DIRECTOR'S REPORT TO THE MEMBERS To, The Members, 1. Your Directors present hereunder the 21th Annual Report on the Business and operations of the Company along with audited statement of accounts of your Company for the Financial Year ended March 31, 2015. 2. DIVIDEND: In order to conserve the resources, the directors do not recommend any dividend for the year. 3. DEPOSITS: Your Company did not accept / hold any deposits from public / shareholders during the year under review. 4. DIRECTORS AND KEY MANAGERIAL PERSONNEL: In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shripal Shah, Executive Director of the Company retires by rotation and offers himself for re-appointment. Mr. Shripal Shah & Mr. Shreyas Shah will continue to be Executive Directors while Mr. Ram Gaud, Mr. Darshit Parikh and Mrs. Tejal Vala shall continue to be Independent Directors of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013. The appointment / re-appointment forms part of the notice convening the Annual General Meeting and the resolutions are recommended for the member's approval. During the year under review Mr. Malcolm Mascarenhas was appointed as the Company Secretary and Key Managerial Personnel of the company. Mr. Shripal Shah continues to be the Chief Financial Officer and Key Managerial Personnel of the company. 5. MEETINGS A calendar of Meetings is prepared and circulated in advance to the Directors. During the year five Board Meetings were convened and held on 26.05.2014, 13.08.2014, 12.11.2014, 12.02.2015, 10.03.2015.The details of which are given in the Corporate Governance Report, which forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. 6. BOARD EVALUATION Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of evaluation of Independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the corporate governance report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. 7. DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT A declaration by an Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 has been taken by the company. An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. 8. RETIREMENT BY ROTATION: Section 149 of the Companies Act, 2013 provides that an Independent Director shall not hold office for more than two consecutive terms of five years each provided that the director is re-appointed by passing a special resolution on completion of first term of five consecutive years. Independent Directors are no longer liable to retire by rotation. 9. INTERNAL AUDIT & CONTROLS Pursuant to provisions of Section 138 read with read with rules made there under, the Board has appointed Thakur, Vaidyanath Aiyar & Co., Chartered Accountants, as an Internal Auditors of the Company to check the internal controls and functioning of the activities and recommend ways of improvement. The Internal Audit is carried out quarterly basis; the report is placed in the Audit Committee Meeting and the Board Meeting for their consideration and direction. The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls. 10. AUDITORS AND AUDITOR'S REPORT: a) STATUTORY AUDITOR The Directors recommend the ratification of the appointment of Auditor, M/s Thakur, Vaidyanath Aiyar & Co (Registration No 000038N) at the forthcoming AGM. The Auditors confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. Comments made by the Auditors in their report are self-explanatory and therefore do not call for any further explanations. b) SECRETARIAL AUDITOR Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. JNG & CO., a firm of Company Secretaries in Practice (CP No. 8108), to undertake the Secretarial Audit of the Company for the year 2014-15. The Secretarial Audit Report is annexed herewith as "Annexure II". There are no qualifications, reservations or adverse remarks or disclaimers by the Secretarial Auditor in the Secretarial Audit Report. 11. VIGIL MECHANISM In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at <http://www.afsl.co.in> 12. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. 13. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY: There are no material changes or commitments, affecting the financial position of the company which have occurred between 31st March 2015 and the date of this report. 14. DIRECTOR'S RESPONSIBILITY STATEMENT: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that- i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2015 and of the profit and loss of the company for the year ended on that date; iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; iv) the directors had prepared the Annual Accounts for the financial year ended March 31, 2015 on a 'Going Concern' basis; and v) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, The Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.afsl.cio.in The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. Thus Disclosure in form AOC-2 is not required. Further, during the year, the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. All related party transactions are placed before the Audit Committee and Board for approval. The details of the related party transactions as required under Accounting Standard - 18 are set out in Note to the financial statements forming part of this Annual Report. 16. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENT: The Ministry of Corporate Affairs (MCA) vide General Circular No.2/2011 No. 51/12/2007-CL-III dated 8th February 2011 read with General Circular No.3/2011 No. 5/12/2007-CL-III dated 21st February 2011 has granted a general exemption from attaching the Balance Sheet of subsidiary companies with holding company's Balance Sheet if the holding company presents in its Annual Report the Consolidated Financial Statements duly audited by its Statutory Auditors. The Company is publishing Consolidated Financial Statements in its Annual Report and accordingly, the Company is not attaching the Balance Sheets of the subsidiary companies. Further, as required under the said circular, a statement of financial information of the subsidiary company; Aryaman Capital Markets Limited (formally known as Aryaman Broking Limited) is given in Annexure attached to this Report. The Annual Accounts of the above referred subsidiary shall be made available to the shareholders of the Company and of the subsidiary company on request and will also be kept open for inspection at the Registered Office of the Company and of the subsidiary companies during the office hours on all working days and during the Annual General Meeting. As required by Accounting Standard-21 (AS-21), issued by the Institute of Chartered Accounts of India, the Company's consolidated financial statements included in this Annual Report incorporates the accounts of its subsidiaries. 17. EXTRACT OF ANNUAL RETURN: As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE I . 18. PUBLIC DEPOSITS: Your Company has neither accepted nor renewed any deposit within the meaning of Section 73 of the Companies Act, 2013 and rules made there under during the year ended March 31, 2014. 19. PERSONNEL: The Board wishes to inform you that your Company has appointed new employees to look after the Merchant Banking division of the Company. The Company plans to recruit more employees in Merchant Banking, Secretarial, Marketing and Accounts section once the Business is grown. During the year under review nine employees were in receipt of remuneration not exceeding the limits under review as prescribed under the provisions of Section 134 of the Companies Act, 2013, as amended, hence no such particulars are furnished. ANNEXURE III. The Board wishes to place on record their gratitude for continued co-operation, assistance and guidance extended by the Banks, clients, Stock Exchange Members and associates. 20. PARTICULARS OF CONSERVATION OF ENERGY, TECHNICAL ABSORBATION, FOREIGN EXCHANGE EARNING AND OUTGO: The Company is not engaged in any manufacturing activity and therefore provisions of Section 134(3)(m) of the Companies Act, 2013 are not applicable to the company. 21. CORPORATE GOVERNANCE: Pursuant to Clause 49 of the Listing Agreement entered into with the BSE Limited, the following have been made a part of the Annual Report and are attached to this report: • Management Discussion and Analysis Report • Corporate Governance Report • Certificate regarding compliance of conditions of Corporate Governance 22. CORPORATE GOVERNANCE CERTIFICATE: The Compliance certificate from JNG & CO., a firm of Company Secretaries in Practice, regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement shall be annexed with the report. 23. AUDIT COMMITTEE: The Audit Committee consists of Mr. Darshit Parikh, Mr. Shripal Shah and Mr. Ram Gaud. Mr. Darshit Parikh is Chairman of the Audit Committee. The Committee interalia reviewed the internal control system and reports of Internal Auditors and compliance of various regulations. The Committee reviews at length the financial statements and approves the same before they are placed before the Board of Directors. 24. LISTING OF SECURITIES: The equity shares of your Company continue to be listed on the Bombay Stock Exchange Limited (BSE), Ahmedabad stock Exchange Limited & Delhi Stock Exchange Limited. However since Ahmedabad stock Exchange Limited & Delhi Stock Exchange Limited are no longer Stock Exchanges having national wide terminals, the Company is in the process of delisting of securities from the said stock exchanges. 25. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: In accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under, the Company has framed and adopted the policy for Prevention of Sexual Harassment at Workplace. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 26. ACKNOWLEDGEMENTS: Your Directors take this opportunity to express their sincere appreciation for the assistance and co-operation received from all the Government departments, Banks, Financial Institutions, other business constituents and members during the year under review and also look forward to their continued support in the future. Your Directors also wish to place on record their deep appreciation for the committed services of the employees of the Company. For and on behalf of the Board of Directors Sd/- Shripal Shah Executive Director sd/- Shreyas Shah Executive Director Date: August 13, 2015 Place: Mumbai |