Capital Trade Links Limited.
Your Directors delightfully present the 34th Annual Report on the business andoperation of the Company together with the Audited Financial Accounts for the year ended31st March 2019.
| || ||(Rs.in Lacs) |
|Particulars ||F.Y. ended 31.03.2019 ||F.Y. ended 31.03.2018 |
|Revenue from Operations ||427.85 ||383.76 |
|Other Income ||1.24 ||31.66 |
|Total Income ||429.09 ||415.42 |
|Less: Operational and Other Expenses ||194.90 ||240.05 |
|Profit/(Loss) before Depreciation & Finance Cost ||234.19 ||175.37 |
|Less: Depreciation & Amortization ||2.89 ||1.99 |
|Less: Finance Cost ||49.30 ||35.83 |
|Profit/(Loss) before T ax ||181.43 ||137.54 |
|Less: Tax and Adjustments ||52.45 ||43.23 |
|Net Profit after Tax ||128.98 ||94.31 |
For the year ended March 2019 your Company had earned a total income of Rs. 429.09lakhs as compared to Rs. 415.42 lakhs in the previous year.
However the Net Profit of the Company has increased to Rs. 128.98 lakhs against the NetProfit of previous year for Rs. 94.31 lakhs.
DIVIDEND ON EQUITY SHARES
No dividend was declared for the current financial year due to conservation of protsand continued investment in the business.
As per section 45 IC of Reserve Bank of India Act 1934 the Company has transferredRs. 25.80 Lakhs in reserve fund i.e aggregating of 20% of its net profit.
NATURE OF BUSINESS
Your Company is one of the growing NBFCs in the country with presence in North Indiaand offers a wide range of financial services to many sectors. Your company is a nondeposit accepting Non Banking Financial Company registered with Reserve Bank of India andobtained certicate of registration no. B-14.02516 dated 19.11.2001.
The Company is principally engaged in the business of advancing loans and nancing. TheCompany offers credit facilities to individuals and business clients in low medium andhigh range. The Company offers business loans loans against property and fullls workingcapital requirement among others of its individual partnership rms entrepreneurs bodycorporate/business clients and other legal entities. The Company offers various productsand services which include venture capital equity nancing personal loan and securedloan. E-rickshaw financing has become a major contributor to the revenue of the Companyduring the Financial Year 2018-19. E-rickshaw financing will continue to be the mainstayfor the Company.
The Directors are quite hopeful to achieve new milestones of achievement in the yearsto come.
MISSION AND VALUE:
Your company aims to be the financial institution for the unbanked population in thenear future. With the focus on client satisfaction we plan to encourage self-sufciencyand entrepreneurship in the various clients that we serve.
There is no change in the nature of business of the Company during the year underreview. The company portfolio comprises business loans loans against property andfulfills working capital requirement among others of its individual partnership firmsentrepreneurs body corporate/business clients and other legal entities. E-rickshawfinancing has become a major contributor to the revenue of the Company during theFinancial Year 2018-19.
The Company has proper procedures for the identication of borrower due diligenceverication & assessment of borrowers' income to ensure timely repayment.
The Borrower has to give Guarantee while taking loan. In some cases the agent alsostands as guarantor and the commission to agent is paid after recovery of loan fully.
Your company is an organization providing monetary facility to individuals andorganizations which are in need of nance. Similar to bank the Company is extendingcredit facilities to individuals business entities whether proprietorship partnershiprms companies or any other legal entity.
The money is advanced for both personal and commercial purpose. Instead of borrowingfunds from bank the Company has been generating funds from market financial resources.The company has established its own standards and norms for evaluating different needs ofits clients and always provides suitable payment option considering no harm to itscustomers as well as recoverable easily.
PRODUCTS & SERVICES:
The Company is into providing following products and services to potential clients
During the Previous Year 2017-18 the loans were given for purchase of E-RickshawPersonal Loans Business Loan SME Loan Two-Wheeler LoanLoan against Property. Duringthe Financial Year 2018-19 E-Rickshaw loan became the main stay of the Company.
During Financial Year 2018-19 there was no change in the capital structure of theCompany. As on 31st March 2019 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 (Listing Regulations) andCircular/ Notications/ Directions issued by Reserve Bank of India from time to time theManagement Discussion and Analysis of the financial condition and result of consolidatedoperations of the Company for the year under review is presented in a separate sectionforming part of the Annual Report. MDA report also contains the details of the riskmanagement framework of the company including the development and implementation of riskmanagement policy and the key risks faced by the company.
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 since the company is having paid up equity share capital notexceeding Rs. 10 crore and Net Worth not exceeding Rs. 25 crore as on the last day of theprevious financial year. The Company does not fulll any of the criteria's as mentionedabove and hence are not required to comply with the Corporate Governance provisions asenvisaged under SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. However your Company has formed various committees in order to keep the checks andbalances on the business operations of the Company.
The company is a Non-Deposit Accepting Non-Banking Finance Company (NBFC-ND). It ceasedtaking deposits from the public effective 1 November 2006. The company does not hold oraccept deposits as on the date of balance sheet.
Investment and Credit Company (NBFC-ICC)
During the year RBI vide notication dated 22 February 2019 harmonised differentcategories of non-banking financial companies (NBFCs) viz. Asset Finance Companies (AFC)Loan Companies (LCs) and Investment Companies (ICs) into a new category called NBFCInvestment and Credit Company (NBFC-ICC). Accordingly the company being Loan Companyfalls in the category of Investment and Credit Company (NBFC-ICC).
RBI'S NORMS AND STANDARDS
The Company continues to have a conservative provisioning policy which is signicantlymore stringent than the RBI norms. It fulls and of ten exceeds norms and standards laiddown by the RBI relating to the recognition and provisioning of nonper forming assetscapital adequacy statutory liquidity ratio etc.
NUMBER OF MEETINGS OF THE BOARD
During the year Six Board Meetings were held and the intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.
The dates on which the Board Meetings were held are 1st May 2018 30th May 2018 14thAugust 2018 14th November 2018 30th January2019 and 14th February 2019.
COMMITTEES OF BOARD
In accordance with the Companies Act 2013 and Listing Regulations the Company hasfollowing Committees in place:
Nomination and Remuneration Committee
takeholders Relationship Committee
Risk Management Committee
Independent Director's 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
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED DURING THE YEAR
Mr. Krishan Kumar (DIN: 00004181) non- executive non-independent director of theCompany retire by rotation at the forthcoming 34th Annual General Meeting and beingeligible offered himself for reappointment.
Appointment of Mr. Amar Nath as Independent Director
Mr. Amar Nath (DIN: 06524521) was appointed as Independent Director of the companyw.e.f 29.09.2018 to hold ofce for a second term of 5 (five) consecutive years on the Boardof the Company.
Key Managerial Personnel:
Pursuant to the provisions of Section 203 of the Act read with the rules made thereunder the following employees were/are the wholetime key managerial personnel of thecompany during FY 19:
1. Mr. Yashwant Saini Chief Financial Ofcer (up to 30.05.2018)
2. Mr. Santosh Gupta Chief Financial Ofcer (from 30.05.2018)
3. Mr. Hariom Sharma Company Secretary (up to 01.05.2018)
4. Mr. Gaurav Joshi Company Secretary (from 01.05. 2018 upto 30.04.2019)
DECLARATION FROM INDEPENDENT DIRECTORS
Denition of 'Independence' of Directors is in conformity with Section 149(6) of theCompanies Act 2013 and the requirements of Listing Regulations. Based on the conrmation /disclosures received from the Directors and on evaluation of the relationships disclosedthe following Non-Executive Directors are Independent in terms of Section 149(6) of theCompanies Act 2013 and the requirements of Listing Regulations :-
1. Mr. Amar Nath
2. Ms. Jagrati Sethi
3. Mr. Neeraj Kumar Bajaj
4. Mr. Abhay Kumar
All the independent directors (IDs) have submitted their declaration independence asrequired pursuant to section 149(7) of the Act conrming that they meet the criteria ofindependence as provided in section 149(6) of the Act. In the opinion of the board theIDs fulll the conditions specied in the Act and the rules made there under for appointmentas IDs and conrm that they are independent of the management.
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 ensurecompliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
ANNUAL EVALUATION OF THE BOARD
Pursuant to the provisions of the Act and Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual evaluation of its performance the Directors individually as well as theevaluation of the working of its Audit and Nomination & Remuneration Committees forthe Financial Year 2018-19. The evaluation was conducted on the basis of a structuredquestionnaire which comprises performance criteria such as performance of duties andobligations independence of judgement level of engagement and participation attendanceof directors their contribution in enhancing the Board's overall effectiveness etc. TheBoard has expressed their satisfaction with the evaluation process. The following are someof the broad issues that are considered in performance evaluation:
Criteria for evaluation of Board and its Committees:
Setting up of performance objectives and performance against them
Board's contribution to the growth of the Company
Whether composition of the Board and its Committees is appropriate with theright mix of knowledge and skill sufficient to maximize performance in the light of futurestrategy
Board's ability to respond to crisis
Board communication with the management team
Flow of quality information to the Board
Criteria for evaluation of Independent Directors
Demonstrates willingness to devote time and effort to understand the Company andits business
Demonstrates knowledge of the sector in which the Company operates
Quality and value of their contributions at board meetings
Contribution to development of strategy and risk management policy
Effective and proactive follow up on their areas of concern
Criteria for evaluation of Non-Independent Directors
Knowledge of industry issues and exhibition of diligence in leading the organization
Level of attendance at the Board and Committee meetings where he/she is a member
Effectiveness in working with the Board of Directors to achieve the desiredresults
Providing direction and support to the Board regarding its fiduciary obligationsand governance role
Providing well-balanced information and clear recommendations to the Board as itestablishes new policies.
The independent directors met on 14th February 2019 without the presence of otherdirectors or members of Management. All the independent directors were present at themeeting. In the meeting the independent directors reviewed performance of non independentdirectors the Board as a whole and Chairman. They assessed the quality quantity andtimeliness of flow of information between the Company management and the Board.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company being a non-banking nance Company registered with the Reserve Bank ofIndia and engaged in the business of giving loans advancing of monies and other kind ofnancings such as E-rickshaw financing etc. is exempt from complying with the provisions ofsection 186 of the Companies Act 2013. Accordingly the disclosures of the loans given asrequired under the aforesaid section have not been given in this Report.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of Director's Report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
The information pursuant to Section 134(3)(m) of the Act read with Companies(Accounts) Rules 2014 is as follows:
a. The Company has no activity involving conservation of energy or technologyabsorption.
b. The Company does not have any Foreign Exchange Earnings. c
The Company does not have any Foreign Exchange outgo Details related to this is givenas Annexure I to this report.
DETAILS OF MANAGERIAL REMUNERATION
The disclosure with respect to remuneration as required under section 197 of the Actread with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is attached and forms part of 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 thisDirector's Report.
PARTICULARS OF EMPLOYEES:
In accordance with section 136 of the Act the report and accounts are being sent tothe members and others entitled thereto. During the year under review there were noemployees drawing remuneration of Rs. 10200000/- p.a. or Rs. 850000/- p.m. or more.Hence there is no information to be provided in accordance with the provisions of Section134 of the Companies Act 2013 read with the Companies (Particulars of employees) Rules1975.
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 your company understand its accountabilitiestowards the society or the environment and as a result it took parts in various CSRactivities & initiatives.
No Foreign currency expenditure was incurred during FY 2018-19. The Company did nothave any foreign exchange earnings.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has documented its internal financial controls considering the essentialcomponents of various critical processes physical and operational which include itsdesign implementation and maintenance along with periodical internal review ofoperational effectiveness and sustenance. This ensures orderly and efcient conduct of itsbusiness including adherence to Company's policies safeguarding of its assetsprevention of errors accuracy and completeness of the accounting records and the timelypreparation of reliable financial information. The internal financial controls withreference to the financial statements were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All the related party transactions were entered in ordinary course of business on anarm's length basis. Hence no disclosure in Form AOC-2 is necessary and the same does notform part of this report. For details of the transactions with related party entered inordinary course of business on an arm's length basis refer to the Note 25 to the financialstatements. The company has in place a policy on related party transactions as approved bythe board and the same is available on the website of the company (weblink:https://capitaltrade.in/policies/ on-Related-Party-Transactions.pdf).
There are no materially signicant related party transactions made by the Company withpromoters directors key managerial personnel or other designated persons which may havea potential conict with the interest of the Company at large. None of the Directors hasany pecuniary relationships or transactions vis-a-vis the Company save and except thepayment of sitting fees and commission paid to independent directors.
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. The Code of Conductto regulate monitor and report Insider trading is uploaded on the Company's website:www.capitaltrade.in
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has established a 'Whistle Blower Policy and Vigil Mechanism' for Directorsand employees to report to the appropriate authorities concerns about unethical behaviouractual or suspected fraud or violation of the Company's code of conduct policy andprovides safeguards against victimization of employees who avail the mechanism and alsoprovide for direct access to the Chairman of the Audit Committee. The Whistle BlowerPolicy/Vigil Mechanism is uploaded on the Company's website: www.capitaltrade.in
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 signicant and material orders passed by the Regulators or Courts orTribunals 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 identied by the businesses and functions are systematically addressed throughmitigating actions on a continual basis.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
In order to prevent Sexual Harassment of Women at Workplace a new Act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notied on 9th December 2013. Under the said Act every Company is required to set upan Internal Complaints Committee to look into complaints relating to sexual harassment atwork place of any women employee.
The company has in place a policy for prevention of sexual harassment in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013 (POSH Act). The company has complied with the provisions relatingto constitution of internal complaints committee (ICC) under the POSH Act. The SexualHarassment Policy is uploaded on the Company's website: www.capitaltrade.in
PRESENTATION OF FINANCIAL STATEMENTS
The financial statements of the Company for the year ended 31stMarch 2019 have beendisclosed as per Schedule III to the Companies Act 2013.
The Company does not have any subsidiary Company.
The Company has electronic connectivity with both depositories namely CentralDepository Services (India) Limited and National Securities Depository Limited. As onMarch 31 2019 98.11% of the Company's paid-up share capital representing 50016377 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.
M/s A.C. Gupta & Associates Chartered Accountants was appointed by the Company asthe Auditors in the Annual General Meeting held on 30th September 2014 for a period offive years in terms of the provisions of Section 139(2) of the Companies Act 2013 readwith Rules made thereunder. Accordingly the Auditors hold ofce until the conclusion ofthe ensuing Annual General Meeting.
The Board of Directors has proposed the re-appointment of M/s A.C. Gupta &Associates Chartered Accountants as the Statutory Auditor of the Company subject to theapproval of Shareholders for a period of five years to hold ofce from the conclusion ofensuing AGM untill the conclusion of AGM to be held in year 2024.
The Statutory Auditors have submitted a certicate conrming their eligibility underSection 139 of the Act and meet the criteria for appointment specied in Section 141 of theAct. Further the Company has also received a copy of Peer Review Certicate as prescribedby the Institute of Chartered Accountant of India to the Auditors and declaration from theAuditors that they are not disqualied for such appointment/ reappointment under the saidAct.
The Notes on accounts and observations of the Auditors in their Report on the Accountsof the Company are self-explanatory. There are no observations (including any qualicationreser vation adverse remark or disclaimer) of the Auditors in their Audit Reports thatmay call for any explanation from the Directors.
DISCLOSURE ABOUT COST AUDIT
Maintenance of cost records and requirements of cost audit as prescribed under theprovisions of section 148(1) of the Act is not applicable for the business activitiescarried out by the company.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Atiuttam Singh & Associates Company Secretaries to undertake theSecretarial Audit of the Company for the FY 2018-19. The Secretarial Audit Report isattached and forms part of this report. There were followings observations as mentionedbelow of the Secretarial Auditors in their Audit Report that may call for any explanationfrom the Directors.
1. The Company has not taken prior written permission of the Reserve Bank of India forchange in the management of the Company which results in change in more than 30 per centof the directors excluding independent directors.
Explanation: The Company has given intimation to the Reserve Bank of India afterchange in Management of the Company due to change in more than 30 per cent of thedirectors but prior written permission was not sought for the same.
2. The company has not led E- Form DIR-12 with the Registrar for consent to act as adirector.
Explanation: Due to inadvertently the company has not lled the form. Now thecompany is under process of lling E- Form DIR-12 along with the penalty to the registrar.Also the company has led E-Form MGT-14 to the ROC for the appointment of Director.
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 FY 2018-19 is attached to theBalance Sheet.
No equity shares were issued with differential rights as to dividend voting orotherwise.
No equity shares (including sweat equity shares) were issued to employees ofyour company under any scheme.
The company has not resorted to any buy back of its equity shares during theyear under review.
There was no fraud reported by the Auditors of the Company under the Section143(12) of Act to the Audit Committee.
The Company has complied with Secretarial Standards issued by the Institute ofCompany Secretaries of India on Board Meetings Annual General Meetings and Dividend.
Disclosure regarding details relating to deposits covered under Chapter V of theAct is not applicable since our company is a Non-Banking Financial Company regulated byReserve Bank of India.
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 of the board |
| ||For CAPITAL TRADE LINKS LIMITED |
| ||Sd/- |
|Place: Delhi ||Vinay Kumar Chawla |
|Dated: 30.07.2019 ||Whole Time Director |