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Akme Star Housing Finance Ltd.

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Akme Star Housing Finance is not listed on NSE

Annual Report

For Year :
2018 2017 2016 2015

Director’s Report

The directors are pleased to present the Annual Report of your Company along with the audited accounts for the year ended March 31, 2018. The Management Discussion and Analysis has also been incorporated into this report.

KEY FINANCIALS

The Board''s Report shall be prepared based on the stand alone financial statements of the company. The Company''s financial performance for the financial year ended March 31st, 2018, is summarized below: -

PARTICULAR

RS. IN LACS

2017-18

2016-17

Gross Income

705.82

340.40

Less : Finance Cost

170.89

47.42

Overhead

131.3

77.90

Depreciation

3.60

4.66

Profit Before Tax

400.04

210.40

Less : Provision for taxation

110.54

69.67

Profit After tax

289.50

140.73

Balance Brought Forward from last year

297.75

199.09

Appropriations

289.50

140.72

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

80.01

42.08

Transferred to general reserve

Nil

Nil

Balance Carried over to the Balance Sheet

507.24

297.75

Transfer to Reserves

During the year under review, your Company transferred NIL to the General Reserve during the year under review and Rs. 80.01 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. 289.50 Lacs is proposed to be retained in the Profit and Loss Account.

HIGHLIGHTS OF PERFORMANCE

Following are the key factors indicating the performance of the Company :

(Rs. In Lacs)

KEY FACTORS

2017-18

2016-17

GROWTH (%)

Gross Income

705.82

340.04

107.57%

Net Profit

289.50

140.73

105.71%

Portfolio

4915.55

2027.33

142.46%

(Outstanding Housing Loan/Other Loan)

EPS (Basic)

2.43

1.19

104.20%

CRAR(%)

67.02%

109.00%

-

DIVIDEND

To look after the further expansion of business activity and inadequacy of profits your directors do not recommend any payment of dividend for the year ended 31st March, 2018.

ALTERATION IN CAPITAL

- Authorized Share Capital

During the year under review the authorized share capital of the Company was increased from Rs. 12,00,00,000 (divided into 1,20,00,000 Equity Shares of Rs. 10/- each) to Rs. 14,00,00,000 (divided into 1,40,00,000 Equity shares of Rs. 10/each) vide Extraordinary General Meeting of the members of the Company held on 16th October, 2017.

- Share Warrants

Pursuant to SEBI (ICDR) Regulation, 2009 the members of the Company approved the Issue of Warrants to the prospective investors vide Extraordinary General Meeting dated 16th October, 2017 ath price of Rs. 84/- calculated in accordance with prescribed guidelines .

After obtaining the necessary approvals from BSE, the Board vide its meeting dated 30 th November, 2017 alloted 4,35,000 warrants to the promoters and non promoters on preferential basis at Rs. 84/- on receipt of amount equivalent to 25% of the Issue Price i.e. Rs. 91,35,000/- out of which 2,10,000 warrants allotted to non promoters were further converted into equity shares vide Board Meeting dated 09th January, 2018 in accordance with SEBI (ICDR) Regulations, 20009 and prescribed provisions of Companies Act, 2013 on receipt of the balance amount of 75% amount of the issue price. Thus at the end of the year there are 2,25,000 outstanding warrants issued to promoters.

And Accordingly, the aggregate paid up capital of the Company is Rs. 12,07,90,000/- divided into 1,20,79,000 equity shares of Rs. 10/- each as on 31.03.2018.

MIGRATION TO MAIN BOARD

In respect of postal ballot exercise as approved by members of the Company on 25.05.2017 for migration to Main Board, the trading approval was received from the BSE for migration of equity shares of the Company from BSE SME Platform to BSE Main board platform w.e.f 30.06.2017.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

Mr. Ashish Jain (DIN:02041164) has been designated as Chairman & Managing Director of the Company w.e.f 01st June 2018 for a tenure not exceeding Five Years subject to the approval of Shareholders by way of Special Resolution Cessation of Dr. Mohan Lal Nagda from the post of Chairman & Managing Director of the Company w.e.f. 19th May, 2018 as per prescribed provisions of Companies Act, 2013 due to his sudden demise.

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 complaints are 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.

RESOURCE MOBILISATION

Your Company''s borrowing policy is under the control of the Board. The Company has vide special resolution passed by means of special Resolution on September, 10th, 2014, 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 and free reserves of the Company up to an amount of Rs. 50 crore and the total amount so borrowed shall be within the limits as prescribed under the Housing Finance Companies (NHB) Directions, 2010.

Since the business of company is growing the requirement of funds arose and to meet that the Board proposed to members to increase the borrowing limit of the Company and accordingly seeks approval at the ensuing meeting scheduled to be held on 28th July, 2018 for increasing the Borrowing Limits under Section 180(1)(c) in excess of aggregate of paid up share capital and free reserves including securities premium of the Company up to an amount of Rs. 200 crore. 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.

BANK BORROWINGS

During the financial year 2017-18 your Company raised Rs. 15 Cr. through term loan from State Bank of India & Rs. 8.00 Crores through AU Small Finance Bank Limited in the form of Term loan and Cash Credit Facility 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 FY 2018-19.

The Outstanding Bank Borrowing as on 31.03.2018 stood at Rs 2955.64 Lacs.

RATING

The company has been assigned BBB- by SMERA Ratings Limited for the facility obtained from the Bank as on 13.03.2018.

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 31, 2018.

CAPITAL ADEQUACY

As required under National Housing Bank Directions, your Company is presently required to maintain a minimum capital adequacy of 12% on a standalone basis. In addition, the National Housing Bank Directions also require that your Company transfers minimum 20% of its annual profits to a reserve fund.

Your Company''s Capital Adequacy Ratio is at 67.02 % as at March 31, 2018, which provides an adequate cushion to withstand business risks and is above the minimum requirement of 12% stipulated by the National Housing Bank.

SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any subsidiary Company or Joint Company or Associate Company.

HUMAN RESOURCES AND TRAINING

Your Company has experienced promoters and a team whom your Company relies upon to capitalize on emerging new business opportunities. Your Company believes that a combination of its reputation in the market, its working environment and competitive compensation programs allows it to attract and retain best talent. Your Company strives to attract the best talent in the industry and ensures its employees'' development and their contribution to the Company''s success.

Your Company''s vision is to become an employer of choice by providing a compelling employee value proposition. Your Company has molded its policies relating to hiring, deployment, transfers, promotion, training, including its performance-linked bonuses and employee stock options, with the clear aim of building a ''cadre-based organization, whose cadre understands the company''s customers, their problems, issues and aspirations. Your Company''s human resources policies and practices are focused on recruiting and training employees who can empathies and deal with potential and existing borrowers.

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 are no employees of the Company covered under this section who is earning salary over and above specified limit.

DISCLOSURE UNDER SUB-SECTION (3) OF SECTION 134 OF COMPANIES ACT, 2013, READ WITH RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

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.

INSURANCE

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 Company''s 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.

BSE COMPLIANCES

The Company has submitted various returns and reports as required quarterly/half yearly/ yearly in accordance with the prescribed guidelines.

RISK MANAGEMENT FRAMEWORK

ASHFL''S risk management is a discipline that forms the core of the Company and encompasses all the activities that affect the Company''s risk profile. As a housing finance institution, your Company is exposed to various risks like credit risk, market risk (interest rate and currency risk), liquidity risk and operational risk (technology, employee, transaction and reputation risk).

The Risk Management Committee (RMC) of the Company comprises of members of its senior management team, who have many years of experience in the industry and have put in place preventive mechanisms to contain various risks. The RMC met multiple times during the year ending 31 March, 2018 and to identify, measure, monitor and control various risks the Company was exposed to. The RMC put in place or enhanced the control measures to contain these risks.

The Company has a robust mechanism to ensure an ongoing review of systems, policies, processes and procedures to contain and mitigate risk that arise from time to time. ASHFL''S goal is to build a business that is stable, scalable and sustainable. In seeking to do this, the Company recognizes the importance and has in place a well-defined risk management framework that permeates all aspects of its business and, to which, every employee is sensitized.

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 NHB''s Asset Liability Management Guidelines.

VIGIL MECHANISM

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 vigil mechanism that encourages and supports its Directors and employees to report instances of illegal activities, unethical behavior, actual or suspected, fraud or violation of the Company''s Code of Conduct or Ethics Policy. It also provides for adequate safeguards against victimization of persons who use this mechanism and direct access to the Chairman of the Audit Committee in exceptional cases.

CODES AND STANDARDS

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 a Board 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 organization''s policies vis-a-vis client protection. The FPC captures the spirit of the National Housing Bank guidelines on fair practices for Housing Finance Companies.

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 Executive Officer, 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 SEBI (Prohibition of Insider Trading) Regulations, 2015, 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 Policy''s 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 programmes that can be undertaken by the Company, in terms of the Company''s 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.

- Remuneration Policy

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.

- Familiarisation 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 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 financial year 2017-18 on time.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

- Changes in the Director

During the year following changes took place in the board of Directors:

Sr.

No.

Name of the Director

Designation

Appointment/

Resignation

Date of change

1

Rekha Jain

Independent Director

Appointment

29.07.2017

2

Ashish Jain

Executive Director

Appointment

29.07.2017

3

Avinash Bhatnagar

Independent Director

Resignation

08.08.2017

4

Ashish Jain

CFO

Resignation

08.08.2017

5

Bhanwar Si ngh Kachhawaha

CFO

Appointment

08.08.2017

6

Dr. Mohan Lal Nagda

Chairman & Managing Director

Cessation

19.05.2018

7

Ashish Jain

Chairman & Managing Director

Appointment as Managing Director

28.05.2018

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.

- 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:

On recommendation of Nomination and Remuneration Committee in the meeting held on 16th May, 2018, the Board has appointed Mr. Ashish Jain (DIN: 02041164) as Chairman & Managing Director w.e.f. 1st June, 2018 for the term of 5 years subject to the approval of members at the ensuing Annual General Meeting. Necessary resolution is being proposed in the notice of the ensuing Annual General Meeting for appointment of Mr. Ashish Jain as Chairman & Managing Director on Board of the Company in accordance with Companies Act, 2013 and Article of Association of the Company who shall hold office for a term of five consecutive years with effect from this Annual General Meeting and whose period of office will not be liable to determination by retirement of directors by rotation.

- 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. Nirmal Kumar Jain, Director of your Company being the longest in office among Directors who are liable to retire by rotation, retires by rotation and being eligible; offers himself for reappointment at the ensuing Annual General Meeting.

- Stock Option:

During the year under review, no stock options were issued to the Directors of the Company.

PERFORMANCE EVALUATION

The provisions of the Companies Act, 2013 mandates formal annual evaluation of the Board of Directors, its committees and individual Directors. Schedule IV of the Companies Act, 2013 also requires the performance evaluation of Chairman & Managing Director and Non Executive Directors and Board as a whole to be carried out at a separate meeting by the Company''s Independent Directors. It also states that performance evaluation of Independent Directors shall be done by the entire Board excluding the Director being evaluated. The provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, also require that the Board shall monitor and review the Board Evaluation Framework. The annual performance evaluation of the Board as a whole, all Directors as well as the evaluation of the Board Committees including Audit Committee, Nomination & Remuneration Committee, Risk Management Committee, Stakeholders'' Relationship Committee, and Corporate Social Responsibility Committee of the Board of Directors of the Company, was carried out.

MEETINGS

- Board

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 2017-18, eleven (11) Board Meetings were convened and held. 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 Extra Ordinary General Meeting of the Company was held on 16th October, 2017 during the year, the details of the Meeting has been disclosed in Corporate Governance report.

The Company''s 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 24th, 2018 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, and 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 2017-18 were mainly in the ordinary course of business and on an arm''s length basis.

Prior approval of the Audit Committee is obtained by the Company before entering into any related party transaction as per the applicable provisions of Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per the provisions of Section 188 of the Companies Act, 2013, approval of the Board of Directors is also obtained for entering into related party transactions by the Company. A quarterly update is also given to the Audit committee and the Board of Directors on the Related Party Transactions undertaken by the Company for their review and consideration.

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 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 Company''s 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 -

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, 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 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018, 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.

- Statutory Auditors

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 from the conclusion of this Annual General Meeting 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 joint 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) of the Companies Act, 2013:

- that in the preparation of the annual financial statements for the year ended March 31, 2018, 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, 2018 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 IV'' to this report. The said certificate for financial year 2017-18 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.

MANGEMENT 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 of the Companies (Management and Administration) Rules, 2014,the extract of the Annual Return as at March 31, 2018, in the prescribed form MGT 9, forms part of this report and is annexed as ''Annexure V .

ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company''s 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.

OUTLOOK

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 2018-19.

ACKNOWLEDGEMENTS

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 Company''s 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.

CAUTIONARY STATEMENT

Statements in the Board''s Report and the Management Discussion & Analysis describing the Company''s 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 Company''s 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.

Registered office For, and on behalf of the Board

AKME Business Center (ABC)

4-5 Subcity Center Savina Circle Sd/- Sd/-

Opp. Krishi Upaz Mandi Udaipur.313002 Ashish Jain Nirmal Kumar Jain

Date : 16.06.2018 Managing Director Director

DIN 02041164 DIN 00240441

Director’s Report