.

No.

02101

-2010

15-

02-

2010

Nareshbhai

Devjibhai

Tadv V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

21864

23997/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us

and case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

43 F.I.R. No.

02106

-2010

15-02-

2010

Sanjaykumar Shaligram

Belsara V/s.

Arman

Financial

Services

Limited.

(Formaly Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirzapur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds" Contract no.

21640

22552/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

44 F.I.R. No.

02100

-2010

15-02-

2010

Laljisigh Mohansingh

Bhadoria

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138.

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090702070

30

50981/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

45 F.I.R.

No.

02116

-2010

15-

02-

2010

Deepak

Jagdishbhai

Jodhani

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090803093

06

42307/

-

Pendin

g for

hearing

Origi

nal

docu

ment

s

provi

ded

by us

and

case

is

pend

ing

As the

Company has

filed the case

for recovery,

there is no

adverse

effect on the

financial of

the company

137

46 F.I.R.

No.

02111

-2010

15-

02-

2010

Atulkumar

Purshotamb

hai Patel

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

21909

47411/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is

pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

47 F.I.R.

No.

02112-2010

15-

02-

2010

Bipinkumar

Karsandas

Panchal V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090612065

72

42029/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

48 F.I.R.

No.

02105

-2010

15-

02-

2010

Dilipbhai

Babubhai

Sathwara

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured.

Reason

"Insufficient

Funds"

Contract no.20908030

9240

46433/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

49 F.I.R.

No.

02113

-2010

15-

02-

2010

Dalsukhbhai

Laxmandas

Panchal V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22036

64218/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

138

50 F.I.R.

No.

02114

-2010

15-

02-

2010

Gajanram

Basriyaram

Sharma V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22283

40466/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

51 F.I.R.

No.

02099-2010

15-

02-

2010

Prakashbhai

Ramanlal

Shah V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s 138 Cheque

dishonoure.

Reason

"Insufficient

Funds".

Contract no.

1010709080

69

34197/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

52 F.I.R.

No.

02115

-2010

15-

02-

2010

Mahipatsinh

Laxmansinh

Vaghela

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


332

37084/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

53 F.I.R.

No. 02104

-2010

15-

02-2010

Rukkiyabibi

Rafia Shaikha

V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no10803092

53

40750/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

139

54 F.I.R.

No.

03789

-2010

05-

03-

2010

Manish

Mahanaran

Shukla V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

101070607570

57935/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

55 F.I.R.

No.

03783-2010

05-

03-

2010

Salimkhan

Islamkhan

Pathan V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010709080

68

55930/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

56 F.I.R.

No.

03832

-2010

05-

03-

2010

Rajivsingh

Ravindra

ChauhanV/s

. Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


479

36265/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

57 F.I.R.

No. 03796

-2010

05-

03-2010

Yogendrasin

gh Pachubhai

Jadeja V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease

and Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.1010712

08689

17488/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

140

58 F.I.R.

No.

03786

-2010

05-

03-

2010

Moh.Tanvir

Moh.Siddik

Shaikh V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

101071208690

21117/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

59 F.I.R.

No.

03787-2010

05-

03-

2010

Mohd.Irfan

Pirbhai

Mansuri V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010801087

51

23691/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

60 F.I.R.

No.

03785

-2010

05-

03-

2010

Munniruddi

n Safruddin

Shaikh V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


55

46863/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

61 F.I.R.

No. 03790

-2010

05-

03-2010

Majharkhan

Safdarkhan Pathan V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010802089

16

75279/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

141

62 F.I.R.

No.

03828

-2010

05-

03-

2010

Rajubhai

Laljibhai

Desai V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

101080208999

32306/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

63 F.I.R.

No.

03812-2010

05-

03-

2010

Maheshbhai

Amratbhai

Desai V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010802091

31

55041/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

64 F.I.R.

No.

03818

-2010

05-

03-

2010

Rafiq

Gulammust

ufa Shaikh

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


35

31812/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

65 F.I.R.

No.

03834

-2010

05-

03-

2010

Wasim

Jamilahmed

Shaikh

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010804096

69

29175/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

142

66 F.I.R.

No.

03837

-2010

05-

03-

2010

Sanjaybhai

Jagdishbhai

Acharya

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

101080409678

18453/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is

pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

67 F.I.R.

No.

03833-2010

05-

03-

2010

Poonamcha

nd Kantilal

Patel V/s Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010805097

51

47068/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

68 F.I.R.

No.

03827

-2010

05-

03-

2010

Yashdev

Somdev

Roy V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


91

46266/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

69 F.I.R.

No. 03784

-2010

05-

03-2010

Naranbhai

Vithallbhai Kahar V/s

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090701067

55

31772/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

143

70 F.I.R.

No.

03835

-2010

05-

03-

2010

Sureshbhai

Keshavlal

Patel V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

209070207051

22320/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

71 F.I.R.

No.

03788-2010

05-

03-

2010

S.B. Dresses

V/s. Arman

Financial Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090702070

62

13736/

-

Pendin

g for

hearing

Bail

able

warrant

issu

ed

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

72 F.I.R.

No.

03820

-2010

05-

03-

2010

Rajkumar

Ananta

Basatani

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


89

9716/- Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

73 F.I.R.

No.03817-

2010

05-

03-2010

Prafulbhai

Nathabhai Prajapati

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090703071

61

14054/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

144

74 F.I.R.

No.

03826

-2010

05-

03-

2010

Vitthalbhai

Sukhabhai

Valand V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

209070407319

12856/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

75 F.I.R.

No.

03836-2010

05-

03-

2010

Shobharam

Banarasi

Yadav V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090710082

28

29965/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

76 F.I.R.

No.

03822

-2010

05-

03-

2010

Rudra

Marketing

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


78

73964/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

77 F.I.R.

No. 03791

-2010

05-

03-2010

Maheshbhai

Bangalibabu Soni V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090801087

05

60929/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

145

78 F.I.R.

No.

03814

-2010

05-

03-

2010

Ravi

Hasmukhray

Bhojani V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

209080108779

67342/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is

pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

79 F.I.R.

No.

03838-2010

05-

03-

2010

Sahebalam

Abdulkhalik

Rangrej V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010804096

65

41714/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

80 F.I.R.

No.

03804

-2010

05-

03-

2010

Parulben

Radheshya

m Bhavsar

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


37

12555

1/-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

81 F.I.R.

No. 03823

-2010

05-

03-2010

Satishbhai

Ramchandra Harjani V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.2090803

09236

55091/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

146

82 F.I.R.

No.

03803

-2010

05-

03-

2010

Pooja

Mukeshbhai

Patel V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

209080309248

25386/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

83 F.I.R.

No.

03816-2010

05-

03-

2010

Nazimakhta

r

Abdulsalim Ansari V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010806010

154

37627/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

84 F.I.R. No.

03799

-2010

05-03-

2010

Nareshji Kantiji

Thakor V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010808010

781

42942/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

85 F.I.R.

No.

03806

-2010

05-

03-

2010

Naynaben

Janardan

Trivedi V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010809011

304

44998/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

147

86 F.I.R.

No.

03807

-2010

05-

03-

2010

Mubinbhai

Iqbalbhai

Saiyed V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2110903013290

42628/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

87 F.I.R.

No.

00050-2010

05-

03-

2010

Mrudulbhai

Dolatrai

Desai V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

21423/2004-

05

23721/

-

Pendin

g for

hearing

Orig

inal

docume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

88 F.I.R. No.

03825

-2010

05-03-

2010

Vaishaliben Rashmin

Doshi V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds".

Contract no.

21819/2005-

06

20070/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

89 F.I.R.

No.

03805

-2010

05-

03-

2010

Nirav

Sureshchand

ra Shah V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22050/ECS/

05-06

33652/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

148

90 F.I.R.

No.

03815

-2010

05-

03-

2010

Ramilaben

Jagdishbhai

Rathod V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22111/2005-06

16019/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us

and case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

91 F.I.R. No.

03824

-2010

05-03-

2010

Shree Tirupati

Courier

Service V/s.

Arman

Financial

Services

Limited. (Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirzapur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds" Contract no.

22120/ECS/

05-06

29301/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

92 F.I.R.

No.

03819

-2010

05-

03-

2010

Prakash

Nagardas

Khatri V/s.

Arman

Financial

Services Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Court

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason "Insufficient

Funds"

Contract no.

22351/2006-

07

41429/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

93 F.I.R.

No.

03798

-2010

05-

03-

2010

Nitinbhai

Sureshbhai

Kag V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22414-

ECS/06-07

27763/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

149

94 F.I.R.

No.

03794

-2010

05-

03-

2010

Abdulkadar

V Memon

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

103080409489

11032

5/-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

95 F.I.R.

No.

03802-2010

05-

03-

2010

Pratplalsing

S Rajput

V/s. Arman Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.1030804

09460

86677/

-

Pendin

g for

hearing

Bail

able

warrant

issu

ed

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

96 F.I.R.

No.

03792

-2010

05-

03-

2010

Afzalhussai

n J Shaikh

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no. 61029/06-07

98230/

-

Pendin

g for

hearing

Bail

able

warr

ant

issu

ed

and

case

is pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

97 F.I.R.

No. 03793

-2010

05-

03-2010

Maheshbhai

K Desai V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1030701069

97

62485/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

150

98 F.I.R.

No.

06794

-2010

24-

04-

2010

Kaushalkish

or Chunilal

Agarwal

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

101070207130

50464/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us

and case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

99 F.I.R. No.

03813

-2010

05-03-

2010

Sabbirbhai Ramjubhai

Mansuri

V/s. Arman

Financial

Services

Limited.

(Formaly Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirzapur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds" Contract

no.1010711

08400

40261/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

100 F.I.R. No.

06535

-2010

24-04-

2010

Jahiruddin Anwarmiya

Saiyed V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010706075

46

15883/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

101 F.I.R.

No.

06779

-2010

24-

04-

2010

Bharatsinh

Gulabsinh

Panwar V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010709079

47

53549/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

151

102 F.I.R.

No.

06774

-2010

24-

04-

2010

Ishwarbhai

Raymalbhai

Desai V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

101070907970

36901/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

103 F.I.R.

No.

06521-2010

24-

04-

2010

Chandni

Asheshbhai

Shah V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.1010709

07992

57755/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

104 F.I.R.

No.

06775

-2010

24-

04-

2010

Imran

Ibrambhai

Ganchi V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


89

46025/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

105 F.I.R.

No. 06528

-2010

24-

04-2010

Harishbhai

Karsanbhai Ravat V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010802088

90

54864/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

152

106 F.I.R.

No.

06516

-2010

24-

04-

2010

Javed

Usmangani

Talat V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

101080209109

12669/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

107 F.I.R.

No.

06786-2010

24-

04-

2010

Baldevji

Laxmanji

Thakor V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.1010803

09281

28947/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

108 F.I.R.

No.

06801

-2010

24-

04-

2010

Akbarbhai

Usmanbhai

Malek V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.1010803

09445

28033/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

109 F.I.R.

No. 06782

-2010

24-

04-2010

Bharatbhai

Ranchhodbhai Raval

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.1010804

09481

44532/

-

Pendin

g for hearing

Origi

nal docu

ment

s

provi

ded

by us

and

case

is

pend

ing

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

153

110 F.I.R.

No.

06795

-2010

24-

04-

2010

Faridahmed

Abdulkadar

Shaikh V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.101080409666

14923/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

111 F.I.R.

No.

06788-2010

24-

04-

2010

Chhaganbha

i Jesangbhai

Danger V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.1010805

09900

27028/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

112 F.I.R.

No.

06526

-2010

24-

04-

2010

Chaitanya

Pravinbhai

Trivedi V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.2090612

06678

24421/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

113 F.I.R.

No. 06784

-2010

24-

04-2010

Ghanshyam

bhai S Lavingia

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.2090702

07123

8543/- Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

154

114 F.I.R.

No.

06524

-2010

24-

04-

2010

Bhartiben

Ganpatbhai

Vaje V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.209070307184

39865/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

115 F.I.R.

No.

06534-2010

24-

04-

2010

Ashokbhai

Manubhai

Udhrejiya V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.2090703

07211

30929/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

116 F.I.R.

No.

06530

-2010

24-

04-

2010

Govindbhai

Ambalal

Parekh V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


77

12348/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

117 F.I.R.

No. 06776

-2010

24-

04-2010

Kalavatiben

Sunilbhai Gupta V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.2090704

07334

61503/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

155

118 F.I.R.

No.

06518

-2010

24-

04-

2010

Kalpeshbhai

Sureshbhai

Darji V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

209070407353

7522/- Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

119 F.I.R.

No.

06799-2010

24-

04-

2010

Abhay

Chandrakant

Shah V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.2090707

07650

17937/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

120 F.I.R.

No.

06525

-2010

24-

04-

2010

Kinjal

Enterprise

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.2090708

07812

10402/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

121 F.I.R.

No. 06522

-2010

24-

04-2010

Bharat

Narottamdas Padhiyar

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.2090709

08057

50293/

-

Pendin

g for hearing

Origi

nal docu

ment

s

provi

ded

by us

and

case

is

pend

ing

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

156

122 F.I.R.

No.

06778

-2010

24-

04-

2010

Changanbha

i Hamirbhai

Ahir V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.209071108497

31953/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

123 F.I.R.

No.

06796-2010

24-

04-

2010

Dinaben

Rameshchan

dra Pancholi V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090712085

88

26802/

-

Pendin

g for

hearing

Orig

inal

docume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

124 F.I.R. No.

06513

-2010

24-04-

2010

Jayhind Babulal

Gupta V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090801087

31

49956/-

Pending for

hearing

Original

doc

ume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

125 F.I.R.

No.

06527

-2010

24-

04-

2010

Hathiramji

Kachraji

Dholpuria

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090803093

05

19592/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

157

126 F.I.R.

No.

06533

-2010

24-

04-

2010

Dinesh

Harilal

Raval V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

209080309358

39544/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

127 F.I.R.

No.

06532-2010

24-

04-

2010

Dineshbhai

Somalal

Makwana V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2090804095

67

39058/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

128 F.I.R.

No.

06520

-2010

24-

04-

2010

Dharmeshbh

ai

Vinodsinh

Varma V/s.

Arman

Financial

Services

Limited.

(Formaly Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


82

60918/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

129 F.I.R.

No.

06523

-2010

24-

04-

2010

Bhavesh

Jagdishchan

dra Mehta

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.2090805

09790

29431/

-

Pendin

g for

hearing

Pen

ding

As the

Company has

filed the case

for recovery,

there is no

adverse

effect on the

financial of

the company

158

130 F.I.R.

No.

06791

-2010

24-

04-

2010

Faridbhai

Ayubbhai

Ghanchi

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010806010167

39108/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

131 F.I.R.

No.

06800-2010

24-

04-

2010

Ajitsinh

Jujarsinh

Rahevar V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010808010

629

25111/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

132 F.I.R.

No.

06798

-2010

24-

04-

2010

Dhaval

Nileshbhai

Limbachiya

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"


761

31875/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

133 F.I.R.

No. 06531

-2010

24-

04-2010

Ganpatsinh

Bhavansinh Vaghela

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

minal

Law

of

Cou

rt

Mirz

apur

Criminal

Case file U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010808011

009

53469/

-

Pendin

g for hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

159

134 F.I.R.

No.

06785

-2010

24-

04-

2010

Asifkhan

Munnakhan

Pathan V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010810011448

34680/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

135 F.I.R.

No.

06517-2010

24-

04-

2010

Khaleda

Mohd.Habib

Hawawala V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

1010901012

587

36599/

-

Pendin

g for

hearing

Orig

inal

docume

nts

prov

ided

by

us

and

case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

136 F.I.R. No.

06515

-2010

24-04-

2010

Jay Ambe Folding

Centre V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

Reason

"Insufficient

Funds"

Contract no.

2090806010

187

32903/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

137 F.I.R.

No.

06783

-2010

24-

04-

2010

Bharatbhai

Lalbhai

Patel V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

2110812012

520

41110/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

160

138 F.I.R.

No.

06797

-2010

24-

04-

2010

Dilipbhai

Haribhai

Patel V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

21869/ECS/05-06

19974/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us

and case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

139 F.I.R. No.

06514

-2010

24-04-

2010

Jayesh Decoraters

V/s. Arman

Financial

Services

Limited.

(Formerly

known as Arman

Lease and

Finance

Limited.)

Crimin

al

Law

of

Cou

rt

Mirzapur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds" Contract no.

22314/06-07

41798/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

140 F.I.R. No.

06787

-2010

24-04-

2010

Dharmesh Shashikant

Bharmbhatt

V/s. Arman

Financial

Services

Limited.

(Formerly

known as

Arman

Lease and

Finance

Limited.)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract

no.22375/20

06-07

24410/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

141 F.I.R.

No.

06781

-2010

24-

04-

2010

Amarjeetsin

gh P Saluja

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22396/06-07

36423/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

161

142 F.I.R.

No.

06792

-2010

24-

04-

2010

Bhimsingh

Harisingh

Gurkha V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

22402/06-07

17670/

-

Pendin

g for

hearing

Orig

inal

doc

ume

nts

prov

ided

by

us

and case

is

pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

143 F.I.R. No.

06529

-2010

24-04-

2010

Hakamdan Ranidan

Ghdhavi

V/s. Arman

Financial

Services

Limited.

(Formaly Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirzapur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds" Contract no.

22404/ECS/

06-07

20428/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

144 F.I.R. No.

06536

-2010

24-04-

2010

Laxmansing Ratansing

Chaudhary

V/s. Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Crimin

al

Law

of

Cou

rt

Mirz

apur

Criminal Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

30227/05-06

33107/-

Pending for

hearing

Pending

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

145 F.I.R.

No.

06790

-2010

24-

04-

2010

Govindbhai

Ratilal

Senma V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

.Reason

"Insufficient

Funds"

Contract no.

30384/2005-

06

41084/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed the

case for

recovery,

there is no

adverse

effect on the

financial of

the

company

162

146 F.I.R.

No.

06780

-2010

24-

04-

2010

Jaimin

Bharatbhai

Shah V/s.

Arman

Financial

Services

Limited.

(Formaly

Known as a

Arman Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

30516/2005-06

26564/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

147 F.I.R.

No.

06777-2010

24-

04-

2010

Ghanshyam

Mafatbhai

Patel V/s Arman

Financial

Services

Limited

(Formaly

Known as a

Arman

Lease and

Finance

Limited)

Cri

min

al Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138 Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no.

30605/2006-

07

29751/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

148 F.I.R.

No.

06789

-2010

24-

04-

2010

Harkant

Kantilal

Gandhi V/s

Arman

Financial

Services

Limited

(Formaly

Known as a Arman

Lease and

Finance

Limited)

Cri

min

al

Law

of

Cou

rt

Mirz

apur

Criminal

Case file

U/s. 138

Cheque

dishonoured

. Reason

"Insufficient

Funds"

Contract no. 30672/2006-

07

27788/

-

Pendin

g for

hearing

Pen

ding

As the

Company

has filed

the case for

recovery,

there is no

adverse

effect on

the

financial of

the

company

b) Cases filed against the Company - Nil

c) Cases filed by the Promoters- Nil d) Cases filed against the Promoters -Nil

e) Cases filed by the Directors- Nil

f) Cases filed against the Directors - Nil

g) Cases filed by the Group Companies/associate concerns - Nil

h) Cases filed against the Group companies/associate concerns - Nil

2. under securities Laws

a) Cases filed by the Company – Nil

163

b) Cases filed against the Company- Nil

c) Cases filed by the Promoters- Nil

d) Cases filed against the Promoters- Nil


f) Cases filed against the Directors- Nil g) Cases filed by the Group Companies/associate concerns - Nil

h) Cases filed against the Group companies/associate concerns - Nil

3. under Tax Laws

a) Cases filed by the Company –

Sr.

No.

Case

no.

Instit

ution

Date

Parties Autho

rity

Subject Matter and

Relief sought

Amount

Involved

(in Rs.)

Prese

nt

statu

s

Status

as on

date

Likely

advers

e effect

on the

financi

al of

issuer

compa

ny

1 2053/

05

2002-

03

Income Tax

Department

V/s Arman

Financial

Services

Limited(Formerl

y known as

Arman Lease

and Finance

Limited.)

ITAT Department has done

addition U/s 73 of IT

Act. The tribunal has

set aside the matter

and same has been

restored to the file of

A.O. There are already

3 judgments by High

Court in favour of

Arman.

1415000/

-

Pendi

ng

Pendin

g

If order

comes

against

the

company,

company

has to

pay Rs.

14.15

Lacs

2 160/

05

2001-

02

Income Tax

Department

V/s Arman

Financial

Services Limited

(Formerly

known as Arman

Lease and

Finance

Limited.)

ITAT Income Tax

Department has done

addition u/s 73 of

IncomeTax Act. The

Tribunal had set aside

the matter and same

has been restored to

the file of Assessing

Officer.

1434000/

-

pendi

ng

Pendin

g

If order

comes

against

the

company,

company

has to

pay Rs.

14.34

Lacs

3 18/8

08-09

2005-

06

Income Tax

Department

V/s Arman

Financial

Services Limited

(Formerly

known as Arman

ITAT Assessing Officer of

Income Tax

Department has

disallowed some bad

debt claim by the

Company Arman has

file appeal with ITAT.

183000/-

Pendi

ng

Pendin

g

If order

comes

against

the

company,

company

has to

164

Lease and

Finance

Limited.)

pay Rs.

1.83 Lacs

b) Cases filed against the Company

Sr.

No.

Case

no.

Instit

ution

Date

Parties Authori

ty

Subject Matter and

Relief sought

Amount

Involved

(in Rs.)

Present

status

Status as

on date

Likely

adverse

effect on

the

financial

of issuer

compan

y

1 452 of

2007

1997-

98

Income Tax

Department

V/s Arman

Financial

Services

Limited

(Formerly

known as

Arman Lease

and Finance

Limited.)

High

Court

Our claim of

depreciation on

leased asset was

disallowed by A.O.

Arman’s appeal is

allowed by CIT

appeals and ITAT.

Income Tax

department has filed

appeal in High

Court.

2216000/

-

Pending Pending

If order

comes

against the

company,

company

has to pay

Rs. 22.16

Lacs

2 60 of

2007

1997-

98

Income Tax

Department

V/s Arman

Financial

Services

Limited

(Formerly

known as

Arman Lease

and Finance

Limited.)

High

Court

Interest Tax addition

by A.O. was

challenged by

Company and it was

allowed by CIT

appeals & ITAT.

Income Tax

Department has filed

appeal in High

Court.

207000/- Pending

Pending

If order

comes

against the

company,

company

has to pay

Rs. 2.07

Lacs

3 479/2

007

1998-

99

Income Tax

Department

V/s Arman

Financial

Services

Limited

(Formerly

known as

Arman Lease

and Finance

Limited.)

High

Court

Interest Tax addition

by Assessing Officer

of Income Tax

Department was

challenged by

Company and it was

allowed by CIT

appeals & ITAT.

Income Tax

Department has filed

appeal in High

Court.

207000/- Case is

pending.

Pending

If order

comes

against the

company,

company

has to pay

Rs. 2.07

Lacs

165




f) Cases filed against the Directors- Nil

g) Cases filed by the Group Companies/associate concerns- Nil

h) Cases filed against the Group companies/associate concerns – Nil

4. Under civil laws

a) Cases filed by the Company

Sr.

No.

Case

no.

Instit

ution

Date

Parties Autho

rity

Subject Matter

and Relief

sought

Amoun

t

Involve

d (in

Rs.)

Present

status

Status as

on date

Likely

adverse

effect on

the

financial

of issuer

compan

y

1 2936/

07

11/10/

2007

Saurangbhai

Bhikhabhai

Thakkar / Aartiben

S Thakkar Vs.

Arman Financial

Services Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

30276 Contract

No. 21767 amt.

finance Rs. 19600

30276 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

2 2937/

07

11/10/

2007

R.K. Industries

(Ramesh

M.Chauhan) Vs.

Arman Financial

Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

16181 Contract

No. 21720 amt.

finance Rs. 39100

16181 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

3 2938/

07

11/10/

2007

Rakesh Hosiery

Works (Rakesh

Barot) / Damini

Rakesh Barot Vs.

Arman Financial

Services Limited

(Formerly known

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

66957 Contract

No. 21837 amt.

finance Rs. 39100

66957 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

166

as Arman Lease

and Finance

Limited.)

Company

has filed

the case for

recovery

4 2939/

07

11/10/

2007

Rakesh Hosiery

Works (Rakesh

Barot) / Damini

Rakesh Barot Vs.

Arman Financial

Services Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

27872 Contract

No. 21920 amt.

finance Rs. 14600

27872 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

5 2940/

07

11/10/

2007

Kunal

Hemantkumar

DeshmukhVs.

Arman Financial

Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

69114 Contract

No. 22024 amt.

finance Rs. 48850

69114 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

6 2941/

07

11/10/

2007

Pramodbhai

Bhailalbhai Patel

Vs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

19574 Contract

No. 21425 amt.

finance Rs. 35500

19574 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

7 2942/

07

11/10/

2007

Mehul

Kushumkant Bhatt

/ Hemaben M

BhattVs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

54252 Contract

No. 21614 amt.

finance Rs. 48850

54252 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

167

recovery

8 2943/

07

11/10/

2007

Shital Trading Co

(Bela Deepak

Mehta) / Deepak

M MehtaVs.

Arman Financial

Services Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

50581 Contract

No. 21926 amt.

finance Rs. 34400

50581 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

9 2944/

07

11/10/

2007

Ravi Ishwarbhai

Motwani / Manish

I MotwaniVs.

Arman Financial

Services Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

63100 Contract

No. 21783 amt.

finance Rs. 44500

63100 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

10 2945/

07

11/10/

2007

Jamnadas Premji

Bhai Solanki /

Varshaben J

SolankiVs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

27118 Contract

No. 21792 amt.

finance Rs. 29350

27118 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

11 2946/

07

11/10/

2007

Mahendra

Narendashankar

Pandya / Divyesh

M PandyaVs.

Arman Financial

Services Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

25362 Contract

No. 21635 amt.

finance Rs. 24500

25362 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

12 2947/ 11/10/ Ankitbhai SummCompany has 29261 Pending Pending No adverse

168

07 2007 Bharatbhai Patel/

Harikishan

KanchiyaVs.

Arman Financial

Services Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

ary

Suit

Bhadr

a

Court

Filed Summary

Civil Suit for

Recovery of Rs.

29261 Contract

No. 21662 amt.

finance Rs. 32000

for

hearing

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

13 2948/

07

11/10/

2007

Chirag Kalidas

Patel / Dinesh C

ModiVs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

41738 Contract

No. 21958 amt.

finance Rs. 29200

41738 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

14 2958/

07

11/10/

2007

Samarthlal

Sohanlal Jain /

Poonam H JainVs.

Arman Financial

Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

24581 Contract

No. 21712 amt.

finance Rs. 29350

24581 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

15 2959/

07

11/10/

2007

Sashikant

Ramanlal Acharya

/ Jayshree S

AcharyaVs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

38587 Contract

No. 21970 amt.

finance Rs. 24350

38587 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

16 2960/

07

11/10/

2007

Hiteshbhai

Amrutlal PatelVs.

Arman Financial

Services

Summ

ary

Suit

Bhadr

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

22747 Pending

for

hearing

Pending No adverse

effect on

the

financial of

169

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

a

Court

22747 Contract

No. 21856 amt.

finance Rs. 29350

the

company

As the

Company

has filed

the case for

recovery.

17 2961/

07

11/10/

2007

Rajeshbhai

Thonjibhai Soni /

N M HinguVs.

Arman Financial

Services

Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

35571 Contract

No. 21696 amt.

finance Rs. 49350

35571 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

18 2962/

07

11/10/

2007

Chandrika

Jaswantbhai

Gowani /

Jaswantbhai C

Govani /

Herekrishna

TredingVs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

30321 Contract

No. 21877 amt.

finance Rs. 48600

30321 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

19 2963/

07

11/10/

2007

Manharsigh

Sardarsingh

ZalaVs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

23793 Contract

No. 21743 amt.

finance Rs.20000

23793 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery

20 2964/

07

11/10/

2007

Dadarao

Mahadevrav

GawandeVs.

Arman Financial

Services

Limited (Formerly

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

55758 Contract

No. 21590 amt.

55758 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

170

known as Arman

Lease and Finance

Limited.)

finance Rs. 48600 As the

Company

has filed

the case for

recovery

21 2965/

07

11/10/

2007

Rajendra Punjalal

ShahVs. Arman

Financial Services

Limited (Formerly

known as Arman

Lease and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

45153 Contract

No. 21934 amt.

finance Rs. 19500

42153 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.

22 2966/

07

11/10/

2007

Arunbhai

Govindbhai

Manve/Bharat T

GaikwadVs.

Arman Financial

Services Limited

(Formerly known

as Arman Lease

and Finance

Limited.)

Summ

ary

Suit

Bhadr

a

Court

Company has

Filed Summary

Civil Suit for

Recovery of Rs.

30711 Contract

No. 21901 amt.

finance Rs. 19500

30711 Pending

for

hearing

Pending No adverse

effect on

the

financial of

the

company

As the

Company

has filed

the case for

recovery.


c) Cases filed by the Promoters-Nil

d) Cases filed against the Promoters-Nil


f) Cases filed against the Directors- Nil g) Cases filed by the Group Companies/associate concerns- Nil

h) Cases filed against the Group companies/associate concerns-Nil

5. Under Labour laws

a) Cases filed by the Company - Nil

b) Cases filed against the Company-Nil c) Cases filed by the Promoters- Nil



f) Cases filed against the Directors- Nil

g) Cases filed by the Group Companies/associate concerns- Nil

h) Cases filed against the Group companies/associate concerns-Nil

6. Under various statutory laws

a) Cases filed by the Company - Nil

171





f) Cases filed against the Directors-Nil g) Cases filed by the Group Companies/associate concerns- Nil

h) Cases filed against the Group companies/associate concerns- Nil

Amount Outstanding to SSI Undertaking or other creditors

There are no SSI Undertakings or other creditors to whom the Company owes an amount exceeding Rs.1

Lac which is outstanding for more than 30 days from the due date.

Material Developments

There are no material developments after the date of the last audited balance sheet as on March 31, 2010,

which may materially affect the performance, or prospects of our Company.

172

GOVERNMENT AND OTHER APPROVALS

We have received the necessary consents, licenses, permissions and approvals from the government and

various governmental agencies required for our present business and except as mentioned below, no

further approvals are required for carrying on our present business.

I. Approvals for the Issue

Corporate Approvals

1. Our Board of Directors has, pursuant to resolutions passed at its meeting held on June 17,2010

authorised the Issue, subject to the approval by the shareholders of the Company under Section

81 of the Companies Act.

2. Our shareholders have, pursuant to a resolution dated September 6, 2010 under Section 81 of the

Companies Act, authorised the Issue.

II. Incorporation Details of the Company

1. The Company was incorporated as Private Limited Company on November 26, 1992 under the

Companies Act, 1956 as Arman Lease and Finance Private Limited by the Registrar of

Companies, Gujarat, and Dadra & Nagar Haveli.

2. The Company subsequently became Public Limited Company and the name of the Company

was changed to Arman Lease and Finance Limited and received fresh certificate of registration

dated December 22, 1993 from Registrar of Companies, Gujarat, Dadra & Nagar Haveli.

3. The name of the company was further changed to Arman Financial Services Limited and new certificate of registration was issued by Registrar of Companies, Gujarat, Dadra & Nagar

Haveli on November 27, 2008.

III. Approvals to carry on our Business

The Company requires various approvals for it to carry on its business in India. Certain approvals

have elapsed in their normal course and the Company has either made an application to the appropriate authorities for renewal of such licenses and/or approvals or is in the process of making

such applications. The approvals that the Company requires include the following:

1. Certificate of Registration No. 01.00066 under section 45-IA of the Reserve Bank of India Act,

1934 issued on 6th November, 1998 to commence or carry on the business of non-banking

financial institution with accepting public deposits.

2. Service Tax Code bearing number AABCA3165EST001, issued by the Commissioner of

Customs, Central Excise and Service Tax,

3. Permanent Account Number issued pursuant to the Income Tax Act: AABCA3165E.

4. Tax Deduction Account Number issued pursuant to the Income Tax Act: AHMA01713F.

5. Registration (No GJ/PFC/AHD/50603/ENF/146) dated May 18, 2004 under the Employees

Provident Fund and Miscellaneous Provisions Act, 1952.

6. Registration under Shops and Establishment Act having registration number

PII/SHA2/01/0000032.

7. Professional Tax Registration No. TRC015160029

173

SECTION VII- OTHER REGULATORY AND STATUTORY DISCLOSURES

AUTHORITY OF THE PRESENT ISSUE

Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on June

17, 2010, it has been decided to make the offer to the Eligible Equity Shareholders of the Company,

with a right to renounce. The Shareholders of the Company have, pursuant to special resolution passed

at its annual general meeting held on September 6, 2010 authorized the Issue. The Board of Directors at

their meeting held on June 17, 2010 has decided to make the following offer to the existing

shareholders of the company.

Issue of 48,91,920 Equity shares of Rs.10/- each at premium of Rs. 5 per share (issue price of Rs. 15)

aggregating to an amount Rs. 733.79 Lacs on rights basis to the existing equity shareholders of the

company in the ratio of 6 (six) Equity share for every 5 (five) equity share (i.e. 6:5) held on [●] (the

record date). The issue price is 1.5 times of the face value of the equity share.

PROHIBITION BY SEBI, RBI AND OTHER GOVERNMENTAL AUTHORITIES

Neither the Company, nor its Promoters, its directors, any of its Group Companies, and the companies

or entities with which directors of the Company are associated, as directors or promoters, have been

prohibited from accessing or operating in the capital market or restrained from buying, selling or

dealing in securities under any order or directions passed by SEBI. None of the Promoters, their

relatives, the Company or the Promoter Group Companies are detained as willful defaulters by RBI/

government authorities and there are no proceedings relating to violations of securities laws pending

against them and there are no violations of securities laws committed by them in the past. The Listing

of any securities of the Issuer has never been refused at anytime by any of the Stock Exchanges in

India.

ELIGIBILITY FOR THE ISSUE

Our Company is an existing listed Company and it is eligible to offer this Rights Issue in terms of

Regulation 4 of the SEBI (ICDR) Regulations, 2009.

Our Company is in compliance as prescribed under Regulation 57(2)(b) and Part E of Schedule VIII of

the SEBI(ICDR) Regulations 2009. It satisfies the following conditions

A. We have been filing periodic reports, statements and information in compliance with the listing

agreement for the last three years immediately preceding the date of filing this Draft letter of offer

with the designated stock exchange.

B. The reports, statements and information referred to sub-clause (a) above are available on the

website of Bombay Stock Exchange Limited (BSE) one of the recognized stock exchange with nationwide trading terminals.

C. We have investor grievance – handling mechanism which includes meeting of the Shareholder’s or

Investor’s Grievance Committee at frequent intervals, appropriate delegation of power by the board

of directors of the Company as regards share transfer and have clearly laid down systems and

procedures for timely and satisfactory redressal of investor grievances.

174

DISCLAIMER CLAUSE OF SEBI

AS REQUIRED, A COPY OF THIS DRAFT LETTER OF OFFER HAS BEEN SUBMITTED

TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI).

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF DRAFT LETTER OF

OFFER TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE

SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY

RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR

THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE

CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE

DRAFT LETTER OF OFFER. LEAD MERCHANT BANKER, NIRBHAY CAPITAL

SERVICES PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN

THE DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN

CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)

REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO

FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING

INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER IS

PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE

OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD

MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE

ISSUER DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND

TOWARDS THIS PURPOSE, THE LEAD MANAGER, NIRBHAY CAPITAL SERVICES

PRIVATE LINMITED HAS FURNISHED TO THE SECURITIES AND EXCHANGE BOARD

OF INDIA (SEBI) A DUE DILIGENCE CERTIFICATE DATED OCTOBER 05, 2010 WHICH

READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO

LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH

COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE

FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER,

ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT

VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE,

PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER

PAPERS FURNISHED BY THE ISSUER, WE CONFIRM THAT:

(a) THE DRAFT LETTER OF OFFER FILED WITH THE BOARD IS IN CONFORMITY

WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

(b) ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE

REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE

BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT

AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

(c) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR

AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED

DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH

DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE

COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA

175

(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009

AND OTHER APPLICABLE LEGAL REQUIREMENTS.

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN

THE DRAFT LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT

TILL DATE SUCH REGISTRATION IS VALID.

4. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE

UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. – NOT

APPLICABLE.

5. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED

FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF

PROMOTERS"CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED

SECURITIES PROPOSED TO FORM PART OF PROMOTERS” CONTRIBUTION SUBJECT

TO LOCK-IN SHALL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS

DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT LETTER

OF OFFER WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN

PERIOD AS STATED IN THE DRAFT LETTER OF OFFER. – NOT APPLICABLE AS THE

PRESENT ISSUE IS A RIGHTS ISSUE.

6. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD

OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS,

2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION

OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND

APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION

HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER. – NOT APPLICABLE AS THE

PRESENT ISSUE IS A RIGHTS ISSUE

7. WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C)

AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND

EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE

REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM

THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS‟‟‟‟ CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING

OF THE ISSUE. WE UNDERTAKE THAT AUDITORS‟‟‟‟ CERTIFICATE TO THIS EFFECT

SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT

ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS‟‟‟‟ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED

COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER ALONG WITH THE

PROCEEDS OF THE PUBLIC ISSUE. – NOT APPLICABLE AS THE PRESENT ISSUE IS

RIGHTS ISSUE

8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE

FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE “MAIN

OBJECTS‟‟‟‟ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF

ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES

WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE

OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

9. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE

THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE

BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF

THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE

176

SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK

EXCHANGES MENTIONED IN THE DRAFT LETTER OF OFFER. WE FURTHER

CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO

THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION - NOTED

FOR COMPLIANCE

10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF

OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN

DEMAT OR PHYSICAL MODE.

11. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE

SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND

DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION

TO DISCLOSURES WHICH, IN THE VIEW, ARE FAIR AND ADEQUATE TO ENABLE

THE INVESTOR TO MAKE A WELL INFORMED DECISION.

12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE

DRAFT LETTER OF OFFER:

(a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL

BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER; AND

(b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH

DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO

TIME.

13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO

ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA

(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE

MAKING THE ISSUE.

14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS

BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS

BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS

STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE, ETC.

15. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE

WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD

OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS,

2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE

STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER

WHERE THE REGULATION HAS BEEN COMPLIED WITH AND THE COMMENTS, IF

ANY.

THE FILING OF THIS DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE

THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE

COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY

OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE

PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY

POINT OF TIME; WITH THE LEAD MANAGER ANY IRREGULARITIES OR LAPSES IN

THIS DRAFT LETTER OF OFFER.

177

DISCLAIMER OF THE COMPANY AND THE LEAD MANAGER

The Company and the Lead Manager accept no responsibility for statements made otherwise than in

this Draft Letter of Offer or in any advertisement or other material issued by the Company or by any other persons at the instance of the Company and anyone placing reliance on any other source of

information would be doing so at his own risk.

The Company and the Lead Manager shall make all information available to the Equity Shareholders

and no selective or additional information will be available for a section of the Equity Shareholders in

any manner whatsoever including at presentations or in research or sales reports, after the filing of this

Draft Letter of Offer with the Stock Exchanges.

CAUTION

Investors who invest in the Issue will be deemed to have represented to our Company and Lead

Manager and their respective directors, officers, agents, affiliates and representatives that they are

eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares

of our Company, and are relying on independent advice / evaluation as to their ability and quantum of

investment in this Issue.

UNITED STATES RESTRICTIONS

NEITHER THE RIGHTS ENTITLEMENTS NOR THE EQUITY SHARES THAT MAY BE

PURCHASED PURSUANT THERETO HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY U.S. STATE

SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, RESOLD OR OTHERWISE

TRANSFERRED WITHIN THE UNITED STATES OF AMERICA OR THE TERRITORIES OR

POSSESSIONS THEREOF (THE “UNITED STATES” OR THE “U.S.”) OR TO, OR FOR THE

ACCOUNT OR BENEFIT OF, “US PERSONS” (AS DEFINED IN REGULATIONS UNDER THE

SECURITIES ACT (“REGULATION S”)), EXCEPT IN A TRANSACTION EXEMPT FROM THE

REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE RIGHTS REFERRED TO IN THIS DRAFT LETTER OF OFFER ARE BEING OFFERED IN INDIA, BUT NOT IN THE UNITED

STATES. THE OFFERING TO WHICH THIS DRAFT LETTER OF OFFER RELATES IS NOT,

AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, AN OFFERING OF ANY

SHARES OR RIGHTS FOR SALE IN THE UNITED STATES OR AS A SOLICITATION THEREIN

OF AN OFFER TO BUY ANY OF THE SAID SHARES OR RIGHTS. ACCORDINGLY, THIS

DRAFT LETTER OF OFFER SHOULD NOT BE FORWARDED TO OR TRANSMITTED IN OR

INTO THE UNITED STATES AT ANY TIME, EXCEPT IN A TRANSACTION EXEMPT FROM

THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NEITHER OUR COMPANY

NOR ANY PERSON ACTING ON BEHALF OF OUR COMPANY WILL ACCEPT

SUBSCRIPTIONS FROM ANY PERSON, OR THE AGENT OF ANY PERSON, WHO APPEARS

TO BE, OR WHO OUR COMPANY OR ANY PERSON ACTING ON BEHALF OF OUR

COMPANY HAS REASON TO BELIEVE IS, A RESIDENT OF THE UNITED STATES AND TO

WHOM AN OFFER, IF MADE, WOULD RESULT IN REQUIRING REGISTRATION OF THIS

DRAFT LETTER OF OFFER WITH THE UNITED STATES SECURITIES AND EXCHANGE

COMMISSION.

DISCLAIMER WITH RESPECT TO JURISDICTION

This Draft Letter of Offer has been prepared under the provisions of Indian Laws and the applicable

rules and regulations there under.

The distribution of the Draft Letter of Offer and the issue of Equity Shares on a rights basis to persons

in certain jurisdictions outside India may be restricted by legal requirements prevailing in those

178

jurisdictions. Persons in whose possession the Draft Letter of Offer may come are required to inform

them about and observe such restrictions. Any disputes arising out of this Issue will be subject to the

jurisdiction of the appropriate court(s) in Ahmedabad, Gujarat, India only.

No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that this Draft Letter of Offer will be filed with SEBI for observations

and SEBI may give its observations. Accordingly, the Equity Shares represented thereby may not be

offered or sold, directly or indirectly, and this Draft Letter of Offer may not be distributed in any

jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither

the delivery of this Draft Letter of Offer nor any sale hereunder, shall under any circumstances create

any implication that there has been no change in our affairs from the date hereof or that the information

contained herein is correct as of any time subsequent to this date.

DESIGNATED STOCK EXCHANGE

The Designated Stock Exchange for the purpose of the Issue will be the BSE.

DISCLAIMER CLAUSE OF THE BSE

As required, a copy of the Draft Letter of Offer has been submitted to the BSE. The Disclaimer Clause

as intimated by BSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Draft

Letter of Offer prior to the Stock Exchange filing.

DISCLAIMER CLAUSE OF THE RESERVE BANK OF INDIA (RBI)

The Reserve Bank of India does not accept any responsibility or guarantee about the present position as

to the financial soundness of the Company or for the correctness of any of the statements or

representations made or opinions expressed by the Company and for discharge of liabilities by the

Company.

LISTING

The existing Equity Shares are listed on BSE (Designated Stock Exchange) and Jaipur Stock Exchange

(JSE). We have made application to BSE for permission to deal in and for an official quotation in

respect of the securities being offered in terms of this Draft Letter of offer. We have received in-

principle approval from BSE vide letter dated [●]. We have applied for delisting of our equity shares

from JSE.

If the permission to deal in and for an official quotation of the securities is not granted by the Stock

Exchanges mentioned above, within 15 days from the Issue Closing Date, our Company shall forthwith

repay, without interest, all monies received from applicants in pursuance of this Draft Letter of Offer. If

such money is not paid within eight days after the Company becomes liable to repay it, then the

Company and every Director of the Company who is an officer in default shall, on and from expiry of

eight days, be jointly and severally liable to repay the money with interest as prescribed under the

Section 73 of the Act.

FILING

The Draft Letter of Offer has been filed with SEBI, Western Regional Office, Unit No: 002, Ground

Floor, SAKAR I, Near Gandhigram Railway Station, Opp.Nehru Bridge Ashram Road, Ahmedabad –

380009 for its observations. After SEBI gives its observations, the Letter of Offer will be filed with the

Designated Stock Exchange.

179

IMPERSONATION

Attention of the applicants is specifically drawn to the provisions of Sub-Section (1) of Section 68A of

the Companies Act, 1956 which is reproduced below:

"Any person who-

(a) Makes in a fictitious name an application to a Company for acquiring, or subscribing for, any

shares therein, or

(b) Otherwise induces a Company to allot or register any transfer of shares therein to him, or any

other person in a fictitious name, shall be punishable with imprisonment for a term which may

extend to five years."

CONSENTS

Consents in writting of the Auditors to our Company, the Directors, the Lead Manager, the Legal

Advisor, Registrar to the Issue, the Compliance officer and Bankers to our Company to act in their

respective capacities have been obtained and filed with Stock Exchange, along with a copy of the Draft

Letter of Offer and such consents have not been withdrawn up to the time of delivery of this Draft

Letter of Offer for registration with the stock exchanges. The Auditors of our Company have given their

written consent for the inclusion of their Report in the form and content as appearing in the Draft Letter

of Offer and such consents and reports have not been withdrawn up to the time of delivery of this Draft

Letter of Offer for registration with the stock exchange.

To the best of our knowledge there are no other consents required for making this Issue. However, should the need arise, necessary consents shall be obtained by us.

EXPERT OPINION, IF ANY

Except the “Auditor’s Report” on page no. 90 of this Draft Letter of Offer, no expert opinion has been

obtained by our Company in relation to this Draft Letter of Offer.

EXPENSES OF THE ISSUE

The total expenses of the issue are estimated to be around Rs. [●] Lacs. All expenses with respect to

the issue would be met out of the proceeds of the issue. The split up of issue expenses is as under: -

Particular

Ammount

RS.(lacs)

% of total

size of the

issue

% of total

issue

expenses

Fees of Lead Manager, Registrar, Legal Advisor, Auditors, Tax Auditors, etc

[●] [●] [●]

Printing & Stationery, Distribution, Postage, etc [●] [●] [●]

Advertisement & Marketing Expenses [●] [●] [●]

Other Expenses (incl. Filing Fees, Listing Fees,

Depository Charges, etc.)

[●] [●] [●]

Total [●] [●] [●]

* Amounts will be finalized at the time of filing the Letter of Offer and determination of Issue

price and other details.

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INVESTOR GRIEVANCES AND REDRESSAL SYSTEM

We have in place an Investors/Shareholders Grievance Committee. The committee consists of Mr. C. R.

Shah, Chairman, Mr. K. D. Shah & Mr. Jayendra Patel, Members along with Mr. Aalok J Patel, the

Director, as the Compliance Officer. The Committee looks into the matter relating to transfer of shares, demat of shares, issue of duplicate share certificates, redressal of investor complaints regarding non-

receipt of dividends, Annual Reports, dividend warrants etc. The Company has appointed Sharepro

Services (India) Pvt. Ltd as its Share Transfer Agents both for the physical as well as for demat shares.

Letters are filed category wise after having attended to Redressal norm for response time for all

correspondence including shareholders complaints is 15 days. However, our Company ensures to

redress all the investor grievances well within the said 15 days from the date of receipt of the complaint.

The Compliance Officer Mr. Aalok J Patel takes care for redressal of complaints on a regular basis.

Status of Complaints

No. of shareholders complaints as of 31st March 2010 0

Total number of complaints received during 01.04.2009 to 31.03.2010 1

Total number of complaints resolved during 01.04.2009 to 31.03.2010 1

Outstanding number of complaints 0

INVESTOR GRIEVANCES ARISING OUT OF THIS ISSUE

The investor grievances arising out of the Issue will be handled by Mr. Aalok J Patel, Compliance

Officer and Sharepro Services (India) Private Limited, who are the Registrars to the Issue. The

Registrars will have a separate team of personnel handling only our post issue correspondence. All

grievances relating to the Issue may be addressed to the Registrars to the Issue giving full details such

as folio no., name and address, contact telephone / cell numbers, e-mail id of the first Investors, number

and type of shares applied for, application form serial number, amount paid on application and the name

of the bank and the branch where the application was deposited, along with a photocopy of the

acknowledgement slip. In case of renunciation, the details of the Renounces should be furnished. The

average time taken by the Registrar for attending to routine grievances will be 15 days from the date of

receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the Endeavour of the Registrar to attend to them as expeditiously as possible. We undertake to resolve

the Investor grievances in a time bound manner. Investors may contact the Compliance Officer in case

of any pre-issue/post-issue related problems such as non-receipt of letters of allotment/share

certificates/demat credit/refund orders etc. at:

Mr. Aalok J Patel

Contact Person & Compliance Officer,


502-503, Sakar III, Opp. High Court, Off Ashram Road,

Ahmedabad 380014, Gujarat, India

Tel: +91-79- 30005000, +91-79-27541989, +91-79-27543899

Fax: +91-79-27543666, +91-79-27541738


Website: www.armanindia.com

PREVIOUS ISSUE DETAILS

The company has not made any public/rights issue of its equity shares during the last five years.

PREVIOUS ISSUES OF SECURITIES FOR CONSIDERATION OTHER THAN CASH

The Company has not issued any Equity Shares for a consideration otherwise than for cash since last 3

years.

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COMMISSION OR BROKERAGE ON PREVIOUS ISSUES

The Company has not made any Public / Rights Issue during last five years, hence no commission or

brokerage has been paid.

COMPANIES UNDER THE SAME MANAGEMENT

There are no listed companies under the same management within the meaning of Section 370(1B) of

the Act.

CAPITAL ISSUE DURING THE LAST THREE YEARS

The Company, Promoter Company and Group Companies have not made any capital Issues during the

last three years.

OUTSTANDING DEBENTURES, BONDS AND PREFERENCE SHARES

As of date, the company does not have any outstanding Debentures, Bonds or Preference shares.

PERFORMANCE VIS-À-VIS OBJECTS

(1) Our Company:

Since our Company has not made any public/rights issues made during the period of ten years immediately preceding the date of filing the draft letter of offer with SEBI, details regarding “list of

public/rights issues made during the period of ten years ”, “Promise vis-à-vis object- last three issues”

and “Non achievement of objects” are not applicable.

(2) Listed Group Companies/ Associate companies:

None of our Group Companies/ Associate companies are listed on any of the stock exchanges.

STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY

Our Equity Shares are currently listed on BSE. For details of listing and delisting of our Equity Shares

refer to the section titled “Our History and Corporate Matters” beginning on page no. 63 of this Draft

Letter of Offer. Stock market data for our Equity Shares on the BSE is set forth below. There has been

no trading of our Equity Shares on Jaipur Stock Exchange Limited in last Three Fiscal years.

The high and low closing prices recorded on the BSE for the preceding three fiscal years and the

number of Equity Shares traded on the days the high and low prices were recorded are stated below:

Year

ending

High

Rs

Date of

High

Volume

on date

of high

Low Rs Date of

low

Volume

on date

of low

Average

price for

the year

March,

2010

15.23 31/03/2010 4401 6.51 23/11/2009 200 9.019

March,

2009

9.15 19/08/2008 1425 4.76 24/10/2008 1201 7.001

March,

2008

15.00 04/1/2008 24892 3.82 23/05/2007 4332 6.603

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Source BSE website

The monthly high and low closing prices recorded on the BSE for the preceding six months and the

number of Equity Shares traded on the days the high and low prices were recorded are stated below:

Month

ending

High

Rs

Date of

High

Volume

on date

of high

Low Rs Date of

low

Volume

on (no of

shares)

Average

price for the

Month (Rs.)

September,

2010

32.50 13/09/2010 8865 23.20 01/09/2010 10287 28.38

August, 2010 33.00 04/08/2010 28206 23.10 31/08/2010 7858 27.14

July, 2010 32.30 12/07/2010 34795 25.00 27/07/2010 31467 28.41

June, 2010 34.70 17/06/2010 41.473 21.00 03/06/2010 57846 28.82

May, 2010 21.45 31/05/2010 20866 13.75 18/05/2010 3240 17.18

April, 2010 21.25 13/04/2010 10243 14.75 01/04/2010 28528 17.90

Source: BSE website

Week end closing prices for the last four weeks on BSE is as follows:

Week ended on Closing Price (In Rs.)

October 15, 2010 28.75

October 08, 2010 28.60

October 01, 2010 30.00

September 24, 2010 28.65

Source: BSE website

The closing market price on the BSE was Rs. 29.90 on June 18, 2010.The trading day immediately

following the day on which Board meeting was held to approve the Rights Issue.

CHANGE IN AUDITORS

The Statutory Auditors of our Company are M/s J.T. Shah & Co. Chartered Accountants, Ahmedabad.

There has not been any change in the Statutory Auditors during the last 3 years.

CAPITALISATION OF RESERVES OR PROFITS

We have not capitalized our reserves or profit during the last five years.

REVALUATION OF ASSETS

We have not revalued our assets during the last five years.

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SECTION VIII - OFFERING INFORMATION

TERMS OF THE ISSUE

The Equity Shares proposed to be issued on rights basis, are subject to the provisions of the Act and terms and conditions of this Draft Letter of Offer, the enclosed CAF, the Memorandum & Articles of

Association of the Company, approvals under the Foreign Direct Investment Scheme of Government of

India, FEMA, if applicable, provisions of the Act, guidelines issued by SEBI, guidelines, notifications

and regulations for the issue of capital and for listing of securities issued by Government of India and/

or other statutory authorities and bodies from time to time, Listing Agreement entered into by the

Company with the Stock Exchange, such terms and conditions as may be incorporated in the Letter of

Allotment /Share Certificate or any deed or document executed by the Company regarding the Rights

Issue.

1. Ranking of equity shares

The Equity Shares shall be subject to the Memorandum and Articles of Association of the Company

and shall rank pari passu in all respects including dividends with the existing Equity Shares of the

Company.

For more details see “Main Provisions of Articles Of Association” page no. 212 of this Draft Letter of

Offer.

2. Mode of Payment of Dividend

Dividend, if any declared by the Board and approved by our shareholders, will be paid in any of the modes permitted by the Companies Act, 1956.

3. Face value and issue price

Face value

Each Equity Share shall have the face value of Rs. 10 (Rupees Ten).

Issue Price

Each Equity Share shall be offered at an Issue Price of Rs. 15/- for cash at a premium of Rs. 5/- per

Equity Share. The Issue Price has been arrived in consultation between the Company and the Lead

Manager.

Payment Method: the entire amount is payable on application

The Issue Price of our Equity Shares is Rs. 15/- per Equity Share. The Investors are required to pay

100% of the Issue Price on application,

4. Rights of Equity Shareholders

Subject to applicable laws, the Equity Shareholders of our Company shall have the following rights:

• Right to receive dividend, if declared;

• Right to attend general meetings and exercise voting powers, unless prohibited by law;

• Right to vote in person or by proxy;

• Right to receive offers for rights shares and be allotted bonus shares, if announced;

• Right to receive surplus on liquidation;

• Right to free transferability of Equity Shares; and

184

• Such other rights as may be available to a shareholder of a listed public Company under the

Companies Act, 1956 and Memorandum of Association and Articles of Association.

For further details on the main provisions of our Company’s Articles of Association dealing with voting

rights, dividend, forfeiture and lien, transfer and transmission and / or consolidation / splitting, please

refer to the chapter titled “Main Provisions of Articles of Association” beginning on page no. 212 of

this Draft Letter of Offer.

5. Market lot

The securities of our Company are tradable only in dematerialized form. The market lot for the Equity

Shares in dematerialized mode is one. In case of holding in physical form, our Company would issue to

the allottees separate certificate for the Equity Shares allotted on rights basis. Our Company would

issue one certificate for the entire allotment. However, our Company would issue split certificates on

written requests from the shareholders.

Investors may please note that the Equity Shares of Our Company can be traded on the Stock

Exchange in dematerialized form only.

6. Nomination facility

In terms of section 109A of the Act, nomination facility is available in case of Equity Shares. The

applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.

A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being

individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the

joint-holders, as the case may be, shall become entitled to the Equity Shares. A person, being a

nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity

Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he/she were the

registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may

also make a nomination to appoint, in the prescribed manner, any person to become entitled to the

Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A

nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A

transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share

is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on

request at the Registered Office of our Company or such other person at such addresses as may be

notified by our Company. The applicant can make the nomination by filling in the relevant portion of

the CAF. Only one nomination would be applicable for one folio. Hence, in case the Equity

Shareholder(s) has / have already registered the nomination with our Company, no further nomination

needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the

allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the

applicant would prevail. If the applicant requires change in the nomination, they are requested to inform

their respective DP.

7. Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Issue, our Company shall

forthwith refund the entire subscription amount received within 15 days from the Issue Closing Date. If

such money is not repaid within eight days from the day the Company becomes liable to repay it, (i.e.

15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is

earlier) the Company and every Director of the Company who is an officer in default shall, on and from

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expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under

sub-section (2) and (2A) of Section 73 of the Companies Act.

In case the permission to deal in and for an official quotation of the Equity Shares is not granted by

BSE, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance of this Draft Letter of Offer and if such money is not repaid within eight days after the day

from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under sub-section

(2) and (2A) of section 73 of the Companies Act, 1956.

8. Additional subscription by promoters

The Promoters and Promoter Group also intend to subscribe either by themselves or any other entities

selected by them to any unsubscribed portion of the Issue such that 100% of the issue is subscribed.

The Promoters and Promoter Group shall subscribe to such unsubscribed portion as per the relevant

provisions of the law. Allotment to the Promoters and Promoter Group of any unsubscribed portion

over and above their Rights Entitlement shall be done in compliance with the Listing Agreement and

other applicable laws prevailing at that time relating to continuous listing requirements.

Such subscription for Equity Shares over and above their Rights Entitlement, if allotted, may result in

an increase in their percentage shareholding above their current percentage shareholding. Further, such

acquisition by them of additional Equity Shares in case of the Issue being undersubscribed shall (i) not

result in a change of control of the management of our Company; and (ii) be exempt from the

applicability of Regulations 11 and 12 of the Takeover Code in terms of the proviso to Regulation 3(1)

(b) (ii) of the Takeover Code.

Presently our Company is complying with clause 40A of the Listing Agreement and the minimum

public shareholding required to be maintained for continuous listing is 25% of the total paid up equity capital. The Promoter and/or members of the Promoter Group intend to subscribe for any

undersubscribed portion as per the provisions of applicable law. Allotment to the Promoter and/or

members of the Promoter Group of any undersubscribed portion, over and above their Rights

Entitlement, shall be completed in compliance with clause 40A of the Listing Agreements and other

applicable laws prevailing at that time relating to continuous listing requirements and the minimum

public shareholding of 25% of the total paid up equity capital required to be maintained for continuous

listing shall be maintained.

9. Arrangement for odd lot Equity Shares

Since the market lot for our Company’s Equity Shares is one (1), there is no need for making

arrangements for disposal of odd lots.

10. Restrictions, if any, on transfer and transmission of shares and on their consolidation or

splitting.

Except as stated in the Articles of Association of our Company there are no restrictions on transfer and

transmission of shares. For details please refer to Main Provisions of Articles of Association beginning

on Page no. 212 of this Draft Letter of Offer.

11. Option to receive Equity Shares in Dematerialized Form

Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities

in dematerialized (electronic) form at the option of the applicant. Our Company has signed agreements

with NSDL and CDSL on April 30, 2010 and April 20, 2010 respectively which enables the Investors

to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of

physical certificates.

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In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their

Equity Shares in the form of an electronic credit to their beneficiary account with a depository

participant. The CAF shall contain space for indicating number of shares applied for in demat and

physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be

given the securities in physical form. No separate applications for securities in physical and /or

dematerialized form should be made. If separate applications are made, the application for physical

securities will be treated as multiple applications and is liable to be rejected.

In case of partial allotment, allotment will be done in demat option for the shares sought in demat and

balance, if any, will be allotted in physical shares.

12. Others

Basis for the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders

whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of

the shares held in the electronic form and on the Register of Members of the Company in respect of

shares held in the physical form at the close of business hours on the Record Date i.e. [•] fixed in

consultation with the Designated Stock Exchange.

Rights Entitlement Ratio:

The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company

in the ratio of 6 (Six) Equity Share for every 5 (five) Equity Share held as on the Record Date. [●]

The eligible shareholders shall be entitled to the following:

1. 6 (Six) Equity shares for every 5 (Five) Equity Shares held as on the Record Date i. e. [●].

2. Rights Entitlement on Equity Shares held in the pool account of the clearing members on the Record Date shall be considered, and such claimants are requested to:

a. Approach the concerned depository through the clearing member of the Stock Exchange with

requisite details; and

b. Depository in turn should furnish details of the transaction to the Registrar.

13. Fractional Entitlement

On applying the Rights ratio, the rights entitlement may contain certain fractional entitlements, in such

case the fractional rights entitlement will be rounded off to the next higher integer. The resulting

shortfall in allotment of shares, if any, shall be adjusted against the entitlement of the promoters.

14. Joint Holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to

hold the same as joint holders with benefits of survivorship subject to provisions contained in the

Articles of Association of our Company.

15. Notices

All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one

regional language daily newspaper with wide circulation and/or, will be sent by ordinary post

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/registered post to the registered holders of the Equity Share at the address registered with the registrar

from time to time.

16. Terms of payment

Full amount of Rs. 15 per Equity Share is payable on application.

The payment towards the Equity Shares offered will be as under:

Rs. 10 per share Towards Share Capital

Rs. 05 per share Towards Share Premium Account

Payment should be made in cash (not more than Rs. 20,000) or by cheque / bank demand draft / drawn

in favour of “Arman Financial Services Limited-Rights Issue” and marked “A/c Payee” on any bank

(including a co-operative bank) which is situated at and is a member or a sub-member of the bankers

clearing house located at the centre where the CAF is accepted. Outstation cheques /money orders /

postal orders will not be accepted and CAFs accompanied by such cheque / money orders / postal

orders are liable to be rejected. Where an applicant has applied for additional shares and is allotted

lesser number of shares than applied for, the excess application money shall be refunded. The monies

would be refunded within 15 days from the closure of the Issue, and if there is a delay beyond 8 days

from the stipulated period, our Company will pay interest on the monies in terms of subsections (2) and

(2A) of section 73 of the Companies Act, 1956.

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ISSUE PROCEDURE

The Equity Shares, now being offered, are subject to the terms and conditions contained in this Draft

Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of the Bank, approvals from the RBI, the provisions of the Companies Act, 1956,

guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of

securities issued by Government of India and/ or other statutory authorities and bodies from time to

time, terms and conditions as stipulated in the allotment advice or letter of allotment or security

certificate and rules as may be applicable and introduced from time to time. The Company has in

consultation with the Designated Stock Exchange fixed the Record Date for determining the

shareholders who are entitled to receive this offer for Equity Shares on a rights basis.

Authority for the Issue

This Issue is being made pursuant to the resolution passed by the Board of Directors of the Company

under Section 81(1) of Act at its meeting held on June 17, 2010 and the Special Resolution passed by

Shareholders in the Annual General Meeting held on dated September 6, 2010

Procedure for Application

The enclosed CAF for Equity Shares should be completed in all respects in its entirety before

submission to the Bankers to the Issue or their designated branches as they appear in the CAF. The

forms of the CAF should not be detached under any circumstances; otherwise the application is liable to

be rejected.

The CAF would be sent to all shareholders at their registered Indian address. In case the original CAF is

not received by the applicant or is misplaced by the applicant, the applicant may request the Registrar to

the Issue for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client

ID Number and their full name and address.

For Equity Shareholders wishing to apply through the newly introduced ASBA process for rights

issues, kindly refer section titled“Procedure for Application through the Applications Supported

By Blocked Amount (“ASBA”) Process beginning on page no. 198 of this Draft Letter of Offer.

Acceptance of the Issue

The eligible equity shareholders may accept the Issue and apply for the Equity Shares offered, either in

full or in part, by filling Part A of the enclosed CAF and submit the same along with the application

money payable to the Bankers to the Issue or any of the collection branches as mentioned on the reverse

of the CAF before the close of the hours on or before the Issue Closing Date or such extended time as

may be specified by the Board of Directors of the Company in this regard. Applicants at centers not

covered by the branches of collecting banks can send their CAF together with the cheque drawn at par

on a local bank at Ahmedabad/demand draft payable at Ahmedabad to the Registrar to the Issue by

registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be

rejected. For further details on the mode of payment, see “Mode of Payment for Resident Equity

Shareholders/Investors and Mode of Payment for Non‐Resident Equity Shareholders/Investors” on

page no 194 of this Draft Letter of Offer.

This Issue includes a right exercisable by eligible equity shareholders to renounce the Equity Shares

offered to you either in full or in part in favour of any other person or persons subject to the approval of

the Board. Such renouncees can only be Indian Nationals (including minor through their natural / legal

guardian) / limited companies incorporated under and governed by the Act, statutory corporations /

institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies

Registration Act, 1860 or any other applicable laws) provided that such trust / society is authorized

189

under its constitution / bye laws to hold Equity Shares in a company and cannot be a partnership firm,

foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or

to any person situated or having jurisdiction where the offering in terms of this Draft Letter of Offer

could be illegal or require compliance with securities laws of such jurisdiction or any other persons not

approved by the Board.

The CAF consists of four parts:

Part A: Form for accepting the Rights Equity Shares and for applying for additional Rights Equity

Shares.

Part B: Form for renunciation.

Part C: Form for application for renunciation.

Part D: Form for request for split Application forms.

Application by Mutual Funds

In case of a mutual fund, a separate application can be made in respect of each scheme of the mutual

fund registered with SEBI and such application in respect of more than one scheme of the mutual fund

will not be treated as multiple applications provided that the applications clearly indicate the scheme

concerned for which the application has been made. Applications made by AMCs or custodians of a

mutual fund shall clearly indicate the name of the concerned scheme for which the application is being

made.

Option available to the Equity Shareholders

The summary of options available to the Equity Shareholder is presented below. The eligible equity

shareholders may exercise any of the following options with regard to the Equity Shares offered, using

the enclosed CAF:

Option Option Available Action Required

1 Accept whole or part of your

entitlement without renouncing the

balance.

Fill in and sign Part A of the CAF (All joint holders must

sign)

2 Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to

additional Equity Shares (All joint holders must sign)

3 Renounce your entitlement in full

to one person (Renouncee)

(Joint renouncees not exceeding

three are considered as one

renouncee).

Fill in and sign Part B (all joint holders must sign)

indicating the number of Equity Shares renounced and

hand over the entire CAF to the renouncee. The

renouncees must fill in and sign Part C of the CAF (All

joint renouncees must sign)

4 Accept a part of your entitlement

and renounce the balance to one or

more renouncee(s) OR

Renounce your entitlement to all

the Equity Shares offered to you to

more than one renouncee

Fill in and sign Part D (all joint holders must sign)

requesting for Split Application Forms. Send the CAF to

The Registrar to the Issue so as to reach them on or

before the last date for receiving requests for Split Forms.

Splitting will be permitted only once. On receipt of the

Split Form take action as indicated below.

(i) For the Equity Shares you wish to accept, if any, fill in

And sign Part A of one split CAF (only for option 1).

(ii) For the Equity Shares you wish to renounce, fill in

and sign Part B indicating the number of Equity Shares

renounced and hand over the split CAFs to the

renouncees.

(iii) Each of the renouncees should fill in and sign Part C

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for the Equity Shares accepted by them.

5 Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

Additional equity shares

The equity shareholders are eligible to apply for additional equity shares provided the applicant has applied for all the equity shares offered to him without renouncing them in full or in part. The

application for the additional equity shares shall be considered and allotment shall be made at the sole

discretion of the Board and in consultation if necessary with the Designated Stock Exchange. This

allotment of additional equity shares will be made on equitable basis with reference to number of shares

held by the applicant on the record date. Renouncees for Equity Shares can apply for the Equity Shares

renounced to them and also apply for additional Equity Shares.

Renunciation

This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full

or in part in favour of any other person or persons. Your attention is drawn to the fact that the Company

shall not allot and/or register and Equity Shares in favour of more than three persons (including joint

holders), partnership firm(s) or their nominee(s), minors, HUF, any trust or society (unless the same is

registered under the Societies Registration Act, 1860 or the Indian Trust Act, 1882 or any other

applicable law relating to societies or trusts and is authorized under its constitution or bye-laws to hold

Equity Shares, as the case may be).

Any renunciation from Non-resident Indian Shareholder(s) to Resident Indian(s) is subject to the

renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/or necessary permission of the RBI

under the FEMA and such permissions should be attached to the CAF. Applications not accompanied

by the aforesaid approvals are liable to be rejected. Additionally, any renunciation by any Equity

Shareholder resident in/outside India to any non-resident is prohibited.

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently

issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate

Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of the Company who

do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of

Renouncee shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s).

Part ‘A’ of the CAF must not be used by any person(s) other than those in whose favour this offer has

been made. If used, this will render the application invalid. Submission of the enclosed CAF to the

Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of

renunciation (Part ‘B’ of the CAF) duly filled in shall be conclusive evidence for the Company of the

person(s) applying for Equity Shares in Part ‘C’ of the CAF to receive allotment of such Equity Shares.

The Renouncees applying for all the Equity Shares renounced in their favour may also apply for

additional Equity Shares. Part ‘A’ of the CAF must not be used by the Renouncee(s) as this will render

the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour

of any other person.

A statement that the shareholders making the application otherwise than on the application form shall

not renounce their rights and shall not utilise the application form for any purpose including

renunciation even if it is received subsequently.

Procedure for renunciation

• To renounce all the Equity Shares offered to a shareholder in favour of one Renouncee

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If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In

case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favour

renunciation has been made should complete and sign Part C of the CAF. In case of joint Renouncees,

all joint Renouncees must sign this part of the CAF.

• To renounce in part or renounce the whole to more than one person(s)

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer

under this Issue in favour of two or more Renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of SAFs in the space provided for this purpose in Part D of

the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of

business hours on the last date of receiving requests for SAFs. On receipt of the required number of

SAFs from the Registrar, the procedure as mentioned in paragraph above shall have to be followed.

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree

with the\ specimen registered with the Company, the application is liable to be rejected.

• Renouncee(s)

The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part ‘C’ of the CAF and submit the entire CAF to the Bankers to the Issue on or before the Issue Closing Date along

with the application money in full.

Please note that:

• Part A of the CAF must not be used by any person(s) other than those in whose favour this

Issue has been made. If used, this will render the application invalid.

• Request for split application form should be made for a minimum of one (1) Equity Share or in

multiples of one (1) Equity Share;

• Request by the applicant for the Split Application Form should reach our Company on or

before [●].

• Only the person to whom this Draft Letter of Offer has been addressed to and not the

renouncee(s) shall be entitled to renounce and to apply for Split Application Forms. Forms once

split cannot be split again.

Split form(s) will be sent to the applicant(s) by post at the applicant’s risk

How to Apply

Applications should be made on the enclosed CAF provided by the Company. The enclosed CAF

should be completed in all respects, as explained in the instructions indicated in the CAF. Applications

will not be accepted by the Lead Manager or by the Registrar to the Issue or by the Company at any

offices except in the case of postal applications as per instructions given elsewhere in the Draft Letter of

Offer. Payment should be made in cash (not more than Rs. 20,000/-) or by cheque / bank draft / drawn on any Bank (including a Co-operative Bank) which is situated at and is a member or a sub-member of

the bankers clearing house located at the centre where the CAF is submitted and which is participating

in the clearing at the time of submission of the application. Outstation cheques / money orders / postal

orders will not be accepted and CAFs accompanied by such cheques / money orders / postal orders are

liable to be rejected.

Availability of duplicate CAF

In case the original CAF is not received, or is misplaced by the Investor, the Registrar to the Issue will

issue a duplicate CAF on the request of the Investor who should furnish the registered folio number/ DP

and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that

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the request for duplicate CAF should reach the Registrar to the Issue within [•] days from the Issue

Opening Date.

Please note that those who are making the application in the duplicate form should not utilize the

original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the Investor violates such requirements, he / she shall face the risk of rejection of both the applications.

For applicants residing at places other than designated Bank collecting branches

Applicants residing at places other than the cities where the Bank collection centres have been opened

should send their completed CAF by registered post / speed post to the Registrars to the Issue, along

with bank drafts, net of bank charges and postal charges, payable at Ahmedabad in favor of “Arman

Financial Services Limited – Rights Issue” crossed “A/c Payee only” so that the same are received on

or before closure of the Issue (i.e. [●]). The Company will not be liable for any postal delays and

applications received through mail after the closure of the Issue, are liable to be rejected and returned to

the applicants. Applications by mail should not be sent in any other manner except as mentioned below.

All application forms duly completed together with cash / cheque / demand draft for the application

money must be submitted before the close of the subscription list to the Bankers to the Issue named

herein or to any of its branches mentioned on the reverse of the CAF. The applicants are requested to

strictly adhere to these instructions. Failure to do so could result in the application being liable to be

rejected with the Company, the Lead Manager and the Registrars not having any liabilities to such

applicants.

Application by Non-resident Equity Shareholders

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares

shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the

matter of refund of application moneys, allotment of Equity Shares, issue of letters of allotment /

certificates / payment of dividends etc.

“Non –resident Indian application may please note that only such application as are accompants by payment in free foreign exchange shall be consider for allotment under the reserved category.The non –

resident Indians who intened to make payment through Non-Resident Ordinary (NRO) accounts shall

use the form Meant for Resident Indians and Shall not use the forms meant for reserved category.”

Application Forms have been made available for Eligible NRI at the registered office of our Company

Application on Plain Paper

An Eligible Equity Shareholder who has neither received the original CAF nor is in a position to obtain

the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with a

demand draft, net of bank and postal charges payable at Ahmedabad which should be drawn in favor of

‘Arman Financial Services Limited’– Rights Issue’ or ‘Arman Financial Services Limited – Rights

Issue – NR’ and the Eligible Equity Shareholders should send the same by registered post directly to the

register of the issue

The envelope should be super scribed ‘Arman Financial services Limited – Rights Issue’ and should be

postmarked in India. The application on plain paper, duly signed by the Investors including joint

holders, in the same order as per Specimen recorded with our Bank, must reach the office of the

Registrar to the Issue before the Issue Closing Date and should contain the following particulars:

1. Name of Issuer, being Arman Finance Services Limited. 2. Name and address of the Equity Shareholder including joint holders

3. Registered Folio Number/ DP and Client ID no.

4. Number of shares held as on [●] (Record Date).

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5. Certificate numbers and distinctive numbers, if held in physical form

6. Number of Rights Equity Shares entitled

7. Number of Rights Equity Shares applied for out of entitlement

8. Number of additional Equity Shares applied for, if any

9. Total number of Equity Shares applied for 10. Total amount paid at the rate of Rs. 10/-per Equity Share

11. Particulars of cheaque/draft

12. Savings/Current Account Number and name and address of the Bank where the Equity

Shareholder will be depositing the refund order

13. Applications for a total value of Rs, 50,000 or more, i.e. where the total number of securities

applied for multiplied by the Issue price, is Rs. 50,000 or more the applicant or in the case of

application in joint names, each of the applicants, should mention his/her PAN number allotted

under the Income-Tax Act, 1961 and also submit a photocopy of the PAN card(s) or a

communication from the Income Tax authority indicating allotment of PAN (“PAN

Communication”) along with the application for the purpose of verification of the number.

Applicants who do not have PAN are required to provide a declaration in Form 60/ Form 61

prescribed under the I.T. Act along with the application. Applications without this photocopy/

PAN Communication/declaration will be considered incomplete and are liable to be rejected.

14. In case of Non-Resident shareholders, NRE/FCNR/NRO Account No., name and address of

the bank and branch.

15. Signature of Equity Shareholders to appear in the same sequence and order as they appear in

the records of the Company

16. Payment in such cases, should be through a demand draft, net of demand draft and postal

charges, payable at Ahmedabad be drawn in favor of “Arman Financial Services Limited-

Rights Issue” crossed “A/c Payee only”.

Please note that those who are making the application on plain paper shall not be entitled to renounce

their rights and should not utilize the original CAF for any purpose including renunciation even if it is

received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of

rejection of both the applications as well as forfeiture of amounts remitted along with the applications.

The Company shall refund such application amount to the applicant without any interest thereon.

Application under Power of Attorney

In case of application under power of Attorney or by Limited Companies or Bodies Corporate or

Societies registered under the applicable laws, a certified copy of the Power of Attorney or the relevant

authority, as the case may be, along with the certified copy of Power of Attorney or the relevant

authority, as the case may be, along with the certified copy of Memorandum & Article of Association

or Bye-Laws, as the case may be, must be lodged separately by registered post at the office of the

Registrar to the Issue simultaneously with the submission of the CAF, indicating the serial number of

CAF and the name of the bank and the branch office where the application is submitted within 7 days of

closure of the offer, failing which the application is liable to be rejected. In case the Power of Attorney

is already registered with the company, then the same need not be furnished again. However, the serial

number of the Registration under which the Power of Attorney has been registered with the Company

must be mentioned below the signature of the Applicant.

Quoting of Permanent Account Number in the application forms

In terms of circular no. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29

, 2007, every applicant shall disclose the Permanent Account Number (PAN), allotted under the

Income Tax Act, 1961, in the application form, irrespective of the amount for which application is

made. Application forms without this information will be considered incomplete and are liable to

be rejected.

Quoting of PAN/GIR no. in the application forms

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Note on cash payment (Section 269 SS)

Having regard to the provisions of Section 269 (SS) of the Income Tax Act, 1961, if the amount

payable is Rs. 20,000/- or more, subscriptions against applications for securities should not be effected in cash and must be effected only by ‘Account Payee’ cheques or ‘Account Payee’ bank drafts. In case

payment is effected in contravention of this provision, the application is liable to be rejected.

Last Date of Application

The last date for submission of the duly filled in CAF is [●]. The Board or any committee thereof will

have the right to extend the said date for such period as it may determine from time to time but not

exceeding 30 (Thirty) days from the Issue Opening Date. If the CAF together with the amount payable

is not received by the Banker to the Issue/ Registrar to the Issue on or before the close of banking hours

on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, the

offer contained in this Draft Letter of Offer shall be deemed to have been declined by the shareholders

and the Board / Committee of Directors shall be at liberty to dispose off the Equity Shares hereby

offered, as provided under the section entitled.

Incomplete Application

CAF’s, which are not complete or are not accompanied with the application money amount payable, are


Mode of Payment

Mode of payment for Resident Equity Shareholders/ Applicants

• All cheques / drafts accompanying the CAF should be drawn in favour of “Arman Financial Services

Limited-Rights Issue” and marked ‘A/c Payee only’.

• Applicants residing at places other than places where the bank collection centres have been opened by the Company for collecting applications, are requested to send their applications together with Demand

Draft of amount for the full application amount favouring “Arman Financial Services Limited- Rights

Issue” and marked ‘A/c Payee only’ payable at Ahmedabad directly to the Registrar to the Issue by

registered post so as to reach them on or before the Issue Closing Date. The Company or the Registrar

to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Mode of payment for Non-Resident Equity Shareholders/ Applicants

As regards the application by non-resident Equity Shareholders, the following conditions shall apply:

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident

Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to

Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and /

or necessary permission of the RBI, if and to the extent required, under the FEMA and other applicable

laws and such permissions should be attached to the CAF.

Applications not accompanied by the aforesaid approval(s), wherever the same are liable to be

rejected.

Payment by non-residents must be made by demand draft payable at Ahmedabad/cheque payable drawn on a bank account maintained at Ahmedabad or funds remitted from abroad in any of the following

ways:

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As regards the application by non-resident Equity Shareholders, the following conditions shall apply:

• Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-

Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian

Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the FEMA

and other applicable laws and such permissions should be attached to the CAF.

• Payment by non-residents must be made by demand draft payable at Ahmedabad /cheque payable

drawn on a bank account maintained at Ahmedabad or funds remitted from abroad in any of the

following ways:

Application with repatriation benefits

Payment by NRIs/ FIIs/ foreign investors must be made by demand draft/cheque payable at Ahmedabad

or funds remitted from abroad in any of the following ways:

• By Indian Rupee drafts purchased from abroad and payable at Ahmedabad or funds remitted from

abroad (submitted along with Foreign Inward Remittance Certificate); or

• By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in

Ahmedabad; or

• By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and

payable in Ahmedabad; or

• FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

• All cheques/drafts submitted by non-residents applying on repatriable basis should be drawn in favour

of “Arman Financial Services Limited.- Right Issue - NR” payable at Ahmedabad and crossed ‘A/c Payee only’ for the amount payable.

A separate cheque or bank draft must accompany each application form. Applicants may note that

where payment is made by drafts purchased from NRE/FCNR accounts as the case may be, an Account

Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting

the NRE/FCNR account should be enclosed with the CAF. In the absence of the above the application

shall be considered incomplete and is liable to be rejected.

In the case of NR who remits their application money from funds held in FCNR/NRE Accounts,

refunds and other disbursements, if any shall be credited to such account details of which should be

furnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money

through Indian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in US

Dollars at the rate of exchange prevailing at such time subject to the permission of RBI.

The Company will not be liable for any loss on account of exchange rate fluctuation for converting the

Rupee amount into US Dollars or for collection charges charged by the applicant’s Bankers.

Application without repatriation benefits

As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes

specified above, payment may also be made by way of cheque drawn on Non-Resident(Ordinary)

Account maintained in Ahmedabad or Rupee Draft purchased out of NRO Account maintained

elsewhere in India but payable at Ahmedabad. In such cases, the allotment of Equity Shares will be on

non-repatriation basis.

All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in

favour of “Arman Financial Services Limited - Rights Issue” payable at Ahmedabad and must be crossed ‘A/c Payee only’ for the amount payable. The CAF duly completed together with the amount

payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF

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before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft

payable at par or Ahmedabad must accompany each CAF.

If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from

the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the absence of the above, the application shall be considered

incomplete and is liable to be rejected. New demat account shall be opened for holders who have had a

change in status from resident Indian to NRI.

Note:

• In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the

investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to

Income Tax Act, 1961.

• In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the

Equity Shares cannot be remitted outside India.

• The CAF duly completed together with the amount payable on application must be deposited with the

Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the

Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

• In case of an application received from non-residents, allotment, refunds and other distribution, if any,

will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of

making such allotment, remittance and subject to necessary approvals.

Investment by FIIs

In accordance with the current regulations, the following restrictions are applicable for investment by

FIIs:

The issue of Rights Equity Shares under this Issue to a single FII should not exceed 10% of the post-

Issue paid up capital of the Company. In respect of an FII investing in the Rights Equity Shares on

behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of the

total paid-up capital of the Company or 5% of the total issued capital in case such sub-account is a foreign corporate or an individual. In accordance with foreign investment limits applicable to the

Company, the total FII investment cannot exceed 24% of the total paid-up capital of the Company.

With the approval of the board and the shareholders by way of a special resolution, the aggregate FII

holding can go up to 100%. As of date, the FII investment in the Company is limited to 24% of the total

paid-up capital of the Company.

Investment by NRIs

Investments by NRIs are governed by the Portfolio Investment Scheme under Regulations 5 and 6 of

the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India)

Regulations, 2000.

Rights Entitlement

As your name appears in the Register of Members of the Company on the Record Date, you are entitled

to this Rights Offer on the basis mentioned above. The number of equity shares to which you are

entitled as a Shareholder of the company is shown in part A of the CAF.

Bank details of the applicant

The applicant must fill in the relevant column in the CAF giving particulars of saving Bank / Current

Account Number and the Name of the Bank with whom such account is held, to enable the registrar to

the issue to print the said details in the refund orders, if any, after the name of the Payees. Please note

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that provision of Bank Account details has now been made mandatory and applications not containing

such details are liable to be rejected.

Application number on the Cheque or Demand Draft

To avoid any misuse of instruments, the applicants are advised to write the application number and

name of the first applicant on the reverse of the cheque / demand draft.

General instructions for applicants

All applications should be made on the printed CAF provided by the Company and should be complete

in all respects. Applications, which are not complete in all respects or are made otherwise than as herein

provided or not accompanied by proper application money in respect thereof will be refunded without

interest

• Please read the instructions in the enclosed CAF carefully.

• All communications in connection with your application for the equity shares including any

change in your registered address should be addressed to the registrar to the issue.

• Application Forms must be filled in ENGLISH in BLOCK LETTERS.

• Signatures should be either in English or Hindi or the languages specified in the Eighth

Schedule to the Constitution of India. Signatures other than in the aforementioned languages or

thumb impressions must be attested by a Notary Public or a Special Executive Magistrate under

his/her official seal.

• In case of Joint Holders, all joint holders must sign the relevant parts of the Application Form

in the same order and as per the specimen signatures recorded with the Company.

• In case of joint applicants, refunds and all payments will be made to the person whose name

appears first on the application form and all communications will be addressed to him/her. To

prevent any fraudulent encashment of refund orders by third parties, the Sole/First Applicant

must indicate Saving / Current Account number and the name of the bank and its branch with

whom such account is held in the space provided in the CAF for the purpose so that Refund

Orders are printed with these details after the name. Applications without this information are


• The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A, B,

C and D of the Application Form(s) is /are detached or separated, such application will

forthwith be rejected.

• All shareholders must submit the CAF along with remittance only to the Bankers to the Issue

mentioned elsewhere in this Draft Letter of Offer and not to the Company, the Registrar or the

Lead Manager.

• Any dispute or suit action or proceedings arising out of or in relation to this Draft Letter of

Offer or in respect of any matter or thing herein contained and claimed by either party against

the other shall be instituted or adjudicated upon or decided solely by the appropriate Court

where Registered Office of the Company is situated.

• The last date for receipt of CAF along with the amount payable is [●]. However, the Board will

have the right to extend the same for such period as it may determine from time to time, but not

exceeding 60 days from the date of opening of the subscription list. If the CAF together with

the amount payable there under is not received by the bankers to the issue on or before the

closure of the banking hours on the aforesaid date, or such date as may be extended by the

Board, the offer contained in this Draft Letter of Offer shall be deemed to have been declined

and the Board shall be at liberty to dispose the Rights hereby offered. For further instructions

please read CAF carefully.

Grounds for technical rejection

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

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• Amount paid does not tally with the amount payable for;

• Bank account details (for refund) are not given;

• Age of first applicant not given;

• PAN not given irrespective of the amount of application;

• In case of Application under power of attorney or by limited companies, corporate, trust, etc.,

relevant documents are not submitted;

• If the signature of the existing shareholder does not match with the one given on the

Application.

• Form and for renouncees if the signature does not match with the records available with their

depositories;

• If the Applicant desires to have shares in electronic form, but the Application Form does not

have the Applicant’s depository account details;

• Application Forms are not submitted by the Applicants within the time prescribed as per the

• Application Form and the Draft Letter of Offer;

• Applications not duly signed by the sole/joint Applicants;

• Applications by OCBs unless accompanied by specific approval from the RBI permitting the

OCBs to invest in the Issue;

• Applications accompanied by Stock invest;

• In case no corresponding record is available with the Depositories that matches three

parameters,

Namely, names of the Applicants (including the order of names of joint holders), the

Depositary Participant’s identity (DP ID) and the beneficiary’s identity;

• Applications by US persons;

• Applications by ineligible Non-residents (including on account of restriction or prohibition

under

Applicable local laws) and where last available address in India has not been provided.

PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY

BLOCKED AMOUNT (“ASBA”) PROCESS

This section is for the information of Equity Shareholders proposing to subscribe to the Issue

through the ASBA Process. Shareholders who are eligible to apply under the ASBA Process are

advised to take their independent investigations and ensure that the number of Shares applied for

by such Equity Shareholders do not exceed the applicable limits under laws or regulations.

Shareholders applying under the ASBA Process are also advised to ensure that the CAF is

correctly filled up, stating therein the bank account number maintained with the SCSB in which

an amount equivalent to the amount payable on application as stated in the CAF will be blocked

by the SCSB.

A list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on

http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSB collecting the CAF,

please refer the above mentioned SEBI link.

Equity Shareholders who are eligible to apply under the ASBA Process

The option of applying for Equity Shares in the Issue through the ASBA Process is only available to

Shareholders of the Company on the Record Date and who:

• Is holding Equity Shares in dematerialised form and has applied for entitlements or additional

Securities in the Issue in dematerialised form;

• Have not renounced his entitlements in full or in part;

• Have not split the CAF;

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• Are not renouncees

• Who applies through a bank account with one of the SCSBs?

This section is only to facilitate better understanding of aspects of the procedure which is specific

to ASBA Investors. ASBA Investors should nonetheless read this document in entirety.

Shareholders who are eligible to apply under the ASBA Process are advised to make their

independent investigations and ensure that the number of Equity Shares applied for by such

Shareholder do not exceed the applicable limits under laws or regulations

Our Bank and the Lead Managers are not liable for any amendments or modifications or changes in

applicable laws or regulations, which may occur after the date of this Draft Letter of Offer. Equity

Shareholders who are eligible to apply under the ASBA Process are advised to make their independent

investigations and ensure that the number of Equity Shares applied for by such Equity laws or

regulations. The lists of banks that have been notified by SEBI to act as SCSB for the ASBA Process

are provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSBs

collecting Shareholders do not exceed the applicable limits under the CAF, please refer the above

mentioned link.

ASBA Process

An ASBA Investor can submit his application through CAF/plain paper, either in physical or electronic

mode, to the SCSB with whom the bank account of the ASBA Investor or bank account utilised by the

ASBA Investor is maintained. The SCSB shall block an amount equal to the application amount in the

ASBA Account specified in the CAF, physical or electronic, on the basis of an authorization to this

effect given by the account holder at the time of submitting the CAF. The application data shall

thereafter be uploaded by the SCSB in the web enabled interface of the Stock Exchanges as prescribed

under circular issued by SEBI -

SEBI/CFD/DIL/DIP/38/2009/08/20 dated August 20, 2009 or in such manner as may be decided in

consultation with the Stock Exchanges. The amount payable on application shall remain blocked in the

ASBA Account until finalisation of the Basis of Allotment and consequent transfer of the amount

against the allocated Equity Shares to the separate account opened by our Bank for Rights Issue or until

failure of the Issue or until rejection of the ASBA application, as the case may be. Once the basis of

Allotment is finalized, the Registrar to the Issue shall send an appropriate request to the Controlling

Branch for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the

successful ASBA Investors to the separate account opened by our Bank for Rights Issue. In case of

withdrawal/failure of the Issue, the blocked amount shall be unblocked on receipt of such information

from the Registrar to the Issue.

The Lead Managers, the Bank, its directors, affiliates, associates and their respective directors and officers and the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors,

omissions and commissions etc. in relation to applications accepted by SCSBs, Applications uploaded

by SCSBs, applications accepted but not uploaded by SCSBs or applications accepted and uploaded

without blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by

SCSBs, the amount payable on application has been blocked in the relevant ASBA Account.

CAF

The Registrar will despatch the CAF to all Equity Shareholders as per their entitlement on the Record

Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA payment

mechanism will have to select for this mechanism in Part A of the CAF and provide necessary details.

Equity Shareholders desiring to use the ASBA Process are required to submit their applications by

selecting the ASBA Option in Part A of the CAF only. Application in electronic mode will only be available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF to

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the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the

application in the said bank account maintained with the same SCSB.

Acceptance of the Issue

You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of

the respective CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and

submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date

or such extended time as may be specified by the Board of Directors of the Company in this regard.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain a

duplicate CAF and wanting to apply under ASBA process may make an application to subscribe for the

Issue on plain paper. The application on plain paper, duly signed by the applicants including joint

holders, in the same order as per specimen recorded with the Company, must be submitted at a

designated branch of a SCSB on or before the Issue Closing Date and should contain the following

particulars:

• Name of the issuer, being Arman Financial Services Limited;

• Name and address of the Equity Shareholder, including any joint holders;

• Registered folio number / DP ID number and client ID number;

• Number of Equity Shares held as on the Record Date;

• Rights Entitlement;

• Number of Equity Shares with Detachable Warrants applied for;

• Number of additional Equity Shares with Detachable Warrants applied for, if any;

• Total number of Equity Shares with Detachable Warrants applied for;

• Savings / Current Account Number along with name and address of the SCSB and Branch from

which the money will be blocked;

• The permanent account number (PAN) of the Equity Shareholder and where relevant, for each

joint holder, except in respect of Central and State Government officials and officials appointed

by the court (e.g., official liquidators and court receivers) who, in terms of a SEBI circular

dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities

market, subject to submitting sufficient documentary evidence in support of their claim for exemption, provided that such transactions are undertaken on behalf of the Central and State

Government and not in their personal capacity;

• Signature of the Equity Shareholders to appear in the same sequence and order as they appear

in the records of our Company;

• In case of Non Resident Shareholders, NRE / FCNR / NRO A/c no., name and address of the

SCSB and Branch

• In the application, the ASBA Investor shall, inter alia, give the following

confirmations/declarations:

a) That he / she is an ASBA Investor as per the SEBI ICDR Regulations and

b) That he / she has authorized the SCSBs to do all acts as are necessary to make an application

in the Issue, upload his / her application data, block or unblock the funds in the ASBA Account

and transfer the funds from the ASBA Account to the separate account maintained by the

Company for Rights Issue after finalization of the Basis of Allotment entitling the ASBA

Investor to receive Equity Shares in the Issue etc.

The Equity Shareholder shall submit the plain paper application to the SCSB for authorising such SCSB

to block an amount equivalent to the amount payable on the application in the said bank account

maintained with the same SCSB. If an applicant makes an application in more than one mode i.e both in

the Composite Application Form and on plain paper, then both the applications may be liable for

rejection.

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A statement that the shareholders making the application otherwise than on the application form shall

not renounce their rights and shall not utilise the application form for any purpose including

renunciation even if it is received subsequently.

Mode of payment

The Equity Shareholder applying under the ASBA Process agrees to block the entire amount payable on

application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to

the amount payable on application, in a bank account maintained with the SCSB. After verifying that

sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount

equivalent to the amount payable on application mentioned in the CAF until it receives instructions

from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount

as per Registrar’s instruction allocable to the Equity Shareholders applying under the ASBA Process

from bank account with the SCSB mentioned by the Equity Shareholder in the CAF. This amount will

be transferred in terms of the SEBI Regulations, into the separate bank account maintained by the

Company as per the provisions of section 73(3) of the Companies Act, 1956. The balance amount

remaining after the finalization of the basis of allotment shall be either unblocked by the SCSBs or

refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the

Registrar to the Issue and the Lead Manager to the respective SCSB.

The Equity Shareholders applying under the ASBA Process would be required to block the entire

amount payable on their application at the time of the submission of the CAF. The SCSB may reject the

application at the time of acceptance of CAF if the bank account with the SCSB details of which have

been provided by the Equity Shareholder in the CAF does not have sufficient funds equivalent to the

amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds.

Options available to the Equity Shareholders applying under the ASBA Process

The summary of options available to the Equity Shareholders is presented below. You may exercise any

of the following options with regard to the Equity Shares, using the respective CAFs received from

Registrar:

Option Available Action Required

1 Accept whole or part of your

entitlement without renouncing the

balance.

Fill in and sign Part A of the CAF (All joint holders

must sign)

2 Accept your entitlement in full and

apply for additional Equity Shares

Fill in and sign Part A of the CAF including Block

III relating to the acceptance of entitlement and

Block IV relating to additional Equity Shares (All

joint holders must sign)

The Equity Shareholder applying under the ASBA Process will need to select the ASBA option

process in the CAF and provide required necessary details. However, in cases where this option is

not selected, but the CAF is tendered to the SCSB with the relevant details required under the

ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as

if the Equity Shareholder has selected to apply through the ASBA process option.

Additional Equity Shares

The equity shareholder is eligible to apply for additional Equity Shares over and above the number of

Equity Shares that he is entitled too, provided that he has applied for all the Shares offered without

renouncing them in whole or in part in favour of any other person(s). Applications for additional shares

shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with

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the Designated Stock Exchange and in the manner prescribed under “Basis of Allotment” on page no.

205 of this Draft Letter of Offer.

If you desire to apply for additional shares, please indicate your requirement in the place provided for

additional Securities in Part A of the CAF.

Renunciation under the ASBA Process

Renouncees cannot participate in the ASBA Process.

Last date of Application

The last date for submission of the duly filled in CAF is [●]. The Issue will be kept open for a minimum

of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date

for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue

Opening Date i.e. [●]. If the CAF together with the amount payable is not received by the SCSB on or

before the close of banking hours on the aforesaid last date or such date as may be extended by the

Board of Directors, the offer contained in this Draft Letter of Offer shall be deemed to have been

declined and the Board of Directors shall be at liberty to dispose off the Equity Shares hereby offered,

as provided under “Basis of Allotment” on page no. 205 of this Draft Letter of Offer.

Option to receive Securities in Dematerialized Form

SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY

SHARES OF OUR BANK UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE

EQUITY SHARES ARE BEING HELD ON RECORD DATE.

General instructions for Shareholders applying under the ASBA Process

(a) Please read the instructions printed on the CAF carefully.

(b) Application should be made on the printed CAF / plain paper and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein,

and / or which are not completed in conformity with the terms of this Draft Letter of Offer are liable to

be rejected. The CAF / plain paper application must be filled in English.

(c) The CAF / plain paper application in the ASBA Process should be submitted at a Designated Branch

of the SCSB and whose bank account details are provided in the CAF and not to the Bankers to the

Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to our Bank or Registrar or

Lead Managers to the Issue.

(d) All applicants, and in the case of application in joint names, each of the joint applicants, should

mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of

the application. CAFs / plain paper application without PAN will be considered incomplete and are


(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB.

Cash payment is not acceptable. In case payment is affected in contravention of this, the application

may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth

Schedule to the Constitution of India. Thumb impression and Signatures other than in English or Hindi

must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The

Equity Shareholders must sign the CAF /plain paper application as per the specimen signature recorded

with our Bank / Depositories.

(g) In case of joint holders, all joint holders must sign the relevant part of the CAF / plain paper application in the same order and as per the specimen signature(s) recorded with our Bank. In case of

joint applicants, reference, if any, will be made in the first applicant’s name and all communication will

be addressed to the first applicant.

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(h) All communication in connection with application for the Securities, including any change in

address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of

allotment in this Issue quoting the name of the first / sole applicant Shareholder, folio numbers and

CAF number.

(i) Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate under the ASBA process.

Do’s:

(a) Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are

filled in. In case of non-receipt of the CAF, the application can be made on plain paper with all

necessary details as required under the para “Application on plain paper” appearing under the procedure

for application under ASBA.

(b) Ensure that you submit your application in physical mode only. Electronic mode is only available

with certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to

you.

(c) Ensure that the details about your Depository Participant and beneficiary account are correct and the

beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.

(d) Ensure that the CAF / plain paper application is submitted at the SCSBs whose details of bank

account

have been provided in the CAF / plain paper application.

(e) Ensure that you have mentioned the correct bank account number in the CAF / plain paper

application.

(f) Ensure that there are sufficient funds [equal to {number of Equity Shares applied for} X {Issue Price

per Equity Shares as the case may be}] available in the bank account maintained with the SCSB mentioned in the CAF /plain paper application before submitting the CAF to the respective Designated

Branch of the SCSB.

(g) Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable

on application mentioned in the CAF / plain paper application, in the bank account maintained with the

respective SCSB, of which details are provided in the CAF / plain paper application and have signed the

same.

(h) Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF / plain paper application in physical form.

(i) Each applicant should mention their Permanent Account Number (“PAN”) allotted under the Income

Tax Act.

(j) Ensure that the name(s) given in the CAF / plain paper application is exactly the same as the name(s)

in which the beneficiary account is held with the Depository Participant. In case the CAF is submitted

in joint names, ensure that the beneficiary account is also held in same joint names and such names are

in the same sequence in which they appear in the CAF / plain paper application.

(k) Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts:

(a) Do not apply on duplicate CAF after you have submitted a CAF / plain paper application to a

Designated Branch of the SCSB.

(b) Do not pay the amount payable on application in cash, money order or by postal order.

(c) Do not send your physical CAFs / plain paper application to the Lead Managers to Issue / Registrar /

Collecting Banks (assuming that such Collecting Bank is not a SCSB) / to a branch of the SCSB which

is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of

the SCSB only.

(d) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this

ground.

(e) Do not instruct their respective banks to release the funds blocked under the ASBA Process.

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Grounds for Technical Rejection under the ASBA Process

In addition to the grounds listed under “Grounds for Technical Rejection” beginning on page no.

197of this Draft Letter of Offer, applications under the ABSA Process are liable to be rejected on the

following grounds:

a) Application for entitlements or additional shares in physical form.

b) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available

with the Registrar.

c) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank

is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company.

d) Renouncee applying under the ASBA Process.

e) Insufficient funds are available with the SCSB for blocking the amount.

f) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been

frozen pursuant to regulatory orders.

g) Account holder not signing the CAF or declaration mentioned therein.

Depository account and bank details for Shareholders applying under the ASBA Process

IT IS MANDATORY FOR ALL THE SHAREHOLDERS APPLYING UNDER THE ASBA

PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL

SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR

DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION

NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF / PLAIN PAPER

APPLICATION. SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE

THAT THE NAME GIVEN IN THE CAF / PLAIN PAPER APPLICATION IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF

/PLAIN PAPER APPLICATION IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED

THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE

IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF / PLAIN PAPER

APPLICATION.

Shareholders applying under the ASBA Process should note that on the basis of name of these

Shareholders, Depository Participant’s name and identification number and beneficiary account

number provided by them in the CAF / plain paper application, the Registrar to the Issue will

obtain from the Depository demographic details of these Shareholders such as address, bank

account details for printing on refund orders / advice and occupation (“Demographic Details”).

Hence, Shareholders applying under the ASBA Process should carefully fill in their Depository

Account details in the CAF / plain paper application.

These Demographic Details would be used for all correspondence with such Shareholders including

mailing of the letters intimating unblock of bank account of the respective Shareholder. The

Demographic Details given by Shareholders in the CAF / plain paper application would not be used for

any other purposes by the Registrar. Hence, Shareholders are advised to update their Demographic

Details as provided to their Depository Participants. By signing the CAF / plain paper application, the

Shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on

its records.

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Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of

the Shareholder applying under the ASBA Process as per the Demographic Details received from

the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and

which details are provided in the CAF and not the bank account linked to the DP ID.

Shareholders applying under the ASBA Process may note that delivery of letters intimating

unblocking of bank account may get delayed if the same once sent to the address obtained from

the Depositories are returned undelivered. In such an event, the address and other details given

by the Shareholder in the CAF / plain paper application would be used only to ensure dispatch of

letters intimating unblocking of bank account.

Note that any such delay shall be at the sole risk of the Shareholders applying under the ASBA Process

and none of the SCSBs, Company or the Lead Manager shall be liable to compensate the Shareholder

applying under the ASBA Process for any losses caused to such Shareholder due to any such delay or

liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories that matches three parameters

namely, names of the Shareholders (including the order of names of joint holders), the DP ID and the

beneficiary account number, then such applications are liable to be rejected.

Disposal of Investor Grievances

All grievances relating to the ASBA may be addressed to the Registrar to the Issue, with a copy to the

SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for,

Amount blocked on application, account number of the ASBA Bank Account and the Designated

Branch or the collection centre of the SCSB where the CAF / plain paper application was submitted by the ASBA Investors.

Basis of Allotment

Subject to the provisions contained in the Draft Letter of Offer, the Articles of Association of our

Company and the approval of the Designated Stock Exchange, our Board will proceed to allot the

Rights Equity Shares in the following order of priority:

(a) Full allotment to those Rights Equity Shareholders who have applied for their Rights Entitlement

either in full or in part and also to the Renouncee(s) who has / have applied for Rights Equity Shares

renounced in their favour, in full or in part.

(b) For the Rights Equity Shares being offered under this Issue, if the shareholding of any of the

Eligible Equity Shareholders is less than [●] Equity Shares or is not in the multiple of [●] the fractional

entitlement of such Eligible Equity Shareholders shall be ignored. Eligible Equity Shareholders whose

fractional entitlements are being ignored would be given preference in allotment of one additional

Rights Equity Share each if they apply for additional Rights Equity Shares. Allotment under this head

shall be considered if there are any unsubscribed Rights Equity Shares after allotment under (a) above.

If the number of Rights Equity Shares required for allotment under this head are more than the number

of Rights Equity Shares available after allotment under (a) above, the allotment would be made on a fair

and equitable basis in consultation with the Designated Stock Exchange.

(c) Allotment to the Eligible Equity Shareholders who having applied for all the Rights Equity Shares

offered to them as part of the Issue and have also applied for additional Rights Equity Shares. The

allotment of such additional Rights Equity Shares will be made as far as possible on an equitable basis

having due regard to the number of Equity Shares held by them on the Record Date, provided there is

an undersubscribed portion after making full allotment in (a) and (b) above. The allotment of such additional Rights Equity Shares will be at the sole discretion of the Board in consultation with the

Designated Stock Exchange, as a part of the Issue and not preferential allotment.

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(d) Allotment to Renouncees who having applied for all the Rights Equity Shares renounced in their

favour, have applied for additional Rights Equity Shares provided there is surplus available after

making full allotment under (a), (b) and (c) above. The allotment of such Rights Equity Shares will be

on a proportionate basis at the sole discretion of the Board in consultation with the Designated Stock

Exchange, as a part of the Issue and not preferential allotment.

(e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is

surplus available after making full allotment under (a), (b), (c) and (d) above. After taking into account

allotment to be made under (a) and (b) above, if there is any unsubscribed portion, the same shall be

deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the Takeover Code which would

be available for allocation under (c), (d) and (e) above.

After considering the above Allotment, any additional Rights Equity Shares shall be disposed off by the

Board, in such manner as they think most beneficial to our Bank and the decision of the Board in this

regard shall be final and binding. In the event of oversubscription, Allotment will be made within the

overall size of the Issue. Our Bank expects to complete the allotment of Equity Shares within a period

of 15 days from the date of closure of the Issue in accordance with the listing agreement with the BSE.

In case of delay in allotment our Bank shall, as stipulated under Section 73(2A) of the Act, be required

to pay interest on the same at a rate of 15 per cent p.a.

Payment by Stock invest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stock

invest Scheme has been withdrawn. Hence, payment through Stock invest would not be accepted in this

Issue.

Underwriting

The present Issue is not underwritten.

Allotment / Refund order

Our Bank will issue and dispatch letter of allotment / share certificates / demat credit and / or letters of

regret along with refund orders or credit the allotted Rights Equity Shares to the respective beneficiary

accounts, if any, within a period of fifteen (15) days from the Issue Closing Date. If such money is not

repaid within eight days from the day our Bank becomes liable to pay it, our Bank shall pay that money

with interest as stipulated under Section 73 of the Companies Act.

Investors residing in the 68 cities specified by SEBI pursuant to its circular dated February 1, 2008, will

get refunds through ECS (Electronic Clearing Service) only except where Investors are otherwise

disclosed as applicable / eligible to get refunds through direct credit and RTGS provided the MICR

details are recorded with the Depositories or our Bank.

In case of those Investors who have opted to receive the Rights Equity Shares in dematerialized form

using electronic credit under the depository system, an advice regarding their credit of the Rights Equity

Shares shall be given separately. Investors to whom refunds are made through electronic transfer of

funds will be sent a letter through certificate of posting intimating them about the mode of credit of

refund within a period of fifteen (15) days from the Issue Closing Date.

In case of those Investors who have opted to receive the Rights Equity Shares in physical form, our

Bank will issue the corresponding share certificates under Section 113 of the Companies Act or other

applicable provisions, if any.

Any refund order exceeding Rs. 1,500 would be sent by registered post / speed post to the sole / first

Investor’s registered address. Refund orders up to the value of Rs. 1,500 would be sent under certificate

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of posting. Such refund orders would be payable at par at all places where the applications were

originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of

the sole / first Investor. Adequate funds would be made available to the Registrar to the Issue for this

purpose.

Mode of Payment of Refund

Applicants should note that on the basis of name of the applicants, Depository Participant’s name,

Depository Participant-Identification number and Beneficiary Account Number provided by them in the

Composite Application Form, the Registrar to the Issue will obtain from the Depositories, the

applicant’s bank account details including nine digit MICR code. Hence, applicants are advised to

immediately update their bank account details as appearing on the records of the depository participant.

Please note that failure to do so could result in delays in credit of refunds to applicants at the applicant’s

sole risk and neither the Lead Manager nor the Company shall have any responsibility and undertake

any liability for the same.

The payment of refund, if any, would be done through various modes in the following order of

preference:

1. ECS (Electronic Clearing Service) – Payment of refund would be done through ECS for Investors

having an account at any centre where such facility has been made available. This mode of payment of

refunds would be subject to availability of complete bank account details including the MICR code as

appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for Investors

having a bank account at the centers where ECS facility has been made available by the RBI (subject to

availability of all information for crediting the refund through ECS), except where the Investor, being eligible, opts to receive refund through NEFT, direct credit or RTGS.

2. NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT

wherever the Investors’ bank has been assigned the Indian Financial System Code (IFSC), which can be

linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank

branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date

of payment of refund, duly mapped with MICR numbers. Wherever the Investors have registered their nine digit MICR number and their bank account number while opening and operating the demat

account, the same will be duly mapped with the IFSC Code of that particular bank branch and the

payment of refund will be made to the Investors through this method. Our Bank in consultation with the

Lead Managers may decide to use NEFT as a mode of making refunds. The process flow in respect of

refunds by way of NEFT is at an evolving stage and hence use of NEFT is subject to operational

feasibility, cost and process efficiency. In the event that NEFT is not operationally feasible, the

payment of refunds would be made through any one of the other modes as discussed herein.

3. Direct Credit – Investors having bank accounts with the Bankers to the Issue shall be eligible to

receive refunds through direct credit. Charges, if any, levied by the relevant bank(s) for the same would

be borne by our Company.

4. RTGS (Real Time Gross Settlement) – Investors having a bank account at any of the centres where

such facility has been made available and whose refund amount exceeds Rs. 1 Lacs, have the option to

receive refund through RTGS. Such eligible Investors who indicate their preference to receive refund

through RTGS are required to provide the IFSC code in the CAF. In the event the same is not provided,

refund shall be made through ECS. Charges, if any, levied by the Refund Bank(s) for the same would

be borne by our Bank. Charges, if any, levied by the Investors’ bank receiving the credit would be

borne by the Investor.

5. For all other Investors, including those who have not updated their bank particulars with the MICR

code the refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and

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through speed post / registered post for refund orders of Rs. 1,500 and above. Such refunds will be

made by cheques, pay or demand drafts drawn in favour of the sole / first Investor and payable at par.

6. Credit of refunds to Investors in any other electronic manner permissible under the banking law,

which are in force, and are permitted by the SEBI from time to time.

Please note that any refund order exceeding Rs. 1,500 would be sent by registered post/ speed post

to the sole / first Investor’s registered address. Refund orders up to the value of Rs. 1,500 would

be sent under certificate of posting. Such refund orders would be payable at par at all places

where the applications were originally accepted. The same would be marked ‘Account Payee

only’ and would be drawn in favour of the sole /first Investor. Adequate funds would be made

available to the Registrar to the Issue for this purpose.

Printing of Bank Particulars on Refund Orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or

misplacement, the particulars of the applicant’s bank account are mandatorily required to be given for

printing on the refund orders. Bank account particulars will be printed on the refund orders/refund

warrants, which can then be deposited only in the account specified. In case the share held in demat

mode, such bank account particulars will be obtained from the Depository. The Company will in no

way be responsible if any loss occurs through these instruments falling into improper hands either

through forgery or fraud.

Allotment advice / Share Certificates/ Demat Credit

Allotment advice/ share certificates/ demat credit or letters of regret will be dispatched to the registered

address of the first named Investor or respective beneficiary accounts will be credited within 15 days,

from the Issue Closing Date. In case the Company issues allotment advice, the relative shared

certificates will be dispatched within one month from the date of the allotment. Allottees are requested

to preserve such allotment advice (if any) to be exchanged later for share certificates.

Option to receive Equity Shares in Dematerialized Form

Investors to the Equity Shares of our Company issued through this Issue shall be allotted the securities

in dematerialized (electronic) form at the option of the Investor. Our Company signed a tripartite

agreement with NSDL on April 30, 2010 and CDSL on April 20, 2010 which enables the Investors to

hold and trade in securities in a dematerialized form, instead of holding the securities in the form of

physical certificates.

In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their

Equity Shares in the form of an electronic credit to their beneficiary account as given in the CAF, after

verification with a depository concerned.

Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF.

Allotment advice, refund order (if any) would be sent directly to the Investor by the Registrar to the

Issue but the Investor’s depository participant will provide to him the confirmation of the credit of such

Equity Shares to the Investor’s depository account. CAFs, which do not accurately contain this

information, will be given the Equity Shares in physical form. No separate CAFs for Equity Shares in

physical and/or dematerialized form should be made. If such CAFs are made, the CAFs for physical

Equity Shares will be treated as multiple CAFs and is liable to be rejected. In case of partial allotment,

allotment will be done in demat option for the Equity Shares sought in demat and balance, if any, will

be allotted in physical Equity Shares.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN

BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM.

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Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is

as under:

Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry the name of the holder in the same manner as is exhibited in the records of the

Company. In the case of joint holding, the beneficiary account should be opened carrying the names of

the holders in the same order as with the Company). In case of Investors having various folios in the

Company with different joint holders, the Investors will have to open separate accounts for such

holdings. Those Equity Shareholders who have already opened such beneficiary account(s) need not

adhere to this step.

For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on

the Record Date, the beneficial account number shall be printed on the CAF. For those who open

accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to

this Issue by way of credit to such account, the necessary details of their beneficiary account should be

filled in the space provided in the CAF. It may be noted that the allotment of Equity Shares arising out

of this Issue may be made in dematerialized form even if the original Equity Shares of the Company are

not dematerialized.

Nonetheless, it should be ensured that the depository account is in the name(s) of the Equity

Shareholders and the names are in the same order as in the records of the Company.

Responsibility for correctness of information (including Investor’s age and other details) filled in the

CAF vis-à‐vis such information with the Investor’s depository participant, would rest with the Investor.

Investors should ensure that the names of the Investors and the order in which they appear in CAF

should be the same as registered with the Investor’s depository participant.

If incomplete / incorrect beneficiary account details are given in the CAF, the Investor will get Equity

Shares in physical form.

The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly

credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund

order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s

depository participant will provide to him the confirmation of the credit of such Equity Shares to the

applicant’s depository account. Renouncees will also have to provide the necessary details about their

beneficiary account for allotment of Equity Shares in this Issue. In case these details are incomplete or

incorrect, the application is liable to be rejected.

Interest in case of delay on allotment / dispatch

The Company will issue and dispatch allotment advice / share certificates / demat credit and/ or letters

of rejection along with refund order or credit the allotted securities to the respective beneficiary

accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is not repaid

within eight 8 from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of the Companies Act.

Disposal of application and application money

No receipt will be issued for the application moneys received. However, the Bankers to the Issue /

Registrar to the Issue receiving the CAF / application on plain paper will acknowledge its receipt. In the

event of shares not being allotted in full, the excess amount paid on application will be refunded to the

applicant within 15 days of the Issue Closing date.

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The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole

or in part, and in either case without assigning any reason thereto. In case an application is rejected in

full, the whole of the application money received will be refunded. Wherever an application is rejected

in part, the balance of application money, if any, after adjusting any money due on Equity Shares

allotted, will be refunded to the applicant within 15 days from the close of the Issue in accordance with section 73 of the Act.

Impersonation

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of

subsection (1) of section 68A of the Companies Act, 1956 which is reproduced below:

“Any person who‐‐‐‐

1. Makes in a fictitious name an application to a company for acquiring, or subscribing for, any

shares therein, or

2. Otherwise induces a company to allot, or register any transfer of shares therein to him, or any

other person in a fictitious name, Shall be punishable with imprisonment for a term which may

extent to five years”

Undertakings by the Company

1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously

and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all

Stock exchanges where the securities are to be listed will be taken within seven working days of

finalization of basis of allotment.

3. That funds required for making refunds to unsuccessful applicants as per the modes disclosed shall

be made available to the Registrar to the Issue by the Company.

4. That where refunds are made through electronic transfer of funds, a suitable communication shall be

sent to the applicant within 15 days of closure of the Issue, giving details of the bank where refunds

shall be credited along with amount and expected date of electronic credit of refund.

5. That no further issue of securities shall be made till the securities offered through this offer document

are listed or till the application moneys are refunded on account of non-listing, under subscription, etc.;

6. Adequate arrangements shall be made to collect all ASBA applications and to consider then similar

to non-ASBA applications while finalising on the Basis of Allotment.

Utilisation of Issue Proceeds

The Board of Directors declares that:

i. All monies received out of this Issue shall be transferred to a separate bank account other than the

bank account referred to sub-section (3) of Section 73 of the Companies Act;

ii. Details of all monies utilized out of the Issue shall be disclosed and continued to be disclosed till the

time any part of the issue proceeds remains unutilized under an appropriate separate head in the balance

sheet of our Company indicating the purpose for which such monies have been utilized; and iii. Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate

separate head in the balance sheet of our Company indicating the form in which such unutilized monies

have been invested.

Important

1. Please read this Draft Letter of Offer carefully before taking any action. The instructions contained in

the accompanying Composite Application Form (CAF) are an integral part of the conditions of this

Draft Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

2. All enquiries in connection with this Draft Letter of Offer or accompanying CAF and requests for

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Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID

number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and

superscripted ‘Arman Financial Services Limited - Rights Issue’ on the envelope to the Registrar to

the Issue at the following address:

SHAREPRO SERVICES (INDIA) PRIVATE LIMITED

13 AB Samhita Warehousing Complex,

2nd Floor, Sakinaka, Telphone Exchange

Skanska, Andheri East, Mumbai - 4000 72

Tel.: 91-22-67720300, Fax: 28591568


Website: www.shareproservices.com

Contact Person: Mr. V.Kumaresan/Mr.Ganesh Rane

3. It is to be specifically noted that this Issue of Equity Shares is subject to the chapter titled “Risk

Factors” beginning on page no. 9 of this Draft Letter of Offer.

4. Our Company will not be liable for any postal delays and applications received through mail after the

closure of the Issue, are liable to be rejected and returned to the applicants.

5. The Issue will not be kept open for more than 15 days unless extended, in which case it will be kept open for a maximum of 30 days.

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SECTION IX- MAIN PROVISIONS OF ARTICLES OF ASSOCIATION

THE COMPANIES ACT, 1956

COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION

OF


TABLE 'A' EXCLUDED

Table "A" not to apply 1. [a] The regulations contained in the Table marked "A" in Schedule I of the Companies Act, 1956

(hereinafter called the Act or the said Act) shall not apply to the Company, except in so far as the

same are repeated, contained or expressly made applicable in these Articles or by the said Act.

Company to be governed by these Articles [b] The regulations for the management of the Company and for the observance of the members

thereto and their representatives, shall, subject to any exercise of the statutory powers of the

Company with reference to the repeal or alteration of or addition to its regulations by Special

Resolution as prescribed or permitted by Section 31 of the Act, be such as are contained in these

Articles.

INTERPRETATION

Headings authoritative 2. The headings used in these Articles shall not affect the construction hereof.

Interpretation Clause a. In the interpretation of these Articles, the following expressions shall have the following

meanings, unless repugnant to the subject or context.

"The Company" or "This Company" "The Company" or "This Company" means "ARMAN FINANCIAL SERVICES LIMITED"

"The Act" "The Act" or "The said Act" means the Companies Act, 1956 (Act 1 of 1956) and subsequent

amendments thereto or any statutory modifications or reenactments thereof for the time being in

force.

“Alter and Alteration” “Alter” and “Alteration” shall include the making of additions and omissions.

“Annual General Meeting” “Annual General Meeting” means a general meeting of the members held in accordance with the

provisions of Section 166 of the Act and any adjourned holding thereof.

“Articles” “Articles” means the Articles of Association of the Company as originally framed or as altered

from time to time.

“Auditors” “Auditors” means and includes those persons appointed as such for the time being of the

Company.

"Beneficial Owner" "Beneficial Owner" means a persons as defined by section 2(1) (a) of Depository Act, 1996.

“Board” or “Board of Directors” “Board” or “Board of Directors” means a meeting of the Directors duly called and constituted,

or as the case may be, the Directors assembled at a Board, or the requisite number of Directors

entitled to pass a circular resolution in accordance with these Articles, or the Directors of the

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Company collectively.

“Body Corporate” or “Corporation” “Body Corporate” or “Corporation” includes a Company incorporated outside India but does not

include :

(i) a corporation sole; (ii) a co-operative society registered under any law relating to co-operative societies; and

(iii) any other body corporate (not being a Company as defined in the Act) which the Central

Government may, by notification in the Official Gazette, specify in this behalf.

"Bye-Laws" "Bye-Laws" means Bye-Laws as defined Under Section 26 if Depository Act, 1996.

“Capital”

“Capital” means the share capital for the time being raised or authorised to be raised, for the

purposes of the Company.

“Company” “Company” shall include a Company as defined in Section 3 of the Act.

"Depository Act, 1996" "Depository Act, 1996" means Depository Act, 1996 and include any statutory modification or

re-enactment thereof the time being in forece.

“Debenture” “Debenture” includes debenture-stock, bonds and other securities of the Company, whether

constituting a charge on the assets of the Company or not.

"Depository" "Depository means includes a company as defined under section 2 (1) (e) of the depositories

Act, 1996.

“Directors” “Directors” means the Directors for the time being of the Company or, as the case may be, the

Directors assembled at a meeting of the Board or acting by circular resolution under these

Articles.

“Dividend” “Dividend” includes bonus unless otherwise stated.

“Document” “Document” includes summons, notice, requisition, order, other legal process and registers, whether issued, sent or kept in pursuance of this or any other Act or otherwise.

“Extraordinary General Meeting” “Extraordinary General Meeting” means general meeting of the members other than Annual

General Meeting duly called and constituted and any adjourned holding thereof.

“Gender” Words imparting the masculine gender also include, where the context requires or admits, the

feminine gender.

“Managing Director” “Managing Director” means a Director who by virtue of an agreement with the Company or of a

resolution passed by the Company in general meeting or by its Board of Directors or by virtue of

its Memorandum or Articles of Association is entrusted with substantial powers of management.

“Meeting” or “General Meeting” “Meeting” means and includes a meeting of the members whether annual or extraordinary

general meeting duly called and convened as per these Articles of Association and in accordance

with these provisions of the Companies Act, 1956.

''Member''

''Member'' means the duly registered holder from time to time of the Shares of the Company and

includes the subscribers to the Memorandum of the Company and includes every persons whose

name is entered as beneficial owner in the records of the depository.

“Memorandum” “Memorandum” means the Memorandum of Association of the Company as originally framed

or as altered from time to time.

“Month”

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“Month” means a calendar month.

“Office” “Office” means the Registered Office for the time being of the Company.

“Ordinary Resolution” A Resolution shall be an ordinary resolution when at a general meeting of which the notice required under the Act has been duly given, the votes cast (whether on a show of hands, or on a

poll, as the case may be) in favor of the resolution (Including the casting vote, if any, of the

Chairman) by members who, being entitled so to do, vote in person, or where proxies are

allowed, by proxy, exceed the votes, if any, cast against the resolution by members so entitled

and voting.

“Paid up” “Paid up Capital” or “Capital paid up” includes Capital credited as paid up.

"Participant" "Participant" means a individual/institutions as defines Under Section 2(1) (g) of the Depository

Act, 1996.

“Persons” “Persons” include firms and corporations as well as individuals.

“Plural Number” Words imparting the plural number also include, where the context requires or admits, the

singular number, and vice versa.

“Proxy” “Proxy” includes attorney duly constituted under the power of attorney.

“Public Holiday” “Public Holiday” means a Public Holiday within the meeting of the Negotiable Instruments

Act,1881 (XXVI of 1881); provided that no day declared by the Central Government to be such a holiday shall be deemed to be such a holiday in relation to any meeting unless the declaration

was notified before the issue of the notice convening such meeting.

“Register of Members” “Register of Members” means the Register of Members to be kept pursuant to the Act, and

includes index of beneficial owners mention by a Depository.

“Registrar” “Registrar” means the Registrar of Companies of the state in which the Registered Office of the Company is for the time being situate.

"Regulations" "Regulations" means made by SEBI.

“Seal” “Seal” means the Common Seal of the Company for the time being.

"SEBI" "SEBI" means Securities and Exchange Board of India.

“Secretary” “Secretary” means any individual possessing the prescribed qualifications appointed to perform

the duties which may be performed by a Secretary under the Act and any other ministerial or

administrative duties.

“Section” “Section” or “Sections” means a Section of the Act for the time being in force.

“Share” “Share” means share in the Share Capital of the Company, and includes stock except where a

distinction between stock and share is expressed or implied.

"Security" "Security" means such security as may be specified by SEBI form time to time.

“Special Resolution” A Resolution shall be a Special Resolution when (A) the intention to propose the resolution as a special resolution has been duly specified in the

notice calling the general meeting or other intimation given to the members of the resolution;

(B) the notice required under the Act has been duly given of the general meeting; and

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(C) the votes cast in favor of the resolution (whether on a show of hands, or on a poll as the case

may be) by members who, being entitled so to do vote in person, or where proxies are allowed,

by proxy, are not less than three times the number of the votes, if any, cast against the resolution

by members so entitled and voting.

“These Presents” “These Presents” means the Memorandum of Association and the Articles of Association as

originally framed or as altered from time to time by Special Resolution.

“Variation” and “Vary” “Variation” shall include abrogation and “Vary” shall include abrogate.

“Written” and “In writing” “Written” and “In writing” include printing, lithography and any other mode or modes or

reproducing words in a visible form or partly one and partly the other.

“Year” and “Financial Year” “Year” means a calendar year and “Financial Year” shall have the meaning assigned thereto by

Section 2(17) of the Act.

Expression in the Act to bear the same meaning in Articles (b) Save as aforesaid, any words or expressions defined in the Act shall, except where the

subject or context forbids, bear the same meaning in these Articles.

Copies of Memorandum and Articles to be furnished by the Company 3. Pursuant to Section 39 of the Act, the Company shall, on being so required by a member, send to

him within 7 (seven) days of the requirement and subject to the payment of a prescribed fee, a

copy of each of the following documents, as in force for the time being

(i) the Memorandum;

(ii) the Articles, if any;

(iii) every other agreement and every resolution referred to in Section 192, of the Act, if and in so far as they have not been embolied in the Memorandum or Articles.

Company's funds may not be applied in purchase of or lent for shares of the Company 4. (i) The Company shall not have power to buy its own shares, otherwise then the manner flowed

under section 77 (A) of the Act, and unless the consequent reduction of capital is effected and

sanctioned in pursuance of Sections 100 to 104 or Section 402 of the Act.

(ii) The Company shall not give whether directly or indirectly and whether by means of a loan,

guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any

shares in the Company or in its holding Company.

Provided that nothing in this clause shall be taken to prohibit:

(a) the provision by the Company, in accordance with any scheme for the time being in force, of

money for the purchase of, or subscription for fully paid shares in the Company or its holding

company, being a purchase or subscription by trustees of or for shares to be held by or for the

benefit of employees of the Company, including any Director holding a salaried office or

employment in the Company; or

(b) the making by the Company of loans, within the limit laid down in sub-section (3) of Section

77 of the Act, to persons (other than Directors or Managers) bonafide in the employment of the

Company, with a view to enabling those persons to purchase or subscribe for fully paid shares in

the Company or its holding Company to be held by themselves by way of beneficial ownership.

(c) No loan made to any person in pursuance of clause (b) of the foregoing provision shall

exceed in amount, his salary or wages at that time for a period of six months.

(d) Nothing in this Article shall affect the right of the Company to redeem any shares issued

under Section 80 of the Act.

SHARE CAPITAL AND VARIATION OF RIGHTS

5. (a) The Authorised Share Capital of the Company shall be as per paragraph V of the Memorandum of Association of the Company with right to alter the same in whatever way as

deemed fit by the Company. The Company may increase the Authorised Capital which may

consist of Equity and/or Preference Shares as the Company in General Meeting may determine

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in accordance with the law for the time being in force relating to Companies with power to

increase or reduce such capital from time to time in accordance with the Regulations of the

Company and the legislative provisions for the time being in force in this behalf and with power

to divide the shares in the Capital for the time being into Equity Share Capital or Preference

Share Capital and to attach thereto respectively any preferential, qualified or special rights, privileges or conditions and to vary, modify and abrogate the same in such manner as may be

determined by or in accordance with these presents.

(b) Subject to the rights of the holders of any other shares entitled by the terms of issue to

preferential repayment over the equity shares in the event of winding up of the Company, the

holders of the equity shares shall be entitled to be repaid the amounts of capital paid up or

credited as paid up on such equity shares and all surplus assets thereafter shall belong to the

holders of the equity shares in proportion to the amount paid up or credited as paid up on such

equity shares respectively at the commencement of the winding up.

INCREASE, REDUCTION AND ALTERATION OF CAPITAL

6. The Company may from time to time in general meeting increase its share capital by the issue of

new shares of such amounts as it thinks expedient.

On what conditions the new shares may be issued (a) Subject to the provisions of sections 80, 81 and 85 to 90 of the Act, the new shares shall be

issued upon such terms and conditions and with such rights and privileges annexed thereto by

the general meeting creating the same as shall be directed and if no direction be given as the

Directors shall determine and in particular such shares may be issued subject to the provisions of the said sections with a preferential or qualified right to dividends and in distribution of assets of

the Company and subject to the provisions of the said sections with special or without any right

of voting and subject to the provisions of Section 80 of the Act any preference shares may be

issued on the terms that they are or at the option of the Company are liable to be redeemed.

Further Issue of Shares (b) Where at the time after the expiry of two years from the formation of the company or at any time after the expiry of one year from the allotment of shares in the Company made for the

first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital

of the Company by allotment of further shares whether out of the unissued capital or out of the

increased share capital the

(i) Such further shares shall be offered to the persons who at the date of the offer, are holders of

the equity shares of the Company, in proportion, as near as circumstances admit, to the capital

paid up on those shares at the date.

(ii) Such offer shall be made by a notice specifying the number of shares offered and limiting a

time not less than thirty days from the date of the offer and the offer if not accepted, will be

deemed to have been declined.

(iii) The offer aforesaid shall be deemed to include a right exercisable by the person concerned

to renounce the shares offered to them in favor of any other person and the notice referred to in

sub clause (b) hereof shall contain a statement of this right.

PROVIDED THAT the Directors may decline, without assigning any reason to allot any shares

to any person is whose favor any member may renounce the shares offered to him.

(iv) After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation

from the person to whom such notice is given that he declines to accept the share offered, the

Board of Directors may dispose off them in such manner and to such person(s) as they may

think, in their sole discretion, fit.

(c) Notwithstanding anything contained in sub-clause (1) thereof, the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in

clause(a) of sub-clause (1) hereof) in any manner whatsoever.

(i) If a special resolution to that effect is passed by the Company in General Meeting, or

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(ii) Where no such special resolutions is passed, if the votes cast (whether on a show of hands or

on a poll as the case may be) in favor of the proposal contained in the resolution moved in the

general meeting (including the casting vote, if any, of the chairman) by the members who, being

entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if

any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf, that the proposal is

most beneficial to the Company.

(d) Noting is sub-clause (c) of (1) hereof shall be deemed :

(i) To extend the time within which the offer should be accepted; or

(ii) To authorise any person to exercise the right of renunciation for a second time on the

aground that the person in whose favor the renunciation was first made has declined to take the

shares comprised in the renunciation.

(e) Nothing in this Article shall apply to the increase of the subscribed capital of the company

caused by the exercise of an option attached to the debenture issued or loans raised by the

Company:

(i) To convert such debentures or loans into shares in the Company; or

(ii) To subscribe for shares in the Company (whether such option is conferred in these Articles

or otherwise)

PROVIDED THAT the terms of issue of such debentures or the terms of such loans include a

term providing for such option and such term:

(i) Either has been approved by the Central Government before the issue of the debentures or the

raising of the loans or is in conformity with the Rules, if any, made by that Government in this

behalf; and

(ii) in the case of debentures or loans or other than debentures issued to or loans obtained from

Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the company in General Meeting before the issue of

the debentures or raising of the loans.

Directors may allot shares as fully paid up (f) Subject to the provisions of the Act and these Articles, the Directors may issue and allot

shares in the capital of the Company on payment or part payment for any property or assets of

any kind whatsoever sold or transferred, goods or machinery supplied or for services rendered to the Company in the conduct of its business and any shares which may be so allotted may be

issued as fully paid up or partally paid up otherwise than in cash, and if so issued, shall be

deemed to be fully paid up or partly paid up shares as the case may be.

Same as original capital (g) Except so far as otherwise provided by the conditions of issue or by these presents, any

capital raised by the creation of new shares shall be considered as part of the original capital and

shall be subject to the provisions herein contained with reference to the payment of calls,

installments, transfers, transmission, forfeiture, lien, surrender, voting and otherwise.

Power to issue Redeemable Preference Shares 7. (a) Subject to the provisions of Section 80 of the Act and subject to the provisions on which any

shares may have been issued, the Company may issue preference shares which are or at the

option of the Company are liable to be redeemed; Provided that :

(i) no such shares shall be redeemed except out of the profits of the Company which would

otherwise be available for dividend or out of the proceeds of a fresh issue of Shares made for the

purpose of redemption;

(ii) no such shares shall be redeemed unless they are fully paid;

(iii) the premium, if any, payable on redemption shall have been provided for out of the profits

of the Company or out of the Company’s share premium account before the shares are redeemed;

(iv) where any such shares are redeemed otherwise than out of the proceeds of a fresh issue,

there shall, out of profits which would otherwise have been available for dividend, be transferred

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to a reserve fund, to be called “the capital redemption reserve account”, a sum equal to the

nominal amount of the shares redeemed; and the provisions of the Act relating to the reduction

of the share capital of the Company shall, except as provided in Section 80 of the Act, apply as if

the capital redemption reserve account were paid up share capital of the Company.

(b) Subject to the provisions of Section 80 of the Act and subject to the provisions on which any shares may have been issued, the redemption of preference shares may be effected on such terms

and in such manner as may be provided in these Articles or by the terms and conditions of their

issue and subject thereto in such manner as the Directors may think fit.

(c) The redemption of preference shares under these provisions by the Company shall not be

taken as reducing the amount of its authorised Share Capital.

(d) Where in pursuance of this Article, the Company has redeemed or is about to redeem any

preference shares, it shall have power to issue shares upto the nominal amount of the shares

redeemed or to be redeemed as if those shares had never been issued; and accordingly the Share

Capital of the Company shall not, for the purpose of calculating the fees payable under Section

611 of the Act, be deemed to be increased by the issue of shares in pursuance of this clause.

Provided that where new shares are issued before the redemption of the old shares, the new

shares shall not so far as relates to stamp duty be deemed to have been issued in pursuance of

this clause unless the old shares are redeemed within one month after the issue of the new shares.

(e) The Capital Redemption Reserve Account may, notwithstanding anything in this Article, be

applied by the Company, in paying up unissued shares of the Company to be issued to members

of the Company as fully paid bonus shares.

Provision in case of Redemption of preference Shares 8. The Company shall be at liberty at any time, either at one time or from time to time as the

Company shall think fit, by giving not less than six months' previous notice in writing to the holders of the preference shares to redeem at par the whole or part of the preference shares for

the time being outstanding, by payment of the nominal amount thereof with dividend

calculated upto the date or dates notified for payment (and for this purpose the dividend shall be

deemed to accrue and due from day to day) and in the case of redemption of part of the

preference shares the following provisions shall take effect :

(a) The shares to be redeemed shall be determined by drawing of lots which the Company shall

cause to be made at its registered office in the presence of one Director at least; and (b) Forthwith after every such drawing, the Company shall notify the shareholders whose shares

have been drawn for redemption its intention to redeem such shares by payment at the registered

office of the Company at the time and on the date to be named against surrender of the

Certificates in respect of the shares to be so redeemed and at the time and date so notified each

such shareholder shall be bound to surrender to the Company the Share Certificates in respect of

the Shares to be redeemed and thereupon the Company shall pay the amount payable to such

shareholders in respect of such redemption. The shares to be redeemed shall cease to carry

dividend from the date named for payment as aforesaid. Where any such certificate comprises

any shares which have not been drawn for redemption, the Company shall issue to the holder

thereof a fresh certificate therefore.

Power To Issue Sweat Equity Shares (c) The Board shall have a power to issue sweat equity shares in manner and subject to

conditions contained in section 79 (A) of the Act,

Reduction of capital 9. The Company may from time to time by special resolution, subject to confirmation by the court

and subject to the provisions of Sections 78, 80 and 100 to 104 of the Act, reduce its share

capital and any Capital Redemption Reserve Account or premium account in any manner for the

time being authorised by law and in particular without prejudice to the generality of the foregoing power maybe :

(a) extinguishing or reducing the liability on any of its shares in respect of Share Capital not paid

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up;

(b) either with or without extinguishing or reducing liability on any of its shares, cancel paid up

share capital which is lost or is unrepresented by available assets; or

(c) either with or without extinguishing or reducing liability on any of its shares, pay off any

paid up share capital which is in excess of the wants of the Company; and may, if and so far as is necessary, alter its Memorandum, by reducing the amount of its share capital and of its shares

accordingly.

Division, Sub-Division, Consolidation, Conversion and Cancellation of Shares 10. Subject to the provisions of Section 94 of the Act, the Company in general meeting may by an

ordinary resolution alter the conditions of its Memorandum as follows, that is to say, it may:

(a) consolidate and divide all or any of its Share Capital into shares of larger amount than its

existing shares;

(b) sub-divide its shares or any of them into shares of smaller amount than originally fixed by

the Memorandum subject nevertheless to the provisions of the Act in that behalf and so however

that in the sub-division the proportion between the amount paid and the amount if any, unpaid on

each reduced share shall be the same as it was in the case of the share from which the reduced

share is derived and so that as between the holders of the shares resulting from such sub-division

one or more of such shares may, subject to the provisions of the Act, be given any preference or

advantage over the others or any other such shares.

(c) convert, all or any of its fully paid up shares into stock, and re-convert that stock into fully

paid up shares of any denomination.

(d) cancel, shares which at the date of such general meeting have not been taken or agreed to be

taken by any person, and diminish the amount of its share capital by the amount of the shares so

cancelled.

Notice to Registrar of Consolidation of Share Capital, Conversion of shares into stocks etc. 11. (a) If the Company has :

(i) consolidated and divided its Share Capital into shares of larger amount than its existing

shares;

(ii) converted any shares into stock;

(iii) reconverted any stock into shares; (iv) sub-divided its share or any of them;

(v) redeemed any redeemable preference shares; or

(vi) cancelled any shares otherwise than in connection with a reduction of Share Capital under

Sections 100 to 104 of the Act,

the Company shall within one month after doing so, give notice thereof to the Registrar

specifying as the case may be, the shares consolidated, divided, converted, sub-divided,

redeemed or cancelled or the stocks reconverted.

(b) The Company shall thereupon request the Registrar to record the notice and make any

alterations which may be necessary in the Company’s Memorandum or Articles or both.

Modifications of rights 12. If at any time the share capital, by reason of the issue of Preference Shares or otherwise, is

divided into different classes of shares, all or any of the rights and privileges attached to any

class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to

the provisions of Sections 106 and 107 of the Act and whether or not the Company is being

wound up, be varied, modified, commuted, affected or abrogated with the consent in writing of

the holders of three-fourths in nominal value of the issued shares of that class or with the

sanction of a Special Resolution passed at a separate general meeting of the holders of the shares

of that class. This Article shall not derogate from any power which the Company would have if

this Article were omitted. The provisions of these Articles relating to general meetings shall mutatis mutandis apply to every such separate meeting but so that if at any adjourned meeting of

such holders a quorum as defined in Article 102 is not present, those persons who are present

shall be quorum.

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SHARES AND CERTIFICATES

Issue of further shares not to affect rights of existing share holders 13. The rights or privileges conferred upon the holders of the shares of any class issued with

preference or other rights, shall not unless otherwise be deemed to be varied or modified or

affected by the creation or issue of further shares ranking pari passu therewith.

Provisions of Sections 85 to 88 of the Act to apply 14. The provisions of Sections 85 to 88 of the Act in so far as the same may be applicable shall be

observed by the Company.

Register of Members and Debenture holders 15. (a) The Company shall cause to be kept a Register of Members and an Index of Members in

accordance with Sections 150 and 151 of the Act and Register and Index of Debenture holders in

accordance with Section 152 of the Act. The Company may also keep a foreign Register of

Members and Debenture holders in accordance with Section 157 of the Act.

(b) The Company shall also comply with the provisions of Sections 159 and 161 of the Act as to

filling of Annual Returns.

(c) The Company shall duly comply with the provisions of Section 163 of the Act in regard to

keeping of the Registers, Indexes, copies of Annual Returns and giving inspection thereof and furnishing copies thereof.

Commencement of business 16. The Company shall comply with the provisions of Section 149 of the Act.

Restriction on allotment 17. The Board shall observe the restriction as to allotment of shares to the public contained in

Sections 69 and 70 of the Act and shall cause to be made the return as to allotment provided for

in Section 75 of the Act.

Shares to be numbered progressively and no shares to be subdivided 18. The shares in the Capital shall be numbered progressively according to the several

denominations and except in the manner hereinbefore mentioned no share shall be subdivided.

Every forfeited or surrendered share shall continue to bear the number by which the same was

originally distinguished.

Shares at the disposal of the Directors 19. Subject to the provisions of Section 81 of the Act and these Articles, the shares in the capital of

the Company for the time being shall be under the control of the Directors who may issue, allot

or otherwise dispose of the same or any of them to such persons, in such proportion either as right or bonus and on such terms and conditions and either at a premium or at par or ( subject to

the compliance with the provision of Section 79 and other related provisions of the Act) at a

discount and at such time as they may from time to time think fit and with the sanction of the

Company in the General Meeting to give to any person or persons the option or right to call for

any shares either at par or premium during such time and for such consideration as the Directors

think fit, and may issue and allot shares in the capital of the Company on payment in full or part

of any property sold any transferred or for any services rendered to the Company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up shares and

if so issued, shall be deemed to be fully paid shares. Provided that option or right to call of

shares shall not be given to any person or persons without the sanction of the Company in the

General Meeting.

Every share transferable etc 20. (i) The shares or other interest of any member in the Company shall be a movable property,

transferable in the manner provided by the Articles.

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(ii) Each share in the Company shall be distinguished by its appropriate number.

(iii) A Certificate under the Common Seal of the Company, specifying any shares held by any

member shall be prima facie, evidence of the title of the member of such shares.

Application of premium received on issue of shares 21. (a) Where the Company issues shares at a premium, whether for cash or otherwise, a sum equal

to the aggregate amount or value of the premium on those shares shall be transferred to an

account to be called “the share premium account” and the provisions of the Act relating to the

reduction of the Share Capital of the Company shall except as provided in this Article, apply as

if the share premium account were paid-up share capital of the Company.

(b) The share premium account may, notwithstanding, anything in clause (a) above, be applied

by the Company.

(i) in paying up unissued shares of the Company to be issued to members of the Company

as fully paid bonus shares;

(ii) in writing off the preliminary expenses of the Company;

(iii) in writing off the expenses of, or the commission paid or discount allowed on, any issue of

shares or debentures of the Company; or

(iv) in providing for the premium payable on the redemption of any redeemable preference

shares or of any debenture of the Company.

Sale of fractional shares 22. If and whenever, as the result of issue of new or further shares or any consolidation or sub-

division of shares, any shares are held by members in fractions, the Directors shall, subject to the

provisions of the Act and these Articles and to the directions of the Company in general meeting,

if any, sell those shares, which members hold in fractions, for the best price reasonably

obtainable and shall pay and distribute to and amongst the members entitled to such shares in due proportion, the net proceeds of the sale thereof. For the purpose of giving effect to any such

sale the Directors may authorise any person to transfer the shares sold to the purchaser thereof,

comprised in any such transfer and he shall not be bound to see to the application of the purchase

money nor shall his title to the shares be affected by any irregularity or invalidity in the

proceedings in reference to the sale.

Acceptance of Shares 23. [A] An application signed by or on behalf of an applicant for shares in the Company, followed

by an allotment of any shares therein shall be an acceptance of shares within the meaning of

these Articles and every person who thus or otherwise accepts any shares and whose name is on

the Register of Members shall for the purpose of these Articles be a member. The Director shall

comply with the provisions of Sections 69, 70, 71, 72 and 73 of the Act in so far as they are

applicable.

Power of Company to purchase its own Securities

[B] Notwithstanding anything contained in the Act, but subject to the provision of Sub-section

(2) and Section 77 B of the Act, the Company shall have power to purchase its own shares or

other specified securities (Refered to as Buy-Back) from.

(A) Out of free Reserve or,

(B) Out of Share Premium Account or,

(C) Out of proceeds of an earlier Issue other than fresh Issue of share made specifically for the

purpose of Buy-Back Shares.

Deposits and calls etc. to be a debt payable immediately 24. The money (if any) which the Board shall, on the allotment of any shares being made by them,

require or direct to be paid by way of deposit, call or otherwise in respect of any shares allotted by them, immediately, on the insertion of the name of the allottee in the Register of Members as

the name of the holder of such shares, become a debt, due to and recoverable by the Company

from the allottee thereof, and shall be paid by him accordingly.

222

Trusts not recognised 25. Save as herein provided, the Company shall be entitled to treat the person whose name appears

on the Register of Members as the holder of any share as the absolute owner thereof, and

accordingly shall not (except as ordered by a Court of competent jurisdiction or as by law required) be bound to recognise any benami, trust of equity or equitable, contingent, future, or

partial or other claim or claims or right to or interest in such share on the part of any other person

whether or not it shall have express or implied notice thereof and the provisions of Section 153

of the Act shall apply.

Issue of Certificates of Shares to be governed by Section 84 of the Act etc. 26. (a) The issue of certificates of shares or of duplicate or renewal of certificates of Shares shall be

governed by the provisions of Section 84 and other provisions of the Act, as may be applicable

and by the Rules or notifications or orders, if any, which may be prescribed or made by

competent authority under the Act or Rules or any other law. The Directors may also comply

with the provisions of such rules or regulations of any stock exchange where the shares of the

Company may be listed for the time being.

Certificate of Shares (b) The certificate of title to shares shall be issued under the Seal of the Company and shall be

signed by such Directors or Officers or other authorised persons as may be prescribed by the

Rules made under the Act from time to time and subject thereto shall be signed in such manner

and by such persons as the Directors may determine from time to time.

(c) The Company shall comply with all rules and regulations and other directions which may be

made by any competent authority under Section 84 of the Act.

Limitation of time for issue of certificate 27. (a) Every member shall be entitled, without payment, to one or more Certificates in marketable

lots, for all the shares of each class or denomination registered in his name, or if the directors so

approve (upon paying such fee as the Directors may from time to time determine) to several

certificates,each for one or more of such shares and the Company shall complete and have ready

for delivery such certificates within three months from the date of allotment, unless the conditions of issue thereof otherwise provide, or within one month of the receipt of application

of registration of transfer, transmission, sub-division, consolidation or renewal of any of its

shares as the case maybe. Every Certificate of shares shall be under the seal of the company and

shall specify the numbers and distinctive numbers of shares in respect of which it is issued and

amount paid up thereon and shall be in such from as the Directors may prescribe or approve,

provided that in respect of a share or shares held jointly by several persons, the Company shall

not be bound to issue more than one certificate and delivery of a certificate of shares to one of

several joint holders shall be sufficient delivery to all such holder.

(b) The Company shall not entertain any application for split of share/debenture certificate for

less than 10 (Ten) Equity shares / 10 (Ten) debentures (all relating to the same series) in market

lots as the case may be. Provided however this restriction shall not apply to an application made

by the existing member or debenture holder for split of share/debenture certificates with a view

to make an odd lot holding into a marketable lot subject to verification by the Company.

(c) Notwithstanding anything contained in Clause (a) above the Directors shall, however,

comply with such requirements of the Stock Exchange where Shares of the Company may be

listed or such requirements of any rules made under the Act or such requirements of the

Securities Contracts (Regulation) Act, 1956 as may be applicable.

Issue of new certificate in place, lost or destroyed 28. If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the

back thereof for endorsement of transfer, then upon production and surrender thereof to the

Company, a new Certificate may be issued in lieu thereof,and if any certificate lost or destroyed

then upon proof thereof to the satisfaction of the company and on execution of such indemnity as

223

the company deem adequate, being given, an a new Certificate in Lieu thereof shall be given to

the party entitled to such lost or destroyed Certificate. Every Certificates under the Article shall

be issued without payment of fees if the Directors so decide, or on payment of such fees (not

exceeding Rs. 2/- for each certificate) as the Directors shall prescribe. Provided that no fee shall

be charged for issue of new certificates in replacement of those which are old, decrepit or worn out or where there is no further space on the back thereof for endorsement of transfer. Provided

that notwithstanding what is stated above the Directors shall comply with such Rules or

Regulation or requirements of any stock Exchange or the Rules made under the Act or the rules

made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable in

this behalf.

The provisions of this Article shall mutatis mutandis apply to debentures of the company.

INTEREST OUT OF CAPITAL

Interest out of Capital 29. Where any shares are issued for the purposes of raising money to defray the expenses of the

construction of any works or building or the provisions of any plant, which cannot be made

profitable for lengthy period, the Company may pay interest on so much of that share capital as

is for the time being paid up, for the period, at the rate and subject to the conditions and

restrictions provided by Section 208 of the Act and may charge the same to capital as part of cost

of construction of the work or building or the provision of the plant.

UNDERWRITING COMMISSION AND BROKERAGE

Power to pay certain commission and prohibition of payment of all other commissions

discounts etc.

30. (A) The Company may pay a commission to any person in consideration of :

(i) his subscribing or agreeing to subscribe whether absolutely or conditionally, for any shares in

or debentures of the Company, subject to the restrictions specified in sub-section (4A) of Section

76 of the Act, or (ii) his procuring or agreeing to procure subscriptions, whether absolute or conditional for any

shares in or debentures of the Company, if the following conditions are fulfilled, namely :

(a) the commission paid or agreed to be paid does not exceed in the case of shares, five percent

of the price at which the shares are issued and in the case of debentures, two and half percent of

the price at which the debentures are issued;

(b) the amount or rate percent of the commission paid or agreed to be paid on shares or

debentures offered to the public for subscription, is disclosed in the Prospectus, and in the case

of shares or debentures not offered to the public for subscription, is disclosed in the

Statement in lieu of Prospectus and filed before the payment of the commission with the

Registrar, and where a circular or notice, not being a Prospectus inviting subscription for the

shares or debentures is issued is also disclosed in that circular or notice;

(c) the number of shares or debentures which such persons have agreed for a commission to

subscribe, absolutely or conditionally is disclosed in the manner aforesaid and

(d) a copy of the contract for the payment of commission is delivered to the Registrar at the time

of delivery of the prospectus or the statement in lieu of prospectus for registration.

(B) Save as aforesaid and save as provided in Section 75 of the Act, the Company shall not allot

any of its shares or debentures or apply any of its moneys, either directly or indirectly, in

payment of any commission, discount or allowance, to any person in consideration of :

(i) his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares

in, or debentures of the Company or; (ii) his procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for

any shares in, or debentures of the Company whether the shares, debentures or money be so

allotted or applied by, being added to the purchase money of any property acquired by the

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Company or to the contract price of any work to be executed for the Company or the money be

paid out of the nominal purchase money or contract price, or otherwise.

(C) Nothing in this Article shall affect the power of the Company to pay such brokerage as it has

hereto before been lawful for the Company to pay.

(D) A vendor to, promoter of, or other person who receives payment in shares, debentures or money from the Company shall have and shall be deemed always to have had power to apply

any part of the shares, debentures or money so received for payment of any commission, the

payment of which, if made directly by the Company would have been legal under Section 76 of

the Act.

(E) The commission may be paid or satisfied (subject to the provisions of the Act and these

Articles) in cash, or in shares, debentures or debenture-stocks of the Company.

CALLS

Directors may make calls 31. The Directors may from time to time and subject to Section 91 of the Act and subject to the

terms on which any shares/debentures may have been issued and subject to the conditions of

allotment, by a resolution passed at a meeting of the Board (and not by circular resolution) make

such calls as they think fit upon the members/debenture holders in respect of all moneys unpaid

on the shares/ debentures held by them respectively and such member/debenture holders shall

pay the amount of every call so made on him to the persons and at the times and places

appointed by the Directors. A call may be made payable by installments. A call may be

postponed or revoked as the Board may determine.

Calls to date from resolution 32. A call shall be deemed to have been made at the time when the resolution of the Directors

authorizing such call was passed and may be made payable by members/debenture holders on a

subsequent date to be specified by the Directors.

Notice of call 33. Thirty days notice in writing shall be given by the Company of every calls made payable

otherwise than on allotment specifying the time and place of payment provided that before the time of payment of such call, the Directors may by notice in writing to the members/debenture

holders revoke the same.

Directors may extend time 34. The Directors may, from time to time, at their discretion, extend the time fixed for the payment

of any call, and may extend such time as to all or any of the members/debenture holders who

from residence at a distance or other cause, the Directors may deem fairly entitled to such

extension, but no member/debenture holder shall be entitled to such extension, save as a matter

of grace and favour.

Sums deemed to be calls 35. Any sum, which by the terms of issue of a share/debenture becomes payable on allotment or at

any fixed date whether on account of the nominal value of the share/debenture or by way of

premium, shall for the purposes of these Articles be deemed to be a call duly made and payable

on the date on which by the terms of issue the same becomes payable, and in case of non-

payment, all the relevant provisions of these Articles as to payment of interest and expenses,

forfeiture or otherwise, shall apply as if such sum had become payable by virtue of a call duly

made and notified.

Instalments on shares to be duly paid 36. If by the condition of allotment of any shares the whole or part of the amount of issue price

thereof shall be payable by instalments, every such instalment shall, when due, be paid to the

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Company by the person who, for the time being and from time to time, shall be the registered

holder of the share or his legal representative.

Calls on shares of the same class to be made on uniform basis 37. Where any calls for further Share Capital are made on shares, such calls shall be made on a

uniform basis on all shares falling under the same class.

Explanation: For the purpose of this provision, shares of the same nominal value on which

different amounts have been paid up shall not be deemed to fall under the same class.

Liability of joint holders of shares 38. The joint holders of a share shall be severally as well as jointly liable for the payment of all

installments and calls due in respect of such shares.

When interest on call or Installment payable 39. If the sum payable in respect of any call or instalment be not paid on or before the day appointed

for payment thereof or any such extension thereof, the holder for the time being or allottee of the

share in respect of which a call shall have been made or the instalment shall be due, shall pay

interest as shall be fixed by the Board from the day appointed for the payment thereof or any

such,extension thereof to time of actual payment but the Directors may waive payment of such

interest wholly or in part.

Partial payment not to preclude forfeiture 40. Neither a judgement nor a decree in favour of the Company for calls or other moneys due in

respect of any shares nor any part payment or satisfaction thereof nor the receipt by the Company of a portion of any money which shall from time to time be due from any member in

respect of any shares either by way of principal or interest nor any indulgence granted by the

Company in respect of payment of any such money shall preclude the forefeiture of such shares

as herein provided.

Proof on trial of suits for money due on shares 41. On the trial or hearing of any action or suit brought by the Company against any member or

his legal representative for the recovery of any money claimed to be due to the Company in

respect of any shares it shall be sufficient to prove that the name of the member in respect of

whose shares the money is sought to be recovered appears in the Register of Members as the

holder or one of the holders, at or subsequent to the date at which the money sought to be

recovered is alleged to have become due, of the shares in respect of which such money is sought

to be recovered, and that the resolution making the call is duly recorded in the Minutes Book;

and that the notice of such call was duly given to the member or his representatives, sued in

pursuance of these presents; and it shall not be necessary to prove the appointment of the

Directors who made such calls nor that a quorum of Directors was present at the Board at which

any call was made, nor that the meeting at which any call was made was duly convened or

constituted nor any other matters whatsoever, but the proof of the matters aforesaid shall be

conclusive evidence of the debt.

Payment in anticipation of calls may carry interest 42. (a) The Directors may, if they think fit, subject to the provisions of Section 92 of the Act, agree

to and receive from any member willing to advance the same whole or any part of the moneys

due upon the shares held by him beyond the sums actually called for, and upon the amount so

paid or satisfied in advance, or so much thereof as from time to time exceeds the amount of the

calls then made upon the shares in respect of which such advance has been made, the Company

may pay interest at such rate, to the member paying such sum in advance and the Directors agree upon provided that money paid in advance of calls shall not confer a right to participate in

profits or dividends. The Directors may at any time repay the amount so advanced.

(b) The member shall not however be entitled to any voting rights in respect of the moneys so

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paid by him until the same would but for such payment, become presently payable.

Term of issue of Debenture 43. Any debentures, debenture-stock or other securities may be issued at a discount, premium or

otherwise and may be issued on condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption. surrender, drawing,

allotment of shares, attending (but not voting) at the General Meeting, appointment of Directors

and otherwise Debentures with the right to conversion into or allotment of shares shall be issued

only with the consent of the Company in the General Meeting by a Special Resolution.

LIEN

Company’s lien on Shares/Debentures 44. The Company shall have first and paramount lien upon all the shares/debenture (other than fully

paid up shares/debentures) registered in the name of each member/debenture holder (whether

solely or jointly with others) and upon the proceeds of sale thereof for all moneys (whether

presently payable or not) called or payable at a fixed time in respect of such shares/debentures

and no equitable interest in any shares/debenture shall be created except upon the footing and

condition that Article 25 hereof will have full effect. And such lien shall extend to all dividends

and bonuses from time to time declared in respect of such shares/debentures. Unless otherwise

agreed the registration of a transfer of shares/debentures shall operate as a waiver of the

Company’s lien if any on such shares/ debentures. The Directors may at any time declare any

shares/debentures wholly or in part to be exempt from the provisions of this Clause.

As to enforcing lien by sale 45. For the purpose of enforcing such lien, the Board may sell the shares/debentures subject thereto

in such manner as they shall think fit, and for that purpose may cause to be issued a duplicate

certificate in respect of such shares and/or debentures and may authorise one of their member or

appoint any officer or agent to execute a transfer thereof on behalf of and in the name of such

member/debenture holder. No sale shall be made until such period, as may be stipulaterd by the

Board from time to time, and until notice in writing of the intention to sell shall have been served

on such member and/or debenture holder or his legal representatives and default shall have been made by him or them in payment, fulfilment, or discharge of such debts, liabilities or

engagements for fourteen days after such notice.

Application of proceeds of sale 46. (a) The net proceeds of any such sale shall be received by the Company and applied in or

towards payment of such part of the amount in respect of which the lien exists as is presently

payable and the residue if any, shall (subject to a like lien for sums not presently payable as

existed upon the shares before the sale) be paid to the persons entitled to the shares and/or

debentures at the date of the sale.

Outsiders lien not to affect Company's lien (b) The Company shall be entitled to treat the registered holder of any share or debenture as the

absolute owner thereof and accordingly shall not (except as ordered by a court of competent

jurisdiction or by statute required) be bound to recognise equitable or other claim to, or interest

in, such shares or debentures on the part of any other person. The Company’s lien shall prevail

notwithstanding that it has received notice of any such claims.

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FORFEITURE

If call or instalment not paid notice must be given 47. (a) If any member or debenture holder fails to pay the whole or any part of any call or instalment

or any money due in respect of any share or debentures either by way of principal or interest on

or before the day appointed for the payment of the same or any such extension thereof ,as

aforesaid, the Directors may at any time thereafter, during such time as the call or any instalment

or any part thereof or other moneys remain unpaid or a judgement or decree in

respect thereof remains unsatisfied in whole or in part, serve a notice on such member or

debentureholder or on the person (if any) entitled to the share by transmission requiring him to

pay such call or instalment or such part thereof or other moneys as remain unpaid together with

any interest that may have accrued and all expenses that may have been incurred by the

Company by reason of such non payment.

Form of Notice (b) The notice shall name a day not being less than One Month from the date of the notice and a

place or places, on and at which such call, or instalment or such part or other moneys as

aforesaid and such interest and expenses as aforesaid are to be paid. The notice shall also state

that in the event of non payment of call amount with interest at or before the time and at the

place appointed, the shares or debentures in respect of which the call was made or instalment or

such part or other moneys is or are payable will be liable to be forfeited.

In default of payment shares or debentures to be forfeited 48. If the requirements of any such notice as aforesaid are not complied with any share/debenture in

respect of which such notice has been given, may at any time thereafter before payment of all

calls or instalments, interest and expenses or other moneys due in respect thereof, be forfeited by

a resolution of the Directors to that effect. Neither the receipt by the Company of a portion of

any money which shall from time to time be due from any member of the Company in respect of

his shares, either by way of principal or interest, nor any indulgence granted by the company, in

respect of the payment of any such money, shall preclude the company from thereafter

proceeding to enforce a forfeiture of such shares as herein provided. Such forfeiture shall include all dividends declared or interest paid or any other moneys payable in respect of the forfeited

shares or debentures and not actually paid before the forfeiture.

Entry of forfeiture in Register of members/debenture holders 49. When any shares/debenture shall have been so forfeited, notice of the forfeiture shall be given to

the member or debenture holder in whose name it stood immediately prior to the forfeiture and

an entry of the forfeiture with the date thereof, shall forthwith be made in the Register of

members or debenture holders but no forfeiture shall be invalidated by any omission or neglect

or any failure to give such notice or make such entry as aforesaid.

Forfeited share/debenture to be property of Company and may be sold 50. Any share or debenture so forfeited shall be deemed to be the property of the Company, and may

be sold, re-allotted or otherwise disposed of either to the original holder or to any other person

upon such terms and in such manner as the Directors shall think fit.

Power to annual forfeiture 51. The Directors may, at any time, before any share or debenture so forfeited shall have been sold,

re-allotted or otherwise disposed of, annual forfeiture thereof upon such conditions as they think

fit.

Shareholders or Debenture holders still liable to pay money owing at time of forfeiture and

interest 52. Any member or debenture holder whose shares or debentures have been forfeited shall,

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notwithstanding the forfeiture, be liable to pay and shall forthwith pay to the Company, all calls,

instalments, interest expenses and other money owing upon or in respect of such shares or

debentures at the time of the forfeiture togetherwith interest thereon from the time of the

forfeiture until payment at such rate as the Directors may determine, and the Directors may

enforce the payment of the whole or a portion thereof, if they think fit, but shall not be under any obligation to do so.

Effect of forfeiture 53. The forfeiture of a share or debenture shall involve extinction at the time of forfeiture, of all

interest in and all claims and demands against the Company, in respect of the share or debenture

and all other rights incidental to the share or debenture, except only such of those rights as by

these Articles are expressly saved.

Certificate of forfeiture 54. A Certificate in writing under the hand of one Director and counter signed by the Secretary or

any other officer authorised by the Directors for the purpose, that the call in respect of a Share or

debenture was made and notice thereof given and that default in payment of the call was made

and that the forfeiture of the share or debenture was made by the resolution of Directors to that

effect shall be conclusive evidence of the facts stated therein as against all persons entitled to

such share or debenture.

Validity of sales under Articles 45 and 50 55. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers

hereinabove given, the Directors may, if necessary, appoint some person to execute an

instrument of transfer of the shares or debentures sold and cause the purchaser’s name to be entered in the Register of members or Register of debenture holders in respect of the shares or

debentures sold, and the purchaser shall not be bound to see to the regularity of the proceedings,

or to the application of the purchase money and after his name has been entered in the Register

of members or debenture holders in respect of such shares or debenture the validity of the sale

shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall

be for damages only and against the Company exclusively.

Cancellation of share/debenture Certificate in respect of forfeited shares/debentures 56. Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the

certificate/s originally issued in respect of the relative shares or debentures shall (unless the same

shall on demand by the Company has been previously surrendered to it by the defaulting

member or debentureholder) stand cancelled and become null and void and be of no effect, and

the directors shall be entitled to issue a duplicate certificate/s in respect of the said share or

debentures to the person/s entitled thereto.

Title of purchaser and allottee of forfeited shares/debentures 57. The Company may receive the consideration, if any, given for the share or debenture on any

sale, re-allotment or other disposition thereof, and the person to whom such share or debenture is

sold, re-allotted or disposed of may be registered as the holder of the share or debenture and

shall not be bound to see to the application of the consideration, if any, nor shall his title to the

share or debenture be affected by any irregularity or invalidity in the proceedings in reference to

the forfeiture, sale, re-allotment or other disposal of the share or debenture.

Surrender of Shares or Debentures 58. The Directors may, subject to the provisions of the Act, accept a surrender of any share or

debenture from or by any member or debenture holder desirous of surrendering them on such

terms as they think fit.

TRANSFER AND TRANSMISSION OF SHARES AND DEBENTURES

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Register of transfers 59. The Company shall keep a book to be called the “Register of transfers” and therein shall be

fairly and distinctly entered the particulars of every transfer or transmission of any share.

Instrument of transfer 60. The instrument of transfer shall be in writing and all provisions of Section 108 of the Companies

ACT, 1956 and statutory modification thereof for the time being shall be duly compiled with in

respect of all transfer of shares and registration thereof.

Instrument of transfer to be executed by transferor and transferee 61. Every such instrument of transfer shall be signed both by the transferor and transferee and the

transferor shall be deemed to remain the holder of such share until the name of the transferee is

entered in the Register of members in respect thereof.

Directors may refuse to register transfer 62. (a) Subject to the provisions of Section 111 of the Act and Section 22A of the Securities

Contracts (Regulation) Act, 1956, the Directors may, at their own absolute and uncontrolled

discretion and by giving reasons, decline to register or acknowledge any transfer of shares

whether fully paid or not and the right of refusal, shall not be affected by the circumstances that

the proposed transferee is already a member of the Company but in such cases, the Directors

shall within one month from the date on which the instrument of transfer was lodged with the

Company, send to the transferee and transferor notice of the refusal to register such transfer

provided that registration of transfer shall not be refused on the ground of the transferor being

either alone or jointly with any other person or persons indebted to the Company on any account

whatsoever except when the company has a lien on the shares. Transfer of shares/debentures in whatever lot shall not be refused.

(b) Nothing in Sections 108, 109 and 110 of the Act shall prejudice this power to refuse to

register the transfer of, or the transmission on legal documents by operation of law of the rights

to, any shares or interest of a member in, any shares or debentures of the Company.

Transfer of shares 63. (a) An application of registration of the transfer of shares may be made either by the transferor or

the transferee provided that where such application is made by the transferor, no registration

shall in the case of partly paid shares be effected unless the Company gives notice of the

application to the transferee and subject to the provisions of Clause (d) of this Article, the

Company shall unless objection is made by the transferee within two weeks from the date of

receipt of the notice, enter in the Register of members the name of the transferee in the same

manner and subject to the same conditions as if the application for registration was made by the

transferee.

(b) For the purpose of clause (a) above notice to the transferee shall be deemed to have been

duly given if sent by prepaid registered post to the transferee at the address given in the

instrument of transfer and shall be deemed to have been duly delivered at the time at which it

would have been delivered to him in the ordinary course of post.

(c) It shall not be lawful for the Company to register a transfer of any shares unless a proper

instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on

behalf of the transferee and specifying the name, address and occupation if any, of the transferee

has been delivered to the Company alongwith the Certificate relating to the shares and if no such

Certificate is in existence, alongwith the letter of allotment of shares. The Directors may also call

for such other evidence as may reasonably be required to show the right of the transferor to

make the transfer provided that where it is proved to the satisfaction of the Directors of the

Company that an instrument of transfer register the transfer on such terms as to indemnity as the

Directors may think fit. (d) Nothing in clause (c) above shall prejudice any power of the company to register as share

holder any person to whom the right to any share has been transmitted by operation of law.

(e) The company shall accept all applications for transfer of shares/debentures, however, this

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condition shall not apply to requests received by the company;

(A) for splitting of a share or debenture certificate into several scripts of very small

denominations;

(B) proposals for transfer of shares/debentures comprised in a share/debenture certificate to several parties involving, splitting of a share/debenture certificate into small denominations and

that such split/transfer appears to be unreasonable or without any genuine need.

(i) transfer of Equity shares/debentures made in pursuance of any statutory provision or an order

of a competent court of law;

(ii) the transfer of the entire Equity shares/debentures by an existing shareholder/debenture

holder of the Company holding under one folio less than 10 (ten) Equity Shares or 10 (ten)

debentures (all relating to the same series) less than in market lots by a single transfer to a single

or joint transferee.

(iii) the transfer of not less than 10 (ten) Equity shares or 10 (ten) debentures (all relating to the

same series) in favour of the same transferee(s) under two or more transfer deeds, out of which

one or more relate(s) to the transfer of less than 10 (ten) Equity Shares/10 (ten) debentures.

(iv) the transfer of less than 10 (ten) Equity shares or 10 (ten) debentures (all relating to the same

series) to the existing share holder/debenture holder subject to verification by the Company.

Provided that the Board may in its absolute discretion waive the aforesaid conditions in a fit and

proper case(s) and the decision of the Board shall be final in such case(s).

(f) Nothing in this Article shall prejudice any power of the Company to refuse to register the

transfer of any share.

Custody of instrument of transfer 64. [A] The instrument of transfer shall after registration be retained by the Company and shall

remain in their custody. All instruments of transfer which the Directors may decline to

register,shall on demand be returned to the persons depositing the same. The Directors may

cause to be destroyed all transfer deeds lying with the Company after such period as they may

determine.

Dematerialisation/Rematerialisation [B] Nothwithstanding anything contained in these Articles the company shall be entitled to dematerialise its securities and to offer securities in a dematerialised form pursuant to the

Depository Act, 1996.

Option for Investors [C] Every holder of or subscriber to securities of the Company shall have the option to receive

security certificates or to hold the securities with a depository. Such a person who is the

beneficial owner of the Securities can at any time option out of a Depository, if permitted, by the

law, in respect of any security in the manner provided by the Depositories Act, 1996 and the

Company shall in the manner and within the time prescribed, issued to the beneficial owner the

required Certificates for the Securities.

If a person options to hold its Security with a Depository, the Company shall intimate such

depository the details of allotment of the Security.

Securities in Depository to be in fungible form [D] All securities of the Company held by the Depository shall be dematerialised and be in

fungible form.

Nothing contained in Sections 153, 153A, 153B, 187C and 372A of the Act shall apply to a

Depository in respect of the Securities of the Company held by it on behalf of the beneficial owners.

Rights of Depositories and Beneficial Owners

231

[E] (i) Nothwithstanding anything to the contrary contained in the Act a Depository shall be

deemed to be the registered owner for the purpose of effecting transfer of ownership of Security

of the Company on behalf of the beneficial owner.

(ii) Save as otherwise provided in (i) above, the depository as the registered owner of the

Securities shall not have any voting rights or any other rights in respect of the Securities held by it.

(iii) Every person holding Securities of the Company and whose name is entered as the

beneficial owner in the record of the depository shall be deemed to be a member of the

Company. The beneficial owner of Securities shall be entitled to all the rights and benefits and

be subject to all the liabilities in respect of his Securities which are held by a depository.

Service of Documents [F] Nothwithstanding anything contained in the Act to the contrary, where Securities of the

Company are held in depository, the records of the beneficial ownership may be served by such

depository to the Company by means of electronic mode or by delivery of floppies or discs.

Transfer or Securities [G] Nothing contained in Section 108 of the Act, shall apply to a transfer of Securities effect by

a transferor and transferee both of whom are entered as beneficial owners in the record of a

depository.

Allotment of Securities dealt with in a depository [H] Nothwithstanding anything contained in the Act, where Securities are dealt with by a

depository, the Company shall intimate the details thereof to the depository immediately on

allotment of such securities.

Register and Index of Members [I] The company shall cause to be kept at its Registered Office or at such other place as may

be decided, Register and Index of Members in accordance with Sections 150 and 151 and other

applicable provisions of the Act and the Depositories Act, 1996 with the details of Shares held in

physical and dematerialised forms in any media as my be permitted by law including in any form

of electronic media. The Register and Index of beneficial owners maintained by a depository under Section 11 of the Depositories Act, 1996 shall be deemed to be the Register and Index of

Members for the purpose of this Act. The Company shall have the power to keep in any state or

country outside India, a Register of Members for the residents in that state or Country.

Applicability of the depositories Act [J] In case of transfer of shares, debentures and other marketable securities, where the Company

has not issued any certificate and where such shares, debentures or securities are being held in an

electronic and fungible form with a Depository, the provisions of the Depositories Act, 1996

shall apply.

Transfer books and Register of members when closed 65. The Board shall have power on giving not less than seven days’ previous notice by

advertisement in some newspaper circulating in the district in which the office of the Company

is situate, to close the Transfer books, the Register of members or Register of debenture holders

at such time or times and for such period or periods, not exceeding thirty days at a time and not

exceeding in the aggregate forty five days in each year.

Transfer to Minors etc. 66. Only fully paid shares or debentures shall be transferred to a minor acting through his/her legal

or natural guardian. Under no circumstances, shares or debentures be transferred to any insolvent

or a person of unsound mind.

Title to shares of deceased holder 67. The executors or administrators of a deceased member (not being one or two or more joint

232

holders) or the holder of a deceased member (not being one or two or more joint holders) shall

be the only persons whom the Company will be bound to recognise as having any title to the

shares registered in the name of such member, and the Company shall not be bound to recognise

such executors or administrators or the legal representatives unless they shall have first obtained

probate or Letters of Administration or a Succession Certificate, as the case may be, from a duly constituted competent court in India, provided that in any case where the Directors in their

absolute discretion think fit, the Directors may dispense with the production of probate or Letters

of Administration or a Succession Certificate upon such terms as to indemnity or otherwise as

the Directors in their absolute discretion may think necessary and under Article 70 register the

name of any person who claims to be absolutely entitled to the shares standing in the name of a

deceased member, as a member.

Registration of persons entitled to share otherwise than by transfer 68. (a) Subject to the provisions of Articles 67 and 77(d), any person becoming entitled to any share

in consequence of the death, lunacy, bankruptcy or insolvency of any member or by any lawful

means other than by a transfer in accordance with these presents, may with the consent

of the Directors (which they shall not be under any obligation to give) upon producing such

evidence that he sustains the character in respect of which he proposes to act under this Article

or of such titles as the Directors shall think sufficient, either be registered himself as a member

in respect of such shares or elect to have some person nominated by him and approved by the

Directors registered as a member in respect of such shares. Provided nevertheless that if such

person shall elect to have his nominee registered he shall testify his election by executing in

favour of his nominee an instrument of transfer in accordance with the provisions herein

contained and until he does so, he shall not be free from any liability in respect of such shares.

(b) A transfer of the shares or other interest in the Company of a deceased member thereof made by his legal representative shall, although the legal representative is not himself a member be as

valid as if he had been a member at the time of the execution of the instrument of transfer.

Nominations (c) [i] Every Shareholder or Debentureholder or depositholder of the Company, may at any time,

nominate a person to whom his Shares or Debentures or Deposit shall vest in the event of his

death in such manner as may be prescribed under the Act, and shall have all powers vested under Section 109A of the Companies Act, 1996.

[ii] Where the Shares or Debentures or deposits of the Company are held by more than one

person jointly, joint holders may together nominate a person to whom all the rights in the Shares

or Debentures or Deposits as the case may be shall vest in the event of death of all the joint

holders.

[iii] Nothwithstanding anything contained in any other law for the time being in force or in any

disposition, whether testamentary or otherwise, where a nomination made in the manner

aforesaid purpose to confer on any person the right to vest the Shares or Debentures or Deposits,

the nominee shall, on the death of the Shareholder or Debentureholder or depositholder, as the

case may be on the death of the joint holders become entitled to all the rights in such Shares or

Debentures or Deposits as the case may be, all the joint holders, in relation to such Shares or

Debentures or Deposits, to the exclusion of all other persons, unless the nomination is varied or

cancelled in the manner as may prescribed under the Act.

[iv] Where the nominee is a minor, it shall be lawful for the holder of the Shares or Debentures

or Deposits, to make the nomination to appoint any person to become entitled to Share in, or

Debentures or deposits of, the Company, in the manner prescribed under the Act, in the event of

his death, during the minority.

Claimant to be entitled to same advantage 69. The person becoming entitled to a share by reason of the death, lunacy, bankruptcy or

insolvency of the holder shall be entitled to the same dividends and other advantages to which he

would be entitled as if he were registered holder of the shares except that he shall not before

being registered as a member in respect of the share, be entitled in respect of it, to exercise any

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right conferred by membership in relation to the meeting of the Company provided that the

Board may at any time give notice requiring any such persons to elect either to be registered

himself or to transfer shares and if the notice is not complied within sixty days, the Board may

thereafter withhold payment of all dividends, interests, bonuses or other moneys payable in

respect of the share until the requirements of the notice have been complied with.

Persons entitled may receive dividend without being registered as member 70. A person entitled to a share by transmission shall, subject to the right of the Directors to retain

such dividends, bonuses or moneys as hereinafter provided be entitled to receive, and may give a

discharge for any dividends, bonuses or other moneys payable in respect of the share/debenture.

71. Article 70 shall not prejudice the provisions of Articles 44 and 55.

Refusal to register nominee 72. The Directors shall have the same right to refuse on legal ground to register a person entitled by

transmission to any shares or his nominee as if he were the transferee named in an ordinary

transfer presented for registration.

Directors may require evidence of transmission 73. Every transmission of a share shall be verified in such manner as the Directors may require, and

the Company may refuse to register any such transmission until the same be so verified or until

or unless an indemnity be given to the Company with regard to such registration which the

Directors at their discretion shall consider sufficient, provided nevertheless that there shall not be

any obligation on the Company or the Directors to accept any indemnity.

No fee on transfer or transmission 74. No fee shall be charged for registration of transfer, transmission, Probate, Succession Certificate

and Letters of administration, Certificate of Death or Marriage, Power of Attorney or similar

other document.

The Company not liable for disregard of a notice prohibiting registration of transfer 75. The Company shall incur no liability or responsibility whatsoever in consequence of its

registering or giving effect to any transfer of shares made or purporting to be made by any

apparent legal owner thereof (as shown or appearing in the Register of members) to the

prejudice of persons having or claiming any equitable right, title or interest to or in the said

shares, notwithstanding that the Company may have had notice of such equitable right, title or

interest or notice prohibiting registration of such transfer and may have entered such notice

referred thereto in any book of the Company and the Company shall not be bound or required to

regard or attend or give effect to any notice which may be given to it of any equitable right, title

or interest or be under any liability whatsoever for refusing or neglecting so to do, though it may

have been entered or referred to in some book of the Company, but the Company shall

nevertheless be at liberty to regard and attend to any such notice and give effect thereto if the

Directors shall so think fit.

76. The provisions of these Articles shall mutatis mutandis apply to the transfer or transmission by

operation of law, of debentures of the Company.

JOINT HOLDERS

Joint-holders 77. Where two or more persons are registered as the holders of any share/debentures, they shall be

deemed (so far as the Company is concerned) to hold the same as joint tenants with benefits of survivorship, subject to the following and other provisions contained in these Articles.

No transfer to more than four persons as joint holders

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(a) The joint holders of any share/debenture shall be liable severally four persons as the holders

of any share/debenture.

Transfer by joint holders (b) In the case of a transfer of shares/debentures held by joint holders, the transfer will be effective only if it is made by all the joint holders

Liability of joint holders (c) The joint holders of any share/debenture shall be liable severally as well as jointly for and in

respect of all calls or instalments and other payments which ought to be made in respect of such

share/debenture.

Death of one or more joint holders (d) On the death of any one or more of such joint holders the survivor/survivors shall be the only

person or persons recognised by the Company as having any title to the share/debenture, but the

Directors may require such evidence of death as they may deem fit, and nothing herein contained

shall be taken to release the estate of a deceased joint holder from any liability on

shares/debentures held by him jointly with any other person.

Receipt of one sufficient (e) Any one of such joint holders may give effectual receipts of any dividends, interests or other

moneys payable in respect of such share/debenture.

Delivery of certificate and giving of notices to first named holder (f) Only the person whose name stands first in the Register of Members/debenture holders as one of the joint holder of any shares/debentures shall be entitled to the delivery of the certificate

relating to such share/debenture or to receive notice (which expression shall be deemed to

include all documents as defined in Article (2) (a) hereof and any document served on or sent to

such person shall be deemed service on all the joint holders.

Vote of joint holders (g) (i) Any one of two or more joint holders may vote at any meeting either personally or by attorney or by proxy in respect of such shares as if he were solely entitled thereto and if more

than one of such joint holders be present at any meeting personally or by proxy or by attorney

then that one of such persons so present whose name stands first or higher (as the case may be)

on the Register in respect of such share shall alone be entitled to vote in respect thereof but the

other or others of the joint holders shall be entitled to be present at the meeting provided always

that a joint holder present at any meeting personally shall be entitled to vote in preference to a

joint holder present by Attorney or by proxy although the name of such joint holder present by

an Attorney or proxy stands first or higher (as the case may be) in the Register in respect of such

shares.

(ii) Several executors or administrators of a deceased member in whose (deceased member) sole

name any share stands shall for the purpose of this clause be deemed joint holders.

BORROWING POWERS

Restriction on powers of the Board 78. The Board of Directors shall not, except with the consent of the Company in general meeting

and subject to Article 172 of the Articles of Association of the Company:

(a) sell, lease or otherwise dispose of the whole or substantially the whole, of the undertaking of

the Company, or where the Company owns more than one undertaking of the whole, or

substantially the whole, of any such undertaking. (b) remit, or give time for the repayment of any debt due by a Director.

(c) invest, otherwise than in trust securities the amount of compensation received by the

Company in respect of the compulsory acquisition alter the commencement of this Act, of any

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such undertaking as is referred to in clause (a) or of any premises or properties used for any such

undertaking and without which it can not be carried on or can be carried on only with difficulty

or only after a considerable time.

(d) borrow monies where the moneys to be borrowed, together with the moneys already

borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of the company

and its free reserves, that is to say, reserves not set apart for any specific purpose.

(e) contribute, to charitable and other funds not directly relating to the business of the Company

or the welfare of its employees, any amounts the aggregate of which will, in any financial year,

exceed fifty thousand rupees or five percent, of its average net profits as determined in

accordance with the provisions of Sections 349 and 350 of the Act during the three financial

years immediately preceding, whichever is greater. Explanation : Every resolution passed by the

Company in general meeting in relation to the exercise of the power referred to in clause (d) or

in clause (e) shall specify the total amount upto which money may be borrowed by the Board of

Directors under clause (d) or as the case may be, the total amount which may be contributed to

charitable and other funds in any financial year under clause (e).

Conditions on which money may be borrowed 79. The Directors may raise and secure the payment of such sum or sums in such manner and upon

such terms and conditions in all respects as they think fit, and in particular by the issue of bonds,

perpetual or redeemable, debenture or debenture stocks or any mortgage or charge or other

security on the undertaking of the whole or any part of the property of the company (both

present and future) including its uncalled capital for the time being.

Bonds, debentures etc. to be subject to the control of directors 80. Any bonds, debentures, debenture stocks or other securities issued or to be issued by the

Company shall be under the control of the Directors who may issue them upon such terms and

conditions and in such manner and for such consideration as they shall be consider for the

benefit of the Company. Provided that bonds, debentures, debenture stock or other securities so

issued or to be issued by the Company with the right to allotment of or conversion into shares

shall not be issued except with the sanction of the Company in general meeting by a special

resolution.

Securities may be assignable free from equities 81. Debentures, debenture stocks, bonds or other securities may be made assignable free from any

equities between the company and the person to whom the same may be issued.

Issue at discount etc. or with special privileges 82. Any bonds, debenture stocks, or other securities may be issued, subject to the provisions of the

Act, at a discount premium or otherwise and with any special privileges as to redemption,

surrender, drawings, appointment of Directors and otherwise and subject to the following:

Debentures with voting rights not to be issued

(a) The Company shall not issue any debentures carrying voting rights at any meeting of the

Company whether generally or in respect of particular classes of business.

(b) The Company shall have power to reissue redeemed debentures in certain cases in

accordance with Section 121 of the Act.

(c) Payments of certain debts out of assets subject to floating charge in priority to claims under

the charge may be made in accordance with the provisions of Section 123 of the Act.

(d) Certain charges mentioned in Section 125 of the Act shall be void against the liquidators or

creditors unless registered as provided in section 125 of the Act.

(e) The term ‘charge’ shall include mortgage in these Articles. (f) A contract with the Company to take up and pay for any debentures of the Company may be

enforced by a decree for specific performance.

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Limitation of time for issue of certificate (g) The Company shall, within three months after the allotment of any of its debentures or

debenture stock, and within one month after the application for the registration of the transfer of

any such debentures or debenture stocks have complete and have ready for delivery the

Certificate of all the debentures and the Certificates of all debenture stocks allotted or transferred unless the conditions of issue of the debentures or debenture stocks otherwise provide. The

expression ‘transfer’ for the purpose of this clause means a transfer duly stamped and otherwise

valid and does not include any transfer which the Company is for any reason entitled to refuse to

register and does not register.

Right to obtain copies of and inspect Trust Deed (h) (i) A copy of any Trust Deed for securing any issue of debentures shall be forwarded to the

holder of any such debentures or any member of the Company at his request and within seven

days of the making thereof on payment.

(1) In the case of a printed Trust Deed of the sum of Rupee One and

(2) In the case of a Trust Deed which has not been printed of thirty seven paise for every one

hundred words or fractional part thereof required to be copied.

(ii) The Trust Deed referred to in item (i) above shall also be open to inspection by any member

or debenture holder of the Company in the same manner, to the same extent, and on payment of

the same fees, as if it were the Register of members of the Company.

Mortgage of uncalled capital 83. If any uncalled capital of the Company is included in or charged by any mortgage or other

security the Directors shall, subject to the provisions of the Act and these Articles, make calls on

the members in respect of such uncalled capital in trust for the person in whose favour such mortgage or security is executed.

Indemnity may be given 84. If the Directors or any of them or any other person shall become personally liable for the

payment of any sum primarily due from the Company, the Directors may execute or cause to be

executed any mortgage charge or security over or affecting the whole or any part of the assets of

the Company by way of indemnity to secure the Directors or person so becoming liable as aforesaid from any loss in respect of such liability.

Registration of charges 85. (a) The provisions of the Act relating to registration of charges shall be complied with.

(b) In the case of a charge created out of India and comprising solely property situated outside

India, the provisions of Section 125 of the Act shall also be complied with.

(c) Where a charge is created in India but comprises property outside India, the instrument

creating or purporting to create the charge under Section 125 of the Act or a copy thereof

verified in the prescribed manner, may be filed for registration, notwithstanding that further

proceedings may be necessary to make the charge valid or effectual according to the law of the

country in which the property is situate, as provided by Section 125 of the Act.

(d) Where any charge on any property of the Company required to be registered under Section

125 of the Act has been so registered any person acquiring such property or any part thereof or

any share or interest therein shall be deemed to have notice of the charge as from the date of

such registration.

(e) In respect of registration of charges on properties acquired subject to charge, the provisions

of Section 127 of the Act shall be complied with.

(f) The Company shall comply with the provisions of Section 128 of the Act relating to

particulars in case of series of debentures entitling holders pari passu.

(g) The Company shall comply with the provisions of Section 129 of the Act in regard to registration of particulars of commission, allowance or discount paid or made, directly or

indirectly, in connection with the debentures.

(h) The provisions of Section 133 of the Act as to endorsement of Certificate of registration on

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debenture or Certificate of debenture stock shall be complied with by the Company.

(i) The Company shall comply with the provisions of Section 134 of the Act as regards

registration of particulars of every charge and of every series of debentures.

(j) As to modification of charges, the Company shall comply with the provisions of Section 135

of the Act. (k) The Company shall comply with the provisions of Section 136 of the Act regarding keeping

a copy of instrument creating charge at the registered officer of the Company and comply with

the provisions of Section 137 of the Act in regard to entering in the register of charges any

appointment of Receiver or Manager as therein provided.

(l) The Company shall also comply with the provisions of Section 138 of the Act as to reporting

satisfaction of any charge and procedure thereafter.

(m) The Company shall keep at its registered office a Register of charges and enter therein all

charges specifically affecting any property of the Company and all floating charges on the

undertaking or on any property of the company giving in each case:

(i) a short description of the property charged;

(ii) the amount of the charge; and

(iii) except in the case of securities to bearer, the names of persons entitled to the charge.

(n) Any creditor or member of the Company and any other person shall have the right to inspect

copies of instruments creating charges and the Company’s Register of charges in accordance

with and subject to the provisions of Section 144 of the Act.

Trust not recognised 86. No notice of any trust, express or implied or constructive, shall be entered on the Register of

Debenture holders.

SHARE WARRANTS

Powers to issue share warrants 87. The Company may issue share warrants subject to and in accordance with the provisions of

Sections 114 and 115 of the Act and accordingly, the Board may, in its discretion, with respect

to any share which is fully paid upon application in writing signed by the persons registered as

holder of the share and authenticated by such evidence (if any) as the Board may, from time to time require as to the identity of the person signing the application, and on receiving the

certificate (if any) of the share, and the amount of the stamp duty on the warrant and such fee as

the Board may, from time to time, require, issue a share warrant.

Deposit of share warrants 88. (a) The bearer of a share warrant may at any time deposit the warrant at the office of the

Company and so long as the warrant remains so deposited, the depositor shall have the same

right of signing a requisition for calling a meeting of the Company, and of attending, and voting,

and exercising the other privileges of a Member at any meeting held after the expiry of two clear

days from the time of deposit, as if his name were inserted in the Register of members as the

holder of the share included in the deposited warrant.

(b) Not more than one person shall be recognised as depositor of the Share Warrant.

(c) The Company shall on two days' written notice return the deposited share warrant to the

depositor.

Privileges and disabilities of the holders of share warrant. 89. (a) Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant,

sign a requisition for calling a meeting of the Company, or attend, or vote or exercise any of the

privileges of a member at a meeting of the Company, or be entitled to receive any notice from

the Company. .(b) The bearer of a share warrant shall be entitled in all other respects to the same privileges and

advantages as if he were named in the Register of members as the holder of the shares included

in the warrant and he shall be a member of the Company

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Issue of new share warrant or coupon 90. The Board may, from time to time, make rules as to the terms on which (if it shall think fit) a

new share warrant or coupon may be issued by way of renewal in case of defacement, loss or

destruction.

CONVERSION OF SHARES INTO STOCK AND RECONVERSION

Shares may be converted into stock 91. The Company in general meeting may convert any paid up shares into stock and when any

shares shall have been converted into stock, the several holders of such stock may thence forth

transfer their respective interest therein or any part of such interests, in the same manner and

subject to the same regulations as, and subject to which shares from which the stock arise might

have been transferred, if no such conversion had taken place, or as near thereto as circumstances

will admit. The Company may at any time reconvert any stock into paid up shares of any

denomination.

Rights of Stock holders 92. The holders of stock shall, according to the amount of stock, held by them have the same right,

privileges and advantages as regards dividends, voting at meeting of the Company and other

matters, as if they held the share from which the stock arose, but no such privilege or advantage

(except participation in the dividends and profits of the Company and the assets on winding up)

shall be conferred by an amount of stock which would not if existing in shares, have conferred

that privilege or advantage.

GENERAL MEETINGS

Annual General Meeting 93. Subject to the provisions contained in Sections 166 and 210 of the Act, as far as applicable, the

Company shall in each year hold, in addition to any other meetings, a general meeting as its

annual general meeting, and shall specify, the meeting as such in the Notice calling it; and not

more than fifteen months shall elapse between the date of one annual general meeting of the

Company and that of the next. Provided that if the Registrar for any special reason, extends the time within which any annual general meeting shall be held, then such annual general meeting

may be held within such extended period.

Summary of Annual General Meeting The Company may in any one general meeting fix the place for its any annual general meetings.

Every member of the Company shall be entitled to attend either in person or by proxy and the

Auditor of the Company shall have the right to attend and to be heard at any general meeting

which he attends on any part of the business which concerns him as Auditor. At every annual

general meeting of the Company, there shall be laid on the table, the Director’s report, the

audited statements of accounts and auditor’s report (if any, not already incorporated in the

audited statements of accounts). The proxy registered with the Company and Register of

Director’s Share holdings of which latter register shall remain open and accessible during the

continuance of the meeting. The Board shall cause to prepare the Annual list of members,

summary of Share Capital, Balance Sheet and Profit and Loss Account and forward the same to

the Registrar in accordance with Sections 159, 161 and 220 of the Act.

Time and place of Annual General Meeting 94. Every annual general meeting shall be called at any time during business hours, on a day that

is not a public holiday, and shall be held either at the registered office of the Company or at

some other place within the city, town or village in which the registered office of the Company is situate, and the notice calling the meeting shall specify it as the annual general meeting.

Sections 171 to 186 of the Act shall apply to meetings

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95. Sections 171 to 186 of the Act with such adaptations and modifications, if any, as may be

prescribed shall apply with respect to meetings of any class of members or debentureholders of

the Company in like manner as they apply with respect to general meetings of the Company.

Powers of Director’s to call Extraordinary General Meeting 96. The Directors may call an extraordinary general meeting of the Company whenever they think

fit.

Calling of Extra Ordinary General Meeting on requisition 97. (a) The Board of Directors of the Company shall on the requisition of such number of members

of the Company as is specified in clause (d) of this Article, forthwith proceed duly to call an

Extraordinary general meeting of the Company.

(b) The requisition shall set out the matters for the consideration of which the meeting is to be

called, shall be signed by the requisitionists, and shall be deposited at the registered

office of the Company.

(c) The requisition may consist of several documents in like form, each signed by one or more

requisitionists.

(d) The number of members entitled to requisition a meeting in regard to any matter shall be

such number of them as hold at the date of the deposit of the requisition not less than one tenth

of such of the paid up share capital of the Company as at that date carried the right of voting in

regard to that matter.

(e) Where two or more distinct matters are specified in the requisition the provisions of clause

(d) above, shall apply separately in regard to each such matter; and the requisition shall

accordingly be valid only in respect of those matters in regard to which the condition specified in

that clause is fulfilled.

(f) If the Board does not, within twenty one days from the date of the deposit of a valid

requisition in regard to any matters, proceed duly to call a meeting for the consideration of those matters then on a day not later than forty five days from the date of the deposit of the requisition,

the meeting may be called:

(i) by the requisitionists themselves;

(ii) by such of the requisitionists as represent either a majority in value of the paid up share

capital held by all of them or not less than one tenth of such of the paid-up share capital of the

Company as is referred to in clause (d) above, whichever is less.

Explanation: For the purpose of this clause, the Board shall in the case of a meeting at which

resolution is to be proposed as a Special Resolution, be deemed not to have duly convened the

meeting if they do not give such notice thereof as is required by sub-section 189 of the Act.

(g) A meeting, called under clause (f) above, by the requisitionists or any of them:

(i) shall be called in the same manner, as nearly as possible, as that in which meetings are to be

called by the Board; but

(ii) shall not be held after the expiration of three months from the date of the deposit of the

requisition.

Explanation: Nothing in clause (g) (ii) above, shall be deemed to prevent a meeting duly

commenced before the expiry of the period of three months aforesaid, from adjourning to some

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day after the expiry of that period.

(h) Where two or more persons hold any shares or interest in the Company jointly, a requisition,

or a notice calling a meeting, signed by one or some of them shall, for the purposes of this

Article, have the same force and effect as if it had been signed by all of them.

(i) Any reasonable expenses incurred by the requisitionists by reason of the failure of the Board

duly to call a meeting shall be repaid to the requisitionists by the Company; and any sum so

repaid shall be retained by the Company out of any sums due or to become due from the

Company by way of fees or other remuneration for their services to such of the Directors as were

in default.

Length of notice for calling meeting 98. (a) A general meeting of the Company may be called by giving not less than twenty one days'

notice in writing.

(b) A general meeting of the Company may be called after giving shorter notice than that

specified in clause (a) above, if consent is accorded thereto;

(i) in the case of an annual general meeting by all the members entitled to vote thereat: and

(ii) in the case of any other meeting, by members of the Company holding not less than 95

(ninety five) per cent of such part of the paid up capital of the Company as gives a right to vote

at the meeting;

Provided that where any members of the Company are entitled to vote only on some resolution

or resolutions to be moved at the meeting and not on the others, those members shall be taken

into account for the purposes of this clause in respect of the former resolution or resolutions and

not in respect of the latter.

Contents and manner of service of notice and persons on whom it is to be served 99. (a) Every notice of a meeting of the Company shall specify the place and the day and hour of the

meeting and shall contain a statement of the business to be transacted thereat.

(b) Notice of every meeting of the Company shall be given:

(i) to every member of the Company, in any manner authorised by sub-sections (1) to (4)

of Section 53 of the Act;

(ii) to the persons entitled to a share in consequence of the death or insolvency of a member, by

sending it through the post in a prepaid letter addressed to them by name, or by the title or

representatives of the deceased or assignees of the insolvent, or by any like description, at the

address, if any, in India supplied for the purpose by the persons claiming to be so entitled, or

until such an address has been so supplied, by giving the notice in any manner in which it might

have been given if the death or insolvency had not occurred;

(iii) to the Auditor or Auditors for the time being of the Company in any manner authorised

by Section 53 of the Act in the case of any member of members of the Company and

(iv) to all the Directors of the Company

Provided that where the notice of a meeting is given by advertising the same in a newspaper circulating in the neighborhood of the registered office of the Company under sub-section (3) of

Section 53 of the Act, the statement of material facts referred to in Section 173 of the Act need

not be annexed to the notice as required by that Section but it shall be mentioned in the

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advertisement that the statement has been forwarded to the members of the Company.

(c) The accidental omission to give notice to, or the non-receipt of notice by any member or

other person to whom it should be given shall not invalidate the proceedings at the meeting.

Explanatory statement to be annexed to notice 100. (A) For the purpose of this Article :

(i) in the case of an annual general meeting, all business to be transacted at the meeting shall be

deemed special with the exception of business relating to

(a) the consideration of the accounts, balance sheet and the reports of the Board of Directors and

auditors.

(b) the declaration of a dividend;

(c) the appointment of Directors in the place of those retiring, and

(d) the appoint of and the fixing of the remuneration of the auditors, and

(ii) in the case of any other meetings, all business shall be deemed special.

(B) Where any items of business to be transacted at the meeting are deemed to be special as

aforesaid, there shall be annexed to the notice of the meeting a statement setting out all material

facts concerning each item of business including in particular the nature of the concern or interest, if any, therein of every Director, and the manager, if any. Provided that where any item

of special business as aforesaid to be transacted at a meeting of the Company relates, to or

affects, any other company, the extent of shareholding interest in that other Company of any

such person shall be set out in the circumstances specified in the provison to sub-section (2) of


(C) Where any item of business consists of the according of approval to any document by the meeting, the time and place where the documents can be inspected shall be specified in the

statement aforesaid.

Quorum for meeting 101. (a) Five members personally present shall be the quorum for a general meeting of the company.

If quorum not present meeting to be dissolved or adjourned (b) (i) If within half an hour from the time appointed for holding a meeting of the Company, a

quorum is not present, the meeting, if called upon by requisition of members, shall stand

dissolved.

(ii) In any other case, the meeting shall stand adjourned to the same day in the next week, at the

same time and place or to such other day and at such other time and place, as the Board may

determine.

Adjourned meeting to transact business (c) If at the adjourned meeting also, a quorum is not present within half an hour from the time

appointed for holding the meeting, the members present shall be the quorum.

Presence of quorum 102. (a) No business shall be transacted at any general meeting unless the requisite quorum be present

at the commencement of the business.

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Business confined to election of chairman whilest chair vacant (b) No business shall be discussed or transacted at any general meeting except the election of a

Chairman whilst the Chair is vacant.

Chairman of general meeting (c) (i) The Chairman of the Board of Directors shall be entitled to take the chair at every general

meeting. If there be no Chairman or if at any meeting he shall not be present within 15 (fifteen)

minutes after the time appointed for holding such meeting or is unwilling to act, the Directors

present may choose one of themselves to be the Chairman and in default of their doing so, the

members present shall choose one of the Directors to be Chairman and if no Directors present be

willing to take the chair, the members present shall choose one of themselves to be the

Chairman.

(ii) If at any meeting a quorum of members shall be present, and the Chair shall not be taken by

the Chairman or Vice Chairman of the Board or by a Director at the expiration of 15 (fifteen)

minutes from the time appointed for holding the meeting or if before the expiration of that time

all the Directors shall decline to take the Chair, the members present shall choose one of their

members to be the Chairman of the meeting.

Chairman with consent may adjourn the meeting (d) The Chairman with the consent of the meeting may adjourn any meeting from time to time

and from place to place in the city, town or village where the registered office of the Company is

situate.

Business at adjourned meeting (e) No business shall be transacted at any adjourned meeting other than the business which

might have been transacted at the meeting from which the adjournment took place.

Notice of adjourned meeting (f) When a meeting is adjourned only for thirty days or more, notice of the adjourned meeting

shall be given as in the case of original meeting.

In what cases poll taken with or without adjournment (g) Any poll duly demanded on the election of a Chairman of a meeting or any question of

adjournment shall be taken at the meeting forthwith, save as aforesaid, any business other than

that upon which a poll has been demanded may be proceeded with pending the taking of the

poll.

Proxies 103. (a) Any member of the Company entitled to attend and vote at a meeting of the Company shall

be entitled to appoint any other person (whether a member or not) as his proxy to attend and vote

instead of himself. A member (and in the case of joint holders all holders) shall not appoint more

than one person as proxy. A proxy so appointed shall not have any right to speak at the meeting.

Provided that unless where the proxy is appointed by a body corporate a proxy shall not be

entitled to vote except on a poll.

(b) In every notice calling a meeting of the Company there shall appear with reasonable

prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy to

attend and vote instead of himself, and that a proxy need not be a member.

(c) The instrument appointing a proxy or any other document necessary to show the validity or

otherwise relating to the appointment of a proxy shall be lodged with the Company not less than

48 (forty eight) hours before the meeting in order that the appointment may be effective thereat. (d) The instrument appointing a proxy shall :

(i) be in writing, and

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(ii) be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a

body corporate, be under its seal or be signed by an officer or an attorney duly authorised by it.

Form of proxy (e) Every instrument of proxy whether for a specified meeting or otherwise shall, as nearly as

circumstances will admit, be in usual common form.

(f) An instrument appointing a proxy, if in any of the forms set out in Schedule IX to the Act

shall not be questioned on the ground that it fails to comply with any special requirements

specified for such instrument by these Articles.

(g) Every member entitled to vote at a meeting of the Company, or on any resolution to be

moved thereat, shall be entitled during the period beginning 24 (twenty four) hours before the

time fixed for the commencement of the meeting and ending with the conclusion of the meeting,

to inspect the proxies lodged at any time during the business hours of the Company, provided

not less than 3 (three) days’ notice in writing of the intention so to inspect is given to the

Company.

VOTES OF MEMBERS

Restrictions on exercise of voting rights of members who have not paid calls 104. (a) No member shall exercise any voting right in respect of any shares registered in his name

on which any calls or other sums presently payable by him have not been paid or in regard to

which the Company has and has exercised any right of lien.

(b) Where the shares of the Company are held in trust, the voting power in respect of such shares

shall be regulated by the provisions of Section 187 B of the Act.

Restriction on exercise of voting right in other cases to be void 105. A member is not prohibited from exercising his voting right on the ground that he has not held

his share or other interest in the Company for any specified period preceding the date on which

the vote is taken, or on any other ground not being a ground set out in Article 104.

Equal rights of share holders 106. Any shareholder whose name is entered in the Register of members of the Company shall enjoy

the same rights and be subject to the same liabilities as all other shareholders of the same class.

Voting to be by show of hands in first instance 107. At any general meeting a resolution put to vote at the meeting shall unless a poll is demanded

under Section 179 of the Act be decided on a show of hands.

108. (a) Subject to the provisions of the Act, upon show of hands every member entitled to vote and

present in person shall have one vote, and upon a poll every member entitled to vote and present

in person or by proxy shall have one vote, for every share held by him.

No voting by proxy on show of hands (b) No member not personally present shall be entitled to vote on a show of hands unless such

member is a body corporate present by proxy or by a representative duly authorised under

Sections 187 or 187A of the Act, in which case such proxy or representative may vote on a show

of hands as if he were a member of the Company.

How members non compos minutes and minor may vote (c) A member of unsound mind or in respect of whom an order has been made by any court

having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll by his

committee or other legal guardian and any such committee or guardian may on poll vote by proxy; if any member be a minor the vote in respect of his share or shares shall be by his

guardians or any one of his guardians, if more than one, to be selected in case of dispute by the

Chairman of the meeting.

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Votes in respect of shares of deceased or insolvent members etc. (d) Subject to the provisions of the Act and other provisions of these Articles, any person entitled

under the transmission clause to any shares may vote at any general meeting in respect thereof as

if he was the registered holder of such shares, provided that at least 48 (forty eight) hours before the time of holding the meeting or adjourned meeting as the case may be at which he proposes to

vote, he shall satisfy the Directors of his right to such shares unless the Directors shall have

previously admitted his right to vote at such meeting in respect thereof.

Custody of Instrument (e) If any such instrument of appointment be confined to the object of appointing proxy or

substitute for voting at meetings of the Company, it shall remain permanently or for such time as

the Directors may determine in the custody of the Company; if embracing other objects a copy

thereof examined with the original, shall be delivered to the Company to remain in the custody

of the Company.

Validity of votes given by proxy notwithstanding death of members etc .

(f) A vote given in accordance with the terms of an instrument of proxy shall be valid

notwithstanding the previous death of the principal or revocation of the proxy or the transfer of

the share in respect of which the vote is given, provided that no intimation in writing of the

death, revocation or transfer shall have been received at the registered office of the Company

before the meeting.

Time for objections for vote (g) No objection shall be made to the validity of any vote except at the meeting or poll at which such vote shall be tendered and every vote whether given personally or by an agent or proxy or

representative not disallowed at such meeting or poll shall be deemed valid for all purpose of

such meeting or poll whatsoever.

Chairman of any meeting to be the judge of any vote (h) The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at

such meeting. The Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll.

Chairman's declaration of result of voting by show of hands to be conclusive 109. A declaration by the Chairman in pursuance of Section 177 of the Act that on a show of

hands,a resolution has or has not been carried, either unanimously or by a particular majority,

and an entry to that effect in the books containing the minutes of the proceedings of the

Company, shall be conclusive evidence of the fact, without proof of the number or proportion of

the votes cast in favour of or against such resolution.

Demand for poll 110. (a) Before or on the declaration of the result of the voting on any resolution of a show of hands,

a poll may be ordered to be taken by the Chairman of the meeting of his own motion and shall be

ordered to be taken by him on a demand made in that behalf by any member or members present

in person or by proxy and holding shares in the Company which confer a power to vote on the

resolution not being less than one-tenth of the total voting power in respect of the resolution or

on which an aggregate sum of not less than fifty thousand rupees has been paid up.

(b) The demand for a poll may be withdrawn at any time by the person or persons who made the

demand.

Time of taking poll 111. (a) A poll demanded on a question of adjournment shall be taken forthwith.

(b) A poll demanded on any other question (not being a question relating to the election of a

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Chairman which is provided for in Section 175 of the Act) shall be taken at such time not being

later than 48 (forty eight) hours from the time when the demand was made, as the Chairman may

direct.

Right of a member to use his votes differently 112. On a poll taken at a meeting of the Company a member or other person entitled to vote for him

as the case may be, need not, if he votes, use, all his votes or cast in the same way all the votes

he uses.

Scrutineers at poll 113. (a) Where a poll is to be taken, the Chairman of the meeting shall appoint two scrutineers to

scrutinise the votes given on the poll and to report thereon to him.

(b) The Chairman shall have power, at any time before the result of the poll is declared, to

remove a scrutineer from office and to fill vacancies in the office of scrutineer arising from such

removal or from any other cause.

(c) Of the two scrutineers appointed under this article, one shall always be a member (not being

an officer or employee of the Company) present at the meeting, provided such a member is

available and willing to be appointed.

Manner of taking poll and result thereof 114. (a) Subject to the provisions of the Act, the Chairman of the meeting shall have power to

regulate the manner in which a poll shall be taken.

(b) The result of the poll shall be deemed to be the decision of the meeting on the resolution on

which the poll was taken.

Casting Vote 115. In the case of an equality of votes, whether on a show of hands or on a poll, the Chairman of the

meeting at which the show of hands takes place or at which the polls is demanded shall be

entitled to a casting vote in addition to his own vote or votes to which he may be entitled as a

member.

Representation of Body Corporate 116. A body corporate (whether a Company within the meaning of the Act or not) if it is a member

or creditor (including a holder of debentures) of the Company may in accordance with the

provisions of Section 187 of the Act authorise such person by a resolution of its Board of

Directors as it thinks fit, to act as its representative at any meeting of the Company or of any

class of members of the Company or at any meeting of creditors of the Company.

Representation of the President of India or Governors 117. (a) The President of India or the Governor of a State if he is a member of the Company may

appoint such person as he thinks fit to act as his representative at any meeting of the Company or

at any meeting of any class of members of the Company in accordance with provisions of

Section 187A of the Act or any other statutory provision governing the same.

(b) A person appointed to act as aforesaid shall for the purposes of the Act be deemed to be a

member of such a Company and shall be entitled to exercise the same rights and powers

(including the right to vote by proxy) as the President or as the case may be the Governor could

exercise, as a member of the Company.

Public Trustee (c) The Company shall observe the provisions of Section 187B of the Act, in regard to the Public

Trustee.

Circulation of member's resolution 118. The Company shall comply with provisions of Section 188 of the Act, relating to circulation of

member’s resolutions.

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Resolution requiring special notice 119. The Company shall comply with provisions of Section 190 of the Act relating to resolution

requiring special notice.

Resolutions passed at adjourned meeting 120. The provisions of Section 191 of the Act shall apply to resolutions passed at an adjourned

meeting of the Company, or of the holders of any class of shares in the Company and of the

Board of Directors of the Company and the resolutions shall be deemed for all purposes as

having been passed on the date on which in fact they were passed and shall not be deemed to

have been passed on any earlier date

.

Registration of resolutions and agreements 121. The Company shall comply with the provisions of Section 192 of the Act relating to registration

of certain resolutions and agreements.

Minutes of proceedings of general meeting and of Board and other meetings.

122. (a) The Company shall cause minutes of all proceedings of general meetings, and of all

proceedings of every meeting of its Board of Directors or of every Committee of the Board to be

kept by making within thirty days of the conclusion of every such meeting concerned, entries

thereof in books kept for that purpose with their pages consecutively numbered.

(b) Each page of every such book shall be initialled or signed and the last page of the record of

proceedings of each meeting in such books shall be dated and signed:

(i) in the case of minutes of proceedings of the Board or of a Committee thereof by the Chairman

of the said meeting or the Chairman of the next succeeding meeting.

(ii) in the case of minutes of proceedings of the general meeting by Chairman of the said meeting within the aforesaid period, of thirty days or in the event of the death or inability of that

Chairman within that period, by a Director duly authorised by the Board for the purpose.

(c) In no case the minutes of proceedings of a meeting shall be attached to any such book as

aforesaid by pasting or otherwise.

(d) The minutes of each meeting shall contain a fair and correct summary of the proceedings

thereat. (e) All appointments of officers made at any of the meetings aforesaid shall be included in the

minutes of the meeting.

(f) In the case of a meeting of the Board of Directors or of a Committee of the Board, the

minutes shall also contain:

(i) the names of the Directors present at the meetings, and

(ii) in the case of each resolution passed at the meeting, the names of the Directors, if any

dissenting from or not concurring in the resolution.

(g) Nothing contained in Clauses (a) to (d) hereof shall be deemed to require the inclusion in any

such minutes of any matter which in the opinion of the Chairman of the meeting:

(i) is or could reasonably be regarded, as defamatory of any person

(ii) is irrelevant or immaterial to the proceedings; or

(iii) is detrimental to the interests of the Company.

The Chairman shall exercise an absolute discretion in regard to the inclusion or non-inclusion of

any matter in the minutes on the grounds specified in this clause.

Minutes to be considered to be evidence (h) The minutes of meetings kept in accordance with the provisions of Section 193 of the Act

shall be evidence of the proceedings recorded therein.

Presumptions to be drawn where minutes duly drawn and signed 123. Where minutes of the proceedings of any general meeting of the Company or of any meeting of

its Board of Directors or of a Committee of the Board have been kept in accordance with the

provisions of Section 193 of the Act then, until the contrary is proved, the meeting shall be

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deemed to have been duly called and held, and all proceedings thereat to have duly taken place

and in particular all appointments of Directors or Liquidators made at the meeting shall be

deemed to be valid and the minutes shall be evidence of the proceedings recorded therein.

Inspection of Minutes Books of General Meetings 124. (a) The books containing the minutes of the proceedings of any general meeting of the Company

shall;

(i) be kept at the registered office of the Company, and

(ii) be open, during the business hours to the inspection of any member without charge subject

such reasonable restrictions as the Company may, in general meeting impose so however that

not less than two hours in each day are allowed for inspection.

(b) Any member shall be entitled to be furnished, within seven days after he has made a request

in that behalf of the Company, with a copy of any minutes referred to in Clause (a) above, on

payment of thirty seven paise for every one hundred words or fractional part thereof required to

be copied.

Publication of reports of proceeding of general meetings 125. N o document purporting to be a report of the proceedings of any general meeting of the

Company shall be circulated or advertised at the expenses of the Company unless it includes the

matters required by Section 193 of the Act to be contained in the Minutes of the proceedings of

such meeting.

MANAGERIAL PERSONNEL

Managerial Personnel 126. The Company shall duly observe the provisions of Section 197A of the Act regarding

prohibition of simultaneous appointment of different categories of managerial personnel therein

referred to.

BOARD OF DIRECTORS

Board of Directors 127. Unless otherwise determined by the Company in General Meeting the number of Directors shall

not be less than three and not more than twelve.

The First Directors of the Company shall be:

1. Mr.Jitendra Bhailal Patel

2. Mr. JayendraB. Patel (Permenent Director)

3. Mr. Girish Maneklal Shah

4. Mr. Amit R. Mankiwala

5. Mrs. Rita Jayendra Patel

Appointment of Senior Executives as Wholetime Directors 128. (a) Subject to the provisions of the Act and within the overall limit prescribed under these

Articles for the number of Directors on the Board, the Board may appoint any Senior Executive

of the Company as a Wholetime Director of the Company for such period and upon such terms

and conditions as the Board may decide. The Senior Executive so appointed shall be governed

by the following provisions:

(i) He shall be liable to retire by rotation as provided in the Act but shall be eligible for

reappointment. His reappointment as a Director shall not constitute a break in his appointment as

Wholetime Director. (ii) He shall be reckoned as Director for the purpose of determining and fixing the number of

Directors to retire by rotation.

(iii) He shall cease to be a Director of the Company on the happening of any event specified in

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Sections 283 and 314(2C) of the Act. He shall cease to be a Director of the Company, if for any

reason whatsoever, he ceases to hold the position of Senior Executive in the Company or ceases

to be in the employment of the Company.

(iv) Subject to what is stated hereinabove he shall carry out and perform all such duties and

responsibilities as may, from time to time, be conferred upon or entrusted to him by the Managing Director/s and/or the Board, shall exercise such powers and authorities subject to such

restrictions and conditions and/or stipulations as the Managing Director/s and/ or the Board may,

from time to time determine.

(b) Nothing contained in this Article shall be deemed to restrict or prevent the right of the Board

to revoke, withdraw, alter, vary or modify all or any of such powers, authorities, duties and

responsibilities conferred upon or vested in or entrusted to such wholetime directors.

Debenture Director

129. Any Trust Deed for securing debentures or debenture stocks, may, if so arranged, provide for the

appointment, from time to time by the Trustees thereof or by the holders of debentures or

debenture stocks, of some person or persons to be a Director or Directors of the Company and

may empower such Trustees or holders of debentures or debenture stocks from time to time, to

remove and reappoint any Director/s so appointed. The Director/s so appointed under this Article

is herein referred to as “Debenture Director” and the term “Debenture Director” means the

Director for the time being in office under this Article. The Debenture Director(s) shall not be

bound to hold any qualification shares and shall not be liable to retire by rotation or be removed

by the Company. The Trust Deed may contain such ancillary provisions as may be arranged

between the Company and the Trustees and all such provisions shall have effect notwithstanding

any of the other provisions herein contained.

Nominee Director 130. Notwithstanding anything to the contrary contained in these Articles, so long as any moneys

remain owing by the Company to the Industrial Development Bank of India (IDBI), The

Industrial Credit and Investment Corporation of India Ltd. (ICICI), Industrial Finance

Corporation of India (IFCI) and Life Insurance Corporation of India (LIC) or to any other

Finance Corporation or Credit Corporation or to any other Finance Company or Body out of any loans granted by them to the Company or so long as IDBI, IFCI, ICICI, LIC and Unit Trust of

India (UTI) or any other Financing Corporation or Credit Corporation or any other Financing

Company or Body (each of which IDBI, IFCI, ICICI, LIC and UTI or any other Finance

Corporation or Credit Corporation or any other Financing Company or Body is hereinafter in

this Article referred to as “the Corporation”) continue to hold debentures in the Company as a

result of underwriting or by direct subscription or private placement, or so long as the

Corporation holds shares in the Company as a result of underwriting or direct subscription or so

long as any liability of the Company arising out of any guarantee furnished by the Corporation

on behalf of the Company remains outstanding, the Corporation shall have a right to appoint

from time to time any person or persons as a Director or Directors wholetime or non-wholetime

(which) Director or Directors is/are hereinafter referred to as “Nominee Director/s”) on the

Board of the Company and to remove from such office any person or persons so appointed and

to appoint any person or persons in his or their place/s. The Board of Directors of the Company

shall have no power to remove from office the Nominee Director/s. At the option of the

Corporation such Nominee Director/s shall not be required to hold any share qualification in the

Company. Also at the option of the Corporation such Nominee Director/s shall not be liable to

retirement by rotation of Directors. Subject as aforesaid, the Nominee Director/s shall be entitled

to the same rights and privileges and be subject to the same obligations as any other Director of

the Company. The Nominee Director/s so appointed shall hold the said office only so long as

any money remain owing by the Company to the Corporation or so long as the Corporation holds debentures in the Company as a result of direct subscription or private placement or so

long as the Corporation holds shares in the Company as a result of underwriting or direct

subscription or the liability of the Company arising out of any guarantee is outstanding and the

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Nominee Director/s so appointed in exercise of the said power shall ipso facto vacate such office

immediately the moneys owing by the Company to the Corporation is paid off or on the

Corporation ceasing to hold debentures/shares in the Company or on the satisfaction of the

liability of the Company arising out of any guarantee furnished by the Corporation.

The Nominee Director/s appointed under this Article shall be entitled to receive all notices of

and attend all General Meetings, Board Meetings and of the Meetings of the Committee of

which the Nominee Director's is/are member/s as also the minutes of such meetings. The

Corporation shall also be entitled to receive all such notices and minutes. The Company shall

pay to the Nominee Director/s sitting fees and expenses which the other Directors of the

Company are entitled but if any other fees, commission, monies or remuneration in any form is

payable to the Directors of the Company, the fees, commission, monies and remuneration in

relation to such Nominee Director/s shall accrue to the Corporation and same shall accordingly

be paid by the Company directly to the Corporation. Any expenses that may be incurred by the

Corporation or by such Nominee Director/s in connection with their appointment or

Directorship, shall also be paid or reimbursed by the Company to the Corporation or as the case

may be to such Nominee Director/s.

Provided that if any such Nominee Director/s is an officer of the Corporation the sitting fee in

relation to such Nominee Director/s shall also accrue to the Corporation and the same shall

accordingly be paid by the Company directly to the Corporation.

Provided further that if such Nominee Director/s is an officer of the Reserve Bank of India the

sitting fees in relation to such Nominee Director/s shall also accrue to IDBI and the same shall

accordingly be paid by the Company directly to IDBI.

Provided also that in the event of the Nominee Director/s being appointed as Wholetime

Director/s such Nominee Director/s shall exercise such powers and duties as may be approved

by the Lenders and have such rights as are usually exercised or available to a wholetime Director

in the management of the affairs of the Borrower. Such Nominee Director/s shall be entitled to

receive such remuneration, fees, commission and monies as may be approved by the Lenders.

Special Director 131. (a) In connection with any collaboration arrangement with any company or corporation or firm

or person for supply of technical know-how and/or machinery or technical advice, the Directors

may authorise such Company, Corporation, firm or person (hereinafter in this clause referred to

as “Collaborator”) to appoint from time to time any person or persons as Director or Directors of

the Company (hereinafter referred to as “Special Director”) and may agree that such Special

Director shall not be liable to retire by rotation and need not possess any qualification shares to

qualify him for the office of such Director, so however, that such Special Director shall hold

office so long as such collaboration arrangement remains in force unless otherwise agreed upon

between the Company and such Collaborator under the collaboration arrangements or at any

time thereafter.

(b) The collaborator may at any time and from time to time remove any such Special Director

appointed by it and may at the time of such removal and also in the case of death or resignation

of the person so appointed, at any time, appoint any other person as a Special Director in his

place and such appointment or removal shall be made in writing signed by such company or

corporation or any partner or such person and shall be delivered to the Company at its registered

office.

(c) It is clarified that every collaborator entitled to appoint a Director under this Article may appoint

one or more such person or persons as a Director(s) and so that if more than one Collaborator is

so entitled there may at any time be as many Special Directors as the Collaborators eligible to make the appointment.

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132. Subject to the provisions of Section 255 of the Act, the number of Directors appointed under

Articles 130 and 131 shall not exceed in the aggregate one-third of the total number of Directors

for the time being in office.

Appointment of Alternate Director 133. (a) The Board of Directors of the Company may appoint an alternate Director to act for a

Director (hereinafter in this Article called “the Original Director”) during his absence for a

period of not less than three months from the State in which meetings of the Board are ordinarily

held.

(b) An alternate Director appointed under this Article shall not hold office as such for a period

longer than that permissible to the Original Director in whose place he has been appointed and

shall vacate office if and when the Original Director returns to the State in which meeting of the

Board are ordinarily held.

(c) If the term of office of the Original Director is determined before he returns to the State

aforesaid any provision for the automatic reappointment of retiring directors in default of another

appointment shall apply to the original and not to the alternate director.

Appointment of Additional Directors 134. Subject to the provisions of Section 260 of the Act, the Board of Directors shall have power at

any time to appoint any person as an additional Director to the Board, but so that the total

number of Directors shall not exceed the maximum number fixed by these Articles. Any

Director so appointed shall hold the office only upto the next annual general meeting of the

Company and shall then be eligible for re-appointment.

Appointment of Director to fill the casual vacancy 135. (a) Subject to the provisions of Section 262 of the Act, if the office of any Director appointed by

the Company in general meeting is vacated before his term of office expires in the normal

course, the resulting casual vacancy may in default of and subject to any regulation in the

Articles of the Company be filled by the Board of Directors at the meeting of the Board and the

Director so appointed shall hold office only up to the date up to which the Director in whose

place he is appointed would have held office if it had not been vacated as aforesaid but he shall then be eligible for re-election.

Individual Resolution for Directors appointment (b)At a general meeting of the Company a motion shall not be made for the appointment of two or

more persons as Director of the Company by a single resolution unless a resolution that it shall

be so made has first been agreed to by the meeting without any vote being given against it.

Resolution moved in contravention of this Article shall be void whether or not objection was

taken at the time of its being so moved. Provided that where a resolution so moved is passed no

provision for the automatic reappointment of retiring director by virtue of these Articles and the

Act in default of another appointment shall apply.

Appointment of Chairman 136. The directors may from time to time elect among themselves a chairman of the Board and

determine the period for which he is to hold office if at any meeting of the Board, the chairman

is not present within fifteen minutes after the time appointed for holding the same, the directors

present may choose one of their members to be chairman of the meeting.

Qualification of Director 137. A Director need not hold any shares in the Company to qualify him for the office of a Director

of the Company.

Remuneration of Directors 138. (a) Subject to the provisions of the Act, a Managing Director or a Director who is in the

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wholetime employment of the Company may be paid remuneration either by way of a monthly

payment or at a specified percentage of the net profits of the Company or partly by one way and

partly by the other.

(b)Subject to the provisions of the Act, a Director, who is neither in the wholetime employment nor a Managing Director may be paid remuneration either :

(i)by way of monthly, quarterly or annual payment with the approval of the Central Government,

or

(ii) by way of commission if the Company by a special resolution has authorised such payment.

(c) The fee payable to Directors (other than Managing or Wholetime Director, if any) for

attending each meeting of the Board or Committee thereof shall be such sum as may be

prescribed by the Act or the Central Government from time to time.

Travelling and other expenses 139. The Board may allow and pay to any Director for the purpose of attending a meeting such sum

either as fixed allowance and/or actual as the Board may consider fair compensation for

travelling, board and lodging and incidental and/or such actual out of pocket expenses incurred

by such Director in addition to his fees, for attending such meeting to and from the place at

which the meetings of the Board or Committees thereof or general meetings of the Company are

held from time to time or any other place at which the Director executes his duties.

Remuneration for extra services 140. If any Director, being willing shall be called upon to perform extra services or to take any

special exertions for any of the purposes of the Company and in that event the Company may,

subject to the provisions of the Act, remunerate such Director either by a fixed sum or by a percentage of profit or otherwise, as may be determined by the Directors but not exceeding that

permitted under Section 309 of the Act and such remuneration may be either in addition to or in

substitution for his share in the remuneration above provided.

Increase in remuneration of Directors 141. (a) Any provision relating to the remuneration of any Director including a Managing or Joint

Managing or Wholetime Director or any amendment thereof, which purports to increase or has

the effect of increasing, whether directly or indirectly, the amount thereof, whether that

provision is contained in the Company’s Memorandum or its Articles, or in an agreement

entered into by it, or any resolution, passed by the Company in general meeting or by the Board

of Directors, shall require the approval of the Central Government unless it is in accordance with

Sections 198, 269, 309,310, 311 Schedule XIII and other applicable provisions of the Companies

Act, 1956, and their amendment from time to time.

Increase in remuneration of Managing Director on re-appointment or appointment (b) If the terms of any re-appointment of a Managing or Joint Managing or Wholetime Director,

purport to increase or have the effect of increasing, whether directly or indirectly, the

remuneration which the Managing or Joint Managing or Wholetime Director, as the case may be

was receiving immediately before such reappointment or appointment shall require the approval

of the Central Government unless they are in accordance with Sections 198, 269, 309, 310, 311

Schedule XIII and other applicable provisions of the Companies Act, 1956, and their amendment

from time to time.

Directors not to act when number falls below minimum 142. When the number of Directors in Office falls below the minimum above fixed, the Directors,

shall not act except in emergencies or for the purpose of filling up vacancies or for summoning a

general meeting of the Company and so long as the number is below the minimum they may so act notwithstanding the absence of the necessary quorum.

Eligibility

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143. A person shall not be capable of being appointed a Director if he has the disqualifications

referred to in Section 274 of the Act.

Directors vacating office 144. (a) The Office of a Director shall become vacant if:

(i) he is found to be of unsound mind by a Court of competent jurisdiction;

(ii) he applies to be adjudicated an insolvent;

(iii) he is adjudged an insolvent;

(iv) he is convicted b y a Court, o f any offence involving moral turpitude and sentenced in

respect thereof to imprisonment for not less than six months;

(v) he fails to pay any call in respect of shares of the Company held by him, whether alone

or jointly with others, within six months from the last date fixed for the payment of the

call unless the Central Government by Notification in the Official Gazette removes the

disqualification incurred by such failure;

(vi) he absents himself from three consecutive meetings of the Board of Directors, or from

all meetings of the Board of Directors for a continuous period of three months,

whichever is longer, without obtaining leave of absence from the Board;

(vii) he, whether by himself or by any person for his benefit or on his account or any firm in

which he is a partner or any private company of which he is a director, accepts a loan or

any guarantee or security for a loan, from the Company in contravention of Section 295

of the Act;

(viii) he acts in contravention of Section 299 of the Act;

(ix) he becomes disqualified by an order of court under Section 203 of the Act;

(x) he is removed in pursuance of Section 284 of the Act; (xi) having been appointed a Director by virtue of his holding any office or other

employment in the Company, he ceases to hold such office or other employment in the

Company;

(xii) he resigns his office by notice in writing given to the Company.

(b) Notwithstanding anything in sub-clauses (iii),(iv) and (v) of clause (a) above, the

disqualifications referred to in these sub-clauses shall not take effect; (i) for thirty days from the date of the adjudication, sentence or order;

(ii) where any appeal or petition is preferred within the thirty days aforesaid against the

adjudication, sentence or conviction resulting in the sentence or order until the expiry of

seven days from the date on which such appeal or petition is disposed off, or

(iii) where within the seven days aforesaid, any further appeal, or petition is preferred in

respect of the adjudication, sentence, conviction or order and the appeal or petition, if

allowed, would result in the removal of the disqualification, until such further appeal or

petition is disposed off.

Removal of Directors 145. (a) The Company may (subject to the provisions of Section 284 and other applicable provisions

of the Act and these Articles) remove any director other than ex-officio directors or special

directors or debenture directors or a nominee director or a director appointed by the Central

Government in pursuance of Section 408 of the Act, before the expiry of his period of office.

(b) Special notice as provided by Section 190 of the Act shall be required of any resolution to

remove a Director under this Article or to appoint some other person in place of a Director so

removed at the meeting at which he is removed.

(c) On receipt of notice of a resolution to remove a Director under this Article, the Company

shall forthwith send a copy thereof to the Director concerned and the Director (whether or not he

is a member of the Company) shall be entitled to be heard on the resolution at the meeting. (d) Where notice is given of a resolution to remove a Director under this Article and the Director

concerned makes with respect thereto representations in writing to the Company (not exceeding

a reasonable length) and requests their notification to members of the Company, the Company

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shall unless the representations are received by it too late for it do so,

(i) in the notice of the resolution given to members of the Company state the fact of the

representations having been made, and

(ii) send a copy of the representation to every member of the Company to whom notice of the

meeting is sent (whether before or after receipt of the representations by the Company) and if a copy of the representations, is not sent as aforesaid because they were received too late or

because of the Company’s default, the Director may (without prejudice to his right to be heard

orally) require that the representations be read out at the meeting, provided that copies of the

representations need not be sent or read out at the meeting if so directed by the Court.

(e) A vacancy created by the removal of a Director under this Article may, if he had been

appointed in pursuance of Section 262 of the Act be filled by the appointment of another

Director in his stead by the meeting at which he is removed, provided special notice of the

intended appointment has been given under clause (b) hereof. A Director so appointed shall hold

office until the date upto which his predecessor would have held office if he had not been

removed as aforesaid.

(f) If the vacancy is not filled under clause (e), it may be filled as a casual vacancy in accordance

with the provisions, in so far as they may be applicable, of Section 262 of the Act, and all the

provisions of that Section shall apply accordingly; Provided that the Director who was removed

from office under this Article shall not be re-appointed as a Director by the Board of Directors.

(g) Nothing contained in this Article shall be taken:

(i) as depriving a person removed thereunder of any compensation or damages payable to him in

respect of the termination of his appointment as Director or of any appointment terminating with

that as director; or

(ii) as derogating from any power to remove a Director which may exist apart from this Article.

Directors may contract with Company

146. (a)Subject to the restrictions imposed by these Articles and by Sections 292, 293, 294, 295, 297,

300, 311, 370 and 373 and any other provisions of the Act, no Director, Managing Director, or

other Officer or employee of the Company shall be disqualified from holding his office by

contracting with the Company either as vendor, purchaser, agent, broker or otherwise, nor shall

any such contract or arrangement entered into by or on behalf of the Company in which any

Director, Managing Director, Joint Managing Director, Executive Director other officer or employee shall be in any way interested, be avoided, nor shall the Director, Managing Director

or any officer or employee so contracting or being so interested be liable to account to the

Company for any profit realised by any such contract or arrangement by reason only of such

Director, Managing Director, Officer or employee holding that office or of the fiduciary relation

thereby established, but the nature of his or their interest must be disclosed by him or them in

accordance with the provisions of Section 299 of the Act where that section be applicable.

(b) In accordance with Section 300 of the Act, no Director shall, as a Director, vote or take part

in any discussion in respect of any contract or arrangement in which he is interested and if he

does so vote, his vote shall be void nor shall his presence count for the purpose of forming the

quorum at the time of any such discussion or vote. Provided that the above prohibition or

restriction shall not apply to the extent or under the circumstances mentioned in sub-section (2)

of Section 300 of the Act.

(c) A General notice such as is referred to in sub-section (3) of Section 299 of the Act shall be

sufficient disclosure under this Article as provided in that Section.

Directors may be directors of companies promoted by the company 147. A Director, Managing Director, Officer or employee of the Company may be, or become a

director, of any Company promoted by the Company or in which it may be interested as a

vendor, member or otherwise, and no such director shall be accountable for any benefits received as director or member of such company except to the extent and under the

circumstances as may be provided in the Act.

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Duty of Directors etc. to make disclosure

148. (a) Every Director (including a person deemed to be a Director by virtue of the explanation to

sub- section (1) of Section 303 of the Act), Managing Director, Manager or Secretary of the

Company, who is appointed to or relinquishes the office of Director, Managing Director, Manager or Secretary of any other body corporate shall, within twenty days of his appointment

or relinquishment of such office, as the case may be, disclose to the Company aforesaid the

particulars relating to the office in the other body corporate which are required to be specified

under sub-section (1) of Section 303 of the Act.

(b) Every Director of the Company and every person deemed to be a Director of the Company

by virtue of sub-section (10) of Section 307 of the Act and every other person referred to in sub-

section (11) of Section 307 of the Act, shall give notice to the Company of such matters as may

be necessary for the purpose of enabling the Company to comply with the provisions of that

Section and Section 308 of the Act.

Directors etc. not to hold office or place of profit 149. The provisions of Section 314 of the Act shall be complied with when applicable in regard to

holding of office or place of profit under the Company or under any subsidiary of the Company

by any person mentioned in the said section. The words office or place of profit shall have the

meaning assigned to them by Section 314 of the Act.

Loans to Directors 150. The Company shall observe the restrictions imposed on the Company in regard to granting of

loans to Directors and other persons as provided in Section 295 and other applicable provisions, if any of the Act.

Appointment of Sole Selling Agents 151. (a) The appointment, re-appointment and extension of the term of a Sole Selling Agent, shall be

regulated in accordance with the provisions of Section 294 of the Act and any rules or

Notifications issued by competent authority in accordance with that section and the Directors

and/or the Company in general meeting may make the appointment, re-appointment or extension of the term of office in accordance with and subject to the provisions of the said Section and

such Rules or Notification, if any as may be applicable.

(b) The payment of any compensation to a Sole Selling Agent shall be subject to the provisions

under Section 294A of the Act.

Board resolution at a meeting necessary for certain contract 152. (a) Except with the consent of the Board of Directors of the Company and with the previous

approval of the Central Government a Director of the Company or his relative, a firm in which

such a Director or relative is a partner, any other partner in such a firm, or a private company of

which the Director is a member or director, shall not enter into any contract with the Company;

(i) for the sale, purchase or supply of any goods materials or services, or

(ii) for underwriting the subscription of any shares in, or debentures of the Company.

(b) Nothing contained in the foregoing sub-clause (a) shall affect:

(i) the purchase of goods and materials from the Company or the sale of goods and materials to

the Company, by any Director, relative, firm, partner or private company as aforesaid for cash at

prevailing market prices; or

(ii) any contract or contracts between the Company on one side and any such Director, relative,

firm, partner or private company on the other side for sale, purchase, or supply of any goods,

materials and services in which either the Company or the Director, relative, firm, partner or

private company as the case may be, regularly trades or does business:

Provided that such contract or contracts do not relate to goods and materials the value of which,

or service cost of which, exceeds five thousand rupees in the aggregate in any year comprised in

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the period of the contract or contracts.

(c) Notwithstanding anything contained in the foregoing sub-clause (a) and (b) a Director,

relative, firm, partner of private company as aforesaid, may in circumstances of urgent necessity,

enter, without obtaining the consent of the Board, into any contract with the Company for the sale, purchase or supply of any goods, materials or services even if the value of such goods,

materials or services exceeds five thousand rupees in the aggregate in any year comprised in the

period of the contract; but in such a case, the consent of the Board shall be obtained at a meeting

within three months of the date on which the contract was entered into.

(d) Every consent of the Board required under this clause shall be accorded by a resolution

passed at a meeting of the Board and not otherwise; and the consent of the Board required under

sub-clause (a) above shall not be deemed to have been given within the meaning of that sub-

clause unless the consent is accorded before the contract is entered into or within three months of

the date on which it was entered into.

(e) If consent is not accorded to any contract under this clause, anything done in pursuance of

the contract shall be voidable at the option of the Board.

(f) The Directors, so contracting or being so interested shall not be liable to the Company for

any profit realised by any such contract or the fiduciary relation thereby established.

(g) The Company shall also comply with such other provision of Section 297 of the Act, as may

be applicable.

ROTATION OF DIRECTORS

Rotation of Directors 153. Not less than two thirds of the total number of Directors shall

(a) be persons whose period of office is liable to determination by retirement of Directors by

rotation, and

(b) save as otherwise expressly provided in the Act, be appointed by the Company in general meeting. The remaining Directors shall, in default of and subject to any regulations in the

Articles of the Company, also be appointed by the Company, in general meeting.

Ascertainment of Directors retiring by rotation and filling up vacancies 154. (a) At every annual general meeting one-third of such of the Directors for the time being as are

liable to retire by rotation, or if their number is not three or a multiple of three, then the number

nearer to one-third, shall retire from office.

(b) The Directors to retire by rotation at every annual general meeting shall be those who have

been longest in office since their last appointment, but as between persons who became

Directors non the same day, those who are to retire shall, in default of and subject to any

agreement amongst themselves, be determined by lot.

(c) At the annual general meeting at which a Director retires as aforesaid, the Company may fill

up the vacancy by appointing the retiring Director or some other person thereto.

(d) (i) If the place of the retiring Director is not so filled up and that meeting has not expressly

resolved not to fill the vacancy, the meeting shall stand adjourned till the same day in the next

week, at the same time and place, or if that day is a public holiday, till the succeeding day which

is not a public holiday, at the same time and place.

(ii) If at the adjourned meeting also, the place of the retiring Director is not filled up and that meeting also has not expressly resolved not to fill the vacancy, the retiring Director shall be

deemed to have been re-appointed at the adjourned meeting, unless

(1) at that meeting or at the previous meeting a resolution for the re-appointment of such

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Director has been put to the meeting and lost;

(2) the retiring Director has, by a notice in writing addressed to the Company or its Board of

Directors, expressed his unwillingness to be so re-appointed;

(3) he is not qualified or is disqualified for appointment;

(4) a resolution, whether special or ordinary, is required for his appointment or reappointment in virtue of any provisions of the Act; or

(e) The proviso to sub-section (2) of Section 263 of the Act is applicable to the case Explanation:

In this Article and Article 156 the expression ‘Retiring Director’ means Director retiring by

rotation.

Right of persons other than retiring Directors to stand for Directorship 155. (a) A person who is not a retiring Director shall, in accordance with Section 257 of the Act and

subject to the provisions of the Act, be eligible for appointment to the office of Director at any

general meeting if he or some member or members intending to propose him has, not less than

fourteen days before the meeting, left at the registered office of the Company a notice in writing

under his hand signifying his candidature for the office of director or the intention of such

member or members to propose him as a candidate for that office, as the case may be alongwith

a deposit of such sum as may be prescribed by the Act, or the central government from time to

time which shall be refunded to such person or, as the case may be, to such member, if the

person succeeds in getting elected as a Director.

(b) The Company shall inform its members of the candidature of a person for the office of

director or the intention of a member(s) to propose a person as a candidate for that office by

serving individual notices on the members not less than seven days before the meeting in the

manner provided under Section 257 of the Act.

Consent of candidate for Directorship to be filed with the Registrar 156. Every person who is proposed as a candidate for the office of Director of the Company shall sign

and file with the Company and with the Registrar, his consent in writing to act as a Director, if

appointed, in accordance with the provisions of Section 264 of the Act in so far as they may be

applicable.

PROCEEDINGS OF DIRECTORS

Meeting of Directors 157. The Directors may meet together as a Board for the despatch of business from time to time and

shall so meet at least once in every three months and at least four such meetings shall be held in

every year and they may adjourn and otherwise regulate their meetings and proceedings as they

deem fit. The provisions of this Article shall not be deemed to be contravened merely by reason

of the fact that meetings of the Board, which had been called in compliance with the terms

herein mentioned could not be held for want of quorum.

When meeting to be convened 158. Any Director of the Company may and the Manager or Secretary on the requisition of a Director

shall, at any time, summon a meeting of the Board.

Directors entitled to notice 159. Notice of every meeting of the Board of the Company shall be given in writing to every Director

for the time being in India and at his usual address in India.

Questions at Board meeting how decided 160. Question arising at any time at a meeting of the Board shall be decided by majority of votes and

in case of equality of votes, the Chairman, in his absence the Vice Chairman or the Director

presiding shall have a second or casting vote.

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Who to preside at meetings of the Board 161. (a) The Directors may elect a Chairman of their meetings and determine the period for which he

is to hold office. The Directors may also appoint a Vice Chairman of the Board of Directors to

preside at the meetings of the Board of Directors at which the Chairman shall not be present and determine the period for which he is to hold office.

(b) All the meetings of the Directors shall be presided over by the Chairman, if present, but if at

any meeting of Directors the Chairman be not present at the time appointed for holding the

same, the Vice Chairman, if present, shall preside and if he be not present at such time then and

in that case the Directors shall choose one of the Directors then present to preside at the meeting.

Quorum at Board Meeting

162. (a) The quorum at a meeting of the Directors shall be as prescribed by Section 287 of the Act.

Quorum competent to exercise power (b) A meeting of the Directors for the time being at which a quorum is present shall be

competent to exercise all or any of the authorities, powers and discretions by or under the

regulations or the Articles of the Company for the time being vested in or exercisable by the

Directors generally.

Procedure in case of want of quorum (c) If a meeting of the Board could not be held for want of quorum, then the meeting shall

automatically stand adjourned till the same day in the next week, at the same time and place, or

if that day is a Public Holiday, till the next succeeding day which is not a public holiday, at the

same time and place.

Directors may appoint committee 163. Subject to the provisions of Section 292 and other provisions of the Act and Article 165 the

Directors may delegate all or any of their powers to committees consisting of such member or

members of their body as they think fit, and they may, from time to time revoke and discharge any

such Committee either wholly or in part, and either as to persons or purposes, but every

Committee so formed shall in the exercise of the powers so delegated, conform to any regulations that may from time to time be imposed on it by the Directors. All acts done by any such

Committee in conformity with such regulations and in fulfilment of the purposes of their

appointments but not otherwise, shall have the like force and effect as if done by the Board.

Subject to the provisions of the Act the Board may from time to time fix the remuneration to be

paid to any member or members of that body constituting a Committee appointed by the Board in

terms of these Articles, and may pay the same.

Resolution by circular 164. Subject to the provisions of Section 289 of the Act, a resolution passed without any meeting of

Directors, or of a Committee of Directors appointed under these Articles and evidenced by

writing under the hands of all the Directors or members of such Committee as aforesaid, for the

time being in India, be as valid and effectual as a resolution duly passed at a meeting of the

Directors or of such committee called and held in accordance with the provisions of these

Articles.

Provided that the resolution has been circulated in draft, together with the necessary papers, if

any, to such Directors, or members of the Committee, then in India (not being less in number

than the quorum fixed for a meeting of the Board or the Committee as the case may be) and all

other Directors or members at their usual address in India and has been approved by such

Directors as are then in India or by majority of such of them, as are entitled to vote on the resolution.

Limit of Directors' numbers

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165. Subject to the provisions of Sections 252, 255 and 259 of the Act, the Company in general

meeting may, by ordinary resolution, increase or reduce the number of Directors within the

limits fixed in that behalf by these Articles.

Acts of Board or Committee valid notwithstanding defect of appointment 166. All acts done by any meeting of the Directors or by a Committee of Directors, or by any person

acting as a Director, shall notwithstanding that it shall afterwards be discovered that there was

some defect in the appointment of such Directors or persons acting as aforesaid, or they or any

of them were or was disqualified or that their or his appointment had terminated by virtue of any

provisions contained in these Articles or the Act, be as valid as if every such person has been

duly appointed and was qualified to be a Director.

Minutes of proceedings of the Board and the Committees to be valid 167. The Directors shall cause minutes to be duly entered in a book or books provided for the purpose

in accordance with these Articles and Section 193 of the Act.

Board Minutes to be evidence 168. .Minutes of any meeting of the Board of Directors or of any Committees of the Board if

purporting to be signed by the Chairman of such meeting or by the Chairman of the next

succeeding meeting shall be for all purposes whatsoever prima facie evidence of the actual

passing of the resolution recorded and the actual and regular transaction or occurrence of the

proceedings so recorded and the regularity of the meeting at which the same shall appear to have

taken place.

Register of Directors and Managing Directors etc. 169. The Directors shall cause to be kept at the registered office of the Company:

(a) (i) A Register of the Directors, Managing Directors, Manager and Secretary of the Company

containing the particulars required by Section 303 of the Act. (ii) A Register of Contracts with companies and firms in which the Directors are interested,

containing the particulars required by Section 301 of the Act, and

(iii) A Register of Directors shareholding containing the particulars required by Section 307 of

the Act. They shall also cause to be kept other registers and indexes as required by the Act.

(b) The Company shall comply with the provisions of Sections 301, 303 and 307 and other

Section

of the Act with regard to the inspection of registers and furnishing copies or extracts so far as the same be applicable to the Company.

POWERS OF DIRECTORS

Certain powers to be exercised by the Board only at meeting 170. (a) Without derogating from the powers vested in the Board of Directors under these Articles,

the Board shall exercise the following powers on behalf of the Company and they shall do so

only by means of resolutions passed at meetings of the Board.

(i) The power to make calls on shareholders in respect of money unpaid on their shares;

(ii) The power to issue debenture;

(iii) The power to borrow moneys otherwise than on debentures;

(iv) The power to invest the funds of the Company, and

(v) The power to make loans.

Provided that the Board may be resolution passed at the meeting, delegate to any Committee

of Directors, the Managing Director, the Manager or any other principal officer of the Company

or in the case of a branch office of the Company, a principal officer of the branch office, the

powers specified in sub-clauses (iii), (iv) and (v) to the extent specified in clauses (b), (c) and (d)

respectively on such condition as the Board may prescribe.

(b) Every resolution delegating the power referred to in sub-clause (iii) of clause (a) shall specify

the total amount outstanding at any one time upto which moneys may be borrowed by the

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delegate.

(c) Every resolution delegating the power referred to in sub-clause (iv) of clause (a) shall specify

the total amount upto which the funds of the Company may be invested and the nature of the

investments which may be made by the delegate.

(d) Every resolution delegating the power referred to in sub-clause (v) of clause (a) shall specify

the total amount upto which loans may be made by the delegates, the purpose for which the

loans may be made and the maximum amount upto which loans may be made for each such

purpose in individual cases.

(e) Nothing in this Article shall be deemed to affect the right of the Company in general meeting

to impose restrictions and conditions on the exercise by the Board of any of the powers referred

to in sub-clauses (i), (ii), (iii), (iv) and (v) of clause (a) above.

Restriction on powers of Board 171. (a) The Board of Directors of the Company shall not except with the consent of the Company in

general meeting:

(i) sell,lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of

the Company, or where the Company owns more than one undertaking of the whole or

substantially the whole of any such undertaking;

(ii) remit, or give time for the repayment of any debt, due by a Director;

(iii) invest, otherwise than in trust securities, the amount of compensation received by the

Company in respect of the compulsory acquisition of any such undertaking as is referred to in

sub-clause (i) above, or of any premises or properties used for any such undertaking and without which it cannot be carried on or can be carried on only with difficulty or only after a

considerable time;

(iv) borrow moneys, where the money to be borrowed, together with the moneys already

borrowed by the Company (apart from the temporary loans obtained from the Company’s

bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of

the Company and its free reserves that is to say, reserves not set apart for any specific purpose;

or (v) contribute to charitable and other funds not directly relating to the business of the Company

or the welfare of its employees any amounts the aggregate of which will in any financial year,

exceed fifty thousand rupees or five percent of its average net profits as determined in

accordance with the provisions of Sections 349 and 350 of the Act during the three financial

years, immediately proceeding, whichever is greater.

(b) Nothing contained in sub-clause (a) above shall affect:

(i) the title of a buyer or other person who buys or takes a lease of any such undertaking as is

referred to in that sub-clause in good faith and after exercising due care and caution, or

(ii) the selling or leasing of any property of the Company where the ordinary business of the

Company consists of, or comprises such selling or leasing.

(c) Any resolution passed by the Company permitting any transaction such as is referred to in

sub-clause (a) (i) above, may attach such conditions to the permission as may be specified in the

resolution, including conditions regarding the use, disposal or investment of the sale proceeds

which may result from the transaction. Provided that this clause shall not be deemed to authorize

the Company to effect any reduction in its capital except in accordance with the provisions

contained in that behalf in the Act.

(d) No debt incurred by the Company in excess of the limit imposed by sub-clause (iv) of clause

(a) above, shall be valid or effectual, unless the lender proves that he advanced the loan in good

faith and without knowledge that the limit imposed by that clause had been exceeded.

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Prohibition regarding making of political contributions (e) Due regard and compliance shall be observed in regard to matters dealt with by or in the

Explanation contained in sub-section (1) of Section 293 of the Act and in regard to the

limitations on the power of the Company contained in Section 293A of the Act.

General powers of the Company vested in Directors 172. Subject to the provisions of the Act, the management of the business of the Company shall be

vested in the Directors and the Directors may exercise all such powers and do all such acts and

things as the Company is by the Memorandum of Association or otherwise authorize to exercise

and do and not hereby or by the statute or otherwise directed or required to be exercised or done

by the Company in General Meeting, but subject nevertheless to the provisions of the Act and

other Act and of the Memorandum of Association and these Articles and to any regulations, not

being inconsistent with the Memorandum of Association and these Articles or the Act, from time

to time made by the company in general meeting provided that no such regulation shall

invalidate any prior act of the Directors which would have been valid if such regulation had not

been made.

Specific powers given to Directors 173. Without prejudice to the general powers conferred by Article 172 and the other powers conferred

by these presents and so as not in any way to limit any or all of those powers, it is hereby

expressly declared that the Directors shall have the following powers :

To pay registration expense (i) to pay the costs, charges and expenses preliminary and incidental to the promotion, formation, establishment and registration of the Company;

(ii) to pay and charge to the capital account of the Company any interest lawfully payable

thereon under the provisions of Sections 76 and 208 of the Act;

To acquire property (iii) Subject to the provisions of the Act and these Articles to purchase or otherwise acquire any lands, buildings, machinery, premises, hereditaments, property effects, assets, rights, credits,

royalties, bounties and goodwill of any person, firm or Company carrying on the business which

this Company is authorised to carry on, at or for such price or consideration and generally on

such terms and conditions as they may think fit; and in any such purchase or acquisition to

accept such title as the Board may believe or may be advised to be reasonably satisfactory;

To purchase lands, buildings etc. (iv) Subject to the provisions of the Act to purchase, or take on lease for any term or terms of

years, or otherwise acquire any mills or factories or any land or lands, with or without buildings

and outhouses thereon, situate in any part of India, at such price or rent and under and subject to

such terms and conditions as the Directors may think fit; and in any such purchase, lease or other

acquisition to accept such title as the Directors may believe or may be advised to be reasonably

satisfactory;

To construct buildings (v) To erect, construct, enlarge, improve, alter, maintain, pull down rebuild or reconstruct any

buildings, factories, offices, workshops or other structures, necessary or convenient for the

purposes of the Company and to acquire lands for the purposes of the Company;

To mortgage, charge property (vi) To let, mortgage, charge, sell or otherwise dispose of subject to the provisions of Section

293 of the Act, any property of the Company either absolutely or conditionally and in such

manner and upon such terms and conditions in all respects as they think fit and to accept

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payment or satisfaction for the same in cash or otherwise, as they may think fit;

To pay for property etc. (vii) At their discretion to pay for any property, rights or privileges acquired by or services

rendered to the Company, either wholly or partially, in cash or in shares, bonds, debentures, debenture stock or other securities of the Company, and any such shares may be issued either as

fully paid up or with such amount credited as paid up thereon as may be agreed upon; and any

such bonds, debentures, debenture stock or other securities may be either specifically charged

upon all or any part of the property of the Company and its uncalled capital or not so charged;

To insure (viii) To insure and keep insured against loss or damage by fire or otherwise, for such period

and to such extent as they may think proper, all or any part of the building, machinery, goods,

stores, produce and other moveable property of the Company either separately or co-jointly; also

to insure all or any portion of the goods, produce, machinery and other articles imported or

exported by the Company and to sell, assign, surrender or discontinue any policies of assurance

effected in pursuance of this power;

To open accounts (ix) Subject to Section 292 of the Act, to open accounts with any bank or bankers or with any

Company, firm, or individual and to pay money into and draw money from any account from

time to time as the Directors may think fit;

To secure contracts (x) To secure the fulfillment of any contracts or engagements entered into by the Company by mortgage or charge of all or any of the properties of the Company and its unpaid capital for the

time being or in such other manner as they may think fit;

To attach to Shares such conditions (xi) To attach to any shares to be issued as the consideration for any contract with or property

acquired by the Company, or in payment for services rendered to the Company, such conditions,

subject to the provisions of the Act, as to the transfer thereof as they may think fit;

To accept surrender, of shares (xii) To accept from any member on such terms and conditions as shall be agreed, a surrender of

his shares or stock or any part thereof subject to the provisions of the Act;

To appoint trustees (xiii) To appoint any person or persons (whether incorporated or not) to accept and hold in trust

for the Company any property belonging to the Company or in which it is interested or for any

other purposes and to execute and do all such deeds and things as may be requisite in relation to

any such trusts and to provide for the remuneration of such trustee or trustees;

To bring and defend actions (xiv) To institute, conduct, defend, compound or abandon any legal proceedings by or against

the Company or its Officers or otherwise concerning the affairs of the Company and also subject

to the provisions of Section 293 of the Act to compound and allow time for payment or

satisfaction of any debts due, or of any claims or demands by or against the Company;

To refer to arbitration (xv) To refer subject to the provisions of Section 293 of the Act, any claims or demands by or

against the Company to arbitration and observe and perform the awards;

To act on insolvency matters (xvi) To act on behalf of the Company in all matters relating to bankrupts and insolvents;

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To give receipts (xvii) To make and give receipts, releases and other discharges for moneys payable to the

Company and for the claims and demands of the Company subject to the provisions of Section

293 of the Act.

To authorise acceptances (xviii) To determine from time to time as to who shall be entitled to sign bills, notes, receipts,

acceptances, endorsements, cheques, dividend warrants, releases, contracts and documents on

the Company’s behalf;

To invest moneys (xix) Subject to the provisions of Sections 292, 293, 370, 372 of the Act, invest and deal with

any of the moneys of the Company, not immediately required for the purpose thereof, upon such

shares, securities, or investments (not being shares in this Company) and in such manner as they

may think fit, and from time to time to vary or realise such investments;

To provide for personal liabilities (xx) To execute in the name and on behalf of the Company in favour of any Director or other

person who may incur or be about to incur any personal liability for the benefit of the Company,

such mortgages of the Company’s property (present and future) as they may think fit and any

such mortgage may contain a power of sale and such other powers, convenants and provisions as

shall be agreed upon;

To give to Directors etc. an interest in business (xxi) Subject to such sanction as may be necessary under the Act or these Articles, to give to any

Director, Officer, or other person employed by the Company, an interest in any particular

business or transaction either by way of commission on the gross expenditure thereon or

otherwise or a share in the general profits of the Company, and such interest, commission or

share of profits shall be treated as part of the working expenses of the Company.

To provide for welfare of employees (xxii) To provide for the welfare of employees or ex-employees of the Company and their wives,

widows, families, dependants or connections of such persons by building or contributing to the

building of houses, dwelling, or chawls or by grants of money, pensions, allowances, gratuities,

bonus or payments by creating and from time to time subscribing or contributing to provident

and other funds, institutions, or trusts and by providing or subscribing or contributing towards

places of instruction and recreation, hospitals and dispensaries, medical and other attendances

and other assistance as the Directors shall think fit;

To subscribe to charitable and other funds (xxiii) To subscribe, or contribute or otherwise to assist or to guarantee money to charitable,

benevolent, religious, scientific, national public or any other useful institutions, object or

purposes for any exhibition;

To maintain pension funds (xxiv) To establish and maintain or procure the establishment and maintenance of any

contributory or non contributory pension or superannuation funds for the benefit of, and give or

procure the giving of donations, gratuities, pensions, allowances or emoluments, to any persons

who are or were at any time in the employment or services of the Company, or of any Company

which is a subsidiary of the Company or is allied to or associated with the Company or with any

such subsidiary Company, or who are or were at any time Directors or Officers of the Company or of any such other Company as aforesaid, and the wives, widows, families and dependants of

any such persons and, also to establish and subsidies and subscribe to any institutions,

associations, clubs or funds collected to be for the benefit of or to advance the interests and well

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being of the Company or of any such other Company as aforesaid, and make payments to or

towards the insurance of any such person as aforesaid and do any of the matters aforesaid, either

alone or in conjunction with any such other Company as aforesaid; (xxv) To decide and allocate

the expenditure on capital and revenue account either for the year or period or spread over the

years.

To create Reserve Fund (xxvi) Before recommending any dividend, to set a side out of profits of the Company such sums

as they may think proper for depreciation or to Depreciation Fund or Reserve Fund or Sinking

Fund or any other special fund to meet contingencies or to repay redeemable preference shares,

debentures, or debenture stock or for special dividends or for equalizing dividend or for

repairing, improving, extending and maintaining any part of the property of the Company, and

for such other purposes as the Directors may, in their absolute discretion, think conducive to the

interests of the Company and to invest the several sums so set aside or so much thereof as

required to be invested upon such investments (subject to the restrictions imposed by Sections

292 and 293 and other provisions of the Act) as the directors may think fit, and from time to

time, to deal with and vary such investments and dispose of and apply and expend all or any part

thereof for the benefit of the Company in such manner and for such purposes as the Directors

(subject to such restrictions as aforesaid) in their absolute discretion think conducive to the

interests of the Company notwithstanding that the matters to which the Directors apply or upon

which they may expend the same or any part thereof may be matters to or upon which the

Capital moneys of the Company might rightly be applied or expended; and to divide the Reserve

Fund into such special funds as the Directors think fit, and to employ the assets constituting all

or any of the above funds, including the Depreciation Fund, in the business of the Company or in

repayment or redemption or redeemable preference shares, debentures or debenture stock and that without being bound to keep the same separate from other assets or to pay interest on the

same, with power, however to the Directors at their discretion, to pay or allow to the credit of

such fund interest at such rate as the Directors may think proper.

To appoint Managers etc. (xxvii)To appoint and at their discretion to remove or suspend such Managers, Secretaries,

Officers, Clerks, Agents and servants for permanent, temporary or special service as they may from time to time think fit, and to determine their powers and duties, and fix their salaries or

emoluments and require security in such instances and to such amounts as they may think fit,

and from time to time to provide for the management and transactions of the affairs of the

Company in any special locality in India in such manner as they may think fit. The provisions

contained in the clause following shall be without prejudice to the general powers conferred by

this clause.

To authorise by power of attorney (xxviii) At any time and from time to time by power of attorney to appoint any person or persons

to be the Attorney or Attorneys of the Company for such purposes and with such powers,

authorities and discretions (not exceeding those vested in or exercisable by the Directors under

these presents) and for such period and subject to such conditions as the Directors may from

time to time think fit and any such appointment (if the Directors may think fit) be made in favour

of any Company or the members, directors nominees or managers of Any Company or firm or

otherwise in favour of any fluctuating body or person whether nominated, directly or indirectly

by the Directors and any such power of attorney may contain any such powers for the protection

or convenience of persons dealing with such Attorneys as the Directors may think fit; and may

contain powers enabling any such delegates or Attorneys as aforesaid to sub-delegate all or any

of the powers, authorities, and discretions for the time being vested in them.

To authorise, delegate (xxix)Subject to the provisions of the Act, generally and from time to time and at any time to

authorise, empower or delegate to (with or without powers of sub-delegation) any Director,

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Officer or Officers or Employee for the time being of the Company and/or any other person,

firm or Company all or any of the powers, authorities and discretions for the time being vested in

the Directors by these presents, subject to such restrictions and conditions, if any as the Directors

may think proper.

To Negotiate (xxx) To enter into all such negotiations, contracts and rescind and/or vary all such contracts and

to execute and do all such acts, deeds, and things in the name of on behalf of the Company as

they may consider expedient for or in relation to any of the matters aforesaid or otherwise for the

purposes of the Company.

MANAGING DIRECTORS

Power to appoint Managing or Wholetime Directors 174. (a) Subject to the provisions of the Act and of these Articles the Board shall have power to

appoint from time to time any of its members as Managing Director or Managing Directors

and/or Wholetime Directors and/or Special Director like Technical Director, Financial Director,

etc. of the Company for a fixed term not exceeding five years at a time and upon such terms and

conditions as the Board thinks fit, and the Board may by resolution vest in such Managing

Director or Managing Directors/Wholetime Director(s), Technical Director(s) Financial

Director(s) and Special Director(s) such of the powers hereby vested in the Board generally as it

thinks fit, and such powers may be made exercisable for such period or periods, and upon such

conditions and subject to such restrictions as it may determine. the remuneration of such

Directors may be by way of monthly remuneration and/or fee for each meeting and/or participation in profits, or by any or all of those modes, or of any other mode not expressly

prohibited by the Act.

(b) The Directors may whenever they appoint more than one Managing Director, designate one

or more of them as “Joint Managing Director” or “Joint Managing Directors" or “Deputy

Managing Directors” as the case may be.

Appointment and payment of remuneration to Managing or Wholetime Director (c) Subject to the provisions of Sections 198, 269, 309, 310 and 311 of the Act, the appointment

and payment of remuneration to the above Director shall be subject to approval of the members

in general meeting and of the Central Government.

THE SECRETARY Secretary

175. Subject to the provisions of Section 383A of the Act, the Directors may, from time to time,

appoint and, at their discretion remove any individual (hereinafter called ‘the Secretary’) who

shall have such qualifications as the authority under the Act may prescribe to perform any

functions, which by the Act or these Articles are to be performed, by the Secretary, and to

execute any other purely ministerial or administrative duties which may from time to time be

assigned to the Secretary by the Director. The Directors may also at any time appoint some

persons (who need not be the Secretary) to keep the registers required to be kept by the

Company.

SEAL

The seal its custody and use 176. (a) The Directors shall provide a Common Seal for the purpose of the Company and shall have

power from time to time to destroy the same and substitute a new Seal in lieu thereof, and the

Directors shall provide for the safe custody of the Seal for the time being and the Seal shall

never be used except by or under the authority of the Directors or a Committee of the Directors

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previously given, and in the presence of one Director at the least, who shall sign every

instrument to which the Seal is so affixed in his presence.

Seal abroad

(b) The Company shall also be at liberty to have an official seal in accordance with Section 50 of

the Act for use in any territory, district or place outside India and such powers shall accordingly

be vested in the Directors.

INTEREST OUT OF CAPITAL

Interest may be paid out of Capital 177. Where any shares in the Company are issued for the purpose of raising money to defray the

expenses of the construction of any work or building, or the provisions of any plant, which

cannot be made profitable for a lengthy period, the Company may pay interest on so much of

that share capital as is for the time being paid up, for the period and at the rate and subject to the

conditions and restrictions provided by Section 208 of the Act, and may charge the same to

capital as part of the cost of construction of the work or building, or the provisions of plant.

DIVIDENDS

Division of Profits 178. The profits of the Company subject to any special rights relating thereto created or authorised to

be created by these presents shall be divisible among the members in proportion to the amount of

Capital paid up or credited as paid up on the shares held by them respectively.

Dividend payable to registered holder 179. No dividend shall be paid by the Company in respect of any share except to the registerred

holder of such share or to his order or to his banker.

Time for payment of dividend 180. Where a dividend has been declared by the Company it shall be paid within the period provided

in Section 207 of the Act.

Capital paid up in advance and interest not to earn dividend 181. Where the Capital is paid up in advance of calls upon the footing that the same shall carry

interest, such Capital shall not, whilst carrying interest confer a right to dividend or to participate

in profits.

Dividends in proportion to amount paid up 182. (a) The Company shall pay dividends in proportion to the amounts paid up or credited as paid up

on each share, when a larger amount is paid up or credited as paid up on some shares than on

others. Nothing in this Article shall be deemed to affect in any manner the operation of Section

208 of the Act.

(b) Provided always that any Capital paid up on a share during the period in respect of which a

dividend is declared, shall unless the terms of issue otherwise provide, only entitle the holder of

such share to an apportioned amount of such dividend proportionate to the capital from time to

time paid during such period on such share.

Company in Annual General Meeting may declare dividends 183. The Company in Annual general meeting may declare a dividend to be paid to the members

according to their respective rights and interests in the profits and may fix the time for payment.

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Power of Directors to limit dividends 184. No larger dividend shall be declared than is recommended by the Directors but the Company in

general meeting may declare a smaller dividend.

Dividends only to be paid out of profits 185. No dividend shall be declared or paid by the Company otherwise than out of profits of the

financial year arrived at after providing for depreciation in accordance with the provisions of

sub-section (2) of Section 205 of the Act or out of the profits of the Company for any previous

financial year or years arrived at after providing for depreciation in accordance with these

provisions and remaining undistributed or out of both or out of moneys provided by the Central

Government or a State Government for the payment of dividend in pursuance of the guarantee

given by that Government provided that:

(a) If the Company has not provided for depreciation for any previous financial year or years, it

shall before declaring or paying a dividend for any financial year, provide for such depreciation

out of the profits of that financial year or out of the profits of any other previous financial year or

years;

(b) If the Company has incurred any loss in any previous financial year or years the amount of

the loss or an amount which is equal to the amount provided for depreciation for that year or

those years whichever is less, shall be set off against the profits of the Company for the year for

which the dividend is proposed to be declared or paid or against the profits of the Company for

any previous financial year or years arrived at in both cases after providing for depreciation in

accordance with the provisions of sub-section (2) of Section 205 of the Act or against both.

Provided further that, no dividend shall be declared or paid for any financial year out of the

profits of the Company for that year arrived at after providing for depreciation as above, except

after the transfer to the reserves of the Company of such percentage of its profits for that year as may be prescribed in accordance with Section 205 of the Act or such higher percentage of its

profits as may be allowed in accordance with that Section

Nothing contained in this Article shall be deemed to affect in any manner the operation of


Directors' declaration as to net profits conclusive 186. The declaration of the Directors as to the amount of the net profits of the Company shall be

conclusive.

Interim Dividends 187. The Directors may, from time to time, pay to the members such interim dividends as in their

judgement the position of the Company justifies.

Retention of Dividend until completion of transfer under Article 188. The Directors may retain the Dividends payable upon shares in respect of which any person is

under the Transmission clause of these Articles entitled to become a member or which any

person under that clause is entitled to transfer until such person shall become a member in

respect of such shares or shall duly transfer the same.

No member to receive Dividend whilst indebted to the Company and Company’s right to

reimbursement therefrom 189. Subject to the provisions of the Act, no member shall be entitled to receive payment of any

interest or dividend in respect of his share(s) whilst any money may be due or owing from him to

the Company in respect of such share(s) or debenture(s) or otherwise however either alone or

jointly with any other person or persons and the Directors may deduct from the interest or

dividend payable to any member, all sums of moneys so due from him to the Company.

Transferred shares must be registered 190. A transfer of shares shall not pass the right to any dividend declared thereon before the

registration of the transfer.

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Dividend how remitted 191. Unless otherwise directed any dividend may be paid by cheque or warrant or a pay-slip or

receipt having the force of a cheque or warrant sent through ordinary post to the registered

address of the member or person entitled or in the case of joint holders to that one of them first named in the Register of Members in respect of the joint holding. Every such cheque or warrant

so sent shall be made payable to the registered holder of shares or to his order or to his bankers.

The Company shall not be liable or responsible for any cheque or warrant lost in transmission or

for any dividend lost, to the member or person entitled thereto by the forged endorsement of any

cheque or warrant or the fradulent or improper recovery thereof by any other means.

Unpaid Dividend or Dividend Warrant posted 192. (a) Where the Company has declared a dividend but which has not been paid or the dividend

warrant in respect thereof has not been posted within 30 days from the date of declaration to any

shareholder entitled to the payment of the dividend, the Company shall within 7 days from the

date of expiry of the said period of 30 days, open a special account in that behalf in any

scheduled bank, as per Section 205 A of the Act, and transfer to the said account, the total

amount of dividend which remains unpaid or in relation to which no dividend warrant has been

posted.

(b) Any money transferred to the unpaid dividend account of the Company which remains

unpaid or unclaimed for a period of three years from the date of such transfer, shall be

transferred by the Company to the general revenue account of the Central Government. A claim

to any money so transferred to the general revenue account may be preferred to the Central

Government by the shareholders to whom the money is due.

(c) No unpaid or unclaimed dividend shall be forfeited by the Board.

Dividend and call together 193. Any general meeting declaring a dividend may on the recommendation of the Directors make a

call on the members for such amount as the meeting fixes, but so that the call on each member

shall not exceed the dividend payable to him so that the call be made payable at the same time as

the dividend and the dividend may, if so arranged between the Company and the members, be

set off against the calls.

Dividend to be payable in cash 194. No dividend shall be payable except in cash. Provided that nothing in this Article shall be

deemed to prohibit the capitalisation of profit or reserves of the Company for the purpose of

issuing fully paid up bonus shares or paying up any amount for the time being unpaid on any

shares held by the members of the Company.

CAPITALISATION

Capitalisation 195. (a) Any general meeting may resolve that any amount standing to the credit of the Share

Premium Account or the Capital Redemption Reserve Account or any moneys' investments or

other assets forming part of the undivided profits (including profits or surplus moneys arising

from the realization and where permitted by law, from the appreciation in value of any capital

assets of the Company) standing to the credit of the General Reserve, Reserve or any Reserve

Fund or any other fund of the Company or in the hands of the Company and available for

dividend may be capitalised. Any such amount (excepting the amount standing to the credit of

the Share Premium Account and/or the Capital Redemption Reserve Account) may be

capitalised:

(i) by the issue and distribution as fully paid shares, debentures, debenture stock, bonds or obligations of the Company or

(ii) by crediting the shares of the Company which may have been issued and are not fully paid

up, with the whole or any part of the sum remaining unpaid thereon.

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Provided that any amounts standing to the credit of the Share Premium Account may be applied

in;

(1) paying up unissued shares of the Company to be issued to members of the Company as fully

paid bonus shares;

(2) in writing off the preliminary expenses of the Company; (3) in writing off the expenses of, or the commission paid or discount allowed on any issue of

shares or debentures of the Company; or

(4) in providing for the premium payable on the redemption of any redeemable preference shares

or of any debentures of the Company. Provided further that any amount standing to the credit of

the Capital Redemption Reserve Account shall be applied only in paying up unissued shares of

the Company to be issued to the members of the Company as fully paid bonus shares.

(b) Such issue and distribution under sub-clause (a)(i) above and such payment to the credit of

unpaid share capital under sub-clause (a)(ii) above shall be made to, among and in favour of the

members of any class of them or any of them entitled thereto and in accordance with their

respective rights and interests and in proportion to the amount of capital paid up on the shares

held by them respectively in respect of which such distribution under sub-clause (a)(i) or

payment under sub-clause (a)(ii) above shall be made on the footing that such members become

entitled thereto as capital.

(c) The Directors shall give effect to any such resolution and apply portion of the profits,

General Reserve Fund or any other fund or account as aforesaid as may be required for the

purpose of making payment in full for the shares, debentures or debenture stock, bonds or other

obligations of the Company so distributed under sub-clause (a)(i) above or (as the case may be)

for the purpose of paying, in whole or in part, the amount remaining unpaid on the shares which

may have been issued and are not fully paid-up under sub-clause (a)(ii) above provided that no

such distribution or payment shall be made unless recommended by Directors and if so recommended such distribution and payment shall be accepted by such members as aforesaid in

full satisfaction of their interest in the said capitalised sum.

(d) For the purpose of giving effect to any such resolution the Directors may settle any difficulty

which may arise in regard to the distribution or payment as aforesaid as they think expedient and

in particular they may issue fractional certificates or coupons and fix the value for distribution of

any specific assets and may determine that such payments be made to any members on the

footing of the value so fixed and may vest any such cash, shares, fractional certificates or coupons, debentures, debenture stock, bonds, or other obligations in trustees upon such trusts for

the persons entitled thereto as may seem expedient to the Directors and generally may make

such arrangement for the acceptance, allotment and sale of such shares, debentures, debenture

stock, bonds or other obligations and fractional certificates or coupons or otherwise as they may

think fit.

(e) Subject to the provisions of the Act and these Articles in cases where some of the shares of

the Company are fully paid and others are partly paid only, such capitalisation may be effected

by the distribution of further shares in respect of the fully paid shares, and by crediting the partly

paid shares with the whole or part of the unpaid liability thereon but so that as between the

holders of fully paid shares, and the partly paid shares the sums so applied in the payment of

such further shares and in the extinguishment or diminution of the liability on the partly paid

shares shall be so applied pro rata in proportion to the amount then already paid or credited as

paid on the existing fully paid and partly paid shares respectively.

196. When deemed requisite a proper contract shall be filed with the Registrar of Companies in

accordance with the Act and the Board may appoint any person to sign such contract on behalf

of the members entitled as aforesaid and such appointment shall be effective.

ACCOUNTS

Accounts 197. The provisions of Sections 209 to 222 of the Act shall be complied with in so far as the same be

applicable to the Company.

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Books of Accounts to be kept 198. (a) The Company shall keep at its Registered Office proper books of accounts as required by

Section 209 of the Act with respect to:

(i) all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure take place;

(ii) all sales and purchases of goods by the Company; and

(iii) the assets and liabilities of the Company;

Provided that all or any of the books of account aforesaid may be kept at such other place in

India as the Board of Directors may decide and when the Board of Directors so decide, the

Company shall, within seven days of the decision file with the Registrar a notice in writing

giving the full address of that other place.

(b) If the Company shall have a branch office, whether in or outside India, proper books of

account relating to the transactions effected at that office shall be kept at that office and proper

summarised returns made up to date at intervals of not more than three months, shall be sent by

the branch office to the Company at its Registered Office or other place in India, as the Board

thinks fit, where the said books of the Company are kept.

Books to give fair and true view of the Company’s affairs 199. (a) All the aforesaid books shall give a fair and true view of the affairs of the Company or of its

branch office, as the case may be with respect to the matters aforesaid, and explain the

transactions.

(b) The books of account shall be open to inspection by any Director during business hours as

provided by Section 209 of the Act.

(c) The books of account of the Company relating to a period of not less than eight years immediately preceding the current year together with the vouchers relevant to any entry in such

books of accounts shall be preserved in good order.

Inspection by members 200. . The Directors shall from time to time determine whether and to what extent and at what times

and places and under what conditions or regulations the accounts, books and documents of the

Company or any of them, shall be open to the inspection of the members, and no member (not being a Director) shall have any right of inspecting any account or books or documents of the

Company except as conferred by statute or authorised by the Directors or by a resolution of the

Company in general meeting.

Statements of Accounts to be furnished to General Meeting 201. The Board of Directors shall lay before each annual general meeting a Profit and Loss Account

for the financial year of the Company and a Balance Sheet made up as at the end of the financial

year which shall be a date, which shall not precede the day of the meeting by more than six

months or such extended period as shall have been granted by the Registrar of Companies under

the provisions of the Act.

Balance Sheet and Profit and Loss Account 202. (a) Subject to the provisions of Section 211 of the Act, every Balance Sheet and Profit and Loss

Account of the Company shall be in the forms set out in parts I and II respectively of Schedule

VI of the Act, or as near thereto as circumstances admit. There shall be annexed to every

Balance Sheet a statement showing the bodies corporate (indicating separately the bodies

corporate in the same group) in the shares of which investments have been made by it

(including) all investments, whether existing or not, made subsequent to the date as at which the

previous Balance Sheet was made out) and the nature and extent of the investments so made in

each body corporate. (b) So long as the Company is a holding Company having a subsidiary the Company shall

conform to Section 212 and other applicable provisions of the Act.

(c) If in the opinion of the Board, any of the current assets of the Company have not a value on

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realisation in the ordinary course of business at least equal to the amount at which they are

stated, the fact that the Board is of that opinion shall be stated.

Authentication of Balance Sheet and Profit & Loss Account 203. (a) (i) Save as provided by item (ii) of this sub-clause every Balance Sheet and every Profit and

Loss Account of the Company shall be signed on behalf of the Board of Directors by the

Manager or Secretary, if any, and by not less than two Directors of the Company, one of whom

shall be a Managing Director, if any.

(ii) When only one of the Directors of the Company is for the time being in India, the Balance

Sheet and the Profit and Loss Account shall be signed by such Director, but in such a case, there

shall be attached to the Balance Sheet and the Profit and Loss Account a statement signed by

him explaining the reason for non compliance with the provisions of the above item (i).

(b) The Balance Sheet, and the Profit and Loss Account, shall be approved by the Board of

Directors before they are signed on behalf of the Board in accordance with the provisions of this

Article and before they are submitted to the auditors for their report thereon.

Profit and Loss Account to be annexed and Auditors’ Report to be attached to the Balance

Sheet 204. The Profit and Loss Account shall be annexed to the Balance Sheet and the Auditors’ Report

including the Auditors’ separate, special or supplementary report, if any, shall be attached

thereto.

Board’s Report to be attached to Balance Sheet 205. (a) Every Balance Sheet laid before the Company in general meeting shall have attached to it a

Report by the Board of Directors with respect to the state of the Company’s affairs; the amounts, if any which it proposes to carry to any reserves in such Balance Sheet, the amount, if any,

which it recommends to be paid by way of dividends and material changes and commitments, if

any, affecting the financial position of the Company which have occurred between the end of the

financial year of the Company to which the Balance Sheet relates and the date of the Report.

(b) The Report shall, so far as it is material for the appreciation of the state of the Company’s

affairs by its members and will not in the Board’s opinion be harmful to the business of the

Company or of any of its subsidiaries, deal with any changes which have occured during the financial year in the nature of the Company’s business, in the Company’s subsidiaries or in the

nature of the business in which the Company has an interest.

(c) The Board shall also give the fullest information and explanations in its Report or in cases

falling under the proviso to Section 222 of the Act in an addendum to that Report, on every

reservation, qualification or adverse remark contained in the Auditor’s Report.

(d) The Board’s Report and addendum (if any) thereto shall be signed by its Chairman if he is

authorised in that behalf by the Board; and where he is not so authorised shall be signed by such

number of Directors as are required to sign the Balance Sheet and the Profit and Loss Account of

the Company by virtue of sub-clause (a) and (b) of Article 203.

(e) The Board shall have the right to charge any person not being a Director with the duty of

seeing that the provisions of sub-clauses (a) and (c) of this Article are complied with.

(f) Every Balance Sheet and Profit and Loss Account of the Company when audited and

approved and adopted by the members in the annual general meeting shall be conclusive except

as regards any matters in respect of which modifications are made thereto as may from time to

time be considered necessary by the Board of Directors and or considered proper by reason of

any provisions of relevant applicable statutes and approved by shareholders at a subsequent

general meeting.

Right of Members to copies of Balance Sheet and Auditor’s Report 206. A copy of every Balance Sheet (including the Profit and Loss Account, the Auditor’s Report

and every other document required by Law to be annexed or attached as the case may be, to the

Balance Sheet) which is to be laid before the Company in General Meeting shall be made

available for inspection at the Registered Office of the Company during working hours for a

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period of twenty one days before of the meeting.

Three copies of Balance Sheet etc. to be filed with Registrar 207. After the Balance Sheet and Profit and Loss Account have been laid before the Company at the

annual general meeting, three copies of the Balance Sheet and Profit and Loss Account duly signed as provided under Section 220 of the Act together with three copies of all documents,

which are required to be annexed thereto shall be filed with the Registrar, so far as the same be

applicable to the Company.

AUDIT

Accounts to be audited 208. Every Balance Sheet and Profit and Loss Account shall be audited by one or more Auditors to be

appointed as hereinafter mentioned.

Appointment and qualifications of auditors 209. (a) The Company at the annual general meeting each year shall appoint an Auditor or Auditors

to hold office from the conclusion of that meeting until the conclusion of the next annual general

meeting, and shall, within seven days of the appointment, give intimation thereof to every

auditor so appointed.

(b) At any annual general meeting, a retiring Auditor, by whatever authority appointed, shall be

reappointed unless:

(i) he is not qualified for reappointment;

(ii) he has given the Company notice in writing of his unwillingness to be reappointed;

(iii) a resolution has been passed at that meeting appointing somebody instead of him or

providing expressly that he shall not be reappointed, or (iv) where notice has been given of an intended resolution to appoint some person or persons in

the place of retiring Auditor, and by reason of the death, incapacity or disqualification of that

person or of all those persons, as the case may be, the resolution cannot be proceeded with.

(c) Where at an annual general meeting no auditors are appointed or re-appointed, the Central

Government may appoint a person to fill the vacancy.

(d)The Company shall, within seven days of the Central Government’s power under sub-clause

(c) becoming exercisable give notice of that fact to the Government. (e)The Directors may fill any casual vacancy in the office of Auditor, but while any such

vacancy continues the surviving or continuing Auditor or Auditors (if any) may act, but where

such vacancy be caused by the resignation of an auditor, the vacancy shall only be filled by the

Company in general meeting.

(f) A person, other than a retiring Auditor, shall not be capable of being appointed at an annual

general meeting unless special notice of the Resolution for appointment of that person to the

office of Auditor has been given by a member to the Company not less than fourteen days before

the meeting in accordance with Section 190 of the Act, and the Company shall send a copy of

any such notice to the retiring Auditor and shall give notice thereof to the members in

accordance with Section 190 of the Act, and the provisions of Section 225 of the Act shall apply

in the matter. The provision of this sub-clause shall also apply to a Resolution that a retiring

Auditor shall not be re-appointed.

(g) The persons qualified for appointment as Auditors shall be only those referred to in Section

226 of the Act.

(h)None of the persons mentioned in Section 226 of the Act as being not qualified for

appointment as Auditors shall be appointed as Auditors of the Company.

Audit of Branch Office 210. The Company shall comply with the provisions of Section 228 of the Act in relation to the audit

of the accounts of branch offices of the Company except to the extent to which any exemption

may be granted by the Central Government, in that behalf.

Remuneration of Auditors 211. The remuneration of the Auditors shall be fixed by the Company in general meeting in such

manner as the Company may in general meeting determine except that the remuneration of any

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Auditors appointed to fill any casual vacancy may be fixed by the Directors.

Auditor to have access to the books of the Company 212. (a) The Auditor/s of the Company shall have a right of access at all times to the books and

vouchers of the Company and shall be entitled to require from the Directors and Officers of the

Company such information and explanation as may be necessary for the performance of the duties of the Auditor/s.

(b) All notice of, and other communications relating to, any general meeting of the Company

which any member of the Company is entitled to have sent to him shall also be forwarded to the

Auditors of the Company; and the Auditor/s shall be entitled to attend any general meeting and

to be heard at any general meeting which he attends to any part of the business which concerns

him as Auditor.

(c) The Auditors shall make a Report to the members of the Company on the accounts examined

by him and on every Balance Sheet and Profit and Loss Account, and on every other document

declared by the Act to be part of or annexed to the Balance Sheet or Profit and Loss Account,

which are laid before the Company in annual general meeting during his tenure of office, and the

Report shall state whether, in his opinion and to the best of his information and according to the

explanation given to him, the accounts give the information required by the Act in the manner so

required and give a true and fair view:

(i) in the case of the Balance Sheet, of the state of the Company’s affairs as at the end of its

financial year: and

(ii) in the case of the Profit and Loss Account, of the Profit and Loss for that financial year.

(d) The Auditor’s Report shall also state :

(i) whether he has obtained all the information and explanations which to the best of his

knowledge and belief were necessary for the purpose of his audit;

(ii) whether, in his opinion, proper books of accounts as required by law have been kept by the Company so far as appears from his examination of those books and proper returns adequate for

the purpose of his audit have been received from branches not visited by him;

(iii) whether the report on the accounts of any branch office audited under Section 228 by a

person other than the Company auditor has been forwarded to him as required by clause(c) sub-

section (3) of the Section and how he has dealt with the same in preparing the Auditor’s Report;

(iv) whether the Company’s Balance Sheet and Profit and Loss Account dealt with by the report

are in agreement with the books of account and returns. (e) Where any of the matters referred to in this Article is answered in the negative or with a

qualification the Auditor’s Report shall state the reasons for the answer.

Accounts when audited and approved to be conclusive except as to errors discovered

within three months 213. Every account when audited and approved by a general meeting shall be conclusive except as

regards any error therein discovered within three months next after the approval thereof.

Whenever any such error is discovered within the said period, the accounts shall forthwith be

corrected and thenceforth shall be conclusive.

DOCUMENTS AND NOTICES

Service of Notice by member 214. .A notice may be served on the Company or an Officer thereof by sending it to the Company or

Officer at the Registered Office of the Company by post under a Certificate of posting or by

registered post or by leaving it at its Registered Office.

The term ‘Notice’ in this and the following clauses shall include summons, notice, requisition,

order, judgement or other legal papers and any document.

Service of Notice on Registrar 215. A notice may be served on the Registrar by sending it to him at his office by post under a

certificate of posting or by registered post, or by delivering it to, or leaving it for him at his

office.

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Service of Notice on member by the Company 216. (a) A Notice may be served by the Company on any member either personally or by sending it

by post to him to his registerred address or if he has no registered address in India to the address,

if any, within India supplied by him to the Company for giving Notice to him.

(b) Where a Notice is sent by post: (i) Service thereof shall be deemed to be effected by properly addressing prepaying and posting

a letter containing the document, provided that, where a member has intimated to the Company

in advance that documents should be sent to him under a certificate of posting or by registered

post with or without acknowledgement due, and has deposited with the Company a sum

sufficient to defray the expenses of doing so, service of the document shall not be deemed to be

effected unless it is sent in the manner intimated by the member; and

(ii) Such service shall be deemed to have been effected:

(1) in the case of a Notice of a meeting at the expiration of forty eight hours after the letter

containing the same is posted, and

(2) in any other case, at the time at which the letter would be delivered in the ordinary course of

post.

By Advertisement (c) A Notice advertised in a newspaper circulating in neighbourhood of the registered office of

the Company shall be deemed to be duly served on the day on which the advertisement appears

on every member of the Company who has no registered address in India and has not supplied to

the Company an address within India for the giving of Notices to him.

On Joint holder (d) Any Notice may be served by the Company on the Joint-holders of a Share/debenture by serving it on the joint holder named first in the Register of member/debenture holders in respect

of the share/debenture.

On personal Representative (e) A Notice may be served by the Company on the persons entitled to a share in consequence of

the death or insolvency of a member by sending it through the post in a prepaid letter addressed

to them by name, or by the title representatives of the deceased or assignees of the insolvent or by any like description, at the address, if any in India supplied for the purpose by the persons

claiming to be so entitled, or until such an address has been so supplied, by serving the

document in any manner in which it might have been served if the death or insolvency had not

occurred.

Notice by Company and signatures thereto 217. Any Notice given by the Company shall be signed by a Director, or by such Officer as the

Directors may appoint and the signatures thereto may be written printed or lithographed.

Authentication of documents and proceedings 218. Save as otherwise expressly provided in the Act, a document or proceedings requiring

authentication by the Company may be signed by the Director, the Managing Director, the

Manager, the Secretary or other authorised Officer of the Company and need not be under its

Common Seal.

WINDING UP

Distribution of Assets 219. (a) Subject to the provisions of the Act, if the company shall be wound up and the assets

available for distribution among the members as such shall be less than sufficient to repay the whole of the paid up capital such assets shall be distributed so that, as nearly, as may be, the

losses shall be borne by the members in proportion to the Capital paid up, or which ought to

have been paid up, at the commencement of winding up, on the shares held by them

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respectively. And if in winding up, the assets available for distribution among the members shall

be more than sufficient to repay the whole of the Capital paid up at the commencement of the

winding up the excess shall be distributed amongst the members in proportion to the Capital

paid-up at the commencement of the winding up or which ought to have been paid up on the

shares held by them respectively. (b) But this clause will not prejudice the rights of the holders of shares issued upon special terms

and conditions.

220. Subject to the provisions of the Act.

Distribution in specie or kind (a) If the Company shall be wound up whether voluntarily or otherwise, the liquidators may with

the sanction of a special resolution and any other sanction required by the Act, divide amongst

the contributories, in specie or kind the whole or any part of the assets of the Company, and

may, with the like sanction vest any part of the assets of the Company in trustees upon such

trusts for the benefit of the contributories or any of them as the liquidators with the like sanction

shall think fit.

(b) If thought expedient, any such division may, subject to the provisions of the Act, be

otherwise than in accordance with the legal rights of the contributories (except where unalterably

fixed by the Memorandum of Association) and in particular any class may be given (subject to

the provisions of the Act) preferential or special rights or may be excluded altogether or in part

but in case any division otherwise than in accordance with the legal rights of the contributories

shall be determined or any contributory who would be prejudiced thereby shall have the right, if

any to dissent and ancillary rights as if such determination were a special resolution passed

pursuant to Section 494 of the Act. (c) in case any shares to be divided as aforesaid involved a liability to calls or otherwise, any

person entitled under such division to any of the said shares may within ten days after the

passing of the special resolution, by notice in writing direct the liquidators to sell his proportion

and pay him the net proceeds and the Liquidators shall, if practicable act accordingly.

Rights of shareholders in case of sale 221. Subject to the provisions of the Act, a special resolution sanctioning a sale to any other

Company duly passed may, in like manner as aforesaid, determine that any shares or other

consideration receivable by the Liquidators be distributed amongst the members otherwise than

in accordance with their existing rights and any such determination shall be binding upon all the

members subject to the rights of dissent, if any, if such right be given by the Act.

SECRECY CLAUSE 222. (a) Every Director, Manager, Auditor, Treasurer, Trustee, Member of a Committee, Officer,

Servant, Agent, Accountant or other person employed in the business of the Company shall if so

required by the Directors, before entering upon his duties, sign a declaration pledging himself to

observe a strict secrecy respecting all transactions and affairs of the Company with the

customers and the state of the accounts with individuals and in matters thereto, and shall by such

declaration pledge himself not to reveal any of the matters which may come to his knowledge in

the discharge of his duties except when required so to do by the Directors or by law or by the

person to whom such matters relate and except so far as may be necessary in order to comply

with any of the provisions in these presents contained.

(b) No member shall be entitled to visit or inspect any works of the Company without the

permission of the Directors or to require discovery of or any information respecting any detail of

the Company’s trading, or any matter which may relate to the conduct of the business of the

Company and which in the opinion of the Directors, it would be inexpedient in the interest of the

Company to disclose.

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INDEMNITY AND RESPONSIBILITY

Directors and others rights to indemnity 223. (a) Subject to the provisions of Section 201 of the Act, every Director, Managing Director,

Wholetime Director, Manager, Secretary and other Officer or employee of the Company shall be

indemnified by the Company against and it shall be the duty of the Directors, out of the funds of

the Company to pay all costs, losses and expenses (including travelling expense) which such

Director, Manager, Secretary and Officer or employee may incur or become liable to by reason

of any contract entered into or act or deed done by him as such Director, Manager, Secretary,

Officer or Servant or in any way in the discharge of his duties including expenses and the

amount for which such indemnity is provided, shall immediately attach as a lien on the property

of the Company and have priority between the members over all other claims.

(b) Subject as aforesaid, every Director, Managing Director, Manager, Secretary or other officer

and employee of the Company shall be indemnified against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgement is given in his favour

or in which he is acquitted or discharged or in connection with any application under Section

633 of the Act in which relief is given to him by the Court and the amount for which such

indemnity is provided shall immediately attach as a lien on the property of the Company.

Directors and other officers not responsible for the acts of others 224. Subject to the provisions of Section 201 of the Act, no Director, Managing Director, Whole time

Director or other Officer of the Company shall be liable for the acts, receipts, neglects or

defaults of any other Director or Officer or for joining in any receipt or other act for conformity

or for any loss or expense happening to the Company through insufficiency or deficiency of title

to any property acquired by order of the Directors for or on behalf of the Company or for the

insufficiency or deficiency of any security in or upon which any of the monies of the Company

shall be invested or for any loss or damage arising from the bankruptcy, insolvency or troths act

of any person, company or corporation, with whom any moneys, securities or effects shall be entrusted or deposited or for any loss occasioned by any error of judgement or oversight on his

part or for any other loss or damage or misfortune whatever which shall happen in the execution

of the duties of the office or in relation thereto, unless the same happens through his own

dishonesty.

SOCIAL OBJECTIVE 225. The Company shall have among its objectives the promotion and growth of the national

economy through increased productivity, effective utilisation of material and manpower

resources and continued application of modern scientific and managerial techniques in keeping

with the national aspirations, and the Company shall be mindful of its social and moral

responsibilities to the consumers, employees, shareholders, society and the local community.

GENERAL POWER 226. Wherever in the Companies Act, it has been provided that the Company shall have any right

privilege or authority or that the Company could carry out any transaction only if the Company

if so authorised by its Articles, then and in that case these regulations hereby authorise and

empower the Company to have such rights, privilege or authority and to carry such transactions

as have been permitted by the Act.

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SECTION X-OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTIONS

The following Contracts (not being contracts entered into in the ordinary course of the business carried

on by the Company or entered into more than two years before the date of this Draft Letter of Offer) which are or may be deemed material, have been entered into by the Company. These contracts and

also the documents for inspection referred to hereunder, may be inspected at the Registered Office of

the Company between 11.00 a.m. - 4.00 p.m. on any working day from the date of this Draft Letter of

Offer until the closing of the subscription list.

A. MATERIAL CONTRACTS

1. Copy of Memorandum of Understanding dated 15/09/2010 between Arman Financial Services

Limited and Nirbhay Capital Services Private Limited, Lead Manager to the Issue.

2. Copy of Memorandum of Understanding dated 27/09/2010 between Arman Financial Services

Limited and Sharepro Services (India) Private Limited, Registrar to the Issue.

3. Copy of tripartite agreement dated 30/04/2010 between Arman Financial Services Limited, National

Securities Depository Limited (NSDL) and Sharepro Services (India) Private Limited

4. Copy of tripartite agreement dated 20/04/2010 between Arman Financial Services Limited, Central

Depository Services (India) Limited (CDSL) and Sharepro Services (India) Private Limited

B. DOCUMENTS FOR INSPECTION

1. Memorandum of Association and Articles of Association of Arman Financial Services Limited

2. Certificate of Incorporation of the Company dated November 26, 1992

3. Certificate of change of name of the Company dated December 22, 1993

4. Certificate of change of name of the Company dated November 27, 2008

5. Copy of Certificate of Registration dated 06/11/1998 issued by the Reserve Bank of India,

Department of Non-Banking Supervision, Regional Office – Ahmedabad

6. Annual Report of the Issuer Company for the latest Audited Financial Year Ended 31st March 2010.

7. Annual report of the Issuer Company Financial for the year, 31, 2006, 2007, 2008 and 2009.

8. Copy of Special Resolution dated 06/09/2010 passed at the Annual General Meeting of the company

authorizing present Rights issue of equity shares & Copy of the Board resolution dated 17/06/2010

recommending the Rights issue of the company.

9. Copy of certificate dated 20/09/2010 issued by J.T. Shah & Co. Chartered Accountants & Statutory

Auditors of the Company reporting Limited review report for the period 1st April 2010 to June, 2010.

10. Copy of Prospectus dated 20.07.1995

11. Special Tax Benefits Certificate dated 24/09/2010 by Statutory Auditors of the Company.

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12. Copies of Consents from the Directors, Auditors, Compliance Officer, Lead Manager to the Issue,

Banker to the Company, Legal Advisor to the issue and Registrar to the Issue.

13. Due Diligence certificate from the Lead Manager dated October 05, 2010

14. Copy of Board Resolution passed for the purpose of reappointment of Managing Director.

15. Copy of in-principle approval received from BSE vide letter no. [●] dated [●].

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