The Board of Directors are pleased to present the Company's 27th Annual Report coveringits' business and operations together with the audited financial statements (standalone)for the financial year ended March 31 2020.
|1. FINANCIAL HIGHLIGHTS: || || |
| || ||(Amount in Rs Lacs) |
|Financial results for the year ended ||March 31 2020 ||March 31 2019 |
|Total Income ||713.88 ||1807.29 |
|Profit/ (Loss) before tax ||351.74 () ||1156.99 |
|Less: Tax Expenses ||97.81 () ||311.98 |
|Profit / (Loss) for the year ||253.93 () ||845.01 |
|Other Compressive Income/(Loss) for the year net of Income Tax ||0.20 ||0.72 |
|Total Comprehensive Income ||253.73 () ||845.73 |
2. STATE OF COMPANY AFFAIRS:
The year 2019-2020 has proven to be a tough year in the Global economy. The wordeconomic slowdown has deeply impacted the business cycle all across the country andspecially for Lender. Regardless of this your company has not faced any liquidity crisisbut had learned to focus on being prudent and building robust model. Your company hasadopted solid business model for the coming years to calibrate the overall market dynamicand approaching with new strategies in lending and parallel has proven teams that candrive profitability. The year 2019-2020 was not a good year for the company in terms ofrevenue and profit it has booked Loss of Rs 253.93 Lacs for the year ended 31st March2020 largely because of provisioning of higher NPA in books as the company has takenconservative approach due to Covid 19 and as per RBI regulatory norms issued from time totime. Company's Loan book size has reduced during the year 2020 as compared to itsprevious year and accordingly Interest income has also reduced to Rs 691.16 Lacs for theyear 2019-2020. On the other hand the finance cost has drastically reduce to Rs 46.20 Lacsduring the year 2019-2020 as compared to Rs 743.01 Lacs in its previous FY. Your companyis a zero debt company as on 31st March 2020.. We believe that we will acknowledge theselosses as speed bumps on our runway to future success.
Your directors has strategically decided that till the NPA are resolved to asatisfactory level the company will focus more on loan recoveries and strategically willproceed in lending . Your Board is unsatisfied with the quality of our Loan book size andis working exclusively on collection from borrower for speedy recovery. We are happy tohave picked up positive momentum on that front. Our endeavor is to create a legal andcollection robust enough to withstand any size of a loan book.
RE-COMMENCEMENT OF TRADING OF SECURITIES AT BSE
Pursuant to BSE notice no 20190617-15 dated 17th June 2019 the trading in securitiesof the company was re-commenced at BSE platform w.e.f. 25.06.2019 in terms of thearrangement with CSE and upon compliance of the Exchange s requirements .
3. COVID 19
Since the first quarter of CY 2020 the Covid-19 pandemic has impacted most of thecountries including India. Owing to the outbreak of COVID-19 and the related directivesreceived from the Central & State governments lockdown was announced with adoption ofquarantine measures. This has largely affected the economic activity. The Indian economyhas been impacted by this pandemic with contraction in industrial and services industries.Your company immediately took measures for the safety and well being of the employees andadopted "work from home "policy for all employee providing them properinfrastructure and other requirements so that there would be very little or minimaldisruption of services to the clients. As of March 31 2020 work from home was enabled toemployees to work remotely and securely. The Registered branch and corporate office ofthe company was closed since initial lockdown was announced i.e. 24.03.2020. The impact ofthe Covid-19 pandemic on the company's result and operation is depended on futuredevelopment of this pandemic and remains uncertain at this point of time . The company isable to manage its liquidity position and shall continue to focus on its lending businessduring this period. In accordance with the COVID -19 Regulatory package announced by theReserve Bank of India on March 27 2020 wherein on all terms loan NBFC is permitted togrant a moratorium period of three months on payment of all installments falling duebetween March 1 2020 and May 31 2020 to its borrowers/customers whosoever has requestedfor the same . However interest on the Loan outstanding will keep getting levied for thedeferred or moratorium period. The asset classification of term loans which are grantedthe aforesaid moratorium relief shall be determined on the basis of revised due dates andthe revised repayment schedule. Your company has framed a policy titled as "Moratorium Policy COVID 19" on granting moratorium period for three months andthe facility is provided to the clients who have requested for the same and updated thesaid policy on the website of the company.
SEBI vide its various circulars has granted relaxation in compliance requirements forreporting by listed entities to exchanges as required under SEBI (LODR) Regulation due toCOVID 19 Pandemic. Further SEBI vide its circular issued dated 20.05.2020 on "Advisory on disclosure of material impact of CoVID19 pandemic on listed entitiesunder SEBI(LODR) Regulation 2015 noted that due to such a lockdown and disruption isunforeseen and beyond the control of the entities such events can lead to distortions inthe market due to the gap in information available about the operations of a listedentity. So all listed entities were required to ensure that all available informationabout the impact of COVID 19 & Lockdown on the company and its operations to becommunicated in a timely and cogent manner to its investors and stakeholders.
3. CHANGE IN NATURE OF BUSINESS:
There has been no change in nature of business of the company during the F.Y.2019-2020. Your company is engaged in financial services i.e. providing Loan againstsecurities Un-Secured Loan Investment in securities etc so there is only one segmentreporting as per AS 17.
The company has incurred loss during the year under review and so Board of Directorshas decided not to recommend any dividend for the year ended 31st March 2020..
TRANSFER TO UNPAID DIVIDEND ACCOUNT
Pursuant to Section 124 of Companies Act 2013 read with the relevant rules if any thefinal dividend which has been declared by the Company in its' Annual General Meeting heldon 9th August 2019 for Financial Year 2018-2019 has been duly paid to its' members on17th August 2019. As per the provisions of the Companies Act 2013 the unpaid/ unclaimeddividend amount has been transferred to the Unpaid Dividend Account within the prescribedtime.
5. CHANGES IN SHARE CAPITAL:
The Authorized Share Capital of your Company as on March 31 2019 stands at Rs202500000/- divided into 20250000 equity shares of Rs 10/- each. The Issued &subscribed Share Capital of your Company is Rs 118861740/- divided into 11886174equity shares of Rs 10/- each and the Paid-up Share Capital is Rs 118800000/- dividedinto 11880000 equity shares of Rs 10/- each fully paid-up..
During the Financial Year 2019-2020 vide its' Board meeting dated 9th August 2019your company has made allotment of 540000 equity shares to promoter group M/s AshikaGlobal Securities Private Limited issued pursuant to exercise of conversion of balance540000 convertible warrants into equal number of equity shares under preferentialallotment basis. Apart from the above during the year under review the Company has notissued any other shares with differential voting rights sweat equity shares nor grantedany stock options and neither came out with rights bonus or private placement. TheCompany had allotted 1080000 convertible warrants on preferential basis to promotergroup M/s Ashika Global Securities Pvt Ltd as approved by the shareholders at ExtraOrdinary General Meeting held on 26.03.2018 and out of the said 540000 warrants wereconverted into equity shares on 05.08.2018 and the balance 540000 shares were convertedinto equity shares on 09.08.2019. The company had received 25% of upfront money (i.e Rs9/- per warrant) i.e Rs 9720000/- on the date of allotment of the Warrants and thebalance consideration i.e. 75% of the total consideration (i.e Rs 27/- per warrant) i.e.Rs 29160000 was received by the Company at the time of allotment of equity sharesissued pursuant to conversion of such warrant by the warrant holder.
The Company has duly utilized the proceeds of the aforesaid allotment money to meetgeneral business requirements addressing Working Capital needs as well as expansion ofBusiness activities i.e. the manner as specified in the explanatory statement of thenotice of general meeting dated 22.02.2018 and there has been no deviation in utilizationof proceeds pursuant to Regulation 32 of SEBI (LODR) Regulations 2015.
6. TRANSFER TO RESERVE:
Your Directors do not propose to transfer any amount to the Reserves or to statutoryreserves u/s 45 IC of RBI Act 1934 for the year ended March 31 2020 as your company hasincurred loss for the year ended 31.03.2020.
7. DIRECTORS & KEY MANAGERIAL PERSONNEL: DIRECTORS
Your Company's Board is duly constituted and is in compliance with the requirements ofthe Companies Act 2013 the Listing Regulations and provisions of the Articles ofAssociation of the Company. The Board duly possesses requisite skills such as expertiseexperience wisdom and so on.
During the year there stood changes in the composition of the Board of the companywherein pursuant to the recommendation of the Nomination & Remuneration Committee Ms.Sonu Jain (DIN: 07267279) was appointed as an Additional Director of the Company to holdoffice as an Independent Director for a period of 3 (three) consecutive years w.e.f. April1 2019 subject to the approval of the shareholders in the ensuing Annual General Meeting(AGM). Further at the 26th AGM of the Company her appointment as Non ExecutiveIndependent Director of the Company not liable to retire by rotation was ratified by theconsent of the requisite number of shareholders. In this regard your Company issuedformal letter of appointment to the Independent Directors stating inter alia the terms andconditions of their appointment in the Company. Your Company had duly received within therequisite time period individual notices from Members pursuant to Section 160 of theCompanies Act 2013 signifying their intention to propose the candidatures of Ms. SonuJain for the office of Director.
At the 26th AGM with the approval of the Members Mr. Pawan Jain (DIN: 00038076) wasre-appointed as the Chairman cum Whole-time Director of the Company for a period of threeconsecutive years with effect from November 01 2019. Also Mr. Daulat Jain (DIN:00040088) was re-appointed as the Managing Director & CEO of the Company for a periodof three consecutive years with effect from November 01 2019. In terms of Section 152(6)of the Companies Act 2013 read with the Articles of Association of the Company theperiod of office of both Mr Pawan Jain and Mr. Daulat Jain shall be liable to retire byrotation.
Mr. Pawan Jain (DIN: 00038076) Whole Time Director of the Company is due to retire byrotation at the ensuing AGM and being eligible offers himself for re-appointment. YourBoard recommends re-appointment of Mr. Jain as a Whole Time Director of the Companyliable to retire by rotation. This shall not constitute a break in the office of Mr. PawanJain as Executive Chairman and Whole-time Director in the Company.
Mr. Sagar Jain (DIN: 00392422) was appointed as Independent Director of the Company atthe 21st Annual General Meeting of the Company held on September 2 2014 for a term offive (5) consecutive years w.e.f 1st April 2014. Based on the recommendation of theNomination and Remuneration Committee the Board of Directors had proposed hisre-appointment for a second term of five (5) consecutive years at the 26th AGM w.e.f. 1stApril 2019 and the same was duly approved by Members by way of special resolution at the26th AGM of the Company. In this regard your Company has issued formal letter ofre-appointment to the Independent Director stating inter alia the terms and conditions oftheir re-appointment in the Company During the year under review the non-executivedirectors of the Company had no pecuniary relationship or transactions with the Companyother than sitting fees if any and reimbursement of expenses incurred by them for thepurpose of attending meetings of the Board /Committee of the Company...
None of the Directors of the Company is disqualified for being appointed as Directoras specified under Section 164(2) of the Companies Act 2013 and Rule 14(1) of theCompanies (Appointment and Qualification of Directors) Rules 2014. NecessaryResolution(s) along with disclosure(s) / information(s) in respect of the directorsseeking appointment /re-appointment at the ensuing AGM has been annexed to the Noticeconvening the ensuing AGM. In terms of Schedule V of SEBI Listing Regulations 2015 andamendments thereof your Company has identified the list of coreskills/expertise/competencies which are required in the context of the Company'sbusiness(es) and sector(s) for it to function effectively and those which are actuallyavailable with the Board. Details of such skills/expertise/competencies identified alongwith the names of the directors who possess the core skills/ expertise/competencies arefurnished in the Corporate Governance Report which forms part of the Board's Report.
Your Company has received declaration from each of the Independent Directors that theymeet the criteria of Independence as laid down in Section 149(6) of the Companies Act2013 read with Regulations 16(1)(b) and 25(8) of the Listing Regulations and there is nochange in their status of Independence and have also confirmed that they are not aware ofany circumstance or situation which exist or may be reasonably anticipated that couldimpair or impact his/her ability to discharge his/her duties with an objective independentjudgment and without any external influence. All requisite declarations were placed beforethe Board. Along with the aforementioned declarations The Board has also received adeclaration from each of the independent directors of the Company that they comply withRule 6(1) and Rule 6(2) of the Companies (Appointment & Qualification of Directors)Rules 2014 and amendments thereof.
The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience integrity and expertise in the fields of financetaxation advisory corporate law and so on. The Company has adopted requisite stepstowards the inclusion of the names of all Independent Directors in the data bankmaintained with the Indian Institute of Corporate Affairs Manesar (IICA').Accordingly the Independent Directors of the Company have registered themselves with theIICA for the said purpose. In terms of Section 150 of the Act read with Rule 6(4) of theCompanies (Appointment & Qualification of Directors) Rules 2014 and amendmentsthereof the Independent Directors are required to undertake online proficiencyself-assessment test conducted by the IICA within a period of one (1) year from the dateof inclusion of their names in the data bank. The Board of Directors further confirm thatthe Independent Directors shall meet the criteria of proficiency in terms of Rule 8 of theCompanies (Accounts) Rules 2014 (as amended). The Board of Directors confirms that theIndependent Directors have affirmed compliance with the Code for Independent Directors asprescribed in Schedule IV to the Companies Act 2013 and also with the Company's Code ofConduct applicable to all the Board Members and Senior Management Personnel of the Companyfor the financial year ended March 31 2020.
Over the years the Company has developed a robust familiarization process for thenewly appointed Directors with respect to their roles and responsibilities. The processhas been aligned with the requirements under the Act and other related regulations.
In terms of Regulation 25(7) of SEBI Listing Regulations 2015 your Company endeavorsto familiarize the Independent Directors (IDs) about your Company including nature ofindustry in which your Company operates the business structure of your Company rolesrights and responsibilities of IDs and any other relevant information.
The details of familiarization programme conducted for Independent Directors during theyear are available on your Company's website and can be accessed athttps://ashikagroup.com/pdf/familiarization_programme/familiarization-programme-2019-2020.pdf.
As part of the familiarization process the IDs are provided with necessary documentsreports and company's policies to enable them to understand and acquaint with theCompany's procedures and practices. The Directors are also updated on the changes inrelevant corporate laws relating to their roles and responsibilities as Directors.
KEY MANGERIAL PERSONNEL
In terms of the provisions of Section 203 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and amendments thereof.During the year under review Mr Amit Jain CFO has resigned from the post of CFO w.e.fclosure of business hours of 09.08.2019 and in his place Mr Gaurav Jain has been appointedas CFO to take over the responsibility w.e.f. 10.08.2019. The followingdirectors/executives of your Company are whole-time Key Managerial Personnel (KMPs) inaccordance with the provisions of Section 2(51) read with Section 203 of the CompaniesAct 2013 -? Mr. Pawan Jain- Executive Chairman and Whole time Director(reappointed for a further period of three (3) years w.e.f. 01.11.2019) ? Mr.Daulat Jain- Managing Director and Chief Executive Officer (CEO) (reappointed for afurther period of three (3) years w.e.f. 01.11.2019) ? Mr. Gaurav Jain- ChiefCompliance Officer (CFO) ? Ms. Anju Mundhra- Company Secretary and ComplianceOfficer
8. NUMBER OF MEETINGS OF THE BOARD:
Regular Meetings of the Board and its Committees are held to discuss and decide onvarious business policies strategies financial matters and other businesses. Only incase of special and urgent business if the need arises the Board's/Committee's approvalis taken by passing resolutions through circulation or by calling Board/Board Committeemeetings at short notice as permitted by law.
The agenda for the Board and Committee meetings includes detailed notes on the items tobe discussed to enable the Directors to take an informed decision.
During the year under review five board meetings were held on: April 22 2019 August9 2019 September 11 2019 December 10 2019 and January 31 2020. The Board have passedResolution by Circulation dated 1st April 2019. The maximum interval between any twomeetings did not exceed 120 days.
9. EXTRACT OF ANNUAL RETURN:
The extract of Annual Return as on the Financial Year ended on March 31 2020 in FormNo. MGT-9 as required under Section 92(3) of the Companies Act 2013 read with Rule 12(1)of the Companies (Management and Administration) Rules 2014 is set out as AnnexureI' to the Board's Report and forms part of this Annual Report. The same can also beaccessed at the website of the Company at www.ashikagroup.com and is available at the linkhttps://ashikagroup.com/pdf/annualfireturn/ annualfireturn_2019-2020.pdf
10. BOARD COMMITTEES:
The Company has constituted mandatory Board-level committees with Executive and nonexecutive directors in compliance with the requirements of the business and relevantprovisions of applicable laws and statutes: I. Audit Committee II. Nomination andRemuneration Committee III. Stakeholders Relationship Committee IV. Corporate SocialResponsibility Committee In addition of the above the Board has composed other committeesas per RBI norms and other internal committee for the ease of carrying on business withBoard members and KMP like Finance Committee Asset Liability Management CommitteeShare Transfer committee.
The details of mandatory Board committees with respect to the composition terms ofreference number of meetings held etc. are included in the Report on CorporateGovernance which forms part of the Annual Report.
NOMINATION & REMUNERATION POLICY
Your Board has adopted a Nomination & Remuneration Policy for identificationselection and appointment of Directors Key Managerial Personnel (KMPs) and SeniorManagement Personnel (SMPs) of your Company. The Policy provides criteria for fixingremuneration of the Directors KMPs SMPs as well as other employees of the Company andenumerates the powers roles and responsibilities of the Nomination and RemunerationCommittee.
The Nomination & Remuneration Policy of the Company aims to attract retain andmotivate qualified personnel of the Company and seeks to employ people who not onlyfulfill the eligibility criteria but also have the attributes needed to fit into thecorporate culture of the Company. The remuneration policy seeks to provide well-balancedand performance-related packages taking into account industry standards and relevantregulations. Your Board on the recommendations of the Nomination and RemunerationCommittee appoints Director(s) of the Company based on his / her eligibility experienceand qualifications and such appointment is approved by the Members of the Company at theensuing General Meetings. Independent Directors of the Company are appointed who holdtheir office for a maximum term of upto five consecutive years on the Board of yourCompany. Based on their eligibility for re-appointment the outcome of their performanceevaluation and the recommendation by the Nomination and Remuneration Committee theIndependent Directors may be re-appointed by the Board for another term of fiveconsecutive years subject to approval of the Members of the Company. The relationship ofremuneration to performance is clear and meets appropriate performance benchmarks ThePolicy provides criteria for fixing remuneration of the Directors KMPs SMPs functionalheads as well as other employees of the Company. This remuneration policy also governscriteria for determining qualifications positive attributes independence of a directorand other matters provided under sub-section (3) of section 178 of Companies Act 2013 andregulation 19 of SEBI (LODR) Regulations and amendments thereof. The criteria for theselection of candidates for the above positions cover various factors and attributeswhich are considered by the Nomination & Remuneration Committee and the Board ofDirectors while selecting candidates. The Company pays remuneration to IndependentDirectors by way of sitting fees and Non-Executive Non-Independent Directors of yourCompany do not accept any sitting fees. Remuneration to Directors is paid within thelimits as prescribed under the Companies Act 2013 and the limits as approved by theMembers of the Company from time to time. Any revision in the remuneration package ofKMP SMP are approved by Nomination & Remuneration committee and Board. The Nomination& Remuneration policy is available at the website of the Company atwww.ashikagroup.com at the link athttps://ashikagroup.com/pdf/policies/ACCL-Nomination-and-Remuneration-Policy.pdf
11. FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of Section 178 of the Companies Act 2013 read with rulesmade thereunder Regulation 17(10) of the SEBI Listing Regulations and the Guidance noteon Board evaluation issued by SEBI vide its circular dated January 5 2017 the Companyhas carried out evaluation of the annual performance of its Directors Chairman the Boardas a whole as well as the evaluation of the working of its Audit Nomination &Remuneration Stakeholders Relationship and Corporate Social Relationship Committees andalso for the Directors individually through self-assessment and peer assessment. Thecriteria applied in the evaluation process are explained in the Report on CorporateGovernance which forms part of the Annual Report.
12. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed to this Board's Report and are marked asAnnexure II'. A statement containing the information of top ten employees in termsof remuneration drawn and particulars of every employee of the Company who was in receiptof remuneration not less than the limits specified under Section 197(12) of the CompaniesAct 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 and subsequent amendments thereto is provided in aseparate annexure forming part of this report Further the Annual Report is being sent tothe Members excluding the aforesaid annexure. In terms of Section 136 of the Act the saidannexure is open for inspection and any Member interested in obtaining a copy of the samemay write to the Company Secretary.
13. DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES:
Your Company has neither a Subsidiary Company nor a Joint Venture Company or anAssociate Company during the year under review. Hence disclosure regarding the same isnot applicable to the Company under the Companies Act 2013.
14. AUDITORS STATUTORY AUDITORS
In terms of Section 139 of Companies Act 2013 read with the provisions of theCompanies (Audit and Auditors) Rules 2014 and amendments thereof at the 24th AnnualGeneral Meeting (AGM) of your Company held in the year 2017 M/s. Haribhakti & Co.LLP Chartered Accountants having Firm Registration No. 103523W / W100048 was appointedas Statutory Auditors of your Company to hold office for a term of 5 (Five) years from theconclusion of the 24th AGM held in the year 2017 till the conclusion of the 29th AGM ofyour Company to be held in the year 2022 subject to ratification of such appointment bythe Members at every AGM held thereafter. Pursuant to changes made in the Companies Act2013 and the Companies (Audit and Auditors) Rules 2014 by the MCA vide notification datedMay 7 2018 the proviso to Section 139(1) of the Companies Act 2013 read withexplanation to sub-rule 7 of Rule 3 of the Companies (Audit and Auditors) Rules 2014 therequirement of ratification of appointment of Auditors by the Members at every AGM hasbeen withdrawn . Therefore the resolution seeking ratification of the Members for theirappointment is not being placed at the ensuing Annual General Meeting (AGM). Your Companyhas received communication from M/s Haribhakti & Co LLP Chartered Accountantsconfirming their eligibility Ashika Credit Capital Ltd. 19 to continue as Auditors of theCompany in terms of the provisions of Section 141 of the Companies Act 2013 and the Rulesframed thereunder. Pursuant to the regulation 33 of the SEBI (LODR) the StatutoryAuditors peer review certificate as issued by the Peer Review Board of the ICAI is due forreview on 17.05.2020. It was placed by Statutory Auditor that that ICAI has madeannouncement on Extension of validity of Peer Review Certificate in the wake of COVID -19spurt across the country wherein Option B is applicable to our Firm as we have alreadysubmitted the declaration form and hence the validity of our existing Peer ReviewCertificate is extended by one (1) year from the date of validity of the last issuedcertificate (i.e. 17.5.2020). There is no qualification reservation or adverse remarkmade by the Auditors in their Reports to the Financial Statements they have placed anunmodified opinion on the Financials for the company for the year ended 31st March 2020.In the Audit Report under " Emphasis of Matter" attention is drawn to note no 38to the Ind AS Financial which explains that the classification of assets overdue butstandard as on February 29 2020 and where moratorium benefit has been granted thestaging of those accounts as on March 31 2020 is based on the days past due status as onFebruary 29 2020 which will remain at a standstill during the moratorium period inaccordance with the Reserve Bank of India COVID-19 Regulatory Package. Further theCompany considers that all the assets are recoverable. Also the extent to which COVID-19pandemic will impact the Company's operations and financial results is dependent on futuredevelopments which are uncertain at this point of time. The Auditors opinion in theaforesaid matter is not modified.
During the year under review neither the statutory auditors nor the secretarialauditors have reported to the Audit Committee of the Board under Section 143(12) of theAct any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in this 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 Company appointedM/s. M R & Associates Practicing Company Secretaries as its secretarial auditor toundertake the secretarial audit for FY 2019-2020. The Secretarial Audit Report certifiedby the Secretarial Auditors in the specified form MR-3 is annexed herewith and forms partof this report as Annexure III'. The Secretarial Audit Report for the financial yearended March 31 2020 does not contain any qualification reservation adverse remarks ordisclaimer. Furthermore the Secretarial Auditor M/s. M R & Associates PracticingCompany Secretaries have also certified the compliance as per Regulation 24A of the SEBI(Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 and samehas been intimated to the stock exchanges within the stipulated time and there stood noqualification reported by the Secretarial Auditor. .
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Your Company has formulated a Whistle Blower Policy incorporating the provisionsrelating to Vigil Mechanism in terms of Section 177 of the Companies Act 2013 Regulation22 of SEBI Listing Regulations 2015 and amendments thereof and Regulation 9A (6) of SEBIProhibition of Insider Trading) (Amendment) Regulations 2018 in order to encourageDirectors and Employees of your Company to report any issue of genuine concerns regardingunethical behavior actual or suspected fraud or violation of the Companys Code ofConduct and Ethics policy or in appropriate functioning of the organization which isimpacting and compromising with the interest of your Company and its stakeholders in anyway. Your Company is committed to adhere to highest possible standards of ethical moraland legal business conduct and to open communication and to provide necessary safeguardsfor protection of employees from reprisals or victimisation for whistle blowing in goodfaith. The Policy provides direct access to the Chairman of the Audit Committee. No personhas been denied an opportunity to have access to the Audit Committee Chairman. The saidpolicy is available on the website of the Company www.ashikagroup. com and can be accessedat the link https://ashikagroup.com/pdf/policies/ACCL-Vigil-Mechanism-Policy.pdf Furtherno complaints were reported under the Vigil Mechanism during the year under review.
16. RISK MANAGEMENT POLICY:
The Company's governance structure has well defined roles and responsibilities whichenable and empower the Management to identify assess and leverage business opportunitiesand manage risks effectively. Pursuant to section 134(3)(n) of Companies Act 2013 andRegulation 17(9) of SEBI (LODR) Regulations 2015 the Company has developed andimplemented a risk management policy which is periodically reviewed by the management. Therisk management framework encompasses practices relating to identification assessmentmonitoring and mitigation of various risks to key business objectives. Besides exploitingthe business opportunities the risk management process seeks to minimise adverse impactsof risk to key business objectives. The Audit Committee has additional oversight in thearea of financial risks and controls. Your Company has developed robust systems andembraced adequate practices for identifying measuring and mitigating various risks Business Market Strategic Operational Credit Human Resource Interest Regulation& Compliance Liquidity and ensuring that they are contained within pre-definedthreshold levels. The detailed section on key business risks and their mitigation plansforms part of Management Discussion and Analysis' Section in the Report on CorporateGovernance which forms part of annual report.
17. CORPORATE SOCIAL RESPONSIBILITY:
Pursuant to Section 135 of the Companies Act 2013 and the relevant rules madethereunder the Board has constituted Corporate Social Responsibility (CSR) Committee. TheCSR Committee of the Company consists of 3 Directors as its' members Chairman beingIndependent Director. The composition of the committee and other details are mentioned inthe Corporate Governance Report which forms part of this Annual report. The Companyconfirms that the implementation and monitoring of the CSR Policy is in compliance withthe CSR objectives and Policy of the Company. The Company has a CSR Policy in place whichaims to ensure that the Company continues to conduct business in a true fair and ethicalmanner and takes up the responsibility to create a good impact in the society it belongswhile recognizing the interests of all its stakeholders. The objective of the Company isto strive for economic development with minimal resource footprint. It takes up CSRprojects/programmes through which contribution can be made directly by the Company orthrough a registered trust/ Section 8 company which benefits the communities in andaround resulting in enhancing the quality of life of the people in the area where thegroup has its business operations. The Company will prefer to take up projects forspending the amount earmarked for CSR at local areas and areas where the Company operates.The said CSR Policy has been uploaded on the Company's website at www.ashikagroup.com andis available at the web link https://ashikagroup.com/pdf/policies/ACCL-CSR-Policy.PDF
Your Company spent an amount of Rs 1151000/- during the financial year 2019-2020 asagainst its 2% obligation (i.e. 2% of Average Net Profits of the Company for the precedingthree financial years) of Rs 1149000 /- for the said FY. Pursuant to the provisions ofSection 135 of the Companies Act 2013 read with the Companies (Corporate SocialResponsibility Policy) Regulations 2014 a report on CSR Activities in the prescribedformat is annexed to this Board's Report marked as Annexure IV in this Report.
18. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION
Due to COVID 19 pandemic the entire country is under lock down since 24th March 2020which has largely affected the economy of the country. Further the company has implementedthe COVID 19 -Regulatory package announced by the Reserve Bank of India on March 27 2020for NBFCs Bank AIFIs wherein moratorium period was granted to borrowers/ customers onpayments of installments (principal/interest)for term loan falling due between March 12020 and May 31 2020. Thereafter RBI vide its notification dated 23.05.2020 furtherpermitted to extend the moratorium by another three months i.e. from June 1 2020 toAugust 31 2020 on payment of all installments. Though Interest shall continue to accrueon the outstanding portion of the term loans during the moratorium period.
Due to the aforesaid measures taken by the company in lieu of the RBI notification thecompany may face higher credit risk and even higher provisioning due to the relatively newaccounting norm Indian Accounting Standards (Ind-AS) because provisioning underInd-AS known as expected credit loss (ECL) is ascertained based on the expectations offuture credit losses rather than incurred losses followed under GAAP (generally acceptedaccounting principles). So the financial position of the company as on date of signingthis report could not be ascertained now. So the company is not able to determine whetherthere has been any material changes and commitments affecting the financial position ofthe Company which has occurred between the end of the financial year for the Companyi.e. March 31 2020 and the date of this Report. Due to on-going Covid 19 pandemic and itsoverall effect on the Global economy the present situation demands that the companyshould maintain a razor-sharp focus on operating cost and fixed costs and avoidunnecessary and perhaps unproductive overheads. In view of the same a good initiative hadbeen taken by both Mr Pawan Jain Executive Chairman and Mr Daulat Jain Managing Directorfor the year 2020-2021. They both has forgo their remuneration for the FY 2020-2021 fromthe company and Mr Pawan Jain would receive Re. 1/- only as remuneration. This will striveto improve the earning capacity of our business. The contribution by and Mr Pawan Jain& Mr Daulat Jain will make this happen and bring about material change in thefinancial position of the company.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE:
During the year under review there were no such significant material orders passed bythe Regulators / Courts/ Tribunals and no litigations outstanding which would impact thegoing concern status and future operations of your Company.
Manali Properties & Finance Ltd. had filed a complaint case against the companyAshika Credit Capital Ltd. and its Officers u/s 200 of the Code of Criminal Procedure inthe Metropolitan Magistrate Court Kolkata which has been stayed by the Hon'ble CalcuttaHigh Court vide its Order dated 12.09.2012 on an application filed by us u/s 482 of theCode of Criminal Procedure. The matter is still pending in the Metropolitan MagistrateCourt Kolkata due to stay granted against it. Further it is pending in the Hon'ble HighCourt at Calcutta.
20. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY :
The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis which is a part of this report.
21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013
Your Company is a non-deposit taking NBFC. The details of Loans covered under theprovisions of Section 186 of the Act read with the Companies (Meetings of Board and itsPowers) Rules 2014 are disclosed in the Notes to the Standalone Financial Statements.Your Company has neither made any Investments nor given any Guarantee or provided anySecurity during the year under review. Pursuant to MCA Notification dated 11th October2019 the Company being an NBFC is exempted from the compliance of the provisions ofSection 186 of Companies Act 2013.
Being a non-deposit taking Company your Company has not accepted any deposits underSection 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules2014 during the year and within the meaning of the provisions of the Non-Banking FinancialCompanies (Acceptance of Public Deposits) (Reserve Bank) Directions 2016.
23. PARTICULARS OF CONTRACTS/ TRANSACTIONS / ARRANGEMENTS WITH RELATED PARTIES:
All the related party transactions of your Company are entered in the ordinary courseof business and are on arm's length basis and are in compliance with the applicableprovisions of the Companies Act 2013 and SEBI Listing Regulations 2015 and amendmentsthereof. There are no materially significant transactions entered into by your Companywith Promoters Directors or Key Managerial Personnel (KMPs) which have potentialconflict with the interest of your Company at large. Your Company has not entered into anymaterial related party transactions with any of its related parties during the FY 2019-2020 pursuant to section 188 (1) of Companies Act 2013 read with rules thereon. Furtherall material related party transactions entered pursuant to the definition of"material" as per regulation 23 of SEBI (LODR) 2015 and amendments thereof have/shall be placed for approvals before the shareholders. All Related Party Transactions ofyour Company had prior approval of the Audit Committee and the Board of Directors asrequired under the Listing Regulations. Subsequently the Audit Committee and the Boardhave reviewed the Related Party Transactions on a quarterly basis. Since all related partytransactions entered into by your Company were in the ordinary course of business and wereon an arm's length basis Form AOC-2 is not applicable to your Company. Members may referto the notes to the financial statements for period ending March 31 2020 for details ofrelated party transactions.
The Policy on Related Party Transactions as reviewed by the audit committee andapproved by Board of Directors has been posted on the Company's website athttps://ashikagroup.com/pdf/policies/ACCL-RPT-Policy.pdf
24. CORPORATE GOVERNANCE REPORT:
The Board of Directors of the Company reaffirms their continued commitment to goodcorporate governance practices. Your Company has always practiced sound corporategovernance and takes necessary actions at appropriate times for enhancing and meetingstakeholders' expectations while continuing to comply with the mandatory provisions ofCorporate Governance. In compliance with the provisions of Regulation 34 of the ListingRegulations read with Schedule V to the said Regulations the Annual Report of the Companyfor the Financial Year 2019-2020 contains a separate section on Corporate Governance aswell as Management Discussion and Analysis (MDA) Report and a Certificate from theSecretarial Auditors of your Company confirming compliance with the requirements ofCorporate Governance.
25. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE:
Your Company is an equal employment opportunity company and is committed to creating ahealthy working environment that enables employees to work without fear of prejudice andgender bias. Your Company provides a work environment which ensures that every womanemployee is treated with dignity respect and equality. There is zero-tolerance towardssexual harassment and any act of sexual harassment invites serious disciplinary action. Interms of provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and Rules framed thereunder your Company has duly adopted itsGroup Policy and has also complied with the provisions relating to the constitution ofInternal Complaints Committee (ICC). The Policy is meant to sensitize the employees abouttheir fundamental right to have safe and healthy environment at workplace Your Companyaffirms that during the year under review adequate access was provided to any complainantwho wished to register a complaint under the Policy. During the year under review yourCompany has not received any complaints on sexual harassment from any of its' employees.The group sexual harassment policy is uploaded on the website of the company atwww.ashikagroup.com at the given link athttps://ashikagroup.com/pdf/policies/Group-Policy-on-Sexual-Harassment.pdf.
26. COMPLIANCE WITH SECRETARIAL STANDARDS OF ICSI
The Board of Directors affirms that the Company has duly complied with the applicableSecretarial Standards (SS) relating to Meetings of the Board (SS-1) and General Meetings(SS-2) issued by the Institute of Companies Secretaries of India which have mandatoryapplication during the year under review.
27. DISCLOSURES PERTAINING TO MAINTENANCE OF COST RECORDS PURSUANT TO SECTION 148(1) OFTHE COMPANIES ACT 2013
The Company is not required to maintain cost records as specified u/s 148(1) of theCompanies Act 2013 read with the applicable rules thereon for the FY 2019-2020. Hence thesaid clause is not applicable to the Company with respect to its' nature of business.
28. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGOES:
Your Company has no activity relating to Conservation of Energy Technology Absorptionand Foreign Exchange Earnings and Outgo as stipulated in Rule 8(3) of Companies (Accounts)Rules 2014. Hence the requirements pertaining to disclosure of particulars relating toConservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo asprescribed under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies(Accounts) Rules 2014 are not applicable to the Company..
29. BOARD DIVERSITY
The Company recognizes the importance of a diverse board structure in its growth anddevelopment. The Board of the Company consists of individuals having varied skill setsindustry experience background and gender diversity which brings expertise and viewpointsthat in turn adds to the overall strength of the Company. The Board has adopted the BoardDiversity Policy which sets out the approach to diversity of the Board of Directors.
30. DIRECTORS RESPONSIBILITY STATEMENT:
Your Directors to the best of their knowledge and belief and according to theinformation and explanation obtained by them make the following statement in terms ofclause (c) of sub-section (3) of section 134 of Companies Act 2013 that a) In thepreparation of the annual accounts for the financial year ended on 31st March 2020 theapplicable accounting standards had been followed along with proper explanation relatingto material departures. b) The directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the company as at 31st March2020 and of the profit and loss of the company for that period; c) The directors had takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of Companies Act 2013 for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities; d) The directorshad prepared the annual accounts on a going concern basis; e) The directors had laid downinternal financial controls to be followed by the company and that such internal financialcontrols are adequate and were operating effectively. f) The directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.
The Directors express their deep sense of gratitude to the Central and StateGovernments and acknowledge the excellent support and co-operation received fromexchanges its bankers business partners and other stakeholders and place on record theirsincere appreciation to its employees for their continued co-operation in realisation ofthe corporate goals in the years ahead.
| ||For and on behalf of the Board of Directors || |
|Place : Kolkata ||(PAWAN JAIN) ||(DAULAT JAIN) |
|Date : 15.06.2020 ||Chairman ||Managing Director |
| ||DIN: 00038076 ||DIN: 00040088 |