| 230 Annual Report | 2024-2025 Financials Arohan Financial Services Limited Notes to financial statements for the year ended March 31, 2025 (Contd.) (All amounts in ` lakhs unless otherwise stated) Note 51: Disclosures pursuant to Scale Based Regulation as per circular RBI/DoR/2023-24/106 DoR. FIN.REC. No.45/03.10.119/2023-24 (a) 1) Composition of the Board and change in composition of the Board during the financial year Requirements Response NBFCs shall put up to the Board of Directors, at regular intervals, conformity with corporate governance standards, viz., in composition of various committees, their role and functions, periodicity of the meetings and compliance with coverage and review functions, etc. NBFCs has put up to the Board of Directors, at regular intervals, conformity with corporate governance standards, viz., in composition of various committees, their role and functions, periodicity of the meetings and compliance with coverage and review functions, etc. 2) Details of non-compliance with requirements of Companies Act, 2013: There are no default in compliance with the requirements of Companies Act, 2013, including with respect to compliance with accounting and secretarial standards. 3) Details of penalties and strictures: The Reserve Bank of India (RBI), exercising its authority under section 45L(1)(b) of the Reserve Bank of India Act, 1934, issued an order on October 17, 2024, directing the company to cease and desist from sanctioning or disbursing loans, effective from the close of business on October 21, 2024. However, these business restrictions did not prevent the company from servicing its existing customers or conducting collection and recovery processes in accordance with the regulatory Order. The Company initiated all necessary remedial action and submitted its various compliances to RBI and having been satisfied based on the submissions and in view of the adoption of revamped processes, systems and commitment to ensure adherence to the Regulatory Guidelines on an ongoing basis the order was vacated on January 03, 2025 with immediate effect. (b) There are no modified opinion expressed by the auditors. (c) There are no items of income and expenditure of exceptional nature. (d) Breach of financial covenant: (i) Debt securities Lender Debenture trust deed date Description of financial covenants Limit required Actual Northern Arc Capital Limited March 28, 2018 & August 14, 2018 PAR 90 as a percentage of gross loan portfolio (*) (**) Not exceeding 2.00% 2.73% Positive net profit after tax maintained on quarterly basis (***) Positive profit after tax (4,250.90) (*) However the Company has obtained a financial covenant relaxation on maintaining portfolio overdue for more than 90 days percentage threshold permanently. (**) Gross loan portfolio overdue for more than 90 days as a percentage of gross loan portfolio as on March 31, 2025
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