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BSE Code : 508954 | NSE Symbol : | ISIN : INE734I01027 | Industry : Finance & Investments |


Directors Reports

To,

The Members,

Finkurve Financial Services Limited

Your directors take the pleasure in presenting the 40th Annual Report together with Audited Financial Statements of the Company along with Auditor's Report thereon for the financial year ended 31st March, 2024.

1. FINANCIAL SUMMARY

The summary of the Company's financial performance, for the financial year ("FY") 2023-24 and FY 2022-23 is given below: (As per IND-AS) ( in Lakhs.)

Particulars 2023-24 2022-23
Total Revenue 9026.69 5062.78
Less: Total Expenses 6904.69 3103.17
Add: Share of Profit/ (Loss) of Associates - -
Profit/ (Loss) before taxation 2121.99 1959.60
Less: Tax Expense 514.87 527.28
Profit/ (Loss) After Tax 1607.13 1432.32
Other Comprehensive Income (1.27) 4.88
Total comprehensive income for the year 1605.86 1437.20

2. BUSINESS OVERVIEW:

Your Company is majorly in the business of providing loan against jewellery via its widespread network of branches all over India. The Company is aggressively expanding its presence in other locations as well for its Gold Loan Product. Apart from its Gold Loan Product, the Company is also in the business of providing unsecured consumer loans, short term / long term inter corporate loans, etc. The Board is in constant search for new business avenues which can be taken with the existing business.

3. BUSINESS PERFORMANCE:

During the year under review, your Company earned a Total Revenue of 9026.69 lakhs as against 5062.78 lakhs in the previous year. The Profit before Tax was 2121.99 lakhs as against 1959.60 lakhs in the previous year. The Net profit of 1607.13 lakhs has been carried to the Balance Sheet. Your directors expect a better performance in the coming years.

4. SCALE BASED REGULATIONS

Reserve Bank of India issued a circular on "Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs" on 22 October 2021 (‘SBR Framework'). As per the framework, based on size, activity, and risk perceived, NBFCs are categorised into four layers, NBFC - Base Layer ('NBFC-BL'), NBFC - Middle Layer ('NBFC-ML'), NBFC - Upper Layer ('NBFC-UL') and NBFC - Top Layer ('NBFC-TL'). The Company is currently categorised in Base Layer and is in compliance with RBI Scale Based Regulations. With an endeavor to further strengthen the compliance culture across business and functions, an integrated compliance framework has been put in place which would be enhanced from time to time.

5. SHARE CAPITAL: a. Authorised Share Capital:

During the year under review, the Authorized Share Capital of the Company has been increased to 14,00,00,000/- (Rupees Fourteen Crores Only) divided into 14,00,00,000/- (Fourteen Crores) Equity Shares of 1/- each (Rupees One Only) at the Annual General Meeting of the Company held on 29th September, 2023.

b. Paid-up Share Capital:

As on 31st March, 2024, the Paid-up Share Capital of the Company was 12,68,58,198/- (Rupees Twelve Crore Sixty-Eight Lacs Fifty-Eight Thousand One Hundred and Ninety-Eight) divided into 12,68,58,198/- (Twelve Crore Sixty-Eight Lacs Fifty-Eight Thousand One Hundred and Ninety-Eight) Equity Shares of 1/- each (Rupees One Only). There has been no change in the Paid-Up Share Capital of the Company during the year under review.

6. EMPLOYEE STOCK OPTIONS:

The Company has implemented an ESOP scheme called Finkurve ESOP Plan (Finkurve ESOP 2018) in accordance with Securities Exchange Board of India (Share Based Employees Benefits), 2014 for grant of stock options to eligible employees of the Company and its Subsidiary (if any). The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employee Stock Options Scheme of the Company. During the year under review, the Company has not granted any fresh options under Employee Stock Options Plan.

The ESOP Schemes are in compliance with the Act and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the disclosures relating to the ESOP Schemes as required under the abovementioned SEBI Regulations are available on the Company's website, https://www.arvog.com/investors.html.

Changes after the end of the Financial Year:

Based on the recommendation of the Nomination and Remuneration Committee of the Company, the Board of Directors of the Company in its meeting held on 26th June, 2024, has granted 1,61,778 (One Lac Sixty-One Thousand Seven Hundred and Seventy-Eight)

Employee Stock Options to its eligible employees under the "Finkurve ESOP Plan 2018"

7. CHANGE IN THE NATURE OF BUSINESS:

During the year under review, there has been no change in the nature of business of the Company.

8. NUMBER OF MEETING OF BOARD:

During the year 12 (Twelve) Board Meetings were held i.e on 26th April, 2023, 20th May, 2023, 30th June, 2023, 19th July, 2023, 11th August, 2023, 30th August, 2023, 07th October, 2023, 10th October, 2023, 09th November, 2023, 21st December, 2023, 09th February, 2024 and 22nd February, 2024.

The particulars of attendance of Directors are as under:

Sr. Name of Director Number of Board
No. Meetings attended
1 Mr. Ketan Bhawarlal Kothari 12 out of 12
2 Mr. Priyank Rakesh Kothari 12 out of 12
3. Mr. Narendra Champalal Jain 12 out of 12
4. Mr. Nishant Tolchand Ranka 12 out of 12
5. Mrs. Riddhi Kamlesh Tilwani 12 out of 12
6. Mr. Dharmesh Trivedi 12 out of 12

9. DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 with respect to Director's Responsibility Statement, it is hereby confirmed that:

a) In preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b) 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 at the end of the Financial Year and of the profit and loss of the Company for that period;

c) 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; and

d) The directors had prepared the annual accounts for the Financial Year on a "Going Concern" basis;

e) The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

f) 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.

10. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN

THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT UNDER SECTION 143(12):

During the year under review, the Statutory Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143 (12) of the Act, the details of which need to be mentioned in this report.

11. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

UNDER SECTION 149(6):

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations.

12. PARTICULARS OF EMPLOYEES AND REMUNERATION:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975 in respect of employees of the Company and directors have been appended as "Annexure II" to this report.

13. EXTRACT OF ANNUAL RETURN

A copy of the Annual Return as required under Section 92(3) of the Companies Act, 2013, in prescribed form, which will be filed with the Registrar of Companies/MCA, is hosted on the Company's website and can be accessed at website https://www.arvog.com/investor/.

14. LOANS, GUARANTEES AND INVESTMENTS:

Pursuant to Section 186 of Companies Act, 2013 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015 ("Listing Regulations"), disclosure on particulars relating to loans, advances, guarantees and investments are provided as part of the financial statements.

15. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arm's length and in the ordinary course of business. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arm's length basis.

Pursuant to provisions of Section 188(1) of the Act, a Disclosure containing salient features of the contracts/arrangements entered into by the company with related parties of the Company in Form AOC-2 is attached as "Annexure III".

Details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in the notes to the financial statements forming part of this Annual Report 2023-24. To identify and monitor significant Related Party Transactions, the Company has also framed a policy on the Related Party Transactions and the same is available on the Company's website i.e., www.arvog.com.

16. DIVIDEND:

With a view to conserve the reserves of the Company, your directors are not recommending any payment on account of dividend.

17. TRANSFER TO RESERVES:

The Board of Directors recommend to transfer 20% of profit to the reserve fund during the year under review as per Section 45IC of The RBI Act, 1934. Further, the balance amount of profit for the year under review has been carried forward to the Statement of Profit and Loss.

18. MATERIAL CHANGES AND COMMITEMENT, IF ANY, AFFECTING THE

FINANCIAL POSITION OF THE COMPANY:

No material changes and commitments affecting the financial position of the Company occurred from the end of the previous financial year till the date of this report.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNINGS AND OUTGO:

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations.

The particulars relating to the energy conservation, technology absorption, foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the Annexure IV annexed to this Report.

20. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF

RISK MANAGEMENT POLICY OF THE COMPANY

The risk management and minimization procedure adopted and followed by the Company is adequate in relation to the nature and size of the business. The same is reviewed periodically for improvement.

21. CORPORATE GOVERNANCE:

The Company is adhering to good Corporate Governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is annexed to this report as "Annexure V".

22. AUDITORS:

A. STATUTORY AUDITORS AND AUDITOR'S REPORT:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made there under, the current Auditors of the Company, M/s. P. D. Saraf & Co., Chartered Accountants having FRN: 109241W were appointed by the Members at the 36th Annual General Meeting convened on 30th September, 2020, to hold office until the conclusion of the 41st Annual General Meeting to be held in the year 2025.

STATUTORY AUDITORS QUALIFICATION:

There are no qualification, reservation or adverse remarks made in the Statutory Auditors Report.

B. INTERNAL AUDIT AND INTERNAL AUDITOR'S REPORT:

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Rules made there under, the current Internal Auditors of the Company, M/s. Aadesh Shah & Associates, Chartered Accountants having FRN: 138515W were appointed by the Board in the Meeting held on 30th June, 2023, for the Financial Year 2023-24. There are no qualification, reservation or adverse remarks made in the Internal Auditors Report.

C. SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT:

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company engaged the services of Mr. Mayank Arora, proprietor of M/s. Mayank Arora & Co., Company Secretaries, Mumbai (Membership. No. F10378 and COP No.: 13609) to conduct the Secretarial Audit of the Company for the Financial year ended 31st March, 2024.

SECRETARIAL AUDITORS' QUALIFICATION:

The qualification in the Secretarial Compliance Report and Secretarial Audit Report for the year ended 31st March, 2024 and the reply of the Board of Directors to such qualifications are as under:

Sr. No. Qualification/ Observation in the Secretarial Compliance Report and Secretarial Audit Report Reply to the qualifications/ observations by the Board
1. Pursuant to regulation 29 of SEBI (LODR) Regulations, 2015 and BSE Notice No. 20230127-37 dated January 27, 2023 the company was required to submit the prior intimation of board meeting in pdf mode and further was required to file the same in XBRL mode within 24 hours of submission of pdf, however the company filed the prior intimation of board meeting for quarter ended March 31, 2023, June 30, 2023 and September 30, 2023 in pdf mode but failed to submit the same in XBRL mode. The Company had already filed prior intimation of Board Meeting in PDF format within stipulated time to the BSE listing Centre as required under LODR. The Company have further assured that, henceforth it shall also file the same in XBRL format.
2. Pursuant to regulation 30 of SEBI (LODR) Regulations, 2015 BSE Notice No. 20230331-87 dated March 31, 2023, the company was required to submit the notice of Annual General Meeting in XBRL mode within 24 hours of submission of pdf mode, however the company filed the notice of annual general meeting which was held on September 29, 2023 in pdf mode, but failed to submit the same in XBRL mode. The Company had already filed Notice of Shareholders Meeting in PDF format within stipulated time to the BSE listing Centre as required under LODR The Company have further assured that, henceforth it shall also file the same in XBRL format.
3. Pursuant to regulation 12(3) of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the Company has approved issuance of stock options under Finkurve ESOP Plan, 2018 vide shareholders' resolution dated 29th September, 2018. Till date, the Options under the said ESOP Plan are granted in three different tranches i.e., on 26th February, 2021, 30th June, 2021, and 24th August, 2021. As SEBI (Share Based Employee Benefits) Regulation, 2014 was replaced by SEBI (Share Based Employee Benefits) Regulation, 2021 which required the Company to apply for In Principal approval for Listing and Trading., the Company was required to have the said approval prior to granting of options under tranche three i.e., for the options granted on 24th August, 2021. Therefore, the Company had made the application for condonation of delay for non-compliance of Regulation 12(3) of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 for the options granted in tranche three. The said application was accepted With respect to the SEBI (Share Based Employee Benefits) Regulation, 2021, the Company has applied for the condonation of delay application for non- compliance of Regulation 12(3) of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, for the options granted in tranche three dated 24th August, 2021 along with the requisite fees to SEBI. The same has been accepted by BSE and the Company has received the In-Principal Approval for the granting of options under the Finkurve ESOP Plan 2018 on 28th May, 2024.
4. Pursuant to regulation 23 of SEBI ((LODR) Regulations, 2015, the company was required to upload the related party transactions on the same date as date of publication of financial results, however the company missed to upload the disclosure on related party transactions for the half year ended on March 31, 2023 on the same date as the date of publication of financial results. The company made good the default as soon as it came to their notice by filing the same on the immediate following date. The Company has also paid the fine of 5,900/- in response to the penalty imposed by the exchange. The Company erroneously missed to upload the disclosure on Related Party Transactions on the date of Publication of its Financial Result. The company has made good the default after it came to their notice by filing the same to the listing centre on the immediate following date. The Company has also paid the fine of 5,900/- in response to the penalty imposed by the exchange.

 

Sr. No. Qualification/ Observation in the Secretarial Audit Report Reply to the qualifications/ observations by the Board
1. Pursuant to regulation 23 of SEBI (LODR) Regulations, 2015, the company was required to make disclosure of all the related party transactions to the stock exchange, however during the period under review, the company failed to disclose few related party transactions to the stock exchange as mentioned hereunder: Sr. Name of Relationship Type of Value of No. the of the related the related counterparty party transaction party with the transaction during the listed entity period ( or its in lakhs) subsidiary 1. Arvog Wholly Investment 1.00 Services owned Limited subsidiary company 2. Arvog Wholly Investment 1.00 Enterprises owned Limited subsidiary company 3. Sherry and Entity owned CSR 5.00 Diya or controlled Contribution Foundation by the KMP The transaction no.1 and 2 pertains to subscription of equity capital of wholly-owned subsidiaries by the Company and transaction no. 3 pertains to donation made and not towards any kind of business transactions and therefore the Company have not considered the same in the disclosure of related party transactions as submitted to the stock exchange. Further, the said transactions does not pose the risk of conflict of interest that other related party transactions might pose. However, The Board took the note of the same and affirmed that the qualification/ observation raised in the Secretarial Audit Report shall be taken care of in the future.
2. Pursuant to section 135 of the Companies Act, 2013 the Company has made an expenditure towards Corporate Social Responsibility as required under the said act for the FY2022-23; however, the details required to be filed with Registrar of Companies, Mumbai (ROC), in e-form CSR-2 (as an addendum to Form AOC-4), has been given erroneously. The amount which was availed as set-off in pursuance of rule 7(3) of the Companies (CSR Policy) Rules, 2014 has been erroneously stated as surplus arising out of the CSR Projects of the previous financial year in the said e-form. However, this error has no impact on the total CSR Obligation for the financial year 2022-23. The Board took the note of the same and shall be taken care of in the future.

The report of the Secretarial Auditor for the Financial Year ended 31st March, 2024 is appended as "Annexure VI".

23. ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND p>

OF THE INDIVIDUAL DIRECTORS AND COMMITTEES

On the advice of the Board of Directors, the Nomination and Remuneration Committee of the Board of Directors of the Company formulated the criteria for evaluation of the performance of the Board of Directors & its Committees, Independent Directors, Non-Independent Directors and the Managing Director of the Board. Based on that, performance evaluation has been undertaken. The Independent Directors of the Company have also convened a separate meeting for this purpose.

24. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ketan Kothari (DIN: 00230725), Director of the Company who retires by rotation and being eligible, offer himself for re-appointment.

However, there has been no change in the composition of the Board of Directors of the Company during the financial year under review.

Key Managerial Personnel:

During the year under review, there has been no change in the Key Managerial Personnel of the Company.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the company are as follows:

Sr No. Name Designation
1. Mr. Narendra Jain Wholetime Director
2. Mr. Amit Shroff Chief Executive Officer
3. Mr. Aakash Jain Chief Financial Officer
4. Mr. Sunny Parekh Company Secretary & Compliance
Officer

Changes after the end of the Financial Year:

Based on the recommendation of the Nomination and Remuneration Committee, Board has considered and approved the appointment of Mrs. Aastha Vishal Solanki (DIN: 10667741) as an Additional, Non-Executive Independent Director of the Company for term of Five (05) Years from 30th June, 2024 to 29th June, 2029, subject to the approval of Shareholders of the Company in the ensuing general meeting.

And the Board Considered the cessation of Mrs. Riddhi Kamlesh Tilwani (DIN: 06910038) as an Independent Director of the Company, w.e.f. the close of business hours of 30th June, 2024, consequent to end of her Ten (10) years term i.e. Two (02) terms of Five (05) Years each as an Independent Director of the Company.

25. STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO

INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR:

The Board of Directors have evaluated the Independent Directors during the year 2023-24 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors is satisfactory.

26. SUBSIDIARIES, ASSOCIATES & JOINT VENTURES:

During the year under review, the Company had incorporated the below mentioned Wholly Owned Subsidiaries (WOS) a. M/s. Arvog Services Limited (CIN: U82990MH2023SGC410742) on 18th September, 2023 and b. M/s. Arvog Enterprises Limited (CIN: U82990MH2023PLC412647) on 20th October 2023.

However, the purpose for which M/s. Arvog Services Limited (CIN: U82990MH2023SGC410742) was incorporated could not be achieved and therefore the

Company filed an application to the Registrar of Companies (‘ROC') for its Strike-off. The current status of the application is ‘Under process of striking off'.

Further, M/s. Arvog Enterprises Limited (CIN: U82990MH2023PLC412647) was incorporated with the primary objective of providing "Lender Service Provider" (LSP) services. However, due to regulatory and compliance constraints, the said WOS could not start its business operations and therefore the Company sold all of its shares of the said WOS worth of 1,00,000/- (Rupees One Lac Only) at cost. Thus, the said WOS ceased to be the WOS effective from 13th March, 2024.

As on the end of the Financial Year, the Company does not have any subsidiary, associate or joint venture company.

27. PUBLIC DEPOSITS:

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies

(Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing details of deposits which are not in compliance with the Chapter V of the Act is not applicable.

28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR

COURTS:

There are no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.

29. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Pursuant to the applicability of the Companies (Corporate Social Responsibility) Rules, 2014, the Board at its meeting held on 15th September, 2020 constituted the Corporate Social Responsibility Committee of the Company. In terms of the provisions of the Companies Act, 2013, read with the CSR Rules, the Annual Report on CSR activities under the format prescribed in "Annexure VII" of the CSR Rules is annexed to this Report.

30. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO

THE FINANCIAL STATEMENTS:

The Company has put in place proper systems and procedures to detect and protect the Organizational resources both tangible and intangible. The Company has also put in place the following to ensure the adequacy of internal financial controls.

The Company has appointed Internal Auditors to check the Internal Controls and also check whether the workflow of the Organization is in accordance with the approved policies of Financial Statements, Internal Auditors present to the Audit Committee, the Internal Audit Report and Management Comments on the Internal Audit observations.

The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.

31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Regulation 34(2) of the SEBI (Listing Obligations and Disclosures Requirements) (LODR) Regulation, 2015 with the Stock Exchanges, the Management Discussion & Analysis Report for the year under review is given under a separate section as

"Annexure VIII".

32. MAINTENANCE OF COST RECORDS AS MANDATED BY THE CENTRAL

GOVERNMENT

Pursuant to the provisions of Section 148(1) of the Companies act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company was required is not required to maintain cost records.

33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT

WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has been employing women employees in various cadres within the Office premises. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Internal Complaints Committee was re- constituted by the Board of Directors through its resolution dated 09th November, 2023 as per the following:

Sr No. Name of the Member Designation
1 Mrs. Sugandhi Ravi Kumar Presiding Officer
2 Ms. Bharti Solanki Member
3 Mr. Aakash Nemichand Jain Member
4 Ms. Saily Ambavkar External Member

There was no complaint received from any employee during the financial year 2023-24 and hence no complaint is outstanding as on 31.03.2024 for redressal.

34. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING

UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

The Company has initiated proceedings against M/s. Rao Edusolutions Private Limited (CIN: U80301MH2013PTC247740) in the capacity of Financial Creditor before the Hon'ble National Company Law Tribunal (‘NCLT').

The Hon'ble National Company Law Tribunal (‘NCLT') has ordered the Commencement of a Corporate Insolvency Resolution Process (‘CIRP') on July 3, 2023. As of now, the status of the case is pending with the Insolvency Resolution Professional (IRP).

35. AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which is a part of this report.

36. NOMINATION AND REMUNERATION POLICY:

Pursuant to Section 178 of the Companies Act, 2013 the Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee, framed and adopted a policy for selection and appointment of Directors, Senior Management and their remuneration. The details pertaining to the composition of the Nomination & Remuneration Committee are included in the Corporate Governance Report, which is a part of this report.

37. LISTING FEES:

The Equity Shares of the Company is listed on BSE Limited. The Listing fees for the Financial Year 2024-25 for BSE Limited has been paid by the Company.

38. ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND

EMPLOYEES:

The Whistle Blower Policy is formulated to encourage all employees and directors of the Company to report any unethical behaviour, actual or suspected fraud or violation of the Code of the Company and to provide a secure environment to such employees acting in good faith and safeguarding them from any adverse action by the management. This policy is in line with the requirements of the Listing Regulations of the Stock Exchange and the provisions of Sub Section 9 of Section 177 of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 which stipulated that every listed Company shall establish a "Vigil Mechanism".

39. RISK MANAGEMENT:

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and the Listing Regulations, the Company has constituted a Risk Management Committee and it has framed and adopted a policy on Risk Management of the Company, to identify the elements of risk which may threaten the existence of the Company and possible solutions to mitigate the risk involved.

At present the Company has not identified any element of risk which may threaten the existence of the Company.

40. CODE OF CONDUCT:

The Code of Conduct for the directors and Senior Management Personnel of the Company have been laid by the Board and necessary declaration has been obtained from them. The

Company has adopted amended ‘Code of Conduct' (including code of conduct of

Independent Directors) and the terms & conditions for appointment of Independent Directors of the Company in the meeting of Board of Directors held on 12th November, 2014.

A declaration signed by the Executive Director of the Company to this effect is contained at the end of this report. The said Code is posted on the website of the Company i.e. www.arvog.com.

41. AUCTIONS HELD DURING THE YEAR:

During the Financial Year under review, the Company had auctions. The details of auctions required to be furnished in the Annual Report of the Company as per Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs issued by the Reserve Bank of India (RBI) on 22 October 2021 (‘SBR Framework') are stated under:

Date of Auction Number of loan accounts Outstanding amounts (in INR) Value fetched Whether any of its sister concerns participated in the auction
02-06-2023 2 39,526 56,170 NO
04-07-2023 3 1,16,705 1,47,955 NO
05-08-2023 1 1,29,192 1,65,567 NO
05-09-2023 4 4,35,697 4,81,140 NO
30-09-2023 8 6,49,813 7,00,683 NO
05-11-2023 4 7,06,728 7,57,248 NO
07-12-2023 4 7,98,819 8,48,500 NO
27-12-2023 18 31,81,057 33,68,467 NO
05-02-2024 10 12,70,687 12,49,556 NO

42. SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

43. COMPLIANCE OF RBI REGULATIONS

Your Company has been granted registration under Sec. 45IA of Reserve Bank of India Act, 1934 (Registration Number: B- 13.00316) whereby the Company is allowed to carry on business as a Non-Banking Financial Company. The Company has followed all regulatory directions such as, KYC Norms, Provisioning Norms, CRAR, Loan to value guidelines for Gold loans, Asset Liability Management, Fair Practices Code, Fraud Reporting etc., as required by the Reserve Bank of India, the regulator for NBFCs. As on March 31, 2024 the percentage of Gold Loan to total loan book is 74.70%

Your Company's Capital Adequacy Ratio as on March 31, 2024 stood at 67.70% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15.00 %.

44. COMMITTEES OF THE BOARD

As on March 31, 2024, the Board had Seven committees:

The Audit Committee, The Nomination and Remuneration Committee, The Stakeholders Relationship Committee, The Corporate Social Responsibility Committee, The Risk Management Committee, The Internal Compliant Committee and The Asset- Liability

Committee (‘ALCO').

During the year, all recommendations made by the committees were approved by the Board.

A detailed note on the composition of the Board and its committees is provided in the Corporate Governance report.

45. BUSINESS RESPONSIBILITY REPORT:

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time, top 1000 Listed entities in terms of market capitalization as on the last date of the reporting financial year are required to furnish a Business Responsibility Report in the Annual Report. Since the Company does on form the part of top 1000 listed entities in terms of market capitalization as on the last date of the reporting financial year the Company is not required to furnish Business Responsibility Report for the Financial Year under review.

46. CREDIT RATING:

During the year under review, the Credit Rating agencies have revised/ assigned the below credit ratings:

Rating Agency Instrument Type Size of Issues ( Crore) Rating/Outlook (September 16, 2022) Rating/Outlook (April 25, 2023) Rating/Outlook (February 14, 2024) Rating Action
Infomerics Valuation and Rating Private Limited ("INFOMERICS") Long term Bank Facilities- NCD 7.50 IVR BBB-/ Stable (IVR Triple B Minus with Stable Outlook) IVR BBB/Stable (IVR Triple B with Stable Outlook) IVR BBB/Stable (IVR Triple B with Stable Outlook) Revised
Infomerics Valuation and Rating Private Limited ("INFOMERICS") Short term Bank Facilities Overdraft 17.00 (Reduced from 17.50 Crore) IVR A3 (IVR A Three) IVR A3+ (IVR A Three Plus) IVR A3+ (IVR A Three Plus) Revised
Infomerics Valuation and Rating Private Limited ("INFOMERICS") Long Term/ Short Term Bank Facilities Proposed facility 50.50 (Reduced from 75.50 Crore) IVR BBB-/ Stable; IVR A3 (IVR Triple B Minus with Stable Outlook; IVR A Three) IVR BBB/ Stable; IVR A3+ (IVR Triple B with Stable Outlook; IVR A Three Plus) IVR BBB/ Stable; IVR A3+ (IVR Triple B with Stable Outlook; IVR A Three Plus) Revised
Infomerics Valuation and Rating Private Limited ("INFOMERICS") Long term Facilities Term Loans 25.00 IVR BBB/Stable (IVR Triple B with Stable Outlook) Assigned

The above ratings indicate a very strong degree of safety regarding timely servicing of financial obligations.

47. OTHER DISCLOSURES:

(i) Compliance: a. The Company erroneously missed to upload the disclosure on Related Party Transactions on the date of Publication of its Financial Result for the quarter and year ended on 31st March, 2023. The Company has made good the default after it came to its notice by filing the same to the listing centre on the immediate following date. The Company has also paid the fine of 5,900/- in response to the penalty imposed by the exchange.

b. The Company has approved issuance of stock options under Finkurve ESOP Plan, 2018 vide shareholders' resolution dated 29th September, 2018. Till date, the Options under the said ESOP Plan are granted in three different tranches i.e., on 26th February, 2021, 30th June, 2021, and 24th August, 2021. As SEBI (Share Based Employee Benefits) Regulation, 2014 was replaced by SEBI (Share Based Employee Benefits) Regulation, 2021 which required the

Company to apply for In Principal approval for Listing and Trading before granting of any stock options. Therefore, the Company was required to have the said approval prior to granting of options under tranche number three i.e., for the options granted on 24th August, 2021. Hence, the Company had made the application for condonation of delay for non-compliance of Regulation 12(3) of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 for the options granted in tranche three along with the requisite fees to SEBI. The same has been accepted by BSE and the Company has received the In-Principal Approval for the granting of options under the Finkurve ESOP Plan 2018 on 28th May, 2024.

(ii) Whistle Blower Policy:

In line with the best Corporate Governance practices, the Company has in place a system through which the directors and employees may report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct & Ethics without fear of reprisal. The employees and directors may report to the Compliance Officer and have direct access to the Chairman of the Audit Committee. The Whistle-Blower Policy is placed on the website of the Company.

(iii) Prevention of Insider Trading Code:

As per SEBI (Prevention of Insider Trading) Regulation, 1992, as amended, the Company has adopted a Code of Conduct for Prevention of Insider Trading. All the directors, employees at senior management and other employees who could have access to the unpublished price sensitive information of the Company are governed by this code. The trading window is closed during the time of declaration of results and occurrence of any material events as per the Code. The Compliance Officer is responsible for setting forth procedures and implementation of the code for trading in Company securities. During the year under review there has been due compliance with the said code.

(iv) Material Subsidiary Policy:

The Company has framed policy for determining "Material Subsidiaries" to ensure that Board of Directors has overall supervision of functioning of subsidiaries of the Company and to provide the governance framework for such subsidiaries. The policy has been uploaded on the website of the Company i.e. www.arvog.com/reports-policies/.

(v) CEO/ CFO Certification:

The certificate certifying that the financial statements do not contain any materially untrue statement and these statements represent a true and fair view of the Company's affairs is annexed and forms part of the Annual Report.

48. ACKNOWLEDGEMENT:

Your Company and its Directors wish to extend their sincerest thanks for the co-operation received from shareholders, bankers and other business constituent during the year under review. Your directors also wish to place on record their deep sense of appreciation for the commitment displayed by all employees of the Company.

For and on behalf of the Board of Directors
Sd/-
Ketan Kothari
Place: Mumbai Chairman
Date: 29th August, 2024 DIN:00230725