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Akme Star Housing Finance Limited Udaipur
Your directors are pleased to present the Fourteenth Annual Report of your Company along with the audited accounts for the year ended March 31, 2019.
The Boards Report shall be prepared based on the stand alone financial statements of the company. The Companys financial performance for the financial year ended March 31st, 2019, is summarized below: -
|Less : Finance Cost||441.87||170.89|
|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|
|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 (%)|
|(Outstanding Housing Loan/Other Loan)|
|EPS (Basic) in||3.57||2.43||46.91%|
The above mentioned performance was amidst very strong headwinds created due to certain events which had a contagion effect on the entire sector. It is worth mentioning that due to focusing on fundamentals, which has been the main plank over these one decade; enabled the company not only to navigate through this situation but achieved a higher than the targeted growth.
Prospects and Developments :
There is a very huge market to be served, which needs an efficient last mile delivery of credit, thus creating enormous opportunity for all the financial institutions and HFCs in special.
The Company continues to pursue the strategy of being multi product and multi locational, thus giving the distinct edge from the risk management and scalability perspective. The focus across the product is of catering to the lower and the middle income segment, which is the key driver of our economy.
Housing Finance :
The Company aims at serving the middle income and the lower income sector of the economy, especially in the semi urban and rural areas, which are reckoned to be the key drivers of the sector in the coming decades. Fullfledged efforts are on to execute efficiently, as per the detail planning. Being aware of the challenges involved in serving this class of the society, a very cautious approach is adopted in building up volumes. Nevertheless, Company is quite confident of building substantial volumes in the near future.
The Companys rural initiative will also start yielding results shortly. . It is worth mentioning that despite of credit worthy customer class, ascertaining the title of the property remains a challenging job. The Company is actively involved with all the stake holders to smoothen the process and is assertive in getting the right set of documents.
We continue to endeavour relentlessly and are confident of creating a quality portfolio and add value to the ecosystem we work in.
In continuation of our last years efforts the process of expanding its operations in the various region of Gujarat, Maharashtra, Madhya Pradesh, besides Rajasthan is in progress.
Human Resource Management
Human Resource Management plays a very important role in realizing the Companys objective. The Company is managed by the active involvement of the promoters along with strategic inputs from a well-diversified and competent board. In an environment that is rapidly becoming technology and Digital oriented, your Company continues to invest in long term people development, for organizational excellence. Constant endeavors are being made to offer professional growth opportunities and recognitions, apart from imparting training to employees. Training is an integral part of the skill development program initiated for the employees. The articulation and implementation of the strategies is carried on by the core team. Core team is dedicated and competent team of personnel associated with the company almost since its inception and have always extended unstinting support besides, having identified and aligned their career objective with the company.
The Company has a diverse workforce of 25+ employees as on 31st March, 2019. Going forward, the Company will continue to focus on nurturing the right talent to achieve the business goal.
I trust with all the above qualities accompanied by the
determination to excel, this team forms a formidable second line of management at ASHFL.
Your Company will always strive to strengthen this most important resource 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 at maximizing the return on capital employed and at the same time adhering to the prudential guidelines laid down by NHB from time to time.
The Company by virtue of its performance over the years enjoys very good relationships with many leading banks and financial institutions. The Company could raise the required resources from various banks and financial institutions comfortably. We anticipate the same response from all our lending partners for the coming years too. The Company anticipates credit lines from few more banks and financial institutions besides the existing ones.
During the year passed by when the whole sector was looked upon as a risky preposition the Company could not only manage to raise the required resources but also obtained credit lines for the coming year.
Your Company continues to command the respect and the confidence of Bankers 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 Companys borrowing policy is under the control of the Board. The Company has vide special resolution passed by means of special Resolution on 28th July, 2018, under Section 180(1)(c) of the Companies Act, 2013, authorized the Board of Directors to borrow money upon such terms and conditions as the Board may think fit in excess of aggregate of paid up share capital, free reserves, security premium of the Company up to an amount of Rs. 200 crore and the total amount so borrowed shall be within the limits as prescribed under the Housing Finance Companies (NHB) Directions, 2010.
Your Company continued to use a variety of funding sources to optimize funding costs, protect interest margins and maintain a diverse funding portfolio which further strengthened its funding stability and liquidity needs. Your Company continued to keep tight control over the cost of borrowings through
negotiations with lenders and thus, raised resources at competitive rates 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 Crore through term loan from Mas Financial Services Limited, Rs. 2.5 Crores through Term Loan From Mahindra & Mahindra Financial Services Limited, Rs. 3 Crores through term loan from Avanse Financial Services Limited, Rs. 6 Crores through term loan from Hinduja Housing Finance for meeting the working capital requirements. Presently Company is in line up with more proposals with banks and Financial Institutions for meeting the working capital 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 & Research Limited 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 the provisions of Section 186 of the Companies Act, 2013, apart from the loans made, guarantee given or security provided by the Company in the ordinary course of business are given in the Notes to accounts forming part of the Audited Financial Statements for the year ended March 31st, 2019.
As required under National Housing Bank Directions 2010, your Company is 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 proposed certain amendments which includes to raise the capital adequacy ratio for HFCs from 12% to 15% by March 2022.The capital adequacy ratio of HFCs is to be increased from 12% to 13% by March 2020, 14% by March 2021 and 15% by March 2022 as per the said proposal.
Your Companys Capital Adequacy Ratio as at March 31, 2019, was 70.92.% which provides an adequate cushion to withstand business risks and is above the minimum requirement 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 2019 as 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 in the Official Gazette vide Notification G.S.R. 111(E) and G.S.R. 365(E) dated February 16, 2015 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 prescribed under 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 under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment /rules made thereafter from April 1, 2019. Such transition has been carried out from the erstwhile Accounting Standards notified under the Act, read with relevant rules issued there under and guidelines issued by NHB (Collectively referred to as the Previous GAAP).
Transfer to Reserves
During the year under review, your Company having Rs. 119.63 Lacs to the Statutory Reserve under Section 36(1) (viii) of the Income Tax Act, 1961 read with Section 29C of National Housing Bank (NHB) Act, 1987 out of the amount available for appropriation and an amount of Rs. 431.73Lacs is proposed to be retained in the Profit and Loss Account.
Your Directors have considered reinvesting the profits into the business of the Company in order to build a strong reserve base for the long-term growth aspects of the Company. Accordingly, no dividend has been recommended for the financial year ended March 31, 2019.
Authorized Share Capital
During the year under review the authorized share capital stood at Rs. 14,00,00,000 (divided into 1,40,00,000 Equity Share of Rs. 10/-each). No change was made in authorized Share Capital as compared to previous year.
However, Company Increased its Authorised Share Capital From Rs 14,00,00,000/- to Rs 17,00,00,000/- vide passing ordinary resolution in Extra Ordinary General Meeting held on 02.08.2019 after Close of the Financial Year.
Issued and Paid-up Capital
Your Companys issued & paid up Share Capital is Rs. 12,07,90,000 (divided into 12079000 Equity Shares of Rs. 10/-each) as at March, 31st 2019 and no change was made in issued and Paid-up capital as compared to previous year.
The Company has allotted and converted 225000 outstanding warrant into Equity 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 Non Executive, Independent Director of the company w.e.f 22nd May, 2019 due to her pre occupation in other company and her responsibilities.
Appointment of Independent Director
Mr. Suresh Chandra Gupta (DIN: 08527990) has been appointed as Independent 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 to Arkfin Investment Private limited of Rs 17,87,10,000/- vide its Board meeting held on 08th July 2019 and the same has been passed by the shareholders in EOGM held on 02nd August 2019.
Details Relating to Deposits
The Company has been granted registration by the National Housing Bank, New Delhi as a non deposit taking Housing Finance Company. Being so, the Company has neither accepted in the past nor has any future plans to accept any public deposits, by whatever name called.
Investor Complaints and Compliance
During the year under review the Company did not receive any investor complaints and that as on the date no complaint is pending.
And also the Company has timely submitted all the reports relating to Investor 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 performing Assets (NPAs), issued by the National Housing Bank (NHB) under its Directions of 2010, as amended 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 norms prescribed by the NHB, the Company has made provision for contingencies on standard as well as non-performing housing loans and property loans. The details of NPA have been given in financial Statements.
Subsidiary, Joint Ventures and Associate Companies
The Company does not have any subsidiary Company or Joint Company or Associate Company.
Particulars of Employees
The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, there is no employee of the Company covered under this section who is earning salary over and above specified limit.
Particulars of Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo
In accordance with the provision of sec 134(3) (m) of the Act, read with Rule 8 of the companies (Accounts)Rules 2014 the requisite information relating to your Company are as under:-
A. Conservation of energy:
The Company does not fall under any of the industries covered by the Companies (Disclosure of particulars of Directors) Rules, 1988.
B. Technology absorption:
The Company is not involved in any technology absorption nor is there any R&D activity during the year
C. Foreign Exchange Earnings and Outgo:
Your company does not have any foreign exchange earning and outgo during the year under review.
Your Company has insured its various properties and facilities against the risk of fire, theft and other perils, etc. and has also obtained Directors and Officers Liability Insurance Policy, which covers the Companys Directors and Officers (employees in managerial or supervisory position) against the risk of financial loss including the expenses pertaining to defense cost and legal representation expenses arising in the normal course of business.
National Housing Bank (NHB) Guidelines
The Company has complied with the provisions of the Housing Finance Companies (NHB) Directions, 2010 as prescribed by NHB and has been in compliance with the various Circulars, Notifications and Guidelines issued by National Housing Bank
(NHB) from time to time. The Circulars and the Notifications issued by NHB are also placed before the Audit Committee / Board at regular intervals to update Committee / Board members on the same.
The Company has submitted various returns and reports as required quarterly/half yearly/ yearly in accordance with the prescribed guidelines.
Risk Management Framework
Financing activity is the business of management of risks, which in turn is the function of the appropriate credit models and the robust systems and operations. Your Company continues to focus on the above two maxims, and is always eager to improve upon the same.
Your Company continues to give prime importance to the function of receivables management, as it considers this the ultimate reflection of the correctness of marketing strategy as well as appraisal techniques. The stage III assets Net of provisions of 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 of Risk management committee is applicable to top 500 listed entities determined on the basis of market capitalization, as at the end of the immediate previous financial year.
As per the size of the provisions of risk management committee not applicable to the Company, however the Board of Directors has adopted a risk management policy for the Company which provides identification, assessment and control of risks which in the opinion of the Board may threaten the existence of the Company. The Management identifies and controls risks through a properly defined framework in terms of the aforesaid policy.
Asset Liability Management Committee (ALCO)
The Asset Liability Management Committee (ALCO) lays down policies and quantitative limits that involve assessment of various types of risks and shifts in assets and liabilities to manage such risks. ALCO ensures that the liquidity and interest- rate risks are contained within the limits laid down by the Board. The Company has duly implemented the NHBs Asset Liability Management Guidelines.
Vigil Mechanism/Whistle Blower Policy
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Rule 7 of Companies (Meetings
of Board and its Powers) Rules, 2014 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has in place a Whistle Blower Policy, which provides for a framework to promote a responsible and secure whistle blowing. It protects Directors/ employees wishing to raise a concern about serious irregularities within the Company. It provides for a vigil mechanism to channelize reporting of such instances/ complaints/ grievances to ensure proper governance. The Audit Committee oversees the vigil mechanism. No employee h as be en d enie d acce s s to the Chair pe rso n of Audit Committee.
Your Company has formulated various policies and codes in compliance with provisions of Directions and Guidelines issued by the National Housing Bank, Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and to ensure high ethical standards in the overall functioning of the organization. The said policies and codes are periodically reviewed by the Board of Directors.
The key policies and codes as approved by the Board of Directors and the respective compliance there under are detailed herein below:
Know Your Customer & Anti Money Laundering Measure Policy
Your Company has approved Know Your Customer & Anti Money Laundering 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 of the said policy relating to the monitoring and reporting of cash / suspicious transactions. The Company furnishes to Financial Intelligence Unit (FIU), India, in the electronic medium, information of all cash transactions of the value of more than Rupees ten lakh or its equivalent in foreign currency and suspicious transactions whether or not made in cash, in terms of the said Policy.
Fair Practice Code
Your Company has in place a Fair Practice Code (FPC), which includes guidelines on appropriate staff conduct when dealing with the customers and on the organizations policies vis-a-vis client protection. The FPC captures the spirit of the National Housing Bank guidelines on fair practices for Housing Finance
During the year under review, FPC was modified by the Board and the grievance redressal mechanism within the Company was further strengthened.
Policy on Disclosure of material events and information During the year under review, your Company has adopted the Policy on Disclosure of Material Events and Information, in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to determine the events and information which are material in nature and are required to be disclosed to the Stock Exchanges.
Code of Conduct for Board Members and the senior management
Your Company has in place Code of Conduct for the Board of Directors and the Senior Management Personnel to set forth the guiding principles on which the Company and its Board and Senior Management Personnel shall operate and conduct themselves with multitudinous stakeholders, government and regulatory agencies, media and anyone else with whom it is connected. A declaration by Chief Financial Officer and Managing Director, with 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 of Insider Trading Practices in accordance with the model code of conduct as prescribed under the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018, as amended. The code lays down guidelines, which includes procedures to be followed and disclosures to be made while dealing in the shares of the Company.
The code is applicable to the promoters, directors, senior designated employees and their dependents and the said persons are restricted from dealing in the securities of the Company during the restricted trading periods notified by the Company, from time to time.
Code of Business Ethics (COBE)
Your Company has adopted a Code of Business Ethics (COBE) which lays down the principles and standards that govern the activities of the Company and its employees to ensure and promote ethical behavior within the legal framework of the organization.
Sexual Harassment Policy
Your Company has in place a Policy on Prevention,
Prohibition & Redressal of Sexual Harassment of Women at Workplace and an Internal Complaints Committee (ICC) has been constituted there under. The Policys primary objective is to protect the women employees from sexual harassment at the place of work 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 and has adopted a structured and disciplined approach to risk management by developing and implementing risk management framework. With a view to manage its risk effectively your Company has in place a Comprehensive Risk Management Policy which covers a formalized Risk Management Structure, along with other aspects of risk management i.e. credit risk management, operational risk management, market risk management and enterprise risk management. The Risk Management Committee of the Board, on periodic basis, oversees the risk management systems, processes and minimization procedures of the Company.
Corporate Social Responsibility (CSR) Policy
Your Company has voluntarily framed Corporate Social Responsibility Policy (CSR Policy), as per the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, which, inter-alia, lays down the guidelines and mechanism for undertaking socially useful projects for welfare and sustainable development of the community at large. As per the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. The Committee assists the Board in fulfilling its duty towards the community and society at large by identifying the activities and programmers that can be undertaken by the Company, in terms of the Companys CSR Policy. The composition of the CSR Committee and its terms of reference are given in the Corporate Governance Report forming part of this Annual Report.
The Board of Directors had on the recommendation of the Nomination & Remuneration Committee Appointed Mrs. Rajni Gehlot, Independent Director as chairperson, Mr. Amrit Singh Rajpurohit and Mrs. Rekha Jain, Independent Director as Member.
The Company follow a Policy on remuneration of Directors and senior management Employees, The Policy
is approved by the Nomination & Remuneration Committee and the Board and is marked as Annexure-I
Related Party Transactions Policy
Your Company has in place Related Party Transaction Policy, intended to ensure requisite approval, reporting and disclosure of transactions between the Company and its related parties. The said policy also defines the materiality of related party transactions and lays down the procedures of dealing with related party transactions.
During the year under review, the Related Party Transaction Policy was amended to align the same with the requirements of Companies (Amendment) Act, 2015 and Securities 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 the non-executive directors are updated on the business environment and overall operations of the
Company. This enables the non executive directors to make better informed decisions in the interest of the company and its stakeholders.
Listing of Shares of The Company
Your Companys equity shares continue to remain listed on BSE Limited. Your Company has paid the listing fees as payable to the BSE Limited for the financial year 2018-19 on time.
Directors and Key Managerial Personal
The Board of Directors of the Company comprises of Six  directors of which Two  are Executive Directors; One  is Managing Director & Three  are Independent & NonExecutive Director including one woman director as on March 31, 2019 who bring in a wide range of skills and experience to the Board.
The Board of Directors of the Company are :- Composition of the 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 are disqualified for being appointed/re-appointed as directors in terms of Section 164 the Companies 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 & Managing Director:
Dr. Mohan Lal Nagda, Chairman & Managing Director of the of the Company passed away on 19th May, 2018. The Board considered invaluable contributions made by Dr. Mohan Lal Nagda as a Chairman & Managing Director of the Company during his tenure of 11 years.
Appointment of Mr. Ashish Jain as Chairman & Managing Director
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 5 years 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 Board w.e.f. 22nd May, 2019 due to her pre occupation in other company and their responsibilities.
Declaration from Independent directors on Annual basis: The Company has received necessary declaration from each Independent Director of the Company Under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence as laid down in Section 149(6) and the 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 are disqualified for being appointed/re- appointed as directors in terms of Section 164 the Companies Act, 2013.
Retirement of Director by rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association, Mr. Kalu Lal Jain, Executive Director of the Company are liable to retire by rotation, at the ensuring 14th Annual General Meeting of the company and has offered himself for reappointment. Resolutions for reappointment is being proposed at the 14th Annual General Meeting and Profile included in the Notice of the 14th Annual General Meeting.
During the year under review, no stock options were issued to the Directors of the Company.
Formal Evaluation of the Performance of the Board, Committees of the Board and Individual Director :
Pursuant to the provisions of 134(3)(p) the Companies Act, 2013 the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees.
A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. In pursuant to Regulation 17(10) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the evaluation of independent directors were done by the entire board of directors which includes -
(a) Performance of the directors; and
(b) Fulfillment of the independence criteria as specified in the regulations and their independence from the management
Criteria adopted for evaluation:
The Board shall evaluate the roles, functions, duties of Independent Directors (IDs) of the Company. Each ID shall be evaluated by all other directors not by the Director being evaluated. The board shall also review the manner in which IDs follow guidelines of professional conduct.
(i) Performance review of all the Non-Independent Directors of the company on the basis of the activities undertaken by them, expectation of board and level of participation;
Performance review of the Chairman of the Company in terms of level of competence of chairman in steering the company;
(iii) The review and assessment of the flow of information by the Company to the board and manner in which the deliberations take place, the manner of placing the agenda and the contents therein;
(iv) The review of the performance of the directors individually, its own performance as well as evaluation of working of its committees shall be carried out by the board;
(v) On the basis of performance evaluation, it shall be determined by the Nomination and Remuneration Committee and the Board whether to extend or continue the term of appointment of ID subject to all other applicable compliances.
Your Company holds at least four Board meetings in a year, one in each quarter, inter-alia, to review the financial results and also holds additional Board Meetings to address its specific requirements, as and when required. All the decisions and urgent matters approved by way of circular resolutions are placed and numbered and noted at the subsequent Board meeting. Annual calendar of meetings of the Board are finalized well before the beginning of the financial year after seeking concurrence of all the Directors.
During the financial year 2018-19, Nine (9) Board Meetings were convened and held. The details related to Board Meetings are appended in Corporate Governance Report forming part of this Report.
The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015. The details of the Board composition, its meetings held during the year along with the attendance of the respective Directors thereat are set out in the Corporate Governance Report forming part of this Annual Report.
The Companys Independent Directors meet at least once in every financial year without the presence of Executive Directors or management personnel. The Independent Directors of the Company met once during the year on March 02nd, 2019 to review the performance of Non-Independent Directors and the Board as a whole, review the performance of the Chairperson of
the Company and access the quality, quantity and timeliness of flow of information between the company management and the Board.
Audit Committee & Other Board Committees
Your Company has a duly constituted Audit Committee as per the provisions of Section 177 of Companies Act, 2013 and provisions of Securities and Exchange Board 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 that need a closer review and to have an appropriate structure to assist in the discharge of their responsibilities.
The Audit Committee and other Board Committees meet at regular intervals and ensure to perform the duties and functions as entrusted upon them by the Board.
The details of the Audit Committee and other Board Committees are also set 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 or senior management or their relatives etc., that may have potential conflict with the interest of company at large. Transactions entered with related parties, as defined under the Companies Act, 2013 and provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 201819 were mainly in the ordinary course of business and on an arms length basis.
During the year, your Company has not entered into any material contract, arrangement or transaction with related parties, as defined under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Related Party Transaction Policy of the Company. The details with respect to the related 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 be referred to and marked as Annexure-II
Significant and material orders passed by the regulator or court or tribunals
During the year no significant or material order was passed by the Regulators or Courts or Tribunals and the Company has complied with the order and Compliances of Companies act 2013.
Internal Audit & Internal Control Systems and Their Adequacy
Your Company has appointed T.R. Dangi & Associates, Chartered Accountant Udaipur as an Internal Auditor of the Company, who reports to the Audit Committee and to the Board of Directors of the Company. The Internal Auditor conducts comprehensive audit of functional areas and operations of the Company to examine the adequacy of and compliance with policies, procedures, statutory and regulatory requirements. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations.
The audit function maintains its independence and objectivity while carrying out assignments. It evaluates on a continuous basis, the adequacy and effectiveness of internal control mechanism. The function also proactively recommends improvement in policies and processes, suggests streamlining of controls against various risks
Your Company has laid down set of standards, processes and structure, which enables it to implement internal financial control across the Company and ensure that the same are adequate and operating effectively.
Secretarial Auditor & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Pursuant to Reg. 24A of Securities Exchange Board of India (Listing Obligation & Disclosure Requirement) (Amendments) Regulations, 2018, the Board of Directors of the Company had appointed Mr. Ronak Jhuthawat Proprietor of M/s Ronak Jhuthawat & Co., Practicing Company Secretaries, Udaipur, to undertake the Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31st, 2019, is annexed as "Annexure - III" to this report. The said report, does not contain any qualification, reservation or adverse
remark, however, contains certain observations of the Secretarial Auditor 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 or disclaimer made by the company secretary in practice in his secretarial audit report.
At the Eleventh (11th) Annual General Meeting held on September 24th, 2016, the Members had appointed M/S. H.R. Jain & Co., Chartered Accountants, (FRN 000262C), as the Statutory Auditors of the Company, by way of ordinary resolution under section 139 of the Companies Act, 2013, to hold office until the conclusion of the Annual General Meeting of the Company to be held in the year 2021 of the Company.
The Company has received consent from the Statutory Auditors and confirmation to the effect that they are not disqualified to be appointed as the Statutory Auditors of the Company in terms of the provisions of Companies Act, 2013 and Rules framed there under.
Notes to Accounts and Auditors Report
The notes to the accounts referred to in Auditors Report are self-explanatory and do not call for any further comments. The Statutory Auditors Report does not contain any qualification, reservation or adverse remark.
Qualifications in Audit Reports:
There are no qualifications, reservations or adverse remarks or disclaimer made by the statutory auditor in his report.
Directors Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) read with Section 134(5) of the Companies Act, 2013:
that in the preparation of the annual financial statements for the year ended March 31st, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
that such accounting policies as mentioned in Note of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates 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 at March 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 the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
that the annual financial statements have been prepared on a going concern basis;
that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Report on Corporate Governance
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section titled Report on Corporate Governance forms part of this Annual Report.
The Report on Corporate Governance also includes certain disclosures that are required, as per Companies Act, 2013. The certificate by the Statutory Auditors confirming Compliance with the conditions of Corporate Governance as stipulated in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure V to this report. The said certificate for financial 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 being sent to the members and others entitled thereto.
Management Discussion and Analysis
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section titled Report on Corporate Governance forms part of this Annual Report.
Extract of Annual Return
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014,an extract of the Annual Return as at March 31st , 2019, in the prescribed form MGT 9, forms part of this report and is annexed as "Annexure IV ". The weblink of the same www.akmestarhousing.com
Enhancing Shareholders Value
Your Company believes that its Members are among its most important stakeholders. Accordingly, your Companys operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.
During the year, Indian economy continued to consolidate the gains achieved through macroeconomic stability. The country remained on a stable growth path on the back of sharp reduction in crude oil prices and resilient domestic consumption. Besides, inflation remained under control and fiscal and current account deficits continued to be moderate.
As all key business enablers are currently showing favorable signs, your Company is positive and expects another year of healthy growth in 2019-20.
Your Directors wish to place on record their gratitude to the National Housing Bank, Securities and Exchange Board of India, Ministry of Corporate Affairs, Registrar of Companies, Financial Intelligence Unit (India), the Companys Customers, Bankers and other Lenders, Members, and others for their continued support and faith reposed in the Company. The Board also places on record its deep appreciation for the dedication and commitment of the employees at all levels as their hard work, co-operation and support had enabled the Company to
maintain its consistent growth. The Directors would also like to thank the BSE Limited, , National Securities Depository Limited, Central Depository Services (India) Limited and the Credit Rating Agencies for their continued co-operation.
Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
For, and on behalf of the Board
|Ashish Jain||Nirmal Kumar Jain|
|DIN: 02041164||DIN: 00240441|
|AKME Business Center (ABC)|
|4-5 Subcity Center Savina Circle|
|Opp. Krishi Upaz Mandi Udaipur.313002|
|Date : 12.08.2019|
|Place : Udaipur|