Dear Members,

The Directors of your Company have pleasure in presenting Annual Report together with the Audited Accounts and Auditors’ Report for the year ended 31st March, 2018.

1. Financial Performance:-

The financial performance of the Company for the Year ended 31st March, 2018 is as summarized below:-

(in Rs.)

2. Dividend :-

The Board of Directors do not recommend any dividend for the financial year 2017-18 under report.

3. State of the Company’s Affairs:-

The gross turnover for the financial year 2018 at Rs. 3061.82 Lakhs and last year 2017 it was Rs. 3752.80 Lakhs.The Profit before tax for FY 2018 was Rs. 54.82 Lakhs against as Rs. 17.46 Lakhs in FY-2017. The Profit after tax for FY 2018 was Rs. 38.63 Lakhs compared as Rs. 12.75 Lakhs in FY-2017.This has come due to company’s health interest margins, operating efficiencies and prudent risk management.

The Company’s current provisioning standards are more stringent than Reserve Bank of India (RBI) prudential norms. In line with its conservative approach, the Company continues to strengthen its provisioning norms beyond the RBI regulation by accelerating the provisioning to an early stage of delinquencies based on the past experience and emerging trends.

4. Directors:-

Mrs. Gazala Kolsawala retires by rotation at the ensuing Annual General Meeting and, being eligible, offer herself for re-appointment.

Mrs. Sarita Bhartia (DIN 01002622) was appointed as an Additional Director with effect from 8th August, 2018. She holds the office of Additional Director upto the ensuing Annual General Meeting. The Board wants to appoint her as a Non-executive Independent director from the same date for a period of 3 years. She is a Chartered Accountant (Membership no: 056122) having 31 years of experience in finance, taxation, compliance, audits. She is a woman who is result oriented and the Company will be benefitted from her great potential in the above fields.

The resolution seeking approval of the members for the appointment of Mrs. Sarita Bhartia have been incorporated in the notice of the forthcoming annual general meeting of the Company along with brief details about them.

Pursuant to Sections 149 of the Companies Act, 2013 Mr. Sopan Vishwanathrao Kshirsagar has been appointed as Independent Directors for a period of five years till 31st March, 2019 at the annual general meeting held on 29th September, 2014.

Mr. Gajanan Uttamrao Mante has resigned from the board due to his personal reason w.e.f. 8th August, 2018.

The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details of the familiarization programme are available on the website of the Company at http:// www.arnoldholdings.in. /investor relations/ Familiarisation_Programme_for_Independent_Directors.pdf.

Mr. GajananUttamraoMante and Mr. SopanVishwanathrao Kshirsagar, who are independent directors, have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations. Further, all the Directors meet the Fit and Proper criteria as per the policy of the Company and as stipulated by RBI pursuant to the revised regulatory framework notified during the year. The terms and conditions of appointment of Independent Director is also available on the website of the Company at http:// www.arnoldholdings.in./Management/ Appointment of Independent Directors.pdf.

The Directors of the Company have affirmed compliance with the Code of Conduct of the Company.

In the opinion of the Board, the independent directors possess appropriate balance of skills, experience and knowledge, as required.

The brief note on Director retiring by rotation and eligible for re- appointment as well as Independent Directors and re-appointment of Whole Time Director is being furnished in the Report on Corporate Governance.

5. Key Managerial Personnel

During the year under the report, the Company has appointed following persons as Key Managerial Personnel.

Mr. MahendraprasadMallawat - Whole Time Director

Mr. Mohandas Dasari - Whole Time Director

Mrs. Soniya Agarwal - Company Secretary and Compliance Officer.

Mrs. Minaxi M. Chokasi - CFO

6. Directors’ Responsibility Statement-

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

i) That in the preparation of the accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the annual accounts for the financial year ended 31st March 2018 on a going concern basis.

v) 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.

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.

7. Board Evaluation

The Nomination and Remuneration Committees lays down the criteria for performance evaluation of independent directors, Board of Directors and Committees of the Board. The criteria for the performance evaluation is based on the various parameters like attendance and participation at the meetings of the Board and Committees thereof, contribution to strategic decision making, review of risk assessment and risk mitigation, review of financial statements, business performance and contribution to the enhancement of brand image of the Company.

The Board has carried out the evaluation of its own performance as well as that of the Committees of the Board and all the Directors.

8. Subsidiary Company:

The Company does not have any subsidiaries during the year.

9. Meeting of the Board and committees thereof: Board Meeting:

Four meetings of the Board were held during the year, the details of which are disclosed in the Report on Corporate Governance forming part of the Annual Report of the Company.

Audit Committee:

The Company has constituted an Audit Committee comprising of Independent Directors. The composition, terms of reference and details of meeting held during the year are disclosed in the Report on Corporate Governance. Four meetings of the Audit Committee were held during the year.

Stakeholders Relationship Committee:

The Committee met four times during the year. The composition, terms of reference and details of meeting held during the year are disclosed in the Report on Corporate Governance.

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee recommends to the Board the suitability of candidates for appointment as Director/Managing Director and Key Managerial Personnel and the remuneration packages payable to them. The Nomination and Remuneration Committee met two times during the year. The composition, terms of reference and details of meeting held during the year are disclosed in the Report on Corporate Governance.

10. Internal financial control systems and their adequacy:-

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 observations has been received from the Auditors of the company for inefficiency or inadequacy of such controls. The details in respect of internal financial control and their adequacy are included in the Management Discussion & analysis, which forms part of this report.

11. Auditors& Auditors Report

The statutory auditors of the company M/S Amit Ray& CO ( Firm Registration No. 000483C) , Chartered Accountants, retire at the conclusion of this Annual General Meeting of the company and being eligible for Re-Appointment offer them for reappointment.

The Company has received a letter from them to the effect that their re- appointment, if made, would be within the limits prescribed under Section 141(3) (g) of the Companies Act, 2013 and they are not disqualified for re- appointment.

The Notes on Financial Statements referred to in the Auditors’ Report are self- explanatory and do not call for any further comments.

The Audit report does not contain any qualification, reservations or adverse remarks.

12. Management’s Discussion and Analysis Report:-

The Management’s Discussion and Analysis Report(Annexure I) forms an integral part of this report and gives detail of the overview, industry structure an developments, different product groups of the company, operational performance of its various business segments.

13. Corporate Governance:-

As Per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has complied with the requirements of Corporate Governance in all material aspects.

A report on Corporate Governance (Annexure-II) together with a certificate of its compliance from a Practicing Company secretary , forms part of this report.

14. Secretarial Auditor report:

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. S Pardeshi & Associates (CP No. 8485), to conduct Secretarial Audit for the financial year 2017-18.

Secretarial Audit report issued by M/s. S Pardeshi & Associates, Company Secretaries in Form MR-3 forms part of this report Annexure-III.

The said report doesn’t contain any observation or qualification requiring explanation or adverse remarks.

15. Particulars of Loans, Guarantees and Investment.

The Company has not given any loans or guarantee or made any investments in contravention of the provisions of the Section 186 of the Companies Act, 2013. The details of the loans and guarantees given and investments made by the Company are provided in the notes to the financial statements.

16. Related Party Transactions.

All the related party transaction entered into during the financial year was not on the arm’s length basis and were in the ordinary course of Company’s business. The Company’s has not entered into any contracts, arrangements or transaction with any related party which could be considered as material as defined under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

The Board has approved a policy for related party transactions which has been uploaded on the website of the Company www.arnoldholdings.in.

All the related party transactions are placed before the Audit Committee as well as the Board for approval on the quarterly basis. Omnibus approval was also obtained from the Audit Committee and the Board on an annual basis for repetitive transactions.

Related party transactions under Accounting Standards AS- 18 are disclosed in the notes to the financial statements. Prescribed Form No. AOC- 2 pursuant to clause (h) of sub- section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 is furnished as Annexure IV to this report.

Disclosure of Related Party/ Related Party Transactions:

a) Key Managerial Persons:

Mr. Mahendraprasad Mallawat

Mr. Gajanan Uttamrao Mante

Dr. Sopan Vishwanathrao Kshirsagar

Mrs. CA. Gazala Kolsawala

Mrs. Soniya Agarwal

Mrs. Minaxi M. Chokasi

b) Details of transactions:

Director’s remuneration: - Mr. Mahendraprasad Mallawat Rs. 5, 45,500/

Mr. Mohandas Dasari Rs. 27,500/

Mrs. CA. Gazala Kolsawala Rs.40,050/-

Detail of Salary: Mrs. Soniya Agarwal Rs. 3,66,000/

17. RBI guidelines:

The Company is registered as Non deposit taking Company systemically important Non-Banking Finance Company with RBI. Accordingly during the year the Company has not accepted any deposits from the public and there were no deposits which become due for repayment or renewal. The Company has complied with and continues to comply with all applicable Laws, Rules, Circulars, Regulations, norms and standards laid down by the Reserve Bank of India (RBI) during the Financial Year 2017-2018.

18. Dematerialization of Equity Shares: Equity Shares of the Company are compulsorily tradable in electronic form. As on March 31, 2018, 100% of the Equity Shares are held in electronic form only.

19. Secretarial standards of ICSI:

The Institute of Company Secretaries of India (ICSI) has on 23 April 2015, notified the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) to be effective from 1 July 2015. The Company is complying with the same.

20. Extract of Annual Report:

In accordance with the requirements of 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 Form MGT- 9 is furnished as Annexure V to this report.

21. Particulars of Employees:-

None of the employees were in the category of the limits specified Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

22. Fixed Deposits:-

During the year under review, the Company has not accepted any deposits as such no amount of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

23. Vigil Mechanism/Whistle Blower Policy:-

The Company has formulated and established a Vigil Mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, and to enable Directors and Employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct. The details of the same are explained in the Report on Corporate Governance. The Whistle Blower Policy may be accessed on the Company’s website athttp://www.arnoldholdings.in/investor relations/Policies/ Whistle_Blower_Policy.pdf.

24. Conservation of energy, technology absorption and foreign exchange earnings and outgo:-

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be furnished pursuant to Section 134 of the Companies Act, 2013, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are as under:

(i) Part A and B of the Rules, pertaining to conservation of energy and technology absorption, are not applicable to the Company.

(ii) Foreign Exchange Earnings and Outgo:

Foreign Exchange Earned - Rs. Nil

Foreign Exchange Used - Rs. Nil

25. Appointment of Internal Auditor

Pursuant to the provisions of Section 138 read with Rule 13 of the Companies (Accounts) Rule, 2014, Mrs. Soniya Agarwal who is the Company Secretary and compliance officer of the Company has been appointed has the internal auditor of the Company for the financial year 2018-2019 and she is being eligible for re- appointment.

26. Human Resources:

The Company recognizes people as its most valuable asset and it has built an open, transparent and meritocratic culture to nurture this asset. The Company has a planning tool that provides an integrated means of identifying, selecting, developing and retaining top talent within the organization. Focus on Behavioral and Leadership traits through Learning & Development interventions, job rotation is planned for the employees who constitute the Talent Pool.

27. Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Workplace:

The Company has in place a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Work Place. Appropriate reporting mechanisms are in place for ensuring protection against Sexual Harassment and the right to work with dignity. During the year under review, the Company has not received any complaints in this regard.

28. Business Development:

During the year, the Business Development Group (“BDG”) initiated opportunities and harnessed its extensive relationship network within and outside the Company, to benefit the business.

29. Regulatory Action:

There are no significant and material orders passed by the regulators or courts or tribunal impacting the going concern status and operation of the Company in future.

30. Material Changes and Commitments:

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report.

30. Acknowledgments:-

The Directors express their sincere gratitude to the Reserve Bank of India, Securities and Exchange Board of India, BSE Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Company’s bankers for the ongoing support extended by them.

The Directors also place on record their sincere appreciation for the continued support extended by all the stakeholders and trust reposed by them in your Company. The Directors sincerely appreciate the commitment displayed by the employees of the Company and resulting in successful performance during the year.

On behalf of the Board of Directors,

For Arnold Holdings Limited For Arnold Holdings Limited

Mahendraprasad Mallawat Mohandas Dasari

Whole Time Director Whole-Time Director

DIN - 00720282 DIN - 05105936

Place : Mumbai

Date : 30th May, 2018