Capital Trade Links Limited.
Your Directors delightfully present the 35th Annual Report on the businessand operation of the Company together with the Audited Financial Accounts for the yearended 31st March 2020.
(Rs. in Lacs)
|Sl. Particulars No. ||F.Y. ended 31.03.2020 ||F.Y. ended 31.03.2019 |
|I Total Revenue from operations ||479.02 ||474.15 |
|II Other Income ||3.66 ||1.24 |
|III Total Revenue ||482.68 ||475.38 |
|IV Operational Expenses ||336.08 ||257.08 |
|V Depreciation and amortization expense ||2.90 ||2.90 |
|VI Total Expenses ||338.98 ||259.98 |
|VII Profit before tax (III-VI) ||143.70 ||215.40 |
|VIII Tax & Adjustment ||49.09 ||52.46 |
|IX Profit After Tax (VII-VIII) ||94.61 ||162.94 |
For the year ended March 2020 your Company had earned a total income of Rs. 482.68lakhs as compared to Rs. 475.38 lakhs in the previous year. However the Net Profit of theCompany has decreased to Rs. 94.61 lakhs against the Net Profit of previous year for Rs.162.94 lakhs.
DIVIDEND ON EQUITY SHARES
The Board of Directors of your Company has not recommended Dividend for the year20019-20 to the shareholders due to conservation of profits and continued investment inthe business.
As per section 45 IC of Reserve Bank of India Act 1934 the Company has transferredRs. 18.92 Lakhs in reserve fund i.e aggregating of 20% of its net profit.
The COVID-19 pandemic has caused a huge disruption creating an unprecedented impact onthe financial well-being of nations corporations and individuals. A detailed discussionon impact of COVID-19 on the NBFC sector and operations of the Company is covered in the'Management Discussion and Analysis.'
MORATORIUM OF LOANS
The Reserve Bank of India issued guidelines on 27th March 2020 permittingall commercial banks co-operative banks All India Financial Institutions and NBFCs togive moratorium to customers in respect of installments falling due between 01stMarch 2020 to 31st August 2020. Accordingly the Company started offeringmoratorium to its customers basis a Board approved policy.
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 anon-deposit accepting NonBanking Financial Company registered with Reserve Bank of Indiaand obtained certificate of registration no. B-14.02516 dated 19.11.2001.
The Company is principally engaged in the business of advancing loans and financing.The Company offers credit facilities to individuals and business clients in low &medium range. The Company offers various products and services which includes personalloan and secured loan.
The Directors are quite hopeful to achieve new milestones of achievement in the yearsto come.
MISSION AND VALUE:
Capital Trade Links Limited aims to be the financial institution for the unbankedpopulation in the near future. With the focus on client satisfaction we plan to encourageself-sufficiency and 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.
The Company has proper procedures for the identification of borrower due diligenceverification & assessment of borrowers' income to ensure timely repayment.
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.
CTL has entered into very small size and very short period loan through FintechCompanies. In this year your company has engaged with Fintech Companies and using theirplatform for disbursing
such very small loan. Fintech Companies is providing the Marketing services andcreating visibility of Short Term personal loan product in order to attract qualifyingcustomers desirous of obtaining loans.
PRODUCTS & SERVICES:
The Company is into providing following products and services to potential clients
During Financial Year 2019-20 there was change in the capital structure of theCompany. As on 31st March 2019 the paid up share capital of the Company wasRs. 509.8 lakhs comprising of 509.8 lakhs equity shares of Re. 1/- each. Further Companyhas issued 10000000 equity warrants convertible in equity shares on August 30th2019 and further resolution passed by board members for the allotment of 10000000equity warrants at the meeting held on 23rd October 2019(on the receipt of 25%consideration from all the warrant holders) out of which 2920000 equity warrants hasbeen converted and allotted in equity shares on 15th November 2019 on receiptof balance 75% consideration. Further 7080000 equity warrants are still outstanding forconversion in Equity Shares. So Share capital of company as on 31st March 2020is 539 lakhs. The Company has not issued shares with differential voting rights norgranted 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. MDA report also contains the detailsof the risk management framework of the company
including the development and implementation of risk management policy and the keyrisks 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 fulfill 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). Thecompany does not hold or accept deposits as on the date of balance sheet.
Investment and Credit Company (NBFC-ICC)
During the year RBI vide notification dated 22 February 2019 harmonized 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 significantlymore stringent than the RBI norms. It fulfills 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
During the year Five 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 6th May 2019 28thMay 2019 30th July 2019 23rd October 201923rdJanuary 2020.
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
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
Appointment of Ms. Vanisha Arora as an Additional Director
Ms. Vanisha Arora (DIN: 08641753) was appointed as an Additional Director of thecompany w.e.f 19.12.2019 and she will hold office till AGM.
Resignation of Ms. lagrati Sethi from the post of Director
Ms. Jagrati Sethi (DIN: 07670252) has been resigned from the post of Director w.e.f20.09.2019.
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 whole time key managerial personnel of thecompany during FY 19-20:
1. Mr. Santosh Gupta Chief Financial Officer (from 30/05/2018 upto 01/04/2020)
2. Mr. Gaurav Joshi Company Secretary (from 01.05. 2018 upto 01.05.2019)
3. Ms. Vanshita Sharma( from 28.05.2019 upto 25.01.2020)
4. Mr. Arya Jadon (Appointed w.e.f. 20/04/2020 )
5. Mr. Rajan Anand (Appointed w.e.f 27.06.2020)
DECLARATION FROM INDEPENDENT DIRECTORS
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 NonExecutive Directors are Independent in terms ofSection 149(6) of the Companies Act 2013 and the requirements of Listing Regulations :-
Mr. Amar Nath Mr. Neeraj Kumar Bajaj Mr. Abhay Kumar Ms. Vanisha Arora
All the independent directors (IDs) have submitted their declaration independence asrequired pursuant to section 149(7) of the Act confirming that they meet the criteria ofindependence as provided in section 149(6) of the Act. In the opinion of the board theIDs fulfill the conditions specified in the Act and the rules made there under forappointment as IDs and confirm 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 judgments 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.
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 2019-20. 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'scontribution to the growth of the Company
Composition of the Board and its Committees is appropriate with the right mix ofknowledge and skill sufficient to maximize performance in the light of future strategy
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 policyEffective 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 theorganization
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
Providing well-balanced information and clear recommendations to the Board as itestablishes new policies.
The independent directors met on 20th January 2020 without the presence ofother directors or members of Management. All the independent directors were present atthe meeting. In the meeting the independent directors reviewed performance ofnon-independent directors the Board as a whole and Chairman. They assessed the qualityquantity and timeliness of flow of information between the Company management and theBoard.
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.
MATERIAL CHANGES AND COMMITMENTS
Your company have write off of certain loans of Rs.112.44 Lakh & also madeprovisions of Rs. 48.55 Lakh to represent true and fair view of the financial results forthe period under review. The Covid-19 pandemic has resulted in a significant decrease theeconomic activities across the country on account of lockdown that started on 24thMarch 2020. The lockdown also affected the Company's business operations in the last weekof March 2020. Further accordance with the RBI guidelines relating to 'Covid-19Regulatory Package' dated 27 March 2020 the Company offered EMI moratorium to itscustomers based on requests.
Estimates and associated assumptions applied in preparing these financial resultsespecially for determining the impairment allowance for the Company's financial assets(Loans) are based on historical experience and other emerging/forward looking factors onaccount of the pandemic. The Company believes that the factors considered are reasonableunder the current circumstances. The
Company has used early indicators of moratorium and delayed payment metrics observedalong with an estimation of potential stress on probability of default and exposure atdefault due to Covid-19 situation in developing the estimates and assumptions to assessthe impairment loss allowance on Loans.
Given the dynamic nature of the pandemic situation these estimates are subjectuncertainty and may be affected by the severity and duration of the pandemic. In the eventthe impacts are more severe or prolonged than anticipated this will have a correspondingimpact on the carrying value of financial assets the financial position and performanceof the Company.
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 given as 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 AnnexureII to this Director'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 understands its accountabilitiestowards the society or the environment and as a result it took parts in various suchactivities & initiatives.
No Foreign currency expenditure was incurred during FY 2019-20. 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 efficient conduct ofits business 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 with reference to the financial statements wereadequate 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 29 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 significant related party transactions made by the Company withpromoters directors key managerial personnel or other designated persons which may havea potential conflict 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 behavioractual or suspected fraud or violation of the Company's code of conduct policy andprovides safeguards
against victimization of employees who avail the mechanism and also provide for directaccess to the Chairman of the Audit Committee. The Whistle Blower Policy/Vigil Mechanismis 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 significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and company's operations in future.
Risk Management committee is responsible for reviewing the risk management plan andensuring its effectiveness. The Audit Committee has additional oversight in the area offinancial risks and controls. The major risks identified by the businesses and functionsare systematically addressed through mitigating 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 2013has been notified on 9th December 2013. Under the said Act every Company is required toset up an Internal Complaints Committee to look into complaints relating to sexualharassment at work 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 Redressed) 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 2020have been disclosed 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 2020 92.79% of the Company's paid-up share capital representing 5001637equity 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 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.
Thereafter M/s A.C. Gupta & Associates Chartered Accountants Re-appointed as theStatutory Auditor of the Company in the Annual General Meeting held on 30thAugust 2019 for a period of five years to hold office until the conclusion of AGM to beheld in year 2024.
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 anyqualification reservation adverse remark or disclaimer) of the Auditors in their AuditReports that may 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 2019-20. 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.
The company has failed to allot securities within a period of fifteen days from thedate of passing of special resolution under Regulation 170 of SEBI (ICDR) Regulation2018.
Explanation: The company has failed to allot securities within a period of fifteendays from the date of passing of special resolution because the payment towards thesubscriptions from few parties/investors was not credited in our bank account.
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 FY 2019-20 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 of yourcompany under any scheme.
The company has not resorted to any buy back of its equity shares during the year underreview.
There was no fraud reported by the Auditors of the Company under the Section 143(12) ofAct to the Audit Committee.
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings Annual General Meetings and Dividend.
Disclosure regarding details relating to deposits covered under Chapter V of the Act isnot applicable since our company is a Non-Banking Financial Company regulated by ReserveBank 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/- ||Sd/- |
|Place: Uttar Pradesh ||Vinay Kumar Chawla ||Krishan Kumar |
|Dated: 29/07/2020 ||Whole Time Director ||Director |