The Board of Directors hereby submits the report of the business and operations of yourCompany. The Board has pleasure in presenting the 31st Annual Report of theCompany together with the Audited Financial Statements for the financial year ended March31st 2016.
|Particulars ||2015-16 ||2014-15 |
|Revenue from Operations ||1722.39 ||155.33 |
|Other Income ||105.34 ||28.42 |
|Total Income ||1827.73 ||183.75 |
|Less: Operational and Other Expenses ||1755.79 ||123.8 |
|Profit/(Loss) before Depreciation & Finance Cost ||71.94 ||59.96 |
|Less: Depreciation & Amortization ||0.20 ||0.01 |
|Less: Finance Cost ||18.05 ||24.89 |
|Profit/(Loss) before Tax ||53.89 ||35.06 |
|Less: Tax and Adjustments ||16.64 ||14.23 |
|Net Profit after Tax ||37.25 ||20.83 |
For the year ended March 2016 your Company earned a total income of Rs. 1827.73 lakhsas compared to Rs. 183.75 lakhs in the previous year. The Net Profit of the Company isincreased to Rs. 37.25 lakhs against the Net Profit of previous year for Rs. 20.83 lakhs.Your Company is considering various other avenues to increase the income in near future.
DIVIDEND & TRANSFER TO RESERVES
Keeping in mind the overall performance and the future perspective Your Directorsdecided to plough back the profit and therefore dividend is not declared. The creditbalance of Profit and Loss account is transferred to reserves in Balance sheet.
During FY2015-2016 there were changes in the capital structure of the Company. As on31st March 2016 the paid up capital of the Company was Rs. 509.8 lakhs comprising of509.8 lakhs equity shares of Re. 1/- each. During the year Company had issued 1000000warrants convertible into equity shares. The Company has not issued shares withdifferential 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 fulfil any of the criteria's as mentioned above and hence are notrequired to comply with the Corporate Governance provisions envisaged under SEBI (ListingObligations & Disclosure Requirements) Regulations 2015.
The Company being a Non-Deposit Accepting Non-Banking Finance Company has not acceptedany deposits from the public during the year under review and shall not accept anydeposits from the public without obtaining prior approval of RBI. During the year underreview the Company has not accepted deposits falling within the provisions of Section 73to 76 of the Companies Act 2013 read with Companies (Acceptance of the Deposits) Rules2014.
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 non-performing assetscapital adequacy statutory liquidity ratio etc
NUMBER OF MEETINGS OF THE BOARD
The Board met 8 times during the financial year 2015-16 viz. on May 27 2015 August11 2015 September 16 2015 October 30 2015 November 14 2015 December 07 2015January 16 2016 February 15 2016 and March 03 2016. The maximum interval between anytwo 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.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors at its Meeting held on January 16 2016 appointed Mr. ShivShambhu (DIN 06987882) and Mr. Vinaykumar KuldeepranaArora (DIN 03089351) as AdditionalDirectors who shall act as a Non- Executive Independent Directors to hold office up tothe date of forthcoming Annual General Meeting as per the provisions of section 161 of theCompanies Act 2013.
Pursuant to the recommendation of the Audit Committee Nomination and RemunerationCommittee Mr. Vinay Kumar Chawla was appointed as Chief Operating Officer of the Companyby the Board of Directors with effect from April 1st 2016. Mr. Vinay Kumar Chawla theChief Operating Officer of the Company will ensure business stability in the upcomingyears to come.
Also the Board pursuant to the recommendation of the Nomination and RemunerationCommittee has appointed Mrs. Renu Garg (DIN 07095956) as a Whole Time Director of theCompany with effect from May 27 2016 subject to the approval of the shareholders.
The Company has received a notice in writing from Mr. Shiv Shambhu Mr. VinaykumarKuldeepranaArora and Mrs. Renu Garg that they are unable to continue the said directorshipdue to some personal reasons.
Further Mrs. Renu Garg has already stepped down from the Board with effect from 10thAugust 2016.
The Board places on record its appreciation of the valuable services rendered and theenormous contribution made by Mr. Shiv Shambhu Mr. Vinaykumar KuldeepranaArora and Mrs.Renu Garg during their respective tenure to the Company.
c. Retire by Rotation
In accordance with Section 152 and other applicable provisions of Companies Act 2013None of the directors are liable to retire by rotation.
Definition of 'Independence' of Directors is in conformity with Section 149(6) of theCompanies Act 2013 and the requirements of Listing Regulations. Based on the confirmation/ disclosures received from the Directors and on evaluation of the relationshipsdisclosed the following Non-Executive Directors are Independent in terms of Section149(6) of the Companies Act 2013 and the requirements of Listing Regulations :-
1. Mr. Amar Nath (DIN 06524521)
2. Mr. Shiv Shambhu (DIN 06987882)
3. Mr. Neeraj Kumar Bajaj (DIN 06976972)
4. Mr. VinaykumarKuldeepranaArora (DIN 03089351)
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.
The KMPs and other Managerial Personal of the Company includes:
1. Mr. Vinay Kumar Chawla Chief Operating Officer
2. Mr. Yashwant Saini Chief Financial Officer(KMP)
3. Mr. Hariom Sharma Company Secretary(KMP)
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.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT REMUNERATION AND EVALUATION
Pursuant to the provisions of the Companies Act 2013 ("the Act") and ListingRegulations Policy on Nomination and Remuneration of Directors Key Managerial PersonnelSenior Management and other employees had been formulated including criteria fordetermining qualifications positive attributes Independence of a Director and othermatters as required under the said Act and Listing Regulations.
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 its own performanceand that of its Committees and individual Directors and also the necessary evaluation wascarried out by Nomination and Remuneration Committee and Independent Director at theirrespective 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 is exempt from complying with theprovisions of section 186 of the Companies Act 2013. Accordingly the disclosures of theloans given as required under the aforesaid section have not been given in this Report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
The Company being a non-banking finance Company (NBFC) does not have anymanufacturing activity. The directors therefore have nothing to report on 'conservationof energy and technology absorption and is given as "Annexure I" to thisreport.
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 "AnnexureII" to this Director's Report.
PARTICULARS OF EMPLOYEES:
During the year under review there were no employees drawing remuneration of Rs.6000000/- p.a. orRs. 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 FY2016. The Company did not haveany foreign exchange earnings.
Internal financial controls with reference to the financial statements were adequateand operating effectively. The information about internal controls is set out inManagement Discussion & Analysis report which is attached and forms part of thisreport.
RELATED PARTY TRANSACTIONS
There are no materially significant related party transactions made by the Company withthe Promoters Key Management Personnel or other designated persons which may havepotential 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
Your 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. The said policy hasbeen uploaded on the website of the Company.
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 Board of Directorslast year has constituted risk management Committee for the Company which provides foridentification assessment and control of risks which in the opinion of the Board maythreaten the existence of the Company. The Management identifies and controls risksthrough a properly defined framework in terms of the aforesaid policy.
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 2016have 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 the company has entered into the fresh listing agreementwith the Stock Exchange in terms of Securities and Exchange Board of India (SEBI) circulardated October 3 2015 issued in respect of SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 with the aim to consolidate and Streamline the provisionsof the Listing Agreement for different segments of capital markets to ensure betterenforceability. The said regulations were effective December 1 2015. Accordingly alllisted entities were required to enter into the listing agreement within six month fromthe effective date. The company entered into listing agreement with BSE Limited on 25thFebruary 2016.
Further there are no material changes and commitments made by the company between theend of the financial year of the company to which the financial statements relates and thedate of the report.
The Company has electronic connectivity with both depositories namely CentralDepository Services (India) Limited and National Securities Depository Limited. As onMarch 31 2016 95.83% of the Company's paid-up share capital representing 48856377 equityshares 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.
AUDITORS AND AUDITOR'S OBSERVATIONS:
All observations of Auditors are annexed as Auditors Report and are self-explanatoryand therefore do not call for any further comments by Directors in this report.
The Company has received from A.C. Gupta & Associates a written consent forratification of their appointment from the conclusion of ensuing AGM till the conclusionof the 33rd AGM and a certificate to the effect that their appointment shall bein accordance with the prescribed conditions and that the firm is not disqualified underthe Companies Act 2013.
The Audit Report does not contain any qualification reservation or adverse remark ordisclaimer.
SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company had appointed M/s A. K. Popli& Co. Practicing CompanySecretary (Membership No. 3387) to conduct the Secretarial Audit and his Report onCompany's Secretarial Audit in form MR-3 are appended to this Report as "AnnexureIII".
Directors' responsibility statement as required by section 134(5) of the Companies Act2013 appears in this report.
Disclosures as prescribed by Non-Banking 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 is attached to the Balance 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: 13.08.2016 ||Chairman |