The Board of Directors hereby submits the report of the business and operations of yourCompany. The Board has pleasure in presenting the 32nd Annual Report of theCompany together with the Audited Financial Statements for the financial year ended March31st 2017.
|Particulars ||2016-17 ||2015-16 |
|Revenue from Operations ||922.32 ||1722.39 |
|Other Income ||0.31 ||105.34 |
|Total Income ||922.63 ||1827.73 |
|Less: Operational and Other Expenses ||769.10 ||1755.79 |
|Profit/(Loss) before Depreciation & Finance Cost ||153.53 ||71.94 |
|Less: Depreciation & Amortization ||0.83 ||0.20 |
|Less: Finance Cost ||43.64 ||18.05 |
|Profit/(Loss) before Tax ||109.89 ||53.89 |
|Less: Tax and Adjustments ||32.75 ||16.64 |
|Net Profit after Tax ||77.14 ||37.25 |
For the year ended March 2017 your Company had earned a total income of Rs. 922.32lakhs as compared to Rs. 1827.73 lakhs in the previous year. However the Net Profit of theCompany has increased to Rs. 77.14 lakhs which is around 107.08 % against the Net Profitof previous year for Rs. 37.25 lakhs. Your Company is considering various other avenuessuch as E-rickshaw financing Distribution of mutual funds IPOs funding and investmentsinto the capital market in order to enhance the income as well as growth of the Company innear future.
For the first time in the history of the Company your Directors have recommended afinal dividend of 7.5% being Re. 0.075/- per Equity Share of Re. 1/- each for thefinancial year ended March 31 2017. The Final Dividend if approved by the members willbe paid to the members within the stipulated period as required under the Companies Act2013.
As per section 45 IC of Reserve Bank of India Act 1934 the Company has transferredRs. 15.42 Lakhs in reserve fund i.e aggregating of 20% of its net profit.
During Financial Year 2016-2017 there was no change in the capital structure of theCompany. As on 31st March 2017 the paid up share capital of the Company was Rs. 509.8lakhs comprising of 509.8 lakhs equity shares of Re. 1/- each. The Company has not issuedshares with differential voting rights nor granted stock options nor sweat equity.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required under Regulation 34 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") and Circular/ Notifications/ Directions issued by Reserve Bank of Indiafrom time to time the Management Discussion and Analysis of the financial condition andresult of consolidated operations of the Company for the year under review is presented ina separate section forming part of the Annual Report.
We wish to inform the members that in terms of Regulation 15 (2) of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 Corporate Governance is notapplicable to Companies having paid up equity share capital not exceeding Rs. 10 crore andNet Worth not exceeding Rs. 25 crore as on the last day of the previous financial year.The Company does not fulfill any of the criteria's as mentioned above and hence are notrequired to comply with the Corporate Governance provisions as envisaged under SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015. However yourCompany has formed various committees in order to keep the checks and balances on thebusiness operations of the Company.
Being a Non Deposit taking Non-Banking Financial Company your Company has not acceptedany deposits from the public under section 73 of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 during the year under review.
RBI'S NORMS AND STANDARDS
The Company continues to have a conservative provisioning policy which is significantlymore stringent than the RBI norms. It fulfils and often exceeds norms and standards laiddown by the RBI relating to the recognition and provisioning of nonperformingassets capital adequacy statutory liquidity ratio etc
NUMBER OF MEETINGS OF THE BOARD
The Board met 7 times during the financial year 2016-17 viz. on May 16 2016 May 272016 August 13 2016 August 26 2016 November 14 2016 December 08 2016 and February13 2017. The maximum interval between any two meetings did not exceed 120 days.
COMMITTEES OF BOARD
In accordance with the Companies Act 2013 and Listing Regulations the Company hasfollowing Committees in place:
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Risk Management Committee
Details of the said Committees along with their charters composition and meetings heldduring the financial year are provided separately as a part of this Annual Report.
CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS AND OTHER KMPs
During the year under review following changes took place on the Board:
? Cessation of Mr. Vinay kumarkuldeep rana Arora and Mr. Shiv Shambhu from thedirectorship at the 31st Annual General Meeting as their names were not proposed fordirectorship.
? Appointment of Mr. Raj Kumar as Whole-Time Director of the Company.
? Appointment of Ms. Jagrati Sethi as an Additional Director of the Company in thecapacity of Women Director- Independent.
? Cessation of Mr. Raj Kumar from the position of Whole-time Director.
? Change in designation of Mr. Vinay Kumar from Chief Operation Officer to Director cumCOO of the Company.
Definition of Independence' of Directors is in conformity with Section 149(6) ofthe Companies Act 2013 and the requirements of Listing Regulations. Based on theconfirmation / disclosures received from the Directors and on evaluation of therelationships disclosed the following Non-Executive Directors are Independent in terms ofSection 149(6) of the Companies Act 2013 and the requirements of Listing Regulations :-
1. Mr. Amar Nath
2. Ms. Jagrati Sethi
3. Mr. Neeraj Kumar Bajaj
The independent directors have submitted the declaration of independence as requiredunder section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as provided in section 149(6) of the Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby stated that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBIListing Regulations').
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.
The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas:
Objectivity and Independence;
Guidance and support in context of life stage of the Company;
Understanding of the Company's business;
Understanding and commitment to duties and responsibilities;
Willingness to devote the time needed for effective contribution to Company;
Participation in discussions in effective and constructive manner;
Responsiveness in approach;
Ability to encourage and motivate the Management for continued performance andsuccess.
The evaluation involves Self-Evaluation by the Board Member and subsequent assessmentby the Board of Directors. A member of the Board will not participate in the discussion ofhis/her evaluation. Accordingly a process of evaluation was followed by the Board for itsown performance and that of its Committees and individual Directors and also the necessaryevaluation was carried out by Nomination and Remuneration Committee and IndependentDirector at their respective meetings held for the purpose.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company being a non-banking finance Company registered with the Reserve Bank ofIndia and engaged in the business of giving loans advancing of monies and other kind offinancings such as E-rickshaw financing etc. is exempt from complying with the provisionsof section 186 of the Companies Act 2013. Accordingly the disclosures of the loans givenas required under the aforesaid section have not been given in this Report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
The Company being a nonbanking finance Company (NBFC) does not have anymanufacturing activity. The directors therefore have nothing to report onconservation of energy and technology absorption and is given as "AnnexureI" to this report.
DETAILS OF MANAGERIAL REMUNERATION
Details of Managerial remuneration along with required information is explained alongwith "Annexure II" to this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as required pursuant tosection 92(3) of the Companies Act 2013 and rule 12(1) of the Companies (Management andAdministration) Rules 2014 in form MGT 9 is annexed herewith as "Annexure II"to this Director's Report.
PARTICULARS OF EMPLOYEES:
During the year under review there were no employees drawing remuneration of Rs.6000000/- p.a. or Rs. 500000/- p.m. or more. Hence there is no information to beprovided in accordance with the provisions of Section 134 of the Companies Act 2013 readwith the Companies (Particulars of employees) Rules 1975.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the criteria laid down under the Companies Act 2013 and the Rules madethereunder Your Company is not required to form a CSR Committee and to spend minimumamount towards the CSR activities But It understand its accountabilities towards itssociety or the environment and as a result it took parts in various CSR activities &initiatives.
No Foreign currency expenditure was incurred during FY 2016-17. The Company did nothave any foreign exchange earnings.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis which is a part of this report.
RELATED PARTY TRANSACTIONS
During the FY 2016-17 There are no materially significant related party transactionsmade by the Company with the Promoters Key Management Personnel or other designatedpersons which may have potential conflict with interest of the Company at large.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate in securities by the Directors and designated employees of the Company. TheCode prohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has established a Whistle Blower Policy and Vigil Mechanism' forDirectors and employees to report to the appropriate authorities concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's code of conduct policyand provides safeguards against victimization of employees who avail the mechanism andalso provide for direct access to the Chairman of the Audit Committee.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and company's operations in future.
Although as per the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the formation of Risk Management Committee is notmandatory on the Company but in today's era it is better to have Risk Management Committeeas a preventive measure for handling the uncertain events/risks. The committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. TheAudit Committee has additional oversight in the area of financial risks and controls. Themajor risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continual basis.
ANNUAL EVALUATION BY THE BOARD:
The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas:
1. Attendance of Board Meetings and Board Committee Meetings
2. Quality of contribution to Board deliberations
3. Strategic perspectives or inputs regarding future growth of Company and itsperformance
4. Providing perspectives and feedback going beyond information provided by themanagement
5. Commitment to shareholder and other stakeholder interests
The evaluation involves Self-Evaluation by the Board Member and subsequently assessmentby the Board of Directors. A member of the Board will not participate in the discussion ofhis / her evaluation.
PRESENTATION OF FINANCIAL STATEMENTS
The financial statements of the Company for the year ended 31stMarch 2017have been disclosed as per Schedule III to the Companies Act 2013.
The Company does not have any subsidiary Company.
MATERIAL CHANGES AND COMMITMENTS
During the year under review there are no material changes and commitments made by theCompany between the end of the financial year of the company to which the financialstatements relates and the date of the report.
The Company has electronic connectivity with both depositories namely CentralDepository Services (India) Limited and National Securities Depository Limited. As onMarch 31 2017 96.93% of the Company's paid-up share capital representing 49416377equity shares is in dematerialized form (including promoters shareholding). In view of thenumerous advantages offered by the Depository system Members holding shares in physicalmode are requested to avail of the facility of dematerialization of the Company's shareson either of Depositories.
M/s A.C. Gupta & Associates Chartered Accountants the statutory auditors of theCompany for a term of 5 years which was subject to ratification by members at every AnnualGeneral Meeting. The Board has recommended the appointment of M/s A.C. Gupta &Associates Chartered Accountants as the statutory auditors of the Company who shall holdoffice till the conclusion of the 33rd Annual General Meeting of the Company.
AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT:
The Auditor's report and Secretarial auditor's do not contain any qualificationreservation or adverse remarks. Report of the Secretarial auditor's is given as an Annex-3to this report.
Directors' responsibility statement as required by section 134(5) of the Companies Act2013 appears in this report.
Disclosures as prescribed by NonBanking Financial (Deposit Accepting or Holding)Companies Prudential Norms (Reserve Bank) Directions 2007 and other NBFC regulations havebeen made in this Annual Report. A Cash Flow Statement for FY2016-17 is attached to theBalance Sheet.
We are grateful to the Government of India the Reserve Bank of India the Securitiesand Exchange Board of India the Stock Exchanges and other regulatory authorities fortheir valuable guidance and support and wish to express our sincere appreciation for theircontinued co-operation and assistance. We look forward to their continued support infuture.
We wish to thank our bankers investors customers and all other business associatesfor their support and trust reposed in us.
Your Directors express their deep sense of appreciation for all the employees whosecommitment co-operation active participation dedication and professionalism has madethe organization's growth possible.
Finally the Directors thank you for your continued trust and support.
| ||By Order and on behalf of the board |
| ||For CAPITAL TRADE LINKS LIMITED |
| ||Sd/- |
|Place: Delhi ||Neeraj Garg |
|Dated: 27.05.2017 ||Chairman |