maneuvering the complexities in npa resolution

1Annual Report 2018 - 19...maneuvering the complexities in NPA resolution

5TH

ANNUAL REPORT2018-19

2 Annual Report 2018 - 19

Board of Directors

Executives

Sri. G. Sambasiva RaoDirector

Sri. A. Indra Kumar Director

Sri. P. Brahmanandam Director

Mr. A. Narayana PrasadVice President & CFO

Mr. K. Hari Krishna Asst. Vice President

Sri. V. KannanDirector

Smt. Y. Prameela Rani Director

Sri. G. Sree Rama KrishnaDirector

Sri. D. Nanha RamManaging Director & CEO

Sri. Ravi VelagapudiDirector

3Annual Report 2018 - 19

Contents

Registered & Corporate Office# 59A-18/1-5A, Sri Plaza, 3rd Floor

Teachers Colony, Patamata, Vijayawada - 520 008.Phone: 0866-2971144/45

Email: [email protected], Web: www.maximusarc.com

Statutory AuditorsM/s. Pendyala & Co

Chartered AccountantsHyderabad

BankersUnion Bank of India

HDFC Bank Andhra Bank

Axis Bank

Notice 5

Directors’ Report 7

Auditors’ Report 37

Balance Sheet 45

Statement of Profit and Loss 46

Cash Flow Statement 47

Notes to the Financial Statements 48

Accolades 64


VisionTo be a distinguished leader and most preferred ARC for resolution of impaired assets expeditiously and with optimum realization.

To revive and restore economic value of sick units by adopting innovative resolution strategies.

MissionTo drive growth and maximize value creation through innovative and sustainable business practices.

To nurture human intellectual capital by promoting a culture that would attract, empower, reward and provide growth opportunities to its’ employees.

To adopt and demonstrate highest standards of professionalism, transparency, ethical conduct and governance.


NoticeNotice is hereby given that the Fifth Annual General Meeting of the Company will be held on Thursday, the 29th August, 2019 at 3 P.M at Krishna Part-2, Novotel Vijayawada Varun, Bharathi Nagar, Vijayawada - 520 008, Andhra Pradesh to transact the following business:

Ordinary Business:1. To receive, consider and adopt the Audited Balance Sheet, the statement of Profit and Loss and the Cash Flow

Statement for the year ended 31st March, 2019, together with Directors’ and Auditors’ Report thereon.

2. To appoint a Director in place of Mr. A. Indra Kumar (DIN:00190168) who retires by rotation and being eligible offers himself for reappointment.

3. To appoint a Director in place of Mr. G. Sambasiva Rao (DIN:01293395) who retires by rotation and being eligible offers himself for reappointment.

Special Business: NIL

By Order of the Board For Maximus ARC Limited

Manisha Joshi Company Secretary M.No. A55355

Registered & Corporate Office: # 59A-18/1-5A, Sri Plaza, 3rd Floor, Teachers Colony, Patamata, Vijayawada - 520 008 A.P. CIN: U67190AP2015PLC095944

Place : Vijayawada Date : 28.06.2019


Notes1) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING, IS ENTITLED TO APPOINT A PROXY OR

PROXIES WHO CAN ATTEND AND VOTE INSTEAD OF THE MEMBER AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2) The Proxy Form duly completed must be lodged at the Registered Office of the Company at least 48 hours before the time fixed for the Meeting.

3) Corporate Members intending to send their authorized representatives are requested to send a duly certified copy of the Board resolution authorizing their representatives to attend and vote at the Annual General Meeting.

4) Members are requested to intimate immediately any change in their address quoting their Registered Folio enabling the Company to address future communication.


By Order of the Board For Maximus ARC Limited

Registered & Corporate Office: # 59A-18/1-5A, Sri Plaza, 3rd Floor, Teachers Colony, Patamata, Vijayawada - 520 008 A.P. CIN: U67190AP2015PLC095944

Manisha Joshi Company Secretary M.No. A55355


Directors’ ReportDear Members,

Your Directors are pleased to present the 5th Annual Report together with the audited accounts of the company for the financial year ended 31st March, 2019.

Financial ResultsThe performance of the company for the year ended 31st March, 2019 is summarized below:

(R in Lakhs)

Particulars 2018-19 2017-18

Income from Operations 1189.78 715.31

Interest on Fixed Deposits 142.13 35.50

Other Income - -

Total Income 1331.91 750.81

Employee benefit expenses 168.05 122.45

Finance Cost - -

Depreciation and Amortization 11.17 6.98

Administrative and other expenses 82.65 107.41

Total Expenses 261.87 236.84

Profit/(Loss) – Before Tax & Exceptional Items 1070.04 513.97

Exceptional Items - -

Prior Period Item - -

Current Tax 315.14 137.30

Deferred Tax 2.43 10.20

Income Tax provision for the earlier year - -

Interim Dividend - -

Dividend Distribution Tax - -

Profit/(Loss) – After Tax 752.47 366.47

Earnings Per Share of R10/- (in Rupees) 1.14 0.80

The company’s net worth as on 31st March, 2019 stood at R 10769.28 Lakhs.


Performance of the CompanyThe performance of your company in terms of new acquisitions made during the year has been low and much below the projections made in the business plan. However, it is gratifying to note that the company registered significant increase in the recoveries made and the income earned for the year. Provisional figures indicate that the ARCs in aggregate have issued SRs equivalent to R 24,500 crores during the year, of which more than 75% was acquired by the four large ARCs, comprising of either the large ticket advances or portfolios in bulk. Apart from repetition of unsold accounts, banks have not showcased much of the new NPAs for sale, which explains for the poor deal closures. Unfortunately, banks continue to be rigid on Reserve Prices, that are fixed not based on the realizable value of underlying securities; not factoring the process and litigation time, etc. Apparently, the Chief Vigilance Commissioner’s recent guidelines to banks to attempt atleast one sale of secured assets through SARFAESI before they are sold to ARCs, have influenced the banks more in adhering to the guidelines than ensuring success of such sales. Secondly, in the back drop of RBI guidelines warranting banks to continue with the provisioning even after sale of NPAs to ARCs, banks have moved to all cash sales. And with resources constraint, only few ARCs have been able to mop up sizeable business during the year.

Your company, keeping in view its main objective of resolving acquired debts expeditiously and with a reasonable return on its investments, had bid for 6 accounts with an aggregate outstanding debt of R499.33 crores for a bid amount of R58.88 crores. Though, all the bids placed by the company were declared highest, deals were concluded in just 2 accounts with an outstanding due of R78.83 crores for an acquisition cost of R28.35 crores.

On the resolution side, your company has recovered R49.09 crores in 19 accounts as against R37.25 crores recovered in 13 accounts during the previous year. It is heartening note that in 7 accounts, SRs are fully redeemed within an average period of 15 months from the date of their acquisition. The recoveries made during the FY represent 21.60% of Assets Under Management (AUM).

A summary of the debts acquired and realized during the financial year is given below.

Implementation of Indian Accounting Standards (‘Ind-AS’)Indian Accounting Standards (‘Ind-AS’) is a global accounting practice that mandates specified companies/NBFCs/banks/Insurance companies to adopt, which may lead to initial credit losses. The practice is on par with the International Financial Reporting Standard (IFRS) 9. The provisioning requirement would be higher as the company will have to provide for expected losses than incurred losses.

Your company, being an ARC having net worth below R250 Crores, is not covered under the provisions notified by Ministry of Corporate Affairs, Government of India. As such, Accounting Standards specified in Annexure to Companies (Accounting Standards) Rules, 2006 shall continue to apply. Accordingly, financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India, regulatory norms / guidelines prescribed

Acquired 2018-19 2017-18

Number of seller Banks/FIs 2 4

Debt acquired 7883.49 43786.00

Cost of acquisition 2835.49 13951.00

Recovered 2018-19 2017-18

Number of Accounts 19 13

Amount recovered 4909.09 3724.88

(R in Lakhs)

(R in Lakhs)


by Reserve Bank of India, the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable and the prevalent accounting practices in India and Accounting Policy approved by the Board.

Capital Raising & Capital Adequacy RatioDuring FY 2018-19, the paid-up capital of the company has increased to R97.00 crores by issue of fresh equity shares. As on March 31, 2019, the issued, subscribed and paid-up share capital of your company was R97,00,00,000 comprising of 9,70,00,000 equity shares of R10 each.

a) Issue of further Share Capital:During the Financial Year, the Company has issued 3,40,51,400 equity shares of R10 each for cash at par for a sum of R34,05,14,000/- (Rupees Thirty-Four Crores Five Lakhs Fourteen thousand only) by way of preferential allotment / Private Placement basis to the promoters, shareholders and other persons. The details of allotment of shares are as follows:

S. No. Date of Allotment No. of Shares allotted

1 17.12.2018 87,50,000

2 28.03.2019 2,53,01,400

Your company has not issued any equity shares with differential voting rights.

Your company is well capitalized and has a Capital Adequacy Ratio (‘CAR’), of 243.18% as on 31.03.2019 as against the requirement of 15% specified by RBI.

Net Owned FundsWith increase in paid up share capital from R62.95 crores to R97.00 crores and with the addition of R10.69 crores balance in P&L account, Net Owned Funds (NOF) of the company increased to R107.69 crores duly complying with the RBI minimum NOF norm of R100.00 crores to be achieved by 31.03.2019.

DividendThough your company registered net profit for the year, your Directors have not recommended any dividend for the financial year ended 31st March, 2019 in order to augment the resources of the company.

Transfer to ReservesYour Directors have not recommended transfer of any amounts to the general reserves during the year.

Management Discussion & AnalysisBarring the top few, ARCs by and large have not been able to make big strides during FY 2018 - 19. It is reported by RBI that Private Sector Banks have been most aggressive on asset sales,while PSBs lagged mainly owing to large haircuts and various management issues.The other factors influencing deceleration in sale of stressed assts to ARCs are:

a) PSBs have strengthened in-house expertise for recovering NPAs,spurred by the need for faster resolution.

b) The fond hope and expectation of the banks in speedy resolution through IBC.

c) Banks getting influenced by the CVC guidelines.

d) Unwillingness on the part of Banks to co-invest in the acquisitions, firstly because of unsatisfactory redemption rate of SRs and secondly for the reason that the realisations are far below the banks’ expectations, all of which have ressulted in a major shift in sale of NPAs from SR mode to cash mode.

RBI in its review of ARCs as reported in Financial Stability Report of June 2019, noted that while the recovery performance for assets that originated after 2014 is showing a precipitous decline, the recovery performance is relatively impressive in smaller portfolios.


A critical examination of financial assets securitised by ARCs as at the end of the June 2018 reveals that as against an aggregate outstanding of R 1,02,300 Crores SRs issued by the ARCs, the SRs subscribed by the Banks constitute 80%; ARCs is 17%; FI’s and QIBs is a minuscule 3% which demonstrates the poor investment appetite of QIBs in stressed assets, probably for the stated reason that the ARCs have not been able to reach the market expectations both in terms of redemption and return on SRs..

On recoveries side, RBI has reported that as at the end of July 18, the amount of SRs fully redeemed is R 8,800 Cr which is less than 10% of the total outstanding SRs. A comparision of recoveries made through various channels reveals that:

Against a total claim of R 2,95,600 cr, the aggregate amount recovered through various channels is R 40,400 cr, out of which recovery through SARFAESI alone is R 26,500 cr constituting 65.7% of total recoveries, whereas recoveries through DRTs is R 7,200 cr(17.8%); IBC is R 4,900 cr(12.1%) followed by Lok Adalats with a recovery of R 1,800 cr(4.4%).

CRISIL in it’s May, 2019 report commented that The Insolvency and Bankruptcy Code(IBC), which has completed three years, has gained traction with every passing year and helped contain both existing NPAs and fresh slippages in the banking system. As of Mar 2019, 94 cases had been resolved under IBC, with a recovery rate of 43% and an average resolution timeline of 324 days-much better than other recovery mechanisms available and is considerably faster than the recovery time of 3.5 - 4 years taken by ARCs, though it is a matter of concern that on an average 4 out of 5 cases have gone for liquidation.

Future OutlookRBI in it’s Financial Stability Report of Jun,19 reported that the increased pace at which NPAs were recognised led to the NPA cycle peaking in March, 2018. With most of the NPAs already recognised, the NPA cycle turned around with GNPA ratio declining to 9.3 per cent in March 2019, equivalent of R9.34 lakh crores. It is further pointed out that GNPA ratio of Scheduled Commercial Banks may decline to 9.0% by March, 2020.Therefore despite improved recovery performance of banks, the challenges remain. ARCs, that have an easy access to funds, will continue to have lot of opportunities for augmenting their business.

Moody’s Investors Services has recently cautioned that economic growth in India over the next 12-18 months will remain weaker than the previous years, which, in turn, could lead to the creation of new NPAs in the retail and small and medium-enterprise segment.

During the year, your company had discussions with certain FIIs, who have evinced keen interest in partenering with the company in its acquisitions. Considering the assured support, your company is all geared up to acquire even large size debts/portfolios that fall within the policy framework of the company.

Internal Control SystemsThe company has in place adequate internal control systems to ensure transparency, effectiveness, efficiency of operations and compliance with the applicable laws and regulations.

The company also has well documented policies covering every segment of its operations and has laid down set of standards, processes which enable effective implementation of internal financial controls and ensure that the same are adequate and operating effectively.

To further strengthen controls / systems, your Board has approved the appointment of a reputed audit firms as internal & GST auditors.


Corporate GovernanceGood corporate governance is about maximizing shareholder value on a sustainable basis while ensuring fairness to all stakeholders - customers, investors, employees, Government and the society at large.

Your company, since its inception is committed to adopting the highest standards of Corporate governance through its commitment to values and ethical business conduct. Your company strongly believes that sound corporate governance is an essential ingredient for corporate success and sustainable growth.

Our corporate governance is a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices and performance and ensure that we retain and gain the trust of our stakeholders at all times.

In maintaining the independence of the Board and to separate the functions of governance and management, size and composition of the Board plays key role. Independent Directors at 50% of the Board strength ensures the independence of the Board in driving the principles of corporate governance framework viz:

» Compliance to laws of the land

» Management acts as a trustee and not the owner

» Communicate, externally and truthfully, about how the company is run internally

» Ensure high level of transparency

Our corporate governance framework ensures that we make timely disclosures transparently in respect of performance, financials and leadership.

The Reserve Bank of India issued Corporate Governance (Reserve Bank) Directions, 2015 to be followed by NBFCs. Notwithstanding that your company does not come under the scope of the extant directions, as a company which believes in implementing Corporate Governance practices that go beyond just meeting the letter of law, your company, not only comply with the statutory requirements but also incorporates some of the non-mandatory recommendations.

Agenda items are primarily presented to the relevant Board-level committee, report of which is then placed at the Board meetings.

Directors and Key Managerial PersonnelAll appointments of Directors are made in accordance with the relevant provisions of the Companies Act, 2013 and Rules framed thereunder and the rules, guidelines and circulars issued by Reserve Bank of India from time to time.

The Nomination and Remuneration Committee conducts due diligence before appointment of Directors and ensures adherence to ‘Fit and Proper’ criteria, as prescribed by RBI.

None of the Directors of the company are disqualified to be appointed as Directors in accordance with the Section 164 of the Companies Act, 2013.

Each Independent Director of the company, is independent of all other Directors and the Management. In compliance of the provisions of Sections 149 of the companies Act, 2013, which came into effect from 1st April, 2014, Sri G. Sree Ramakrishna was appointed as Independent Director at the Annual General Meeting held on 25.06.2018 for a term of five years w.e.f 11.01.2018. He has submitted a declaration that he meets the criteria of Independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect his status as an Independent Director during the year.

Sri. D. Nanha Ram, Managing Director & CEO was appointed by the Board of Directors for a period of three years w.e.f 11.11.2016.


Ms. Manisha Joshi, Company Secretary was appointed by the Board of Directors w.e.f 20.07.2018.

Pursuant to the provisions of Section 203 of the Companies Act, 2013 the appointments of Sri. D. Nanha Ram, Managing Director & CEO, Sri A. Narayana Prasad, Chief Financial Officer and Ms. Manisha Joshi, Company Secretary as Key Managerial Personnel of the company were formalized.

Retirement by RotationIn accordance with the Articles of Association of the company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Sri. A. Indra Kumar and Sri. G. Sambasiva Rao would retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment.

Board of DirectorsThe Board of directors of your company bring with them, a wide range of significant professional expertise and rich experience across a wide spectrum of functional areas such as Management and Administration, Banking, Accounting, Audit, Technology, Real Estate, Marketing, etc. Your company encourages board diversity and balance of skills at the same time, to ensure effective decision making.

The Board has been constituted in compliance with the Companies Act, 2013 and the guidance notes issued by Reserve Bank of India in this regard. The Board of your company consists of eight (8) directors, out of which four (4) are independent directors including a woman director, one (1) Whole time Director i.e., Managing Director & CEO and three (3) Promoter directors to guide the management.

Brief profile of all the Directors are available on the Company’s website: www.maximusarc.com.

Name of the Director DIN DesignationNo. of board Meetings

eligible to attend

Sri. P. Brahmanandam 00860739 Director 5

Sri. A. Indra Kumar 00190168 Director 5

Sri. G. Sambasiva Rao 01293395 Director 5

Smt. Y. Prameela Rani 03270909 Independent Director 5

Sri. V. Kannan 01354529 Independent Director 5

Sri. Ravi Kumar Velagapudi 02094385 Independent Director 5

Sri. G. Sree Rama Krishna 06921031 Independent Director 5

Sri. D. Nanha Ram 03110169 Managing Director& CEO 5

Changes in Board CompositionDuring the year FY 2018-19, there are no changes in the composition of the Board.

Appointment of Sri G. Sree Rama Krishna as Independent Director for a term of 5 years w.e.f 11.01.2018 was approved by the members at the Annual General Meeting held on 25.06.2018.

Board MeetingsThe Board meets as often as required and at least once in a quarter to review the business of the company, formulate policies and provide strategic direction to the management in achieving the corporate objectives and further ensures the statutory and regulatory compliances, safeguarding the interests of the stakeholders, review the quarterly results along with other agenda items. The dates of the Board meetings are informed to the directors in advance so as to enable them to manage their schedule effectively and prepare for the meeting. The company makes available video conferencing facility or other audio-visual means, to enable large participation of Directors in the meetings.


In consultation with the Managing Director & CEO, the Company Secretary prepares the agenda along with explanatory notes thereon and circulates to the Directors and invitees. Members of the Board are free to recommend inclusion of any matter in the agenda for discussion.

Senior Management Personnel are also invited to attend the Board meeting, make presentations and provide additional inputs to the agenda items under discussion.

During FY 2018-19, the Board met five (5) times during the financial year on 14.05.2018, 14.07.2018, 05.09.2018, 17.12.2018 and 01.03.2019.

Details of attendance of Directors at the Board Meetings during the year 2018-19:

Name of the Director DesignationNo. of Board Meetings

% of attendanceHeld Entitled Attended

Sri. P. Brahmanandam Director 5 5 5 100Sri. A. Indra Kumar Director 5 5 4 80Sri. G. Sambasiva Rao Director 5 5 2 40Smt. Y. Prameela Rani Independent Director 5 5 4 80Sri. V. Kannan Independent Director 5 5 4 80Sri. Ravi Kumar Velagapudi Independent Director 5 5 2 40Sri. G. Sree Rama Krishna Independent Director 5 5 3 60Sri. D. Nanha Ram Managing Director 5 5 5 100

Appointment of Sri G. Sree Rama Krishna as Independent Director for a term of 5 years w.e.f 11.01.2018 was approved by the members at the Annual General Meeting held on 25.06.2018.

The maximum gap between any two consecutive meetings was less than 120 days. The necessary quorum was present for all the meetings.

Periodic presentations are made at the Board / Committee meetings on performance updates, financial statements, status of compliance position of applicable laws etc.

The Board / Committees also pass resolutions by circulation on need basis. The resolutions passed by circulation are placed for noting at the next Board / Committee meetings, as applicable.

The minutes of each Board / Committee meeting are circulated to the respective members for their inputs. The minutes are then recorded in the minutes book after confirmation. Minutes of various Board level committees are circulated to the Board of Directors to have a overview of the functioning of the Committees.

Board CommitteesWhile the Board formulates policies and provides strategic direction to the management in achieving the corporate objectives and further ensures the statutory and regulatory compliances, safeguarding the interest of the stakeholders, the executive management, under the guidance of the Board, oversees the functional matters of the company.

In compliance with various regulatory requirements, various Board-level Committees have been constituted to delegate matters that require greater and more focused attention. These Committees, while taking decisions within the delegated powers, also monitor the activities falling within their terms of reference and recommend their views to the Board.

The Board has constituted 4 Board-level committees namely Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Management Committee.


Details on the constitution, terms of reference, meetings held and attendance of the Board-level Committees are given hereunder.

Audit CommitteeThe Board of Directors have constituted the Audit Committee pursuant to Section 177 of the Companies Act, 2013 and corresponding rules made thereunder.

As on March 31, 2019, the Audit Committee comprised three (3) members, two (2) of whom are Independent Directors and one (1) Non-Independent Director, who is a Chartered Accountant.

1. Sri. V. Kannan - Chairman

2. Sri. G. Sambasiva Rao, FCA

3. Smt. Y. Prameela Rani

All members of the Audit Committee are financially literate and have accounting and related financial management expertise.

The terms of reference to the Audit Committee, inter alia, includes the following:

a. Examination of the financial statement reporting process and the disclosure of its financial information to ensure correctness, adequacy and credibility of financial statements and the auditors’ report thereon;

b. Reviewing, with the management, the quarterly financial statements and results before submission to the Board for approval;

c. Scrutiny and approval of related party transactions;

d. Scrutiny of inter-corporate loans and investments;

e. Valuation of undertakings or assets of the company, wherever it is necessary;

f. Evaluation of internal financial controls and risk management systems;

g. Monitoring the end use of funds raised through public offers and related matters;

h. Review of the status of compliance position of various applicable laws / RBI guidelines;

i. Changes in accounting policies, if any.

There has been no change in the composition of Audit Committee. The Audit Committee met 4 times during the financial year 2018-19 on 14.05.2018, 05.09.2018, 17.12.2018 and 01.03.2019.

Details of attendance of Members at the Audit Committee Meetings during the year 2018-19:

The quorum of the meeting was two (2) members. The necessary quorum was present for all the meetings.

Name of the Director DesignationNo. of Audit Committee Meetings


Sri. G. Sambasiva Rao Director 4 4 2 50

Smt. Y. Prameela Rani Independent Director 4 4 4 100

Sri. V. Kannan Independent Director 4 4 4 100


Nomination and Remuneration CommitteeThe Board of Directors have constituted the Nomination and Remuneration Committee (NRC) pursuant to Section 178 of the Companies Act, 2013 and corresponding rules made thereunder.

As on March 31, 2019, the Nomination and Remuneration Committee (NRC) comprised the following four (4) members out of which two (2) members are Independent Directors.


2. Sri. P. Brahmanandam

3. Sri. A. Indra Kumar

4. Sri. V. Kannan

The terms of reference of NRC, inter alia, includes the following:

a. Formulation of the criteria for determining qualifications, positive attributes and independence of a director from time to time.

b. Formulation and recommendation of a policy relating to remuneration payable to the Directors.

c. Formulation of the criteria for evaluation of Board of Directors’ performance.

d. Advisory to the Board of Directors regarding the terms of employment of senior managerial personnel.

Board Approved ‘Nomination and Remuneration Policy’ is given as Annexure -I which forms part of this report.

The Committee did not meet during the reporting year.

Corporate Social Responsibility CommitteeThe Board of Directors have constituted the Corporate Social Responsibility (‘CSR’) Committee pursuant to Section 135 of the Companies Act, 2013 and corresponding rules made thereunder.

As on March 31, 2019, the Corporate Social Responsibility Committee (CSR) comprised the following three (3) members out of which one (1) member is Independent Director.




The terms of reference of CSR Committee, inter alia, includes the following:

» Formulation and recommendation to the board, a CSR policy indicating the activity or activities to be undertaken by the company as specified in Schedule VII of the Act;

» Recommendation of the amount of expenditure to be incurred on these activities; and

» Monitor the company’s CSR policy from time to time.

The Committee met once (1) on 01.03.2019


Name of the Director DesignationNo. of CSR Committee Meetings


Sri. P. Brahmanandam Director 1 1 1 100


Sri. A. Indra Kumar Independent Director 1 1 1 100

The quorum of the meeting was two (2) members. The necessary quorum was present for the meeting.

The Committee at its’ meeting held on 01.03.2019 made some suggestions for improvement to the ‘Draft Policy’ placed before the Committee. CSR Policy approved by the Board at its’ meeting held on 28.06.2019 is placed on the Company’s Website: www.maximusarc.com.

A report on the CSR activities, in pursuance of clause (o) of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is given as Annexure -IV which forms part of this report.

Reasons for not spending the amount on CSR activity:Being the first year of applicability of the CSR provisions and pending approval of CSR policy, the mandated amount of R 3 Lakhs could not be spent during 2018-19. However, this amount will be spent during the current year in accordance with approved CSR policy.

Management CommitteeThe Board of Directors have constituted the Management Committee and delegated powers to decide matters relating to acquisition and resolution of financial assets; investments and appointment of staff, fixation of their remuneration; etc.

Management Committee is constituted with the following members.




4. Sri. G. Sambasiva Rao

5. Sri. D. Nanha Ram

The Management Committee also recommends policy matters to the Board.

There has been no change in the Management Committee during the reporting year. The Management Committee met five (5) times during the financial year 2018-19 on 14.05.2018, 25.06.2018, 05.09.2018, 17.12.2018 and 01.03.2019.

Details of attendance of Members at the Committee Meeting during the year 2018-19:


Name of the Director DesignationNo. of Board Meetings


Sri. P. Brahmanandam Director 5 5 5 100

Sri. A. Indra Kumar Director 5 5 4 80

Sri. G. Sambasiva Rao Director 5 5 3 60


Sri. D. Nanha Ram Managing Director & CEO 5 5 5 100

The quorum for the meeting is three (3) members. The necessary quorum was present for all the meetings.

Meeting of Independent DirectorsThe company had received a declaration from all the Independent Directors, at the time of appointment and also at the first meeting of the Board of Directors held in FY 2018 - 19, that they meet the criteria of Independence specified under sub-section (6) of Section 149 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and abide by the ‘Code for Independent Directors’ as per Schedule IV of the Companies Act, 2013.

As per Schedule IV of the Companies Act, 2013 and the Rules made thereunder, the Independent Directors of a company shall hold at least one (1) meeting in a year, without the attendance of Non-Independent Directors and the Board as a whole; review the performance of the Chairperson of the Board and assess the quality, quantity and timeliness of the flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Accordingly, a separate meeting of Independent directors was held on March 1, 2019 without the presence of the Managing Director & CEO and Non-Independent Directors. The meeting was attended by three (3) Independent Directors.

Familiarisation Programme for Board MembersAt the time of appointment, all the Directors of your company are made familiar with their roles, responsibilities, rights and duties along with a brief overview of your company’s operations in a nutshell.

The Board members are further provided with necessary documents, reports and internal policies to enable them to familiarize with the Company’s procedures and practices.

Periodic presentations are made at the Board and Committee meetings on latest guidelines / notifications issued by Reserve Bank of India and Government of India to understand the impact of the extant guidelines on the company’s business and performance.

A programme was conducted to all the Directors on 01.03.2019 to familiarize them with the latest developments in the nature of the business of the company and to enable them to understand the intricacies involved therein. This enables the Board to plan appropriate strategies and give better guidance for achieving the objectives of the company.

Board EvaluationThe Board of Directors has carried out an annual evaluation of its own performance, Board Committees and that of individual directors pursuant to the provisions of the Act.

Details of attendance of Members at the Committee Meetings during the year 2018-19:


The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

AuditorsPursuant to Section 139 of the Companies Act, 2013, the rules framed thereunder, M/s. Pendyala & Co., Chartered Accountants, were appointed as Auditors of the company from the conclusion of the 2nd Annual General Meeting of the company held on 30th September, 2016 for a term of 5 years.

Auditors’ report The Auditors’ report does not contain any qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report for the financial year ended March 31, 2019.

Secretarial AuditPursuant 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, your company had appointed Mr. K. Phani (M.No.5670), Practicing Company Secretary, to undertake the Secretarial Audit of the company for the financial year ended March 31, 2019. All assistance and information is provided to the Secretarial Auditors for conducting the audit. The Secretarial Auditor’s Report is appended as Annexure-II which forms part of this report.

The Report does not contain any qualifications, reservations and adverse remarks.

GST AuditPursuant to The Section 35 (5) of the Central Goods & Service Tax Act, 2017 read with Rule - 80 of the CGST Rules, 2017, which stipulates that every registered person whose turnover during a financial year exceeds the limit of R 2 Crore by Rule 80(3) of the CGST Rules 2017 shall get its account audited by a Chartered Accountant or a Cost Accountant and shall submit a copy of the audited accounts, the reconciliation statement duly certified, in Form - GSTR - 9 C, under the Section - 44(2) of the CGST Act, 2017.

Accordingly, M/s Suresh & Babu, Chartered Accountants are appointed as Auditors to undertake the GST audit as per the provisions of the GST Act and submit the report.

Internal AuditPursuant to the provisions of Section 138 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, your company had appointed M/s Sukumar Babu & Co, Chartered Accountants to undertake the Internal Audit of the company for the financial year ended March 31, 2019. All assistance and information is provided to the Internal Auditors for conducting the audit.

Scope of the internal audit, inter alia, include the following:

a. All Income & Expenditure transactions;

b. All operational matters;

c. All legal and other issues

Quarterly reports are being submitted to Audit committee for review and Board for noting.


Particulars of loans, guarantees or investmentsThe company has not granted any loans or made any investments and not extended guarantees for any individuals or corporates under Section 186 of the Act.

Particulars of contracts or arrangements with related partiesThe details of all the contracts or arrangements made with related parties pursuant to Section 188(1) of the Act are reported in point No.19.3 under ‘Additional Notes to financial statements’.

Extract of Annual ReturnAs required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report is enclosed herewith as Annexure-III.

DepositsThe company has not accepted / invited any deposits from the public in terms of section 73 of the Companies Act, 2013.

Directors’ Responsibility StatementPursuant to requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2019 and of the profit of the company for the year ended on that date;

(iii) The Directors have taken proper and sufficient care 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;

(iv) The Directors have prepared the annual accounts of the company for the year ended 31st March, 2019 on a going concern basis; and

(v) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Particulars of EmployeesThe statement showing details of employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not required to be appended as none of the employees are drawing salary as stipulated in the section under reference.

Risk ManagementThe Company has put in place systems and procedures sufficient enough to capture various kinds of risks associated with the business. The management ensures mitigation of such risks as appropriate and the Management Committee oversees the effectiveness in implementation of the same.

Instances of fraud, if any, reported by the Auditors or the ManagementNo offence of fraud was reported by the Auditors of the company under Section 143 (12) of the Companies Act, 2013.


Material changes and commitments affecting the financial position of the companyThere have been no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.

Disclosures as required by “The Securitisation Companies and Reconstruction Companies (Reserve Bank) guidelines and Directions, 2003Details of financial assets acquired from various banks/FIs, dispersion of various financial assets industry-wise and sponsor-wise, migration of financial assets from standard to non-performing etc, in pursuance of RBI guidelines are reported in point No.19.2 under ‘Additional Notes to financial statements.’

Disclosure Under the Sexual Harassment of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013Your Company believes in providing an environment that is free from discrimination and harassment including sexual harassment for every employee of the Company. To ensure this, your company has put in place a Board Approved policy. During the year ended 31st March, 2019, no complaints were received pertaining to sexual harassment.

Energy Conservation, Technology Absorption.As the company is engaged in asset reconstruction and securitization activities, the particulars relating to conservation of energy, technology absorption as required under section 134(3)(m) of the Companies Act, 2013 are not applicable to the company.

Foreign Exchange Earnings and OutgoDuring the year under review, there were no foreign exchange earnings (Previous Year: Nil). The foreign exchange outgo during the year was R30,018/- (Previous Year: Nil).

AcknowledgementsYour Directors express their sincere gratitude to the Shareholders, Reserve Bank of India, Banks, Financial Institutions, Government Authorities and other stake holders for their continued support and faith reposed in the company.

Your Directors also wish to place on record their deep sense of appreciation to all the members of staff for their dedicated services and contribution to the company’s performance and growth.

For and on behalf of the Board of Directors

D. Nanha Ram Managing Director and CEO DIN: 03110169



Nomination and Remuneration CommitteeThe constitution of NRC and its’ terms of reference are in compliance with the provisions of Section 178 of the Companies Act, 2013.

The Board of Directors constitute a Nomination and Remuneration Committee consisting of a minimum of three members of the Board, majority of who are independent.

IntroductionThe company considers human resources as its invaluable assets and accordingly deems it just and fair to pay equitable remuneration to all the Directors, Key Managerial Personnel and employees of the Company with a view to harmonize the aspirations of human resources consistent with the goals of the Company. This policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Committee and recommended for approval to the Board of Directors.

Policy Objectives and Purpose1. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become

Directors (Executive and Non-Executive) and persons who may be appointed in Key Managerial and Senior Management positions and to recommend a policy for determining their remuneration based on their past experience, positions held, contributions/achievements made, financial position of the company and trends and practices on remuneration prevailing in peer companies at the time of initial appointment and thereafter to review their remuneration based on their contribution to company’s growth and achievements.

2. To consider rewarding based on their effort, performance, dedication and achievements relating to the Company’s operations.

3. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

4. To carry out evaluation of the performance of Directors on an annual basis.

In the context of the aforesaid criteria the following policy has been formulated by the Nomination and Remuneration Committee.

ApplicabilityThis Policy is applicable to Directors (Executive and Non-Executive) and the Key Managerial Personnel. All other employees will be governed by the HR policy of the company.

A. Duties of Nomination and Remuneration CommitteeThe Committee shall

1. Formulate the criteria for determining qualifications, positive attributes and independence of a Director.

2. Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy.

3. Recommend to the Board, appointment and removal of Director and Key Managerial Personnel.

Annexure - I to Directors’ ReportNomination and Remuneration Policy


B. Appointment and removal of Director and Key Managerial PersonnelI. AppointmentCriteriaandQualifications1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for

appointment as Director or a Key Managerial Personnel and recommend to the Board his / her appointment.

2. A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as Managing Director/Whole-time Director/Chief Executive Officer who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.

II. Term / Tenure1. Managing Director or Whole-time Director/Chief Executive Officer: The Company shall appoint or re-appoint any person as its Managing Director or Whole-time Director/Chief

Executive Officer for a term not exceeding THREE years at a time or for a term as may be prescribed by Reserve Bank of India from time to time. No re-appointment shall be made earlier than one year before the expiry of term.

2. Independent Director: An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company

and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly. However, if a person who has already served as an Independent Director for 5 years or more in the Company as on 1st October, 2014 or such other date as may be determined by the Committee as per regulatory requirement, he / she shall be eligible for appointment for one more term of 5 years only.

III. Remuneration1. Managing Director or Whole-time Director and Key Managerial Personneli) The remuneration / compensation / commission etc. to the Managing Director/Whole-time Director/Chief

Executive Officer and Key Managerial Personnel on their first appointment will be recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.

a) Fixed pay: The Managing Director/ Whole-time Director / Chief Executive Officer and Key Managerial Personnel shall

be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee. The breakup of the pay scale and quantum of perquisites including, employer’s contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required.


b) Minimum Remuneration: If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay

remuneration to its Managing Director/Whole-time Director in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions, with the previous approval of the Central Government.

c) Provisions for excess remuneration: If any Managing Director/Whole-time Director draws or receives, directly or indirectly by way of remuneration

any such sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction of the Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government.

ii) The remuneration and commission to be paid to the Managing Director/Whole-time Director shall be in accordance with the percentage / slabs / conditions laid down in the Articles of Association of the Company and as per the provisions of the Companies Act, 2013, and the rules made there under.

iii) Increments to the existing remuneration / compensation structure may be approved by the respective Competent Authority as per provisions of company’s HR Policy.

iv) Where any insurance is taken by the Company on behalf of its Managing Director/Whole-time Director/Chief Executive Officer or Key Managerial Personnel for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.

2. Remuneration to Non- Executive / Independent Directori) Remuneration / Commission The remuneration / commission shall be fixed as decided by the board from time to time.

ii) Sitting Fees Independent Directors may receive remuneration by way of fees for attending meetings of Board or Committee

thereof. Provided that the amount of such fees shall not exceed such amount as may be prescribed by the Central Government from time to time.

iii) Commission Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding

1% of the profits of the Company computed as per the applicable provisions of the Companies Act, 2013.

iv) Stock Options An Independent Director shall not be entitled to any stock option of the Company

3. Evaluation The Committee shall carry out evaluation of performance of every Director, Key Managerial Personnel and Senior

Management Personnel at regular intervals (yearly).

4. Removal Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made there under or under

any other applicable Act, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director or a Key Managerial Personnel subject to the provisions and compliance of the said Act, rules and regulations.


5. Retirement The Director or Key Managerial Personnel shall retire as per the applicable provisions of the Companies Act,

2013 and or the prevailing policy of the Company. The Board will have the discretion to retain the Director, Key Managerial Personnel in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the company.

6. Interpretation In the event of any question/ambiguity as to the application or interpretation of any of the provisions of this policy,

it shall be referred to the Board for its decision which shall be final and binding on the Directors, Key Managerial Personnel and other employees of the company.


Annexure-II to Directors’ ReportForm No. MR-3

For The Financial Year Ended 31st March, 2019[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,The Members,M/s. Maximus ARC Limited.Vijayawada.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. Maximus ARC Limited. (hereinafter called the company) Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of M/s. Maximus ARC Limited books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2019 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance - mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by M/s. Maximus ARC Limited for the financial year ended on 31/03/2019 according to the provisions of;

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment.

(v) The Reserve Bank of India Act, 1934 and

(vi) The Securitization Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003.

(vii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014


e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 are not applicable.

f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client are not applicable.

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998.

Clauses Vii (a) to (h) stated above are not applicable to the company.

i) The Company has complied with the provisions of the Securities Contracts (Regulation) Act, 1956 and with the provisions of The Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003 and the Rules made under that Act.

I/we have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards SS-1 and SS-2 issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company with Stock Exchange(s), if applicable.

Clause (ii) stated above is not applicable to the company.

We further report thatThe Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through as there are no dissenting members’ views at the meetings of the Board of Directors and at the Committees. These are captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

K Phani Company Secretary in practice ACS/FCS No. F5670 C P No. 4963



Annexure-III to Directors’ ReportForm No.MGT-9

Extract of Annual Return As on the financial year ended on 31st March, 2019

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

Regstration And Other Details

i) CIN U67190AP2015PLC095944

ii) Registration date 01.01.2015

iii) Name of the Company Maximus ARC Limited

iv) Category / Sub-Category of the CompanyCompany limited by Shares Non-Govt company

v) Registered Office address and contact details

D. No. 59A-18/1-5A, Sri Plaza, 3rd Floor, Teachers Colony, Patamata, Vijayawada – 520008, Andhra Pradesh Ph:0866-2971144 / 45 Email: [email protected]

vi) Whether Listed Company No

vii)Name, Address and contact details of Registrar and Transfer Agent, if any

M/s Karvy Computershare Pvt Ltd Karvy Selenium Tower – B, Plot No.31, Financial District, Gachibowli, Hyderabad – 500 032 Contact Person: S.P.Venugopal Tel: 040 6716 2222 E-Mail: [email protected] Website: www.karvycomputershare.com

I. Principal Business Activities of the Company All the business activities contributing 10% or more of the total turnover of the company are given below:

S.No.Name and Description of main products / services

NIC Code of the product/ service

% to total turnover of the company

1Other financial service activities, except insurance and pension funding activities

64990 100%

II. Particulars of Holding, Subsidiary and Associate Company A. M/s Devi Sea Foods Limited - Associate Company. B. M/s Srinivasa Cystine Private Limited - Associate Company


III. Shareholding Pattern (Equity share capital breakup as percentage of total equity)i) Category-wise Share Holding

Category of The Shareholders

No of Shares Held at The Beginning Of The Year

No of Shares Held at The End Of The Year % Change During

the YearDemat Physical Total% of Total

SharesDemat Physical Total

% of Total

Shares

A. Promoters

Indian

Individual / HUF - 50,80,000 50,80,000 8.07 1,25,80,000 10,00,000 1,35,80,000 14.00 5.93

Central Govt - - - - - - - -

State Govt(s) - - - - - - - -

Bodies Corporate - 4,66,80,000 4,66,80,000 74.16 4,66,80,000 60,00,000 5,26,80,000 54.31 (19.85)

Banks / FI’s - - - - - - - -

Any Other - - - - - - - - -

Sub Total A-1 - 5,17,60,000 5,17,60,000 82.23 5,92,60,000 70,00,000 6,62,60,000 68.31 (13.92)

Foreign

NRI’s Individual - - - - - - -

Other Individuals - - - - - - - -

Bodies Corporate - - - - - - - - -

Banks / FI’s - - - - - - - - -

Any Other - - - - - - - - -

Sub Total A-2 - - - - - - - - -

Total Shareholding of Promoters (A1 + A2)

- 5,17,60,000 5,17,60,000 82.23 5,92,60,000 70,00,000 6,62,60,000 68.31 (13.92)

B. Public Shareholding

1. Institutions - - - - - - - - -

Mutual funds - - - - - - - - -

Banks / FI’s - - - - - - - - -

Central Govt - - - - - - - - -

State Govt(s) - - - - - - - - -

Venture Capital Funds

- - - - - - - - -

Insurance Companies

- - - - - - - - -


Category of The Shareholders

No of Shares Held at The Beginning Of The Year

No of Shares Held at The End Of The Year % Change During

the YearDemat Physical Total% of Total

SharesDemat Physical Total

% of Total

Shares

FII’s - - - - - - - - -

Foreign Venture Capital Funds

- - - - - - - - -

Others (Specify) - - - - - - - - -

Sub Total - B1 - - - - - - - - -

2. Non Institutions

a) Bodies Corporate

Indian - 25,00,000 25,00,000 3.97 37,50,000 41,50,000 79,00,000 8.15 4.18

Overseas - - - - - - - - -

b) Individual

Individual Shareholders holding nominal share capital upto R1 Lakh

- - - - - - - - -

Individual Shareholders holding nominal share capital in excess of R1 Lakh

- 86,88,600 86,88,600 13.80 86,88,600 1,41,51,400 2,28,40,000 23.54 9.74

Others (Specify) - - - - - - - - -

Sub Total B2 - 1,11,88,600 1,11,88,600 17.77 1,24,38,600 1,83,01,400 3,07,40,000 31.69 13.92

Total Public Shareholding (B1+B2)

- 1,11,88,600 1,11,88,600 17.77 1,24,38,600 1,83,01,400 3,07,40,000 31.69 13.92

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C)

- 6,29,48,600 6,29,48,600 100.00 7,16,98,600 2,53,01,400 9,70,00,000 100.00 -


ii) Shareholding of Promoter

S. No.

Shareholder’s Name

Shareholding at the beginning of the year Shareholding at the end of the year

% change in share holding

during the year

No. of Shares

% of total Shares of the

company

% of Shares Pledged /

encumbered to total shares

No. of Shares

% of total Shares of the

company

%of Shares Pledged /

encumbered to total shares

1 M/s. Devi Sea foods Limited 2,36,80,000 37.62 - 2,36,80,000 24.41 - (13.21)

2 Sri. A. Indra Kumar 35,70,000 5.67 - 70,70,000 7.29 - 2.80

3 Sri. P. Brahmanandam 15,10,000 2.40 - 65,10,000 6.71 - 4.31

4 M/s. Srinivasa Cystine P Ltd 2,30,00,000 36.54 - 2,90,00,000 29.89 - (6.65)

Total 5,17,60,000 82.23 - 6,62,60,000 69.48 - (12.75)

iii) Change in Promoters Shareholding (Please Specify if there is no change)

S. No

Name of the promoter

Shareholding at the beginning of the year

Date wise increase / decrease in promoters

shareholding specifying the reasons for increase / decrease (e.g. allotment / transfer/ bonus / sweat

equity etc)

Shareholding at the end of the year

No. of shares

% of total shares of the

company

No. of shares

% of total shares of the

company

1 M/s. Devi Sea Foods Limited 2,36,80,000 37.62 - 2,36,80,000 24.41

2 Sri. A. Indra Kumar 35,70,000 5.67Allotment of shares on

17-12-2018 and 28-03-201970,70,000 7.29

3 Sri. P. Brahmanandam 15,10,000 2.40Allotment of shares

17-12-201865,10,000 6.71

4 M/s. Srinivasa Cystine P Ltd 2,30,00,000 36.54Allotment of shares on

28-03-20192,90,00,000 29.89


iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

S. No

For Each of the Top 10 Shareholders


Cumulative Shareholding during the year

No. of shares

% of total shares of the company

No. of shares% of total shares of the company

1 M/s. Narayanpur Power Company P Ltd 25,00,000 3.97 57,50,000 5.93

2 Sri. A. Sreekar 25,00,000 3.97 37,50,000 3.87

3 Ms. A. Tejaswini 25,00,000 3.97 37,50,000 3.87

4 Sri. Y S V K Vasudeva Rao 25,00,000 3.97 37,50,000 3.87

5 Sri. Tejasvi Chekuri - - 25,00,000 2.58

6 M/s. Devee Horizon LLP - - 21,50,000 2.22

7 Sri. K.L. Narayana 1,00,000 0.16 1,00,000 0.10

8 Sri. V.B.V Giri Prasad - - 70,00,000 7.22

v) Shareholding of Directors and Key Managerial Personnel

S.No Name of the Director


Shareholding at the end of the year

No of Shares % of total Shares No of Shares % of total Shares

1. Sri. A. Indra Kumar 35,70,000 5.67 70,70,000 7.29

2 Sri. G. SreeRamakrishna 1,00,000 0.16 1,00,000 0.10

3 Sri. P. Brahmanandam 15,10,000 2.40 65,10,000 6.71

4 Sri. V. Ravi Kumar 9,88,600 1.57 18,90,000 1.95

Total 61,68,600 9.80 1,55,70,000 16.05


IV. IndebtednessIndebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans

excluding deposits

Unsecured Loans DepositsTotal

Indebtedness

Indebtedness at the beginning of the financial year (01.04.2018)

i) Principal Amount - - - -

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total (i+ii+iii) Nil Nil Nil Nil

Change in Indebtedness during the financial year

* Addition - - - -

* Reduction - - - -

Net Change Nil Nil Nil Nil

Indebtedness at the end of the financial year (31.03.2019)

i) Principal Amount - - - -

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total (i+ii+iii) Nil Nil Nil Nil

(R in Lakhs)


V. Remuneration of Directors and Key Managerial PersonnelA. Remuneration to Managing Director, Whole-time Directors and/or Manager

S. No.

Particulars of RemunerationName of MD & CEO

TOTALSri. D. Nanha Ram

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

83,30,000 83,30,000

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 3,84,000 3,84,000

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - -

2 Stock Option - -

3 Sweat Equity - -

4Commission - as % of profit - others, specify

- -

5 Others, please specify - -

Total (A) 87,14,000 87,14,000

Ceiling as per the Act Refer Note

Note: The remuneration paid to the Managing Director is within the limits prescribed under the Companies Act, 2013 and the Rules framed thereunder.

(Amount in R)

B. Remuneration to other directors(Amount in R)

S. No. Particulars of Remuneration

Fee for attending board

committee meetings

Commission Others, please specify Total (1)

I. Independent Directors

1. Smt. Y. Prameela Rani 4,20,000 - - 4,20,000

2. Sri. G. Sree Ramakrishna 90,000 - - 90,000

3. Sri. V. Kannan 2,40,000 - - 2,40,000

4. Sri. V. Ravi Kumar 60,000 - - 60,000

Total - I 8,10,000 - - 8,10,000

II. Other Non-Executive Directors

Nil

Total - II Nil

Total (I+II) 8,10,000 - - 8,10,000


C. Remuneration to Key Managerial Personnel Other Than MD / Manager / WTD

S. No. Particulars of Remuneration

Key Managerial PersonnelCS

Ms. Manisha JoshiCFO

Sri A. N. Prasad Total

1 Gross salary (a) Salary as per provisions contained in section

17(1) of the Income-tax Act, 1961 3,34,194 22,26,000 25,60,194

(b) Value of perquisites u/s 17(2) Income- tax Act, 1961 - - -

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 - - -

2 Stock Option - - -3 Sweat Equity - - -4 Commission - - - - as % of profit - - - others, specify… - - -5 Others, Allowances - - - Total 3,34,194 22,26,000 25,60,194

VI. Penalties / Punishment / Compounding of Offence:

TypeSection of the

Companies ActBrief

Description

Details of Penalty / Punishment/ Compounding

fees imposed

Authority [RD / NCLT/

COURT]

Appeal made, if any (give

Details)A. COMPANYPenalty

NilPunishmentCompoundingB. DIRECTORSPenalty

NilPunishment

Compounding

C. OTHER OFFICERS IN DEFAULTPenalty

NilPunishmentCompounding


D. Nanha Ram Managing Director and CEO DIN: 03110169



ANNEXURE - IVAnnual Corporate Social Responsibility Report FY 2018-19

[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) rules, 2014]

1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

The company’s Corporate Social Responsibility (“CSR”) Policy encompasses Company’s philosophy of giving back to society as a responsible corporate citizen, by contributing for the development of the wellbeing of less fortunate or under privileged members of the society. The CSR activities is proposed to be undertaken as proactive and voluntary step for contributing towards the benefit of society at large notwithstanding the mandatory prescriptions.

The Policy intends to » Strive for economic development that positively impacts the society at large with minimal resource footprint.

» To embrace the responsibility of contributing towards removing the social imbalances, eradicating poverty, providing healthcare sanitation, education, livelihood, etc to the poor and needy.

» To encourage engagement of employees of the Company to carry out CSR activities.

To achieve the above, the company intends to focus on

i. Eradication of extreme hunger, poverty and malnutrition;

ii. Promoting education and employment;

iii. Rural Development projects;

iv. Promoting gender equality and empowering women;

v. Ensuring environmental sustainability and ecological balance etc.

2. The Composition of the CSR Committee:

a) Mr. P. Brahmanandam

b) Mr. A. Indra Kumar

c) Mrs. Y. Prameela Rani

3. Average net profit of the Company for last three financial years: R147.69 lakhs

4. Prescribed CSR Expenditure (2% of the amount as in item 3 above): R2.95 lakhs. SAY R3.00 lakhs

5. Details of CSR spent during Financial Year: NIL


6. In case the company failed to spend 2% of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board Report:

Being the first year that the CSR provisions are applicable to your company and pending approval of CSR policy, amount could not be spent during 2018-19. However, this amount will be spent during the current year in accordance with approved CSR policy.

7. The CSR Committee of the Company hereby confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

For and on behalf of the Board of DirectorsMaximus ARC Limited

P. Brahmanandam Chairman - CSR Committee DIN: 00860739



Independent Auditors’ ReportTo the Members of M/s Maximus ARC Limited

Report on the Financial StatementsOpinionWe have audited the accompanying financial statements of M/s Maximus ARC Limited (‘the Company’) which comprise the Balance Sheet as at March 31, 2019 the Statement of Profit and Loss and the Cash Flow Statement for the period ended March 31, 2019 and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2019, its profit and Cash flows for the year ended on that date.

Basis for Opinion We conducted our audit in accordance with the standard on auditing specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are Independent of the Company in accordance with the code of the ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled other ethical responsibilities in accordance with these requirements and the code of ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information other than the financial statements and auditors’ report thereonThe Company’s board of directors is responsible for the preparation of the other information. The other information comprises the information included in the Board’s Report including Annexures to Board’s Report, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.


Management’s responsibility for the financial statementsThe Company’s board of directors are responsible for the matters stated in section 134 (5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The board of directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

» Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

» Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

» Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

» Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may


cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

» Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements1) As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government

of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure-A”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2) As required by section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164(2) of the Act.


f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure-B”; and

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company.

For PENDYALA & CO., Chartered Accountants Firm Registration Number: 002632S

P. Ramachandram Proprietor Membership Number: 027692

Place : Hyderabad Date : 28.06.2019


Annexure ‘A’ to the Independent Auditors Report(Referred to in paragraph (1) under ‘Report on other Legal and Regulatory requirements’ of our report of even date)

i). In respect of the Company’s fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As per the explanations given to us and based on our examination of the records, the management has physically verified the fixed assets during the year and in our opinion frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. There were no discrepancies noticed on such physical verification of fixed assets as compared to the books of account.

(c) The company doesn’t have any immovable properties, hence this clause is not applicable.

ii). According to the information and explanations given to us, the company does not require any inventory. Hence, the requirement of clause 3 (ii) of the order is not applicable to it.

iii). According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a) to (c) of the order are not applicable to the Company and hence not commented upon.

iv). The Company has not granted any loans, or made investments or given a security to Directors or related parties during the year to comply the provisions of section 185 and 186 of the Act, hence not commented upon.

v). According to the information and explanations given to us, the Company has not accepted deposits from the public within the meaning of Section 73 and 76 or any other relevant provisions of the Act and the rules framed there under.

vi). As informed to us, the Central Government has not prescribed maintenance of cost records under sub-section (1) of section 148 of the Act.

vii). In respect of Statutory dues:

(a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, service tax, Cess, goods and service tax and other material statutory dues have been regularly deposited during the period by the Company with the appropriate authorities. As per the information and explanation given to us, by the management Provident fund, Employee’s state insurance, customs duty, value added tax, excise duty are not applicable to the company for the year under audit.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

viii). Based on our audit procedures and as per the information and explanations given by the management, the company has not taken any loans from financial institutions or banks. The Company did not have any debentures, outstanding as at the year end.

ix). Based on the information and explanations given to us by the management, the company has not raised any moneys by way of initial public offer or further public offer of equity shares, convertible securities and debt securities. No term loans were taken during the year by the Company.


x). According to the information and explanations given to us, based on the audit procedures performed by us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year covered by our audit.

xi). According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii). In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii). According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv). According to the information and explanations give to us and based on our examination of the records of the Company, the Company has made preferential allotment/private placement with the approval of the shareholders in the general meeting, and no partly/fully convertible debentures are issued during the year.

xv). According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi). According to the information and explanations given to us and based on our examination of the records of the Company, The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.





Annexure ‘B’ to The Independent Auditor’s Report(Referred to in paragraph 2 (f) under ‘Report on other legal and regulatory requirements’ section of our report to the Members of M/s Maximus ARC Limited of even date)

We have audited the internal financial controls over financial reporting of M/s Maximus ARC Limited (‘the Company’) as of March 31, 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide


reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.





Balance Sheet as at 31st March 2019Sl. No. Particulars Note As at

31st March 2019As at

31st March, 2018A Equity and liabilities1 Shareholders’ funds

Share capital 2 97,00,00,000 62,94,86,000 Reserves and Surplus 3 10,69,27,540 3,16,80,432

1,07,69,27,540 66,11,66,432 2 Non-Current Liabilities

Long Term Provisions 4 30,81,041 6,83,457

3 Current LiabilitiesOther current liabilities 5 4,59,97,492 3,42,93,388Short term provisions 6 48,21,249 30,80,993

5,08,18,741 3,73,74,381Total 1,13,08,27,322 69,92,24,270

B ASSETS1 Non-current assets

Property, Plant and Equipment 7i) Tangible Assets 58,80,465 67,08,439ii) Intangible Assets 1,55,204 2,40,238iii) Capital Work In Progress - -

60,35,669 69,48,677Deferred Tax assets (Net) 8 11,40,615 13,83,150Non-current investments 9 44,83,56,067 57,34,59,000Long term loans & advances 10 6,35,000 4,85,000

45,61,67,351 58,22,75,8272 Current assets

Current investments 9 3,00,00,000 1,74,00,000Cash and bank balances 11 63,49,75,715 9,48,05,812Short term loans & advances 12 55,60,775 44,72,851Other current assets 13 41,23,481 2,69,780

67,46,59,971 11,69,48,443Total 1,13,08,27,322 69,92,24,270

Summary of significant accounting policies in note 1and accompanying notes are forming part of the financial statements

As per our report of even date attachedFor PENDYALA & Co., Chartered Accountants Firm Registration Number: 002632S

P. Ramachandram Proprietor, Membership Number: 027692

Vijayawada 28th June 2019

A. Narayana Prasad Chief Financial Officer

Manisha Joshi Company Secretary

P. Brahmanandam Director DIN: 0860739

D. Nanha Ram Managing Director & CEO DIN: 3110169


(Amount in R)


Statement of Profit and Loss for the year ended 31st March, 2019(Amount in R)

Sl.No. Particulars NoteFor the year ended 31st March, 2019

For the year ended 31st March, 2018

1 Income

Revenue from operations 14 11,89,78,509 7,15,30,799

Other income 15 1,42,12,717 35,50,468

Total Revenue 13,31,91,226 7,50,81,267

2 Expenses

Employee benefit expenses 16 1,68,05,614 1,22,44,490

Depreciation expenses 7 11,16,553 6,98,254

Other expenses 17 82,65,110 1,07,40,870

Total expenses 2,61,87,277 2,36,83,614

3 ProfitBeforeTax,Extraordinaryitems(1-2) 10,70,03,949 5,13,97,653

4 Extraordinary items

Preliminary expenses - -

5 ProfitBeforeTaxafterextraordinaryitems(3-4) 10,70,03,949 5,13,97,653

6 Tax expenses

Current Tax 3,15,14,306 1,37,29,599

Current Tax of earlier year 2,42,535 10,21,309

Deferred Tax 3,17,56,841 1,47,50,908

7 Profit/(Loss)fortheyear(5-6) 7,52,47,108 3,66,46,745

8 Earningspershare(ofR10/- each): 18

Basic & Diluted earning per share (INR) 1.14 0.80

As per our report of even date attached

For PENDYALA & Co., Chartered Accountants Firm Registration Number: 002632S









Cash Flow Statement For the year ended 31st March,2019(Amount in R)

Sl. No. Particulars For the year ended 31st March, 2019


A. Cash Flow From Operating Activities:

Net Profit before tax as per Profit & Loss Account: 10,70,03,949 5,13,97,653Adjustment for:

Depreciation 11,16,553 6,98,254Interest income (1,42,12,717) (35,50,468)Write-off of preliminary expenses - -

OperatingProfitbeforeWorkingCapitalChanges 9,39,07,785 4,85,45,439 Adjustment for:

(Increase) /Decrease in Loans and Advances (10,87,923) (42,15,357)(Increase) /Decrease in Other Current Assets (38,53,701) 33,266Increase /(Decrease) in Other Current Liabilities 1,17,04,104 3,34,83,407Increase /(Decrease) in Provisions 17,40,255 30,80,993

Cash Generated from operations 10,24,10,520 8,09,27,748Income tax 3,15,14,306 1,37,29,599Net Cash from Operating Activities 7,08,96,214 6,71,98,149

B. CASHFLOWFROMINVESTINGACTIVITIES:Security Receipts - Investment in Trusts 11,25,02,933 (28,65,41,000)Purchase of Fixed Assets (2,03,545) (32,89,161)Interest Income 1,42,12,717 35,50,468

Net Cash from Investing Activities 12,65,12,105 (28,62,79,693)C. CASHFLOWFROMFINANCINGACTIVITIES:

Proceeds from issue of Equity Shares 34,05,14,000 30,88,86,000Receipts from Long term advances (1,50,000) 2,47,239Increase / (Decrease) in Long-Term Provisions 23,97,584 5,23,457Net Cash from Financing activities 34,27,61,584 30,96,56,696Net increase/(Decrease) in Cash and Cash Equivalents (A+B+C) 54,01,69,903 9,05,75,152Cash and Cash Equivalents at the beginning 9,48,05,812 42,30,660Cash and Cash Equivalents at the end of the period. 63,49,75,715 9,48,05,812











Notes to the Financial Statements for the year ended 31st March, 2019

Corporate InformationM/s Maximus ARC Limited is a limited company incorporated under the provisions of the Companies Act, 2013 (CIN-U67190AP2015PLC095944). The company was incorporated with the objective of carrying on the business of securitization, reconstruction and other ancillary activities etc. Reserve Bank of India granted ‘Certificate of Registration’ with No.018/2016, on 03-08-2016, to commence the business of securitization or asset reconstruction under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (Act 54 of 2002) i.e. SARFAESI Act.

I. Summary of significant accounting policies1. Basis of preparation of financial statements The accompanying financial statements are prepared and presented under the historical cost convention, on the

accrual basis of accounting as a going concern unless otherwise stated. This financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India, Regulatory norms / Guidelines prescribed by Reserve Bank of India (RBI) (hereafter referred to as “Guidelines”), The Companies Act, 2013 (hereafter referred to as “The Act”, Accounting Standard (AS) notified under Section 133 of the Act read with Rule 7 of The Companies (Accounts) Rules, 2014 to the extent applicable and the prevalent accounting practices in India.

2. Use of estimates The preparation of the financial statements in conformity with the generally accepted accounting principles

requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities as on the date of the financial statements. Actual results could differ from the estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods.

3 Principal Accounting Policies3.1 Revenue recognition a. Management fee: Management fee in respect of accounts acquired and held in trust is recognized on receipt

basis. b. Upside Income: Surplus realized in excess of over acquisition price is accounted for as per terms of the relevant

trust deed/offer document. Upside income is recognized only after full redemption of Security Receipts.

c. Yield is recognized after redemption of entire principal amount of security receipts.

d. Other fee income is recognized on receipt basis as per contractual terms.

e. Sale proceeds/Settlement amounts in respect of assets resolved through sale of underlying securities/ One Time Settlement are appropriated first towards expenses outstanding, Management fee, acquisition cost outstanding and the balance amount is recognised as gain.

f. Interest income


a) Interest on bank deposits / permitted investments is accounted for on accrual basis as per the terms of the deposits / instruments

b) Interest on expenses incurred on behalf of the trusts is accounted for in terms of the provisions of the relevant trust deed and offer document and is accrued where reasonable certainty exists with respect to its recovery. Interest on expenses is reversed on earlier of the following situations:

i. If the interest on expenses remains unrealised after the expiry of 180 days from the end of planning period, wherever applicable or from the date of recognition, in other cases.

ii. If Net Assets Value (NAV) of the Security Receipts falls below 50% of the face value of Security Receipts.

Such interest income is recognised only on realisation.

c) Interest income in respect of restructured/rescheduled financial assets is recognised on accrual basis as long as the asset remains performing.

3.2 Asset classification and provisioning there on Financial assets acquired and held in the books of the company are classified and made necessary provisions

against non-performing assets, as per the guidelines issued by Reserve Bank of India from time to time.

4. Rating of Security Receipts Security Receipts issued by the Trusts are rated by accredited Rating Agencies periodically as per guidelines of

Reserve Bank of India.

As per RBI guidelines, initial rating / grading would be assigned within six months of acquisition of assets.

5. Valuation of Investments Investments in Security Receipts (SR) are accounted in accordance with the guidelines issued by RBI.

a) Investment in Security Receipts (SR) is valued at cost till receipt of Initial Rating and at lower of cost or realizable value thereafter. Latest available Net Asset Value (NAV) as declared by the Trusts is considered to be the realizable value. Individual scrip-wise diminution or appreciation is aggregated to arrive at ‘net diminution’ or ‘net apptreciation’.

b) Net diminution of investments if any is provided in the statement of profit and loss account, where as net appreciation, if any, is ignored.

6. Property, Plant and Equipment Property, Plant and Equipment are stated at cost less accumulated depreciation. Cost includes cost of purchase

and all expenditure such as installation costs and professional fee incurred on the assets before it is put to use.

Depreciation is charged on straight line method in accordance with Schedule II of the Companies Act, 2013. Cost of assets (net of taxes and duties eligible for credit) not put to use before the year-end are disclosed under Capital Work-in-Progress. Assets are capitalized when they are ready for use/put to use.

7. Intangible Assets Intangible Assets are stated at cost of acquisition. Intangible Assets such as software, trademark are amortized

as per Schedule II of the Companies Act, 2013.


8. Employee benefits a. Short-termemployeebenefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short-

term employee benefits. Benefits such as salaries, wages, bonus, allowance and contribution to Provident fund etc., are recognized as actual amounts due in the period in which the employee renders services.

b. Definedbenefitplan: Provision for Gratuity and Leave encashment is provided, for the year, as per actuarial valuation, as of the

balance sheet date, carried out by an independent actuary. Actuarial gains/losses are recognized in full in the income and expenditure account of the respective financial year and are not deferred.

9. Pre-acquisition/Post acquisition expenses incurred by the company on behalf of the trust Expenses incurred at pre-acquisition stage for performing due diligence etc, for acquiring financial assets from

banks/FIs are recognised as expenses for the period in which such costs are incurred.

Expenses incurred after acquisition of assets, on the formation of trusts like stamp duty, registration etc, which are recoverable from trusts are charged to respective trust accounts. These expenses are reimbursed to the Company in terms of the provisions of relevant trust deed and offer document.

Such expenses are reversed on earlier of the following situations:

i. If the expenses remain unrealised after the expiry of 180 days from the end of planning period, wherever applicable or from the date of recognition, in other cases.

ii. If Net Assets Value (NAV) of the Security Receipts falls below 50% of the face value of Security Receipts.

10. Taxation Income tax Provision for income tax is recognised based on estimated tax liability computed after adjusting for allowances,

disallowances and exemptions in accordance with the Income Tax Act, 1961.

Deferred taxation The deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognized using

the tax rates that have been enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonable/virtually certain (as the case may be) to be realised.

11. Impairment of assets The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired

based on internal/external factors. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is re-assessed, and the asset is reflected at the recoverable amount subject to a maximum of the depreciable historical cost.


12. Earnings per share (EPS) The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 -

Earnings Per Share. Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding for the year. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the year. Diluted earnings per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at year end.

13. Provisions and contingencies Contingent liabilities are possible but not probable obligation as on the balance sheet date, based on the available

evidence. Provision are recognized when there is a present obligation as a result of past event; and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimates required to settle the obligation at the balance sheet date. Contingent assets are not recognized in the financial statements.

14. Operating cycle concept under Schedule III All the assets and liabilities have been classified as current or non-current as per the Company’s normal operating

cycle and other criteria set out in Schedule-III to the Act. Based on the nature of the services and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or non-current classification of assets and liabilities. The same principle has been followed in case of classification of Investments in Security Receipts.


Notes forming part of the Financial Statements2. Share Capital

Particulars As at 31st March, 2019

As at 31st March, 2018

(a)Authorised 10,00,00,000 (P.Y. 10,00,00,000) number of equity shares of R10/- each

1,00,00,00,000 1,00,00,00,000

(b)Issued,SubscribedandPaid-upCapital 9,70,00,000 (6,29,48,600) number of equity shares of R10/- each

97,00,00,000 62,94,86,000

Total 97,00,00,000 62,94,86,000

2.1 Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period



Equity Shares at the Beginning of the year 6,29,48,600 3,20,60,000

Add: Shares issued during the year 3,40,51,400 3,08,88,600

Number of Shares at the end of the year 9,70,00,000 6,29,48,600

2.2 Terms/ rights attached to equity shares The Company has only one class of equity shares having par value of R 10/- per share. Each holder of equity

shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend recommended by the Board of Directors is subject to approval of shareholders in the ensuring Annual general Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders. As per records of the Company, including its register of shareholders and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

2.3 Details of shares held by each shareholder holding more than 5% shares

Name of shareholder As at 31st March 2019 As at 31st March, 2018

Number of shares held

% holding in that class of shares

Number of shares held

% holding in that class of shares

M/s. Devi Sea Foods Limited 2,36,80,000 24.41 2,36,80,000 37.62

Mr. Alluri Indrakumar 70,70,000 7.29 35,70,000 5.67

M/s. Srinivasa Cystine Ltd 2,90,00,000 29.90 2,30,00,000 36.54

Mr. V.B.V. Giri Prasad 70,00,000 7.22 - -

Mr. P. Brahmanandam 65,10,000 6.71 15,10,000 2.40

M/s. Narayanpur Power Co.Pvt. Ltd. 57,50,000 5.93 25,00,000 3.97

(Amount in R)


Notes forming part of the Financial Statements3. Reserves and surplus



Surplus/(Deficit)inprofitandlossaccountOpening balance 3,16,80,432 (49,66,313)Add: Profit/(loss) for the year 7,52,47,108 3,66,46,745

Closing balance 10,69,27,540 3,16,80,432

4. Long Term Provisions



Provision for Gratuity 8,88,846 6,83,457Provision for Leave Encashment 21,92,195 -

Total 30,81,041 6,83,457

6. Short Term Provisions



Provision for Income tax (Net of Advance tax, TDS) 48,21,249 30,80,993Total 48,21,249 30,80,993

(Amount in R)

(Amount in R)

(Amount in R)

5. Other Current Liabilities



Statutory dues payable 73,95,798 82,87,030Other liabilities 2,19,61,694 31,66,358Security deposit for auction property 1,66,40,000 2,28,40,000

Total 4,59,97,492 3,42,93,388

(Amount in R)

8. Deferred Tax Asset



(A) Deferred tax Assets- on carry forward of losses - -- on other timing differences 15,66,053 18,39,125

Total(a) 15,66,053 18,39,125Less:(B) Deferred tax liability

- on other timing differences - - - on trust expenses recoverable 3,86,515 3,86,515 - on difference between tax and book depreciation on fixed assets 38,923 69,460

Total(b) 4,25,438 4,55,975Total(a-b) 11,40,615 13,83,150

(Amount in R)


9. Investments

ParticularsNon-Current Current





Investment in special purpose vehicles (valued at cost unless stated otherwise)

Traded, Unquoted, Security receipts

Maximus – CPBL-001 Trust 5,03,00,000 5,03,00,000 - -

Maximus – SKM-002 Trust 3,96,00,000 4,63,00,000 1,65,00,000 1,65,00,000

Maximus – RMPL-003 Trust 3,41,00,000 3,41,00,000 - -

Maximus – HPL-004 Trust - 1,05,00,000 - -

Maximus – AB17-005 Trust - 14,97,000 - -

Maximus – Birla-007 Trust 6,90,00,000 6,90,00,000 - -

Maximus – AB17-008 Trust 16,00,000 66,00,000 - -

Maximus – UCO17-009 Trust 1,41,61,000 1,46,71,000 - -

Maximus – LSJM-010 Trust 2,24,00,000 2,24,00,000 - -

Maximus – AB17-011 Trust 1,29,75,000 1,34,25,000 - -

Maximus – AB17-012 Trust 42,14,000 73,13,000 - -

Maximus – MSM-013 Trust 2,58,90,000 2,58,90,000 - -

Maximus – AB17-014 Trust 3,09,59,000 5,13,30,000 1,35,00,000 9,00,000

Maximus – PRM-015 Trust 4,80,65,000 4,80,65,000 - -

Maximus – JAM-016 Trust 2,79,00,000 2,79,00,000 - -

Maximus – JCI-017 Trust - 4,85,00,000 - -

Maximus – SBIL-018 Trust - 3,39,03,000 - -

Maximus – IB0118-019 Trust 1,20,66,000 2,72,70,000 - -

Maximus – IB0218-020 Trust 31,77,000 40,95,000 - -

Maximus – AEL018-021 Trust - 3,04,00,000 - -

Maximus – BOI18 - 022 Trust 4,09,00,000 - - -

Maximus – IOB19-023 Trust 1,10,49,067 - -

Total 44,83,56,067 57,34,59,000 3,00,00,000 1,74,00,000

(Amount in R)

10. Long Term Loans & Advances



(Unsecured and considered good for the value to be received in cash or kind)Security deposits 6,35,000 4,85,000

Total 6,35,000 4,85,000

(Amount in R)


11. Cash and bank balances



a) Cash and cash equivalents:Cash on hand 8,313 9,723 Balances in current accounts with Banks 2,91,04,753 5,37,96,089 b) Other bank balancesDeposits with bank 60,58,62,649 4,10,00,000

Total 63,49,75,715 9,48,05,812

12. Short term loans & advances



Unsecured, Considered Good for the value to be received in cashAdvances Recoverable from Security Trusts (A) 90,13,590 35,86,342Less: Reversal as per RBI Guidelines (B) 35,35,390 14,02,832

(A-B) 54,78,200 21,83,510Other advances 82,575 22,89,341

Total 55,60,775 44,72,851

13. Other Current Assets



Income-tax Refund Receivable 3,73,100 -Interest accrued on Fixed deposit 34,76,953 2,17,850Prepaid Expenses 2,73,428 51,930

Total 41,23,481 2,69,780

14. Revenue from Operations

Particulars For the year ended 31st March, 2019


Management & Other Fee 2,53,46,700 4,54,36,600 Incentives 1,13,07,400 1,08,85,400Processing fee - 2,00,000Interest on Restructured Advances 2,94,01,665 72,45,198Interest on expenses of Trusts 4,98,720 3,44,482Less: Reversal as per RBI Guidelines 2,11,188 2,87,532 1,39,406 2,05,076Gain on sale/redemption of security receipts 5,26,35,212 75,58,525

Total 11,89,78,509 7,15,30,799

(Amount in R)

(Amount in R)

(Amount in R)

(Amount in R)


15. Other income



Interest on fixed deposits with Banks 1,42,12,717 35,41,489Interest on IT Refund - 8,979

Total 1,42,12,717 35,50,468

17. Other expenses



Advertisement expenses 2,32,177 - Legal Expenses 10,000 - Registration Expenses 30,700 - Security Services 1,02,770 - ROC expenses 14,268 43,38,867 Business development expenses - 22,498 Auditors Renumeration - as Statutory Auditor 1,50,000 1,50,000 - others 85,000 - Directors sitting fees 8,10,000 6,14,955 Board meeting expenses 1,27,537 1,70,680 Insurance 1,09,180 44,036 Subscriptions & membership fee 1,48,330 28,130 Rent 12,19,500 12,54,000 Power and fuel expenses 1,49,697 1,42,399 Vehicle maintenance 3,45,746 2,63,881 Office maintenance 4,27,263 2,63,877 Travelling and conveyance 5,68,961 4,03,164 Tender/Bid Expenses - 10,00,000 Reversal of Expenses recoverable from Trust as per RBI Guidelines 20,60,776 12,63,426 Communication costs 1,44,314 1,37,051 Consultancy charges 6,64,225 3,78,374 Printing and stationery 2,26,631 1,99,521 Repairs & Maintenance 60,665 25,382 Interest on Income-tax 4,99,650 - Miscellaneous expenses 77,720 40,629

Total 82,65,110 1,07,40,870

(Amount in R)

(Amount in R)

16. Employee benefit expenses



Salaries & wages 1,34,08,302 1,16,84,485Staff welfare expenses 19,408 36,548Gratuity provided 2,05,389 5,23,457Employees Leave Encashment 21,92,195 - Exgratia 9,80,320 -

TOTAL 1,68,05,614 1,22,44,490

(Amount in R)


18. Earnings Per Share



Profit available to Equity Share Holders (R) 7,52,47,108 3,66,46,745Number of Equity Shares (No's) Opening Number shares 6,29,48,600 3,20,60,000Add: Weighted average number of shares issued during the year 27,94,399 1,39,65,519Equivalent number of shares 6,57,42,999 4,60,25,519Earnings Per Share (R 10 paid for each share) -Basic 1.14 0.80 -Diluted 1.14 0.80

(Amount in R)

19. Additional Notes to financial statements 19.1 The Security Receipts (SR) issued by the Trusts which are managed by the Company as managing trustee are

being rated in accordance with the guidelines issued by Reserve Bank of India for credit rating of SR’s of the Trusts.

19.2 Disclosures as required by “The Securitization Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003”.

a) The Names and addresses of banks/financial institutions from whom financial assets were acquired and the value at which such assets were acquired from each such bank/financial institutions.

Sponsors (A)Seller wise acquisition details as at 31st March 2019

Sellers Address Acquisition Price Nil Nil Nil

Sub Total (A) Nil

Non - Sponsors (B) Seller wise acquisition details

Sellers Address Acquisition Price Andhra Bank Dr. Pattabhi Bhavan, Saifabad, Hyderabad – 500004 7,268

UCO Bank Head office, 10, BTM Sarani, Kolkata - 700001 969

Karvy Financial Services Ltd 762, Solitaire Park, Andheri East, Mumbai 4,600

The Federal Bank Limited PB No.103, Federal Towers, Aluva-683 101, Ernakulam, Kerala 295

State Bank of India Madame Cama Road, Mumbai-400 021 1,000

Bank of India Head Office, Star House, Bandra Kurla Complex, Mumbai - 400051 4,851

Indian Bank 254-260, Avvai Shanmugam Sali, Royapettah, Chennai - 600014 2,875

Indian Overseas Bank No.763, Anna Salai, Chennai-600 002. 110

SubTotal(B) 21,968

GrandTotal(A+B) 21,968

( R in Lakhs)

( R in Lakhs)


b). Dispersion of various financial assets industry-wise and sponsor-wise

IndustryNumber of Borrowers

Acquisition Price

Percentage of Total Acquisition

Price as on 31.03.2019

Sponsors(A):

- - -

SubTotal(A) Nil Nil

Non-Sponsors(B):

Cement Products 2 1,655.00 7.53

Consumer Durable Loans 1 341.00 1.55

Food Products 3 886.49 4.04

Hospitality 1 333.00 1.52

Mechanical components 1 1,000.00 4.55

Real Estate Developers 1 636.00 2.90

Trading 2 4,879.00 22.21

Jute Products 1 1,500.00 6.83

Research & Education 4 5,883.00 26.78

Fertilisers 1 840.00 3.82

Cotton Industries 2 2,066.00 9.40

Steel Industries 1 837.00 3.81

Contractors 2 1,112.00 5.06

SubTotal(B) 22 21,968.49 100.00

( R in Lakhs)


ParticularsAs at

31.03.2019

c) Migration of financial assets from standard to non-performing Nil

d)Value of financial assets acquired till the beginning of the financial year either on the books of the Company or in the books of the Trusts

19,734

e) Value of financial assets Acquired during the year 2,835

f) Value of financial assets including assets acquired through Trust till the end of the financial year 22,569

g) (i) Value of Security Receipts redeemed partially 2,265

(ii) Value of Security Receipts redeemed fully 1,333

h) Value of Security Receipts outstanding at the end of the financial year 18,971

i)Value of Security Receipts which could not be redeemed as a result of non-realization of the financial asset as per the policy formulated by the Securitization company or Reconstruction company under Paragraph 7(6) (ii) or 7(6)(iii)

Nil

j)Value of land and/or building acquired in ordinary course of business of reconstruction of assets (year wise)

Nil

k)Details of assets where the value of acquisition is more than the book value (the value of assets as declared by the seller bank in the auction)

Nil

l)Details of Assets disposed off (either by write off or by realisation) during the year at discount of more than 20% of valuation as on the previous year and reasons therefore

Nil

m) Details of Assets where the value of the SR has declined more than 20% of below the acquisition value Nil

n)The capital adequacy ratio is well above fifteen percent of its total risk weighted assets as on March 31, 2019, accordingly the company has complied with para 5 of the guidelines of the RBI dated July 01, 2015 on net owned funds.

( R in Lakhs)


a) Name of the related parties and description of their relationship

i) Key Managerial Personnel/Directors

Sri. P. Brahmanandam Director

Sri. A.Indra Kumar Director

Sri. Nanharam Devineni Managing Director & CEO

Sri. Sambasiva Rao Gadde Director

Sri. Narayana Prasad Alla CFO

Ms. Manisha Joshi Company Secretary

ii) Relatives of Key Managerial Personnel

Smt. P. Suryavathi Wife of Director

iii)Enterprisesexercisingsignificantinfluence

M/s. Devi Seafoods Ltd Associate Company

M/s. Srinivasa Cystine Pvt. Ltd. Associate Company

iv) Others

M/s. Nexar Labs (P) Ltd. Entity controlled by relative of director

b) Transactions with Related parties

(Figures for previous year in brackets) 31.03.19 31.03.18

Salary

Sri. Nanha Ram Devineni 83.30 72.00

Perquisites

Sri. Nanha Ram Devineni 3.84 3.96

Purchase of services/assets

M/s. Nexar Labs (P) Ltd. - 2.21

Rent Paid

Smt. P. Suryavathi - 0.70

( R in Lakhs)

19.3 Related Party Disclosures As required under Accounting Standard 18 of ICAI “Related party Disclosures”, following are details of transactions during the year with the related parties


c) Investment in share capital of the company

Particulars 31.03.19 31.03.18

M/s. Srinivasa Cystine Pvt. Ltd. 600.00 2,000.00

19.7 Expenditure in Foreign Currency

Particulars 31.03.19 31.03.18

Travelling Expenses (SG$ - 553.33) 0.30 Nil

( R in Lakhs)

( R in Lakhs)

19.4 The company has only one line of business and as such has no separate reportable segment to be disclosed under AS -17 “Segment Reporting”

19.5 Contingent Liabilities R 32,04,075/- being liability on bank guarantees issued by bankers of the borrower if invoked, for the assets acquired through trust. (Previous year: R 17,85,631/-)

19.6 Estimated amount of contracts remaining to be executed on capital account and not provided for R Nil (Previous year: Nil).

19.8 Details of dues to micro, small and medium enterprises

Based on the information available with the Company, there are no suppliers registered as micro & small enterprises under Micro, Small, Medium Enterprises Development Act, 2006. Accordingly, no interest is due or payable or paid or accrued and remaining unpaid to such suppliers.

19.9 Employee Benefits

The expense recognised for Gratuity and Leave encashment, for the year, has been determined by an actuary in confirmity with the principle set out in Accounting Standard 15 (Revised) the details of which are as under:


Disclosure in respect of defined benefit plan i.e. unfunded gratuity and Leave encashment

Particulars

Gratuity Leave Encashment





Reconciliation of liability recognised in the balance sheet:

Present value of commitments (as per actuarial valuation)

2,05,389 - 21,92,195 -

Fair Value of Plan Assets - - - -

Net liability in balance sheet (as per actuarial valuation)

2,05,389 - 21,92,195 -

Movement in net liability recognised in the balance sheet:

Net liability at the beginning of the year 6,83,457 1,60,000 - -

Amount paid during the year - - - -

Net expense recognised in the statement of profit and loss

2,05,389 5,23,457 21,92,195 -

Actual return on plan assets - - - -

Net liability at the end of the year 8,88,846 6,83,457 21,92,195 -

Expense recognised in the statement of profit and loss:

Current service cost 2,05,389 5,23,457 21,92,195 -

Past service cost - - - -

Interest cost - - - -

Actuarial loss/gain - - - -

Expense recognised in the Statement of profit and loss

2,05,389 5,23,457 21,92,195 -

Reconciliation of defined benefit plans:

Balance as at beginning of the year 6,83,457 1,60,000 - -

Current service cost 2,05,389 5,23,457 21,92,195 -

Past service cost - - - -

Interest cost - - - -

Paid benefits - - - -

Actuarial loss/gain - - - -

Balance as at end of the year 8,88,846 6,83,457 21,92,195 -

( R in Lakhs)


Actuarial assumptions:

ParticularsGratuity Leave Encashment





Discount rate 7.61% - 7.61% -

Expected rate of salary increase 5.00% - 5.00% -

Retirement age 70 years for

02 emp. & 60 years for others

- 70 years for 02 emp. & 60

years for others -

Mortality IALM(2006-08) - Ult - IALM(2006-08) - Ult -

The disclosure for current year and previous years is as follows:

ParticularsGratuity Leave Encashment





Plan assets - - - -

Defined benefit obligation 8,88,846 6,83,457 21,92,195 -

Net surplus/deficit (8,88,846) (6,83,457) (21,92,195) -

( R in Lakhs)

( R in Lakhs)

20.0 Prior year Comparatives

Previous year’s figures have been regrouped/reclassified wherever considered necessary to conform to this year’s classification.











Accolades


Ultra Trust established in 1981 manages educational institutions located in Chennai & Madurai providing quality education in diversified faculties such as Dental, Nursing, Pharma, Physiotherapy, Engineering & Technology, Business Administration, etc.

The institutions with a student strength of 5000, underwent serious financial stress for various reasons resulting in the trust accounts turning NPA.

Ultra Trust: Madurai

Maximus ARC, soon after acquiring the debt in Dec’2017, restructured the same on very soft terms providing an executable repayment schedule.

An year after reconstruction of the debt, the institutions are up and running and the trust is able to comfortably manage its cash flows and service the debt.

yet another story of revival…


Proxy Form[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3)

of the Companies (Management and Administration Rules, 2014]

Name of the member (s) : _____________________________________________________________________________

Registered Address : _____________________________________________________________________________

Email Id : _____________________________________________________________________________

Folio No./ Client ID : _____________________________________________________________________________

DP ID : _____________________________________________________________________________

I/We, being the member(s) of _____________________ shares of the above named company, hereby appoint:

1. Name :___________________________________________________ E-mail Id : ____________________________________

Address :________________________________________________________________________________________________

_________________________________________________________________________________________________________

Signature : ___________________________________________________, or failing him / her

1. Name :___________________________________________________ E-mail Id : ____________________________________

Address :________________________________________________________________________________________________

_________________________________________________________________________________________________________


1. Name :___________________________________________________ E-mail Id : ____________________________________

Address :________________________________________________________________________________________________

_________________________________________________________________________________________________________


as my / our proxy to attend and vote (on a poll) for me / us and on my /our behalf at the 5th Annual General Meeting of the Company to be held on day, the 29th August, 2019 at 3 P.M at Krishna Part-2, Novotel Vijayawada Varun, Bharathi Nagar, Vijayawada - 520 008, Andhra Pradesh and at any adjournment thereof in respect of such resolutions as are indicated in page 5 to 6:


Ordinary Business:1. To Consider and adopt Audited Financial Statements, Reports of the Board of Directors and Auditors

2. To appoint a Director in place of Sri A. Indra Kumar who retires by rotation and offers himself for re-appointment.

3. To appoint a Director in place of Sri G. Sambasiva Rao who retires by rotation and offers himself for re-appointment.

Special Business:

NIL

Signed this __________________________ day of ____________________2019

Signature of Shareholder_____________________________ Signature of Proxy holder(s):__________________________

Note: This form in order to be effective should be duly stamped, completed and signed and must be deposited attheRegisteredOfficeofthecompany,notlessthan48hoursbeforethecommencementofthemeeting.

Affix Revenue Stamp


Registered&CorporateOffice# 59A-18/1-5A, 3rd Floor, Sri Plaza, Teachers Colony, Patamata, Vijayawada - 520 008

Phone: 0866-2971144/45, Fax: 0866-2971146,Email: [email protected] Web: www.maximusarc.com

maneuvering the complexities in npa resolution

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