Akme Star Housing Finance Limited Udaipur
Your directors are pleased to present the Fourteenth Annual Report ofyour Company along with the audited accounts for the year ended March 31 2019.
The Board's Report shall be prepared based on the stand alone financialstatements of the company. The Company's financial performance for the financial yearended March 31st 2019 is summarized below: -
|PARTICULAR ||2018-19 ||2017-18 |
|Gross Income ||1180.01 ||705.82 |
|Less : Finance Cost ||441.87 ||170.89 |
|Overhead ||136.79 ||131.3 |
|Depreciation ||3.21 ||3.60 |
|Profit Before Tax ||598.14 ||400.04 |
|Less : Provision for taxation ||166.41 ||110.54 |
|Profit After tax ||431.73 ||289.50 |
|Balance Brought Forward from last year ||507.24 ||297.75 |
|Appropriations ||431.73 ||289.50 |
|Transferred to Statutory Reserve under Section 36(1)(viii) of the Income Tax Act 1961 read with Section 29C of National Housing Bank Act 1987 ||119.63 ||80.01 |
|Transferred to general reserve ||Nil ||Nil |
|Balance Carried over to the Balance Sheet ||823.99 ||507.24 |
|KEY FACTORS ||2018-19 ||2017-18 ||GROWTH (%) |
|Portfolio ||6327.62 ||4915.55 ||28.73% |
|(Outstanding Housing Loan/Other Loan) || || || |
|EPS (Basic) in ' ||3.57 ||2.43 ||46.91% |
|CRAR (%) ||70.92% ||68.40% ||- |
The above mentioned performance was amidst very strong headwindscreated due to certain events which had a contagion effect on the entire sector. It isworth mentioning that due to focusing on fundamentals which has been the main plank overthese one decade; enabled the company not only to navigate through this situation butachieved a higher than the targeted growth.
Prospects and Developments :
There is a very huge market to be served which needs an efficient lastmile delivery of credit thus creating enormous opportunity for all the financialinstitutions and HFCs in special.
The Company continues to pursue the strategy of being multi product andmulti locational thus giving the distinct edge from the risk management and scalabilityperspective. The focus across the product is of catering to the lower and the middleincome segment which is the key driver of our economy.
Housing Finance :
The Company aims at serving the middle income and the lower incomesector of the economy especially in the semi urban and rural areas which are reckoned tobe the key drivers of the sector in the coming decades. Fullfledged efforts are on toexecute efficiently as per the detail planning. Being aware of the challenges involved inserving this class of the society a very cautious approach is adopted in building upvolumes. Nevertheless Company is quite confident of building substantial volumes in thenear future.
The Company's rural initiative will also start yielding resultsshortly. . It is worth mentioning that despite of credit worthy customer classascertaining the title of the property remains a challenging job. The Company is activelyinvolved with all the stake holders to smoothen the process and is assertive in gettingthe right set of documents.
We continue to endeavour relentlessly and are confident of creating aquality portfolio and add value to the ecosystem we work in.
In continuation of our last year's efforts the process of expanding itsoperations in the various region of Gujarat Maharashtra Madhya Pradesh besidesRajasthan is in progress.
Human Resource Management
Human Resource Management plays a very important role in realizing theCompany's objective. The Company is managed by the active involvement of the promotersalong with strategic inputs from a well-diversified and competent board. In an environmentthat is rapidly becoming technology and Digital oriented your Company continues to investin long term people development for organizational excellence. Constant endeavors arebeing made to offer professional growth opportunities and recognitions apart fromimparting training to employees. Training is an integral part of the skill developmentprogram initiated for the employees. The articulation and implementation of the strategiesis carried on by the core team. Core team is dedicated and competent team of personnelassociated with the company almost since its inception and have always extended unstintingsupport besides having identified and aligned their career objective with the company.
The Company has a diverse workforce of 25+ employees as on 31st March2019. Going forward the Company will continue to focus on nurturing the right talent toachieve the business goal.
I trust with all the above qualities accompanied by the
determination to excel this team forms a formidable second line ofmanagement at ASHFL.
Your Company will always strive to strengthen this most importantresource in its quest to have enabling human capital.
Capital and Liability Management :
The Company in tandem with its philosophy of pursuing the mission of"Excellence through Endeavours" will strive to maximize the shareholders' value.The Company continues to pursue an efficient capital management policy which aims atmaximizing the return on capital employed and at the same time adhering to the prudentialguidelines laid down by NHB from time to time.
The Company by virtue of its performance over the years enjoys verygood relationships with many leading banks and financial institutions. The Company couldraise the required resources from various banks and financial institutions comfortably. Weanticipate the same response from all our lending partners for the coming years too. TheCompany anticipates credit lines from few more banks and financial institutions besidesthe existing ones.
During the year passed by when the whole sector was looked upon as arisky preposition the Company could not only manage to raise the required resources butalso obtained credit lines for the coming year.
Your Company continues to command the respect and the confidence ofBankers as their extended channel in their task of providing efficient delivery of credit.The company acknowledges the constructive support of the Investors and banks.
Your Company's borrowing policy is under the control of the Board. TheCompany has vide special resolution passed by means of special Resolution on 28th July2018 under Section 180(1)(c) of the Companies Act 2013 authorized the Board ofDirectors to borrow money upon such terms and conditions as the Board may think fit inexcess of aggregate of paid up share capital free reserves security premium of theCompany up to an amount of Rs. 200 crore and the total amount so borrowed shall be withinthe limits as prescribed under the Housing Finance Companies (NHB) Directions 2010.
Your Company continued to use a variety of funding sources to optimizefunding costs protect interest margins and maintain a diverse funding portfolio whichfurther strengthened its funding stability and liquidity needs. Your Company continued tokeep tight control over the cost of borrowings through
negotiations with lenders and thus raised resources at competitiverates from its lenders while ensuring proper asset liability match.
Term Loan From Banks and Financial Insititutions
During the financial year 2018-19 your Company raised Rs. 10 Crorethrough term loan from Mas Financial Services Limited Rs. 2.5 Crores through Term LoanFrom Mahindra & Mahindra Financial Services Limited Rs. 3 Crores through term loanfrom Avanse Financial Services Limited Rs. 6 Crores through term loan from HindujaHousing Finance for meeting the working capital requirements. Presently Company is in lineup with more proposals with banks and Financial Institutions for meeting the workingcapital requirement of the company in FY2019-20.
The Outstanding Bank Borrowing as on 31.03.2019 stood at Rs. 4196.88.Lacs
Credit Rating Upgrades
The company has been assigned BBB- by Acuite Ratings & ResearchLimited for the facility obtained from the Bank as on 21.11.2018.
Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 apart from the loans made guaranteegiven or security provided by the Company in the ordinary course of business are given inthe Notes to accounts forming part of the Audited Financial Statements for the year endedMarch 31st 2019.
As required under National Housing Bank Directions 2010 your Companyis presently required to maintain a minimum capital adequacy of 12% on a standalone basis.
Further the NHB vide its note dated March 04 2019 has proposedcertain amendments which includes to raise the capital adequacy ratio for HFCs from 12% to15% by March 2022.The capital adequacy ratio of HFCs is to be increased from 12% to 13% byMarch 2020 14% by March 2021 and 15% by March 2022 as per the said proposal.
Your Company's Capital Adequacy Ratio as at March 31 2019 was 70.92.%which provides an adequate cushion to withstand business risks and is above the minimumrequirement of 12% as well as the proposed level of 15%.
Assets Under Management (AUM)
The AUM of your company stood at Rs. 63.28 Crore as at March 31st 2019as against Rs. 49.16 Crore in the previous financial year with a growth of 28.70%.
Implementation of Indian Accounting Standards("IND AS")
The Ministry of Corporate Affairs (MCA) based on its notification inthe Official Gazette vide Notification G.S.R. 111(E) and G.S.R. 365(E) dated February 162015 and March 30 2016 respectively notified the Indian Accounting Standards (Ind AS)applicable to certain class of companies. Ind AS has replaced the Indian GAAP prescribedunder section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts)Rules 2014. These notifications are applicable to all Housing Finance Companies (HFCs)effective from April 1 2019.
Accordingly your Company has adopted Ind AS as prescribed underSection 133 of the Companies Act 2013 read with Rule 3 of the Companies (IndianAccounting Standards) Rules 2015 and relevant amendment /rules made thereafter from April1 2019. Such transition has been carried out from the erstwhile Accounting Standardsnotified under the Act read with relevant rules issued there under and guidelines issuedby NHB (Collectively referred to as 'the Previous GAAP').
Transfer to Reserves
During the year under review your Company having Rs. 119.63 Lacs tothe Statutory Reserve under Section 36(1) (viii) of the Income Tax Act 1961 read withSection 29C of National Housing Bank (NHB) Act 1987 out of the amount available forappropriation and an amount of Rs. 431.73Lacs is proposed to be retained in the Profit andLoss Account.
Your Directors have considered reinvesting the profits into thebusiness of the Company in order to build a strong reserve base for the long-term growthaspects of the Company. Accordingly no dividend has been recommended for the financialyear ended March 31 2019.
Authorized Share Capital
During the year under review the authorized share capital stood at Rs.140000000 (divided into 14000000 Equity Share of Rs. 10/-each). No change was madein authorized Share Capital as compared to previous year.
However Company Increased its Authorised Share Capital From Rs140000000/- to Rs 170000000/- vide passing ordinary resolution in Extra OrdinaryGeneral Meeting held on 02.08.2019 after Close of the Financial Year.
Issued and Paid-up Capital
Your Company's issued & paid up Share Capital is Rs. 120790000(divided into 12079000 Equity Shares of Rs. 10/-each) as at March 31st 2019 and no changewas made in issued and Paid-up capital as compared to previous year.
The Company has allotted and converted 225000 outstanding warrant intoEquity in its Board meeting held on 22.05.2019.
Events Subsequent to the Date of Financial Statements
Resignation of Director
Resignation of Mrs. Rajni Gehlot (DIN: 06627287) from the post of NonExecutive Independent Director of the company w.e.f 22nd May 2019 due to her preoccupation in other company and her responsibilities.
Appointment of Independent Director
Mr. Suresh Chandra Gupta (DIN: 08527990) has been appointed asIndependent Director on the Board w..e.f. 12.08.2019.
Preferential Issue of Equity Shares:
The Board has proposed to issue Equity Shares on preferential basis toArkfin Investment Private limited of Rs 178710000/- vide its Board meeting held on 08thJuly 2019 and the same has been passed by the shareholders in EOGM held on 02nd August2019.
Details Relating to Deposits
The Company has been granted registration by the National Housing BankNew Delhi as a non deposit taking Housing Finance Company. Being so the Company hasneither accepted in the past nor has any future plans to accept any public deposits bywhatever name called.
Investor Complaints and Compliance
During the year under review the Company did not receive any investorcomplaints and that as on the date no complaint is pending.
And also the Company has timely submitted all the reports relating toInvestor Complaints pursuant to SEBI (LODR) Regulations 2015 to BSE.
Non-performing Assets and Provisions For Contingency:
Your Company adhered to the prudential guidelines for Non performingAssets (NPAs) issued by the National Housing Bank (NHB) under its Directions of 2010 asamended from time to time. As per the prudential norms the income on such NPAs is
not to be recognized if unrealized. As per the prudential normsprescribed by the NHB the Company has made provision for contingencies on standard aswell as non-performing housing loans and property loans. The details of NPA have beengiven in financial Statements.
Subsidiary Joint Ventures and Associate Companies
The Company does not have any subsidiary Company or Joint Company orAssociate Company.
Particulars of Employees
The information required pursuant to Section 197 read with Rule 5 ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company there is no employee of the Company covered underthis section who is earning salary over and above specified limit.
Particulars of Conservation of Energy Technology Absorption ForeignExchange Earning and Outgo
In accordance with the provision of sec 134(3) (m) of the Act readwith Rule 8 of the companies (Accounts)Rules 2014 the requisite information relating toyour Company are as under:-
A. Conservation of energy:
The Company does not fall under any of the industries covered by theCompanies (Disclosure of particulars of Directors) Rules 1988.
B. Technology absorption:
The Company is not involved in any technology absorption nor is thereany R&D activity during the year
C. Foreign Exchange Earnings and Outgo:
Your company does not have any foreign exchange earning and outgoduring the year under review.
Your Company has insured its various properties and facilities againstthe risk of fire theft and other perils etc. and has also obtained Directors' andOfficers' Liability Insurance Policy which covers the Company's Directors and Officers(employees in managerial or supervisory position) against the risk of financial lossincluding the expenses pertaining to defense cost and legal representation expensesarising in the normal course of business.
National Housing Bank (NHB) Guidelines
The Company has complied with the provisions of the Housing FinanceCompanies (NHB) Directions 2010 as prescribed by NHB and has been in compliance with thevarious Circulars Notifications and Guidelines issued by National Housing Bank
(NHB) from time to time. The Circulars and the Notifications issued byNHB are also placed before the Audit Committee / Board at regular intervals to updateCommittee / Board members on the same.
The Company has submitted various returns and reports as requiredquarterly/half yearly/ yearly in accordance with the prescribed guidelines.
Risk Management Framework
Financing activity is the business of management of risks which inturn is the function of the appropriate credit models and the robust systems andoperations. Your Company continues to focus on the above two maxims and is always eagerto improve upon the same.
Your Company continues to give prime importance to the function ofreceivables management as it considers this the ultimate reflection of the correctness ofmarketing strategy as well as appraisal techniques. The stage III assets Net of provisionsof the company is 1.14% of total AUM as at the end of FY 2018-19
Pursuant to Regulation 21(5) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the regulations ofRisk management committee is applicable to top 500 listed entities determined on the basisof market capitalization as at the end of the immediate previous financial year.
As per the size of the provisions of risk management committee notapplicable to the Company however the Board of Directors has adopted a risk managementpolicy for the Company which provides identification assessment and control of riskswhich in the opinion of the Board may threaten the existence of the Company. TheManagement identifies and controls risks through a properly defined framework in terms ofthe aforesaid policy.
Asset Liability Management Committee (ALCO)
The Asset Liability Management Committee (ALCO) lays down policies andquantitative limits that involve assessment of various types of risks and shifts in assetsand liabilities to manage such risks. ALCO ensures that the liquidity and interest- raterisks are contained within the limits laid down by the Board. The Company has dulyimplemented the NHB's Asset Liability Management Guidelines.
Vigil Mechanism/Whistle Blower Policy
Pursuant to the provisions of Section 177 (9) & (10) of theCompanies Act 2013 read with Rule 7 of Companies (Meetings
of Board and its Powers) Rules 2014 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 the Companyhas in place a Whistle Blower Policy which provides for a framework to promote aresponsible and secure whistle blowing. It protects Directors/ employees wishing to raisea concern about serious irregularities within the Company. It provides for a vigilmechanism to channelize reporting of such instances/ complaints/ grievances to ensureproper governance. The Audit Committee oversees the vigil mechanism. No employee h as been d enie d acce s s to the Chair pe rso n of Audit Committee.
Your Company has formulated various policies and codes in compliancewith provisions of Directions and Guidelines issued by the National Housing BankCompanies Act 2013 Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and to ensure high ethical standards in theoverall functioning of the organization. The said policies and codes are periodicallyreviewed by the Board of Directors.
The key policies and codes as approved by the Board of Directors andthe respective compliance there under are detailed herein below:
Know Your Customer & Anti Money Laundering Measure Policy
Your Company has approved Know Your Customer & Anti MoneyLaundering Measure Policy (KYC & AML Policy) in place and adheres to the said Policy.The said Policy is in line with the National Housing Bank guidelines.
The Company has also adhered to the compliance requirement in terms ofthe said policy relating to the monitoring and reporting of cash / suspicioustransactions. The Company furnishes to Financial Intelligence Unit (FIU) India in theelectronic medium information of all cash transactions of the value of more than Rupeesten lakh or its equivalent in foreign currency and suspicious transactions whether or notmade in cash in terms of the said Policy.
Fair Practice Code
Your Company has in place a Fair Practice Code (FPC) which includesguidelines on appropriate staff conduct when dealing with the customers and on theorganization's policies vis-a-vis client protection. The FPC captures the spirit of theNational Housing Bank guidelines on fair practices for Housing Finance
During the year under review FPC was modified by the Board and thegrievance redressal mechanism within the Company was further strengthened.
Policy on Disclosure of material events and information Duringthe year under review your Company has adopted the Policy on Disclosure of MaterialEvents and Information in accordance with Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 to determine the events andinformation which are material in nature and are required to be disclosed to the StockExchanges.
Code of Conduct for Board Members and the senior management
Your Company has in place Code of Conduct for the Board of Directorsand the Senior Management Personnel to set forth the guiding principles on which theCompany and its Board and Senior Management Personnel shall operate and conduct themselveswith multitudinous stakeholders government and regulatory agencies media and anyone elsewith whom it is connected. A declaration by Chief Financial Officer and Managing Directorwith regard to the Compliance with the said code forms part of this Annual Report.
Code for Prevention of Insider Trading Practices
Your Company has formulated and adopted a Code for Prevention ofInsider Trading Practices in accordance with the model code of conduct as prescribed underthe Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment)Regulations 2018 as amended. The code lays down guidelines which includes procedures tobe followed and disclosures to be made while dealing in the shares of the Company.
The code is applicable to the promoters directors senior designatedemployees and their dependents and the said persons are restricted from dealing in thesecurities of the Company during the 'restricted trading periods' notified by the Companyfrom time to time.
Code of Business Ethics (COBE)
Your Company has adopted a Code of Business Ethics (COBE) which laysdown the principles and standards that govern the activities of the Company and itsemployees to ensure and promote ethical behavior within the legal framework of theorganization.
Sexual Harassment Policy
Your Company has in place a Policy on Prevention
Prohibition & Redressal of Sexual Harassment of Women at Workplaceand an Internal Complaints Committee (ICC) has been constituted there under. The Policy'sprimary objective is to protect the women employees from sexual harassment at the place ofwork and also provides for punishment in case of false and malicious representations.During the year no complaints were received in this regard.
Comprehensive Risk Management Policy
Your Company is committed to manage its risk in a proactive manner andhas adopted a structured and disciplined approach to risk management by developing andimplementing risk management framework. With a view to manage its risk effectively yourCompany has in place a Comprehensive Risk Management Policy which covers a formalized RiskManagement Structure along with other aspects of risk management i.e. credit riskmanagement operational risk management market risk management and enterprise riskmanagement. The Risk Management Committee of the Board on periodic basis oversees therisk management systems processes and minimization procedures of the Company.
Corporate Social Responsibility (CSR) Policy
Your Company has voluntarily framed Corporate Social ResponsibilityPolicy (CSR Policy) as per the provisions of the Companies (Corporate SocialResponsibility Policy) Rules 2014 as amended which inter-alia lays down theguidelines and mechanism for undertaking socially useful projects for welfare andsustainable development of the community at large. As per the provisions of Section 135 ofthe Companies Act 2013 the Company has constituted a Corporate Social ResponsibilityCommittee. The Committee assists the Board in fulfilling its duty towards the communityand society at large by identifying the activities and programmers that can be undertakenby the Company in terms of the Company's CSR Policy. The composition of the CSR Committeeand its terms of reference are given in the Corporate Governance Report forming part ofthis Annual Report.
The Board of Directors had on the recommendation of the Nomination& Remuneration Committee Appointed Mrs. Rajni Gehlot Independent Director aschairperson Mr. Amrit Singh Rajpurohit and Mrs. Rekha Jain Independent Director asMember.
The Company follow a Policy on remuneration of Directors and seniormanagement Employees The Policy
is approved by the Nomination & Remuneration Committee and theBoard and is marked as Annexure-I
Related Party Transactions Policy
Your Company has in place Related Party Transaction Policy intended toensure requisite approval reporting and disclosure of transactions between the Companyand its related parties. The said policy also defines the materiality of related partytransactions and lays down the procedures of dealing with related party transactions.
During the year under review the Related Party Transaction Policy wasamended to align the same with the requirements of Companies (Amendment) Act 2015 andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
Familiarization Programme for Independent Directors:
The objective of a familiarization programme is to ensure that thenon-executive directors are updated on the business environment and overall operations ofthe
Company. This enables the non executive directors to make betterinformed decisions in the interest of the company and its stakeholders.
Listing of Shares of The Company
Your Company's equity shares continue to remain listed on BSE Limited.Your Company has paid the listing fees as payable to the BSE Limited for the financialyear 2018-19 on time.
Directors and Key Managerial Personal
The Board of Directors of the Company comprises of Six  directors ofwhich Two  are Executive Directors; One  is Managing Director & Three  areIndependent & NonExecutive Director including one woman director as on March 31 2019who bring in a wide range of skills and experience to the Board.
The Board of Directors of the Company are :- Composition ofthe Board as on 31s March 2019
|Name of Director ||Category of Directors || |
|Mr. Ashish Jain* ||Chairman & Managing Director ||02041164 |
|Mr. Nirmal Kumar Jain ||Promoter & Executive Director ||00240441 |
|Mr. Kalu Lal Jain ||Executive Director ||00451442 |
|Mr. Amrit Singh Rajpurohit ||Non Executive & Independent Directors ||02173432 |
|Mrs. Rajni Gehlot* ||Non Executive & Independent Directors ||06627287 |
|Dr. Rekha Jain ||Non Executive & Independent Directors ||07703994 |
|Mr. Suresh Chandra Gupta ||Non Executive & Independent Directors ||08527990 |
Based on the confirmations received none of the Directors aredisqualified for being appointed/re-appointed as directors in terms of Section 164 theCompanies Act 2013.
Changes in the Board*
During the year following changes took place in the board of Directors:
Cessation of Dr. Mohan Lal Nagda as Chairman & ManagingDirector:
Dr. Mohan Lal Nagda Chairman & Managing Director of the of theCompany passed away on 19th May 2018. The Board considered invaluable contributions madeby Dr. Mohan Lal Nagda as a Chairman & Managing Director of the Company during histenure of 11 years.
Appointment of Mr. Ashish Jain as Chairman & ManagingDirector
During the year under review the appointment of Mr. Ashish Jain (DIN:02041164) as Chairman & Managing Director w.e.f. 1st June 2018 for the term of 5years whose period of office will not be liable to determination by
retirement of directors by rotation.
Resignation of Mrs. Rajni Gehlot as Independent Director Mrs.Rajni Gehlot Non executive Independent Director of the company resigned from the Boardw.e.f. 22nd May 2019 due to her pre occupation in other company and theirresponsibilities.
Declaration from Independent directors on Annual basis: TheCompany has received necessary declaration from each Independent Director of the CompanyUnder Section 149(7) of the Companies Act 2013 that the Independent Directors of theCompany meet with the criteria of their Independence as laid down in Section 149(6) andthe provisions of Regulation 16(1)(b) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015.
Based on the confirmations received none of the Directors aredisqualified for being appointed/re- appointed as directors in terms of Section 164 theCompanies Act 2013.
Retirement of Director by rotation
In accordance with the provisions of Section 152 of the Companies Act2013 and Articles of Association Mr. Kalu Lal Jain Executive Director of the Company areliable to retire by rotation at the ensuring 14th Annual General Meeting of the companyand has offered himself for reappointment. Resolutions for reappointment is being proposedat the 14th Annual General Meeting and Profile included in the Notice of the 14th AnnualGeneral Meeting.
During the year under review no stock options were issued to theDirectors of the Company.
Formal Evaluation of the Performance of the BoardCommittees of the Board and Individual Director :
Pursuant to the provisions of 134(3)(p) the Companies Act 2013 theBoard has carried out the annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Committees.
A structured questionnaire was prepared after taking into considerationinputs received from the Directors covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board cultureexecution and performance of specific duties obligations and governance. In pursuant toRegulation 17(10) Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 the evaluation of independent directors weredone by the entire board of directors which includes -
(a) Performance of the directors; and
(b) Fulfillment of the independence criteria as specified in theregulations and their independence from the management
Criteria adopted for evaluation:
The Board shall evaluate the roles functions duties of IndependentDirectors (ID's) of the Company. Each ID shall be evaluated by all other directors' not bythe Director being evaluated. The board shall also review the manner in which ID's followguidelines of professional conduct.
(i) Performance review of all the Non-Independent Directors of thecompany on the basis of the activities undertaken by them expectation of board and levelof participation;
Performance review of the Chairman of the Company in terms of level ofcompetence of chairman in steering the company;
(iii) The review and assessment of the flow of information by theCompany to the board and manner in which the deliberations take place the manner ofplacing the agenda and the contents therein;
(iv) The review of the performance of the directors individually itsown performance as well as evaluation of working of its committees shall be carried out bythe board;
(v) On the basis of performance evaluation it shall be determined bythe Nomination and Remuneration Committee and the Board whether to extend or continue theterm of appointment of ID subject to all other applicable compliances.
Your Company holds at least four Board meetings in a year one in eachquarter inter-alia to review the financial results and also holds additional BoardMeetings to address its specific requirements as and when required. All the decisions andurgent matters approved by way of circular resolutions are placed and numbered and notedat the subsequent Board meeting. Annual calendar of meetings of the Board are finalizedwell before the beginning of the financial year after seeking concurrence of all theDirectors.
During the financial year 2018-19 Nine (9) Board Meetings wereconvened and held. The details related to Board Meetings are appended in CorporateGovernance Report forming part of this Report.
The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013 and the Securities and Exchange Board of India(Listing Obligation and Disclosure Requirements) Regulations 2015. The details of theBoard composition its meetings held during the year along with the attendance of therespective Directors thereat are set out in the Corporate Governance Report forming partof this Annual Report.
The Company's Independent Directors meet at least once in everyfinancial year without the presence of Executive Directors or management personnel. TheIndependent Directors of the Company met once during the year on March 02nd 2019 toreview the performance of Non-Independent Directors and the Board as a whole review theperformance of the Chairperson of
the Company and access the quality quantity and timeliness of flow ofinformation between the company management and the Board.
Audit Committee & Other Board Committees
Your Company has a duly constituted Audit Committee as per theprovisions of Section 177 of Companies Act 2013 and provisions of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Board of Directors has constituted four other committees namely -
Nomination and Remuneration Committee
Stakeholders' Relationship Committee
Risk Management Committee
Corporate Social Responsibility Committee
Which enables the Board to deal with specific areas / activities thatneed a closer review and to have an appropriate structure to assist in the discharge oftheir responsibilities.
The Audit Committee and other Board Committees meet at regularintervals and ensure to perform the duties and functions as entrusted upon them by theBoard.
The details of the Audit Committee and other Board Committees are alsoset out in the Corporate Governance Report forming part of this Annual Report.
Related Party Transactions
There were no materially significant related party transactions
i.e. transactions of material nature with its promoters directors orsenior management or their relatives etc. that may have potential conflict with theinterest of company at large. Transactions entered with related parties as defined underthe Companies Act 2013 and provisions of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 during the financial year201819 were mainly in the ordinary course of business and on an arm's length basis.
During the year your Company has not entered into any materialcontract arrangement or transaction with related parties as defined under Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 and Related Party Transaction Policy of the Company. The details with respect to therelated party transactions are mentioned in the notes to the audited financial statements.
Details of RPT in Form AOC-2 attached to Board report may also bereferred to and marked as Annexure-II
Significant and material orders passed by theregulator or court or tribunals
During the year no significant or material order was passed by theRegulators or Courts or Tribunals and the Company has complied with the order andCompliances of Companies act 2013.
Internal Audit & Internal Control Systems and Their Adequacy
Your Company has appointed T.R. Dangi & Associates CharteredAccountant Udaipur as an Internal Auditor of the Company who reports to the AuditCommittee and to the Board of Directors of the Company. The Internal Auditor conductscomprehensive audit of functional areas and operations of the Company to examine theadequacy of and compliance with policies procedures statutory and regulatoryrequirements. Significant audit observations and follow up actions thereon are reported tothe Audit Committee. The Audit Committee reviews adequacy and effectiveness of theCompany's internal control environment and monitors the implementation of auditrecommendations.
The audit function maintains its independence and objectivity whilecarrying out assignments. It evaluates on a continuous basis the adequacy andeffectiveness of internal control mechanism. The function also proactively recommendsimprovement in policies and processes suggests streamlining of controls against variousrisks
Your Company has laid down set of standards processes and structurewhich enables it to implement internal financial control across the Company and ensurethat the same are adequate and operating effectively.
Secretarial Auditor & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and Pursuant to Reg. 24A of Securities Exchange Board of India (Listing Obligation& Disclosure Requirement) (Amendments) Regulations 2018 the Board of Directors ofthe Company had appointed Mr. Ronak Jhuthawat Proprietor of M/s Ronak Jhuthawat & Co.Practicing Company Secretaries Udaipur to undertake the Secretarial Audit of the Companyfor the financial year 2018-19. The Secretarial Audit Report for the financial year endedMarch 31st 2019 is annexed as "Annexure - III" to this report. The saidreport does not contain any qualification reservation or adverse
remark however contains certain observations of the SecretarialAuditor which are self explanatory and thus do not call for any further comments.
Qualifications in Secretarial Audit Reports:
There are no qualifications reservations or adverse remarks ordisclaimer made by the company secretary in practice in his secretarial audit report.
At the Eleventh (11th) Annual General Meeting held on September 24th2016 the Members had appointed M/S. H.R. Jain & Co. Chartered Accountants (FRN000262C) as the Statutory Auditors of the Company by way of ordinary resolution undersection 139 of the Companies Act 2013 to hold office until the conclusion of the AnnualGeneral Meeting of the Company to be held in the year 2021 of the Company.
The Company has received consent from the Statutory Auditors andconfirmation to the effect that they are not disqualified to be appointed as the StatutoryAuditors of the Company in terms of the provisions of Companies Act 2013 and Rules framedthere under.
Notes to Accounts and Auditors Report
The notes to the accounts referred to in Auditors Report areself-explanatory and do not call for any further comments. The Statutory Auditors Reportdoes not contain any qualification reservation or adverse remark.
Qualifications in Audit Reports:
There are no qualifications reservations or adverse remarks ordisclaimer made by the statutory auditor in his report.
Directors' Responsibility Statement
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3) (c) read with Section 134(5) of the Companies Act2013:
that in the preparation of the annual financial statements forthe year ended March 31st 2019 the applicable accounting standards have been followedalong with proper explanation relating to material departures if any;
that such accounting policies as mentioned in Note of the Notesto the Financial Statements have been selected and applied consistently and judgment andestimates have been made that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as atMarch 31 2019 and of the profit of the Company for the year ended on that date;
that proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
that the annual financial statements have been prepared on agoing concern basis;
that proper internal financial controls were in place and thatthe financial controls were adequate and were operating effectively;
that systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
Report on Corporate Governance
Pursuant to Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 a separate section titled 'Report onCorporate Governance' forms part of this Annual Report.
The Report on Corporate Governance also includes certain disclosuresthat are required as per Companies Act 2013. The certificate by the Statutory Auditorsconfirming Compliance with the conditions of Corporate Governance as stipulated inSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed as 'Annexure V' to this report. The said certificate forfinancial year 2018-19 does not contain any qualification reservation or adverse remark.
In terms of Section 136 of the Act the Reports and Accounts are beingsent to the members and others entitled thereto.
Management Discussion and Analysis
Pursuant to Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 a separate section titled 'Report onCorporate Governance' forms part of this Annual Report.
Extract of Annual Return
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014anextract of the Annual Return as at March 31st 2019 in the prescribed form MGT 9 formspart of this report and is annexed as "Annexure IV ". The weblink of the samewww.akmestarhousing.com
Enhancing Shareholders Value
Your Company believes that its Members are among its most importantstakeholders. Accordingly your Company's operations are committed to the pursuit ofachieving high levels of operating performance and cost competitiveness consolidating andbuilding for growth enhancing the productive asset and resource base and nurturingoverall corporate reputation. Your Company is also committed to creating value for itsother stakeholders by ensuring that its corporate actions positively impact thesocio-economic and environmental dimensions and contribute to sustainable growth anddevelopment.
During the year Indian economy continued to consolidate the gainsachieved through macroeconomic stability. The country remained on a stable growth path onthe back of sharp reduction in crude oil prices and resilient domestic consumption.Besides inflation remained under control and fiscal and current account deficitscontinued to be moderate.
As all key business enablers are currently showing favorable signsyour Company is positive and expects another year of healthy growth in 2019-20.
Your Directors wish to place on record their gratitude to the NationalHousing Bank Securities and Exchange Board of India Ministry of Corporate AffairsRegistrar of Companies Financial Intelligence Unit (India) the Company's CustomersBankers and other Lenders Members and others for their continued support and faithreposed in the Company. The Board also places on record its deep appreciation for thededication and commitment of the employees at all levels as their hard work co-operationand support had enabled the Company to
maintain its consistent growth. The Directors would also like to thankthe BSE Limited National Securities Depository Limited Central Depository Services(India) Limited and the Credit Rating Agencies for their continued co-operation.
Statements in the Board's Report and the Management Discussion &Analysis describing the Company's objectives expectations or forecasts may beforward-looking within the meaning of applicable securities laws and regulations. Actualresults may differ materially from those expressed in the statement. Important factorsthat could influence the Company's operations include global and domestic demand andsupply conditions affecting selling prices of finished goods input availability andprices changes in government regulations tax laws economic developments within thecountry and other factors such as litigation and industrial relations.
For and on behalf of the Board
|Sd/- ||Sd/- |
|Ashish Jain ||Nirmal Kumar Jain |
|Managing Director ||Director |
|DIN: 02041164 ||DIN: 00240441 |
|Registered office |
|AKME Business Center (ABC) |
|4-5 Subcity Center Savina Circle |
|Opp. Krishi Upaz Mandi Udaipur.313002 |
|Date : 12.08.2019 |
|Place : Udaipur |