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A.K.Capital Services Ltd.

BSE: 530499 Sector: Financials
NSE: N.A. ISIN Code: INE701G01012
BSE 00:00 | 08 Aug 437.65 11.10
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NSE 05:30 | 01 Jan A.K.Capital Services Ltd
OPEN 432.00
PREVIOUS CLOSE 426.55
VOLUME 1161
52-Week high 554.90
52-Week low 326.00
P/E 10.07
Mkt Cap.(Rs cr) 289
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 432.00
CLOSE 426.55
VOLUME 1161
52-Week high 554.90
52-Week low 326.00
P/E 10.07
Mkt Cap.(Rs cr) 289
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

A.K.Capital Services Ltd. (AKCAPITALSERV) - Director Report

Company director report

To

The Members of A. K. Capital Services Limited ("Company")

The Directors of your Company are pleased to present the 28th AnnualReport of the Company together with the Annual Audited Standalone and ConsolidatedFinancial Statements for the Financial Year ended March 312021.

1) FINANCIAL HIGHLIGHTS

A summary of the financial performance of the Company both onstandalone and consolidated basis for the Financial Year 2020-21 as compared to theprevious Financial Year is given below:

Standalone Financial Statements:

(INR in Lakhs except earnings per share)

Particulars 2020-21 2019-20
Total revenue 7334.37 6334.25
Total expenses 4087.05 4114.03
Profit before tax 3247.32 2220.22
Tax expenses:
Current tax 731.00 500.00
Prior period tax adjustments - (54.99)
Deferred tax expense/(credit) (25.25) (91.92)
Profit after tax (A) 2541.57 1867.13
Other comprehensive Income net of tax
Item that will not to be reclassified to the statement of profit and loss 6.01 (9.50)
Less: Income tax expense on above (1.52) 8.75
Other comprehensive Income for the year (B) 4.49 (0.75)
Total comprehensive Income for the year [A+B] 2546.06 1866.38
Earnings per equity share (face value INR 10/- per share) Basic and Diluted 38.51 28.29
Opening balance of other comprehensive income (619.81) (619.06)
Add: Other comprehensive income for the year 4.49 (0.75)
Closing balance of other comprehensive income (615.32) (619.81)
Opening balance of retained earnings brought forward from previous year 30604.38 29510.64
Add: Profit for the year 2541.57 1867.13
Profit available for appropriation 33145.95 31377.77
Less: Appropriations
Dividend paid (396.00) (726.00)
Dividend distribution tax on dividend (0.86) (47.39)
Closing balance of retained earnings 32749.09 30604.38

Note: Previous year figures have been regrouped / rearranged wherevernecessary.

2) FINANCIAL PERFORMANCE AND STATE OF AFFAIRS OF THE COMPANY

A. K. Capital Services Limited is a Flagship Company of the A. K.Group and is registered with Securities and Exchange Board of India ("SEBI") asa Category I Merchant Banker and Investment Advisor.

On a standalone basis your Company earned total revenue of INR7334.37 Lakhs during the Financial Year under review as against INR 6334.25 Lakhsreported in the previous Financial Year. The profit before tax is INR 3247.32 Lakhs forthe current Financial Year as against INR 2220.22 Lakhs during the previous FinancialYear. After making provision for tax the net profit of your Company is INR 2541.57 Lakhsfor the current Financial Year as against the net profit of INR 1867.13 Lakhs in theprevious Financial Year.

Consolidated Financial Statements:

(INR in Lakhs except earnings per share)

Particulars 2020-21 2019-20
Total revenue 28914.63 31420.68
Total expenses 19079.24 24885.97
Profit before tax 9835.39 6534.71
Tax expenses:
Current tax 2371.82 1642.71
Prior period tax adjustments 1.34 112.32
Deferred tax expense/(credit) (42.36) (367.91)
Profit after tax (A) 7504.59 5147.59
Other comprehensive income net of tax
Item that will not to be reclassified to the statement of profit and loss (11.96) (42.43)
Less: Income tax expense on above 3.73 14.44
Other comprehensive Income for the year (B) (8.23) (27.99)
Total comprehensive income for the year [A+B] 7496.36 5119.60
Profit for the year attributable to: 7504.59 5147.59
Owners of the Company 7440.08 5100.59
Non-controlling interest 64.51 47.00
Other comprehensive income attributable to: (8.23) (27.99)
Owners of the Company (7.99) (27.84)
Non-controlling interest (0.24) (0.15)
Earnings per equity share (face value INR 10/- per equity share)
Basic and Diluted 112.73 77.28
Opening balance of Other comprehensive income (2363.27) (2335.43)
Add: Other comprehensive income for the year (7.99) (27.84)
Add: Other adjustments - -
Closing balance of other comprehensive income (2371.26) (2363.27)
Opening balance of retained earnings brought forward from previous year: 49230.61 46999.47
Add: Profit for the year 7440.08 5100.59
Profit available for appropriation 56670.69 52100.06
Less: Appropriations
Dividend paid** (396.00) (726.00)
Dividend on CCPS (115.63) (629.24)
Dividend distribution tax on dividend** (4.98) (273.60)
Transfer to special reserve (1017.00) (740.61)
Purchase of CCPS from non-controlling interest - (500.00)
Closing balance of retained earnings 55137.08 49230.61

** During the year 2020-21 the Board of Directors of the Company hadpaid a final dividend of INR 1/- per equity share (previous year INR 6/- per equity sharepertaining to financial year ended March 31 2019) having face value of INR 10/- each forthe year ended March 312020. The same is approved by the shareholders of the Company inthe annual general meeting held on September 19 2020 (previous year's annual generalmeeting held on September 28 2019). The total cash outflow of INR 66.86 Lakhs includingINR 0.86 Lakhs pertaining to earlier year's dividend distribution tax (previous yearINR 415.46 Lakhs including corporate dividend distribution tax).

During the year 2020-21 the Board of Directors of the Company had paidinterim dividend of INR 5/- per equity share (previous year INR 5/- per equity share)having face value of INR 10/- each for the year ended March 31 2021 on its board meetingheld on January 27 2021 (previous year's board meeting held on March 6 2020). Thetotal cash outflow of INR 330.00 Lakhs (previous year INR 357.93 Lakhs including corporatedividend distribution tax).

Note: Previous year figures have been regrouped/rearranged wherevernecessary.

3) SUMMARY OF THE CONSOLIDATED FINANCIAL PERFORMANCE OF THE COMPANY& IT'S SUBSIDIARIES

The consolidated total revenue of your Company stood at INR 28914.63Lakhs for the Financial Year ended March 312021 as against INR 31420.68 Lakhs for theprevious Financial Year. The consolidated profit before tax is INR 9835.39 Lakhs for thecurrent Financial Year as against INR 6534.71 Lakhs in the previous Financial Year. Aftermaking provision for tax the consolidated net profit of your Company is INR 7504.59Lakhs for the current Financial Year as against INR 5147.59 Lakhs in the previousFinancial Year.

Pursuant to Section 129(3) of the Companies Act 2013 ("theAct") read with Rule 5 and Rule 8(1) of The Companies (Accounts) Rules 2014 astatement containing salient features of Financial Statements of Subsidiaries highlightingthe performance of subsidiaries and their contribution to the overall performance of theCompany in Form AOC-1 is attached to the Consolidated Financial Statements in the AnnualReport.

There has been no material change in the nature of the business ofsubsidiaries. In accordance with provisions of Section 136 of the Act the separate auditedfinancial statement of each subsidiary company is also available on the website of yourCompany at www.akgroup.co.in.

4) NOTES ON FINANCIAL STATEMENTS

Standalone Financial Statements have been prepared in accordance withIndian Accounting Standards ("Ind AS") notified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended from time totime.

The Financial Statements have been prepared in accordance with Ind ASunder the historical cost convention on the accrual basis except for certain financialinstruments which are measured at fair values and based on the accounting principle of agoing concern in accordance with Generally Accepted Accounting Principles (GAAP).Accounting policies have been consistently applied except where a newly issued accountingstandard is initially adopted or a revision to an existing accounting standard requires achange in the accounting policy hitherto in use. The Financial Statements are presented inLakhs or decimal thereof.

The Financial Statements have been presented in accordance withSchedule III-Division III General Instructions for Preparation of Financial Statements ofa Non-Banking Financial Company (NBFC) that is required to comply with Ind AS.

5) CHANGE IN THE NATURE OF BUSINESS

During the Financial Year 2020-21 there has been no change in thenature of the business of the Company.

6) DIVIDEND

The Board of Directors approved the payment of Interim Dividend of INR5/- (Indian Rupees Five) per equity share on each fully paid up 6600000 equity shares ofINR 10/- (Indian Rupees Ten) each of the Company amounting to INR 330 Lakhs for theFinancial Year ending March 312021. The dividend was paid (subject to the deduction oftax at source) to those members of the Company whose names appeared on the Register ofMembers of the Company as on February 6 2021.

The Board has recommended a Final Dividend of INR 1/- (Indian RupeeOne) per equity share of INR 10/- (Indian Rupees Ten) each for Financial Year 2020-21.

The payment of the Final Dividend is subject to the approval of themembers at the ensuing Annual General Meeting and shall be paid (subject to the deductionof tax at source) to those members whose names appear in the Register of Members as onFriday August 6 2021. The Register of Members and Share Transfer Books will remainclosed from Saturday August 7 2021 to Saturday August 14 2021 (both days inclusive).The amount of Final Dividend on Equity Shares thereon aggregates to INR 66 lakhs.

The total dividend (Interim and Final) approved/ recommended by theBoard for Financial Year 2020-21 is INR 6/- (Indian Rupees Six) per equity share of INR10/- (Indian Rupees Ten) each fully paid up.

7) TRANSFER TO GENERAL RESERVES

During the year under review the Company has not transferred anyamount to the General Reserves.

8) PUBLIC DEPOSITS

No disclosure is required in respect of the details relating to theDeposits covered under Chapter V of the Act as the Company has not accepted any Depositduring the year under review.

9) PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS BYTHE COMPANY

Particulars of Loans Guarantees and Investments as required under theprovisions of Section 186 of the Act are given in "Note No. 5 6 & 27 ofthe Notes to the Standalone Financial Statements".

10) DIRECTORS'RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c)and 134(5) of theAct with respect to Directors' Responsibility Statement your Directors confirm thatthey have:

a) Followed the applicable accounting standards in preparation of theAnnual Financial Statements for the FinancialYear 2020-21;

b) Have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312021 and of the profit ofthe Company for the Financial Year 2020-21 ended on that date;

c) Taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company & for preventing & detecting fraud andother irregularities if any;

d) Prepared the annual accounts on a ‘going concern basis';

e) Laid down proper internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) Devised proper systems to ensure compliance with the provisions ofall applicable laws and that the systems are adequate and are operating effectively.

11) INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate Internal Financial Controls withreference to the Financial Statements. Internal Financial Control has been assessed duringthe year taking into consideration the essential components of internal controls stated inthe Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby The Institute of Chartered Accountants of India (ICAI). Based on the results of suchassessment carried out by management with the assistance of M/s A. Ratadiya &Associates Practicing Chartered Accountant Firm no reportable material weakness orsignificant deficiency in the design or operation of Internal Financial Controls wasobserved.

The statutory auditors of the Company viz. M/s. PYS & AssociatesLLP Chartered Accountants have also verified the Internal Financial Controls systems overfinancial reporting and have opined that such Internal Financial Controls over financialreporting were operating effectively as at March 312021. The Audit Committee monitors theInternal Financial Control system and ensures adequacy of the same.

Annexure B to the Independent Auditors' Report provides a reporton Internal Financial Controls over the financial reporting of A. K. Capital ServicesLimited as on March 312021.

During the Financial Year under review no material or seriousobservations have been highlighted for inefficiency or inadequacy of such controls.

12) RISK MANAGEMENT

As a diversified enterprise your Company continues to focus on asystem-based approach to business risk management. The management of risk is embedded inthe corporate strategies that best match organizational capability with marketopportunities focusing on building distributed leadership and succession planningprocesses nurturing specialism and enhancing organizational capabilities. Accordinglymanagement of risk has always been an integral part of the Company's Strategy. TheCompany has formulated comprehensive risk management policies and processes to identifyevaluate and manage risks that are encountered during conduct of business activities in aneffective manner.

The pandemic risk was unprecedented and caused many disruptions anduncertainties globally. The Company swiftly activated the Business Continuity Plan (BCP)to face the challenges posed by the pandemic. The BCP is reviewed periodically.

13) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems to commensurate withthe nature of business and size of operations for ensuring:

i. orderly and efficient conduct of business including adherence to Company'spolicies and procedures; ii. safeguarding of all our assets against loss from unauthorizeduse or disposal;

iii. prevention and detection of frauds and errors;

iv. accuracy and completeness of accounting records;

v. timely preparation of reliable financial information; and

vi. compliance with applicable laws and regulations.

The policies guidelines and procedures are in place to ensure that alltransactions are authorised recorded and reported correctly as well as provides foradequate checks and balances.

Adherence to these processes is ensured through frequent internalaudits. The internal control system is supplemented by an extensive program of internalaudit and reviews by the senior management. To ensure independence the internal auditfunction has a reporting line to the Audit Committee of the Board.

The Audit Committee of the Board reviews the performance of theinternal audit and the adequacy of internal control systems and compliance with regulatoryguidelines. The Audit Committee of Board provides necessary oversight and directions tothe internal audit function and periodically reviews the findings and ensures correctivemeasures are taken. This system enables us to achieve efficiency and effectiveness ofoperations reliability and completeness of financial and management information andcompliance with applicable laws and regulations.

14) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company duringthe Financial Year 2020-21 with related parties were in compliance with the provisions ofthe Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations").

The Company had obtained prior approval of the Audit Committee for allthe related party transactions entered during the Financial Year 2020-21 as envisaged inRegulation 23(2) of the Listing Regulations. Further the Audit Committee had given prioromnibus approval under Section 177 of the Act read with Rule 6(A) of The Companies(Meetings of Board and its Powers) Rules 2014 read with Regulation 23(3) of the ListingRegulations for related party transactions that are foreseen and of repetitive natureduring the period under review and the required disclosures are made to the AuditCommittee and Board on quarterly basis.

The Company also secures omnibus approval from the Audit Committee fortransaction up to INR 1 Crore with related party where the need for related partytransaction cannot be foreseen and adequate details are not available.

All related party transactions that were entered during the financialyear ended March 312021 were on an arm's length basis and were in the ordinarycourse of business. Therefore the provisions of Section 188 of the Act were notattracted.

The details of material related party transaction entered into by theCompany during the Financial Year 2020-21 are enumerated in Form AOC-2 as annexed inAnnexure - 4 under Section 134(3)(h) of the Act read with Rule 8(2) of The Companies(Accounts) Rules 2014. In addition to above the disclosure of transactions with relatedparty for the year as per Indian Accounting Standard-24 (Ind AS-24) Related PartyDisclosures is given in "Note No.34 of the Notes to the Standalone FinancialStatements" section of the Annual Report.

Further disclosure required under Schedule V Part A of ListingRegulations pertaining to related party transactions is furnished in "Note No.34 ofthe Notes to the Standalone Financial Statements" section of the Annual Report.

The Company has in place a Board approved Policy on Materiality andDealing with Related Party Transactions which is available on the website of the Companyat:

https://www.akaroup.co.in/docs/Policv%20on%20Materialitv%20and%20Dealina%20with%20Related%20Partv%20TransactionsFinal-202106182150116396437.pdf

15) MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITIONOF THE COMPANY

The COVID-19 pandemic has significantly impacted economic activitiesbusinesses individuals across the spectrum. The Company recognizes the need to makereasonable estimation of the impact of this pandemic on the repayment ability of itscustomers and make additional provisions as considered appropriate over-and-above theextant provisions for expected credit losses. The Company has segmented its portfolio onthe basis of various parameters to ascertain the impact of COVID-19 and basis itsestimates assumptions and judgements arrived at the additional impairment which isprovided for in its financial statements. Given the uncertainty over the potentialmacro-economic condition the impact of the COVID-19 may be different from that expectedas at the date of approval of this Report. As per the Company's assessment this by itselfhas not resulted into any significant increase in the credit risk. The Company willcontinue to closely monitor any material changes to future economic conditions andsuitable effect will be given in the respective future period.

16) STATUTORY AUDITORS AND AUDITOR'S REPORT

M/s. PYS & Co. LLP (Firm Registration No. 012388S/S200048)Chartered Accountants Statutory Auditors of your Company were appointed in the 24thAnnual General Meeting of the Company held on September 16 2017 as Statutory Auditors ofthe Company to hold office for a term of five years until the conclusion of the 29thAnnual General Meeting to be held in the year 2022. The requirement to place the matterrelating to appointment of auditors for ratification by the members at every annualgeneral meeting has been done away by the Companies (Amendment) Act 2017. Accordingly noresolution has been proposed for ratification of appointment of statutory auditors at theensuing Annual General Meeting.

The Auditors have confirmed their eligibility and independence underthe provisions of the Act and the Chartered Accountants Act 1949 and rules orregulations made thereunder.

There is no qualification reservation or adverse remark made by theStatutory Auditors in their Audit Report.

17) REPORTING OF FRAUDS BY AUDITORS

During the year under review the Statutory Auditors of the Companyhave not reported any fraud to the Audit Committee or to the Board of Directors underSection 143(12) of the Act including rules made thereunder.

18) REQUIREMENT FOR MAINTENANCE OF COST RECORDS

The Company is not required to maintain cost records as specified bythe Central Government under Section 148(1) of the Act.

19) SUBSIDIARIES

As on March 312021 your Company has following subsidiaries (includingstep-down subsidiary):

Sr. No. Name of the subsidiaries

i. A. K. Stockmart Private Limited

ii. A. K. Capital Corporation Private Limited

iii. A. K. Wealth Management Private Limited

iv. A. K. Capital (Singapore) Pte. Ltd.

v. A. K. Capital Finance Limited

vi. Family Home Finance Private Limited (Step-down subsidiary).

There was no entity which became or ceased to be subsidiary jointventure or associate company of the Company during the financial year ended March 312021.

20) MATERIAL SUBSIDIARIES

Pursuant to the provisions of Regulation 16 of the Listing Regulationsincluding amendments thereto the Company has two Material Subsidiaries namely A. K.Capital Finance Limited and A. K. Stockmart Private Limited.

The Policy for determining the material subsidiaries has beenformulated and adopted by the Board. The Policy may be accessed on the website at link:

https://www.akgroup.co.in/docs/Policv%20for%20Determining%20Material%20SubsidiariesFinal-202106182144300311577.pdf

21) SECRETARIAL AUDIT OF MATERIAL SUBSIDIARIES

All the material subsidiaries of the Company had undertaken SecretarialAudit for Financial Year 2020-21 pursuant to Section 204 of the Act and the said reportthereon forms part of such subsidiaries' respective annual reports. The SecretarialAudit Report of Material Subsidiary Company viz. A. K. Capital Finance Limited and A. K.Stockmart Private Limited is attached as Annexure - 3 to this report pursuant toRegulation 24A of the Listing Regulations.

22) BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL OFTHE COMPANYCOMPOSITION OF THE BOARD

As on March 312021 the Board of Directors of your Company comprisedof seven Directors of which three are Executive Directors one Woman Non-ExecutiveNon-Independent Director and three are Non-Executive Independent Directors. The Chairmanof the Board is Non-Executive Independent Director. The composition of the Board is inconsonance with Listing Regulations & in accordance with the applicable provisions ofthe Act as amended from time to time.

The details of board composition are provided in ‘Report onCorporate Governance'forming part of the Annual Report.

RETIREMENT BY ROTATION

In accordance with the Articles of Association of the Company and theprovisions of the Section 152 (6) of the Act Mr. Vikas Jain (DIN: 07887754) Whole-timeDirector will retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.

The requisite agenda for re-appointment of Mr. Vikas Jain(DIN:07887754) & his profile is incorporated in the Notice of Annual General Meeting.

KEY MANAGERIAL PERSONNEL

The following persons are the Key Managerial Personnel's(KMP's) of the Company as per the provisions of Section 203 of the Act as on March312021:-

Mr. A. K. Mittal Managing Director
Mr. Ashish Agarwal Whole-time Director
Mr. Vikas Jain Whole-time Director
Mr. Mahesh Bhootra Chief Financial Officer
Mr. Tejas Davda Company Secretary

23) DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from all theIndependent Directors of the Company confirming that they fulfill the criteria ofIndependence prescribed both under Section 149(6) of the Act and Regulation 16(b) ofListing Regulations and that they have complied with the Code of Conduct as specified inSchedule IV to the Act. There has been no change in the circumstances affecting theirstatus as Independent Directors of the Company.

The Independent Directors of the Company have registered themselveswith the Indian Institute of Corporate Affairs (IICA) for recording their names and otherrequisite details in the databank maintained with IICA.

In terms of Section 150 of the Act read with Rule 6(4) of the Companies(Appointment & Qualification of Directors) Rules 2014 all the Independent Directorsare exempted from appearing in online proficiency self-assessment test conducted by theIICA.

24) DECLARATION FROM DIRECTORS AND PRACTISING PROFESSIONAL

Based on the written representations received from the Directors of theCompany as on March 312021 none of the Directors of the Company is disqualified to actas a Director as on March 312021.

M/s. Ragini Chokshi & Co Practicing Company SecretariesSecretarial Auditor have also certified that none of the Directors of the Company havebeen debarred or disqualified from being appointed or continuing as Director of theCompany by SEBI or Ministry of Corporate Affairs or any such other statutory authority.The certificate received from the Secretarial Auditor is attached as Annexure - 6 tothis Board's Report.

25) PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and the Listing Regulations theBoard has carried out an Annual Performance Evaluation of its own performance theDirectors individually as well as the evaluation of the working of its various Committeesfor the Financial Year 2020-21.

The Evaluation was carried on with the objective of enhancing theeffectiveness of the Board. The Nomination and Remuneration Committee formulated themethodology and criteria to evaluate the performance of the Board its Committee and eachDirector.

The evaluation of the performance of the Board Committees and eachDirector is based on the approved criteria laid down in the Nomination and RemunerationPolicy of the Company.

The Independent Directors also held a separate meeting to review theperformance of the Non-Independent Directors the Chairman of the Company the overallperformance of the Board along with its Committees. The Independent Directors expressedsatisfaction over the performance and effectiveness of the Board individualNon-Independent Directors and the Chairman. The details of performance evaluationconducted during the Financial Year 2020-21 is provided in ‘Report on CorporateGovernance' forming part of the Annual Report.

26) MEETINGS OF THE BOARD

Regular meetings of the Board are held to discuss and decide on variousbusiness policies strategies financial matters and other businesses. During the yearunder review the Board met four times. The details of the Board Meetings and theattendance of the Directors at the meetings are provided in the ‘Report on CorporateGovernance' which forms part of this Annual Report.

27) BOARD COMMITTEES:

MANDATORY COMMITTEES

The Board of Directors has constituted four Mandatory Committees viz.

i. Audit Committee

ii. Nomination and Remuneration Committee

iii. Stakeholders' Relationship Committee

iv. Corporate Social Responsibility Committee

The details of all the Mandatory Committees along with theircomposition terms of reference and meetings held during the year are provided in‘Report on Corporate Governance' forming part of the Annual Report.

In the FinancialYear 2020-21 the Board has accepted all therecommendations of its Committees.

NON-MANDATORY COMMITTEES

In addition to the above referred Mandatory Committees the Board hasalso formed the following Non-Mandatory Committees of the Board and delegated powers andresponsibilities with respect to specific purposes:

i. Banking and Investment Committee

ii. Management Committee

iii. Infrastructure Committee

Details of Non-Mandatory Committees as mentioned above along with theircomposition and terms of reference are provided in ‘Report on CorporateGovernance'forming part of the Annual Report.

28) NOMINATION AND REMUNERATION POLICY

The Company's policy on directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of a director and other matters provided under sub-section (3) of Section 178of the Act is mentioned and elaborated in the Nomination and Remuneration Policy.

The Nomination and Remuneration Policy is attached as Annexure - 1 tothis Report.

29) CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee (the"Committee") is established by the Board in accordance with Section 135 of theAct. The Committee has approved and adopted the Corporate Social Responsibility("CSR") policy which lists out the activities that can be undertaken orsupported by the Company within the applicable provisions of the Act. Apart from thecomposition requirements of the Committee the CSR Policy inter alia lays out thecriteria for selection of projects and areas annual allocation modalities of execution/implementation of activities and the monitoring mechanism of CSR activities/ projects.

The CSR Policy of the Company was amended by the Board at their Meetingheld on May 29 2021 in light of the recent amendments introduced by Ministry of CorporateAffairs ("MCA") vide the Companies (Corporate Social Responsibility Policy)Amendment Rules 2021 dated January 22 2021. The CSR Policy of the Company may beaccessed at the link given below:

https://www.akgroup.co.in/docs/CSR%20Policv%20-%20AKCSL20.05.2021-202107281340166030358.pdf

The details of CSR activities undertaken by the Company during theFinancial Year 2020-21 is attached as Annexure - 2 and forms an integral part ofthis Report.

30) WHISTLEBLOWER POLICY AND VIGIL MECHANISM

Pursuant to Section 177(9) of the Act and rules made thereunder and asper Regulation 22 of Listing Regulations the Company has in place a Whistle Blower Policy('Vigil Mechanism') for reporting genuine concerns over happening of instances of anyirregularity unethical practice and/ or misconduct involving the directors and employees.The Policy may be accessed on the Company's website at the link given below:

https://www.akgroup.co.in/docs/Whistle%20Blower%20Policy%20and%20Establishment%20of%20Vigil%20Mechanismorganized- 202006241657493896679.pdf

There was no instance of such reporting received during the year underreview.

31) POLICY FOR PREVENTION PROHIBITION AND REDRESSAL OF SEXUALHARASSMENT OF WOMEN AT WORKPLACE

In accordance with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 ("POSH Act") and the rulesmade thereunder the Company has adopted a Policy on Prevention Prohibition and Redressalof Sexual Harassment at Workplace at a group level and has duly constituted an InternalComplaints Committee (ICC) in line with the provisions of the POSH Act and the rules madethereunder. The Policy has been widely communicated internally and is placed on theCompany's website.

ICC has been set up to redress complaints received regarding sexualharassment.

During the Financial Year 2020-21 no case in the nature of sexualharassment was reported at any workplace of the Company.

The Annual Report prepared by the ICC of the Company as per theprovisions of Section 21 of the POSH Act read with Rule 14 of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Rules 2013 was duly submittedto the District Officer-Women and Child Development located at Worli Mumbai.

32) MANAGEMENT DISCUSSION & ANALYSIS REPORT AND REPORT ON CORPORATEGOVERNANCE

The Report on Management Discussion and Analysis for the year underreview as required under Regulation 34(2) of Listing Regulations is set out separatelyand forms part of this Annual Report.

A Report on Corporate Governance as stipulated under Regulations 17 to27 and Paras C D and E of Schedule V of the Listing Regulations as amended from time totime is set out separately and forms part of this Annual Report. The Company has been incompliance with all the norms of Corporate Governance as stipulated in Regulations 17 to27 and Clauses (b) to (i) of Regulation 46(2) and Paras C D and E of Schedule V of theListing Regulations as amended from time to time.

A certificate from the Statutory Auditors of the Company M/s. PYS& Co. LLP (Firm Registration No.:012388S/S200048) Chartered Accountants confirmingcompliance with the conditions of Corporate Governance stipulated under ListingRegulations is annexed to the ‘Report on Corporate Governance'.

33) SECRETARIAL AUDITOR SECRETARIAL AUDIT REPORT AND SECRETARIALCOMPLIANCE REPORT

Pursuant to the provisions of Section 204 of the Act and the rules madethereunder the Company has appointed M/s. Ragini Chokshi & Co. Practicing CompanySecretaries Mumbai to conduct the Secretarial Audit of the Company for Financial Year2020-21. The Company provided all assistance and facilities to the Secretarial Auditorsfor conducting their audit.

The Secretarial Audit Report is appended as Annexure-3 to thisReport.

There is no qualification reservation or adverse remark made by theAuditor in the Report.

In accordance with SEBI Circular no. CIR/CFD/CMD1/27/2019 datedFebruary 08 2019 the Company has obtained from the Secretarial Auditors of the Companyan Annual Secretarial Compliance Report. The copy of Annual Secretarial Compliance Reportis available on the website of the Company at the link given below:

https://www.akgroup.co.in/docs/Annual%20Secretarial%20Compliance%20Report-%20March%2031.%202021-202106011431067524920.pdf

There is no qualification reservation or adverse remark made by theAuditor in the Annual Secretarial Compliance Report.

34) SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS AND COURTS

There is no significant and material order passed by the Regulators orCourts or Tribunals impacting the going concern status and Company's operation infuture during the FinancialYear 2020-21.

35) CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The operations of the Company are not energy intensive. Howeveradequate measures for conservation of energy usage of alternate sources of energy andinvestments for energy conservation wherever required have been taken. The Company makesall reasonable efforts towards conservation of energy protection of environment andensuring safety.

The Company recognizes the significance of robust IT infrastructure inthe current era where it is crucial to offer clients faster and more efficient services.Towards this end the Company makes a sizeable investment each year to ensure adoption ofbest technologies that can streamline operations brings in efficiency and enable toprovide better customer service to make the Company more competitive in the market.

Your Company has no foreign exchange earnings and outgo during theFinancial Year 2020-21.

36) ACHIEVEMENTS & AWARDS

i) The Company has been awarded the prestigious international title of"India Bond House of the Year 2018" by IFR Asia. With this achievementAK Capital has marked its presence alongwith other Asian countries' bond houses likeHSBC Credit Suisse CIMB ANZ & Bank of China

ii) The Company acted as a Transaction Advisor and Merchant Banker forMunicipal Bond Issue of INR 200 Crores by Lucknow Municipal Corporation. The Issue gotlisted on December 2 2020 at Bombay Stock Exchange. This was the 1st Municipal Bond Issuefrom North India. The Issue received bumper response from Investors with total bidsreceived worth INR 450 Crores viz. 4.5 times against the basic issue of INR 100 Crores.

iii) The Company also acted as a merchant banker for Green MunicipalBond Issue of INR 150 Crores by Ghaziabad Nagar Nigam. The Issue was 1st Green Bond Issueby any municipal corporation in India. The Issue received bumper response from Investorswith total bids received worth INR 401 Crores viz. 4.01 times against the basic issue ofINR 100 Crores.

iv) The Company has been awarded as "Winner in Merchant BankerCategory in Debt Segment" by ASSOCHAM on December 22 2017. The award wasconferred by Sh. P Radhakrishnan Hon'ble Minister of State for Finance and ShippingGovernment of India.

37) DEPOSITORY SYSTEM

The Equity Shares of the Company are compulsorily traded in electronicform. As on March 312021 out of the Company's total paid-up Equity Share Capitalcomprising of 6600000 Equity Shares only 21120 Equity Shares (constituting 0.32% ofthe paid-up share capital) are in physical form and the remaining shares are held indematerialized form. In view of the numerous advantages offered by the Depository Systemthe Members holding shares in physical form are advised to avail the facility ofdematerialization.

38) INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the provisions of Section 124 and other applicableprovisions of the Act read with Investor Education and Protection Fund (Accounting AuditTransfer and Refund) Rules 2016 ("IEPF Rules") all unclaimed dividends arerequired to be transferred by the Company to the Investor Education and Protection Fund(IEPF) after completion of seven (7) years. Further according to IEPF Rules the shareson which dividend has not been claimed by the shareholders for seven (7) consecutive yearsor more shall be transferred to the demat account of the IEPF Authority.

The information pertaining to unpaid / unclaimed dividends for lastseven years and the details of such members whose unclaimed dividend / shares have beentransferred to IEPF Authority is also available on the Company's website viz.www.akgroup.co.in.

In view of the same the Company has transferred 7534 Equity Shares onwhich dividend had remained unpaid or unclaimed for seven (7) consecutive years in favorof IEPF Authority.

Accordingly the entire dividend remaining unpaid/ unclaimed for aperiod of seven (7) consecutive years amounting to INR 161880 /- (Indian Rupees One LakhSixty-One Thousand Eight Hundred and Eighty) was transferred to IEPF account.

39) COMPLIANCE WITH SECRETARIAL STANDARD

The Company has complied with Secretarial Standards issued by Instituteof Company Secretaries of India on Meetings of the Board of Directors (SS-1) and GeneralMeetings (SS-2) including relaxation provided therein.

40) WEBLINK OF ANNUAL RETURN

A weblink of Annual Return for the Financial Year ended March 312021in Form MGT - 7 as required under Section 92 (3) of the Act read with Rule 12 of TheCompanies (Management and Administration) Rules 2014 is available on the website of theCompany at the link:https://www.akgroup.co.in/docs/Form%20MGT-7-2020-21-202107291927368902783.pdf

41) PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5 of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and amendments thereto are provided inthe Annual Report and is attached as Annexure - 4 and forms an integral part ofthis Report.

Information as required in terms of the provisions of Section 197(12)of the Act read with Rules 5(2) and 5(3) of The Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is available for inspection by the Members at theRegistered Office of the Company between 2 p.m. to 4 p.m. on any working day (Monday toFriday) up to the date of 28th Annual General Meeting of the Company. Any member who isinterested in obtaining such information may write to the Company Secretary and the samewill be furnished on such request.

42) CAUTIONARY STATEMENT

The statement in the Directors' Report and the ManagementDiscussion and Analysis Report describing the Company's objectives expectations orpredictions may be forward looking within the meaning of applicable securities laws andregulations. Actual results may differ materially from those expressed in the statement.These risks and uncertainties include the effect of economic and political conditions inIndia volatility in interest rates new regulations and Government policies that mayimpact the Company's business as well as its ability to implement the strategy. TheCompany does not undertake to update these statements.

43) ACKNOWLEDGEMENT

Your Directors wish to place on record their deep and sincere gratitudefor the valuable guidance and support received from the Depositories GovernmentAuthorities Regulators Stock Exchanges Bankers of the Company Auditors of the CompanyConsultants and Advisors Other Statutory Bodies. Vendors and Service Providers YourDirectors would also like to take this opportunity to express their gratitude to theMembers of the Company for their trust and support. The Board also wishes to thank theemployees of the Company and its subsidiaries at all levels for the dedicated servicesrendered by them. Your Directors look forward to your continuing support.

The Company also pays homage to all who have lost their lives due tothe COVID-19 pandemic and acknowledges the hard-work and the heroic efforts of thedoctors para-medics and other front-line workers who are risking their lives every day tocombat the pandemic.

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