Your Directors take pleasure in presenting the Thirty fifth AnnualReport on the business and operations of your company along with the standalone andconsolidated audited financial statements for the year ended March 31 2021.
1. FINANCIAL RESULTS
The Company's financial performance for year ended 31st March2021 is summarized below:
|Particulars ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Total Income from operations ||11286.66 ||14758.00 ||11458.82 ||15509.10 |
|Interest expenses ||3821.40 ||6071.08 ||3311.91 ||5880.75 |
|Depreciation ||57.63 ||89.46 ||57.63 ||89.46 |
|Profit Before Tax ||(3029.88) ||850.37 ||(2937.73) ||1363.07 |
|Profit/(Loss) after tax ||(2377.25) ||53.28 ||(2362.42) ||427.39 |
|Available for appropriation ||(2377.25) ||53.28 ||(2362.42) ||427.39 |
|Transfer to Reserve fund u/s 45IC of - RBI Act 1934 ||10.66 ||- ||57.93 || |
|Additional provisions as management per discretion ||2657.70 ||266.27 ||2657.70 ||266.27 |
2. FINANCIAL PERFORMANCE
The year 2020-21 has been a challenging year due to pandemic all overthe world. The collection and disbursements were badly hit across the industry. Howeveryou company has been having a positive ALM so there has not been any issue with therepayments. In fact the company has prepaid the high cost debts during the year. Thecompany has now been started Capital Digital Loans where the repayment is taken from thecustomers digitally. The performance of the capital digital loans have been remarkable.
The income of the company has decreased from Rs. 15509.10 Lakhs to Rs.11458.82 Lakhs mainly due to drop in portfolio. The company as a cautious step stoppeddisbursements during the months of April to June 2020. The interest expenses have comedown to Rs. 3311.91 Lakhs from Rs. 5880.75 Lakhs during the year mainly due to prepaymentsof high cost debts. Your company has reported a loss of Rs 2362.42 Lakhs due to higherprovisioning done as management discretion as compared to the profit of Rs. 427.39 Lakhsin year 2020. The company has estimated additional expected credit loss allowanceamounting to Rs. 2657.70 lakhs (previous year ended Rs. 266.27 lakhs) over and abovenormal provision based on information available to reflect among other things thedeterioration in the macro-economic factors..
Your company has never failed in paying any instalments or interest tothe lenders. The company enjoys good reputation with all its stakeholder. The creditrating of the company is BBB - with stable outlook by Care Ratings as on 31st March 2021.The Company has also taken issued debentures of Rs. 3000 Lakhs which are also rated asBBB- by Care Ratings.
3. FUND RAISING
The company has raised Rs. 3000 Lakhs from State Bank of India throughSecured listed Non Convertible debentures. HDFC bank has also given term loan and OD limitto the company. The company has also entered into DA and PTC transactions during the year.In total the company has raised Rs. 14070 Lakhs during the year in the form of Term loansPTCs NCDs and Direct Assignments from Banks and NBFCs.
4. SHARE CAPITAL
During the year under review there has not been any change in theShare capital of the company. The paid up capital of the company remains at 163614150divided to 16361415 equity shares of Rs. 10/- each.
As there has been loss during the the year your directors have notrecommended any dividend during the year.
Your Company has formulated Dividend Distribution Policy in accordancewith Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI LODR Regulations') for bringingtransparency in the matter of declaration of dividend and to protect the interest ofinvestors. The Dividend Distribution Policy forms part of this Report.
6. RESERVE FUNDS
As there has been loss in the company the company has not transferredany amount to reserve fund as per section 45 IC of RBI Act 1934.
7. CREDIT RATING
The Credit Rating of the Company was BBB - stable outlook from CareRatings on 31st March 2021.
8. CONSOLIDATED FINANCIAL STATEMENT
In accordance with Section 129(3) of the Companies Act 2013 andAccounting Standards (AS) - 21 on Consolidated Financial Statements the auditedconsolidated financial statement have been prepared which forms part of the AnnualReport.
9. PARTICULARS OF SUBSIDIARY COMPANIES
The Company has two Wholly Owned Subsidiaries in the name of CapitalTrust Microfinance Private Limited and Capital Trust Housing Finance Private Limited. TheAudited Annual Financial Statements of Subsidiary Companies are tabled before the AuditCommittee and Board of Directors of the company. Copies of the Minutes of the BoardMeetings of Subsidiary Companies are tabled at the subsequent Board Meetings held. Yourdirectors are planning to merge these companies in Capital Trust Limited.
10. COMPLIANCE WITH RBI GUIDELINES:
Your Company is compliant with all the applicable RBI regulatory norms.Since the company has become systematically important Non deposit taking NBFC the companyis complying with all the provisions of the master directions in this regard. Thecompany's subsidiary company Capital Trust Microfinance Pvt. Limited has also becomethe systematically important Non deposit taking NBFC as a group company of Capital TrustLimited.
11. CAPITAL ADEQUACY
The Capital Adequacy Ratio of the company on consolidated basis was46.60% as of March 31 2021. The company is having adequate capital to sustain the futuregrowth.
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITIONOF THE COMPANY
There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate and the date of the report.However Covid-19 has impacted the business as the disbursements had stopped for the timebeing upto the month of June 2020. The company has disbursed Rs. 12915 Lakhs since July2020 under new Capital Digital Initiative loans.
13. COVID 19 RESPONSE STRATEGY CAPITAL TRUST LIMITED
Covid- 19 has impacted all the economy and the business all around theglobe. Your company is working mainly in semi urban and Rural areas has been impacted bythe pandemic.
COVID 19 IMPACT ON BUSINESS
The client base is from the semi-urban / rural segment and areoccupationally mainly in the self-employed services segment. The company had done theImpact analysis based on current data which is as follows:
A. Low Geographic Correlation: Geographically our operations are not inthe urban areas where the incidence of cases was high in the first wave. Our branches arein the rural areas of these districts and majority of cases discovered are from urbancenters. The second wave has reached to the Rural India which have impacted the company.
B. Borrowers dependent on local economy & providing essentialservices: Most of the customers are self-employed and linked to the local economy. Manyare providing essential services (like dairy grocery shops etc). These segments cameunder essential services and they were allowed to operate.
C. Cash collections stopped: In line with Government of Indiaguidelines initially all cash collections had stopped. The employees were not able toreach to the client. Only digital collections were continuing. However with the opening ofeconomy the collection percentage has increased.
D. Moratorium of 6 months given by RBI: Given the exceptionalcircumstances the RBI has allowed lenders to give moratorium of 6 months on loanrepayments. The company has also given the option of moratorium to its customers.
E. Pushing for Digital Collection: Since August 2019 your company hadstopped disbursing loans with cash collection model and new loans originated were focusingonly on digital collection. This was our Capital Digital initiative which is at the coreof our organizations future strategy. The company has originated Rs. 17124 Lakhs ofportfolio under this model with high degree of success. However there is still a largepart of our portfolio which was originated before the new model where collection is cashbased. During this period we focused on training and educating clients on the digital modeof repayment. The company have already started this exercise and have started training ourstaff for conversion to digital payment.
F. Staff Training & Calling: the company had been supporting itsstaff during this difficult time as they are a critical part of the company and thesociety. Logistics and financial support is being provided wherever required.
G. Constant Monitoring & Analysis: the company had constantlymonitoring the portfolio and increasing the contact with the client telephonically. Thecompany had prepared the action plans for post-lockdown and post-moratorium periods. TheHODs do atleast 4 meeting through video conferencing to be on top of the crisis.
H. Constant Touch with customer: During the lockdown period all CapitalTrust staff had to make phone call to the clients. The company had reached a calling about50000 clients per day. The calls are regarding training the clients for option of payingthe instalments through digital payments updation of contact numbers Arrear calls etc.
I. Business Continuity: As per our BCP the company has access to allinformation through cloud based servers and work from remote location is on . Eachemployee of the company is involved in work and are in touch with their departmental headsthrough daily conference calls.
J. Disbursement after Covid 1st wave: After the fist way of Covid - 19since July- 20 the company has disbursed Rs. 12915 Lakhs. The collection efficiency ofthese loans have been 99.70%.
COVID-19 REGULATORY PACKAGES AND RESOLUTION FRAMEWORK
FOR COVID-19-RELATED STRESS
The Reserve Bank of India (RBI) issued COVID-19 RegulatoryPackages' dated March 27 2020 April 17 2020 and May 23 2020 to mitigate theimpact of COVID-19 pandemic on the financial services sector. Under stipulated guidelinesthe Company implemented a Policy on Deferment of PEMI/ EMI (COVID-19)' andoffered moratorium on the payment of instalments and/or interest as applicable fallingdue between March 01 2020 and August 31 2020 to all eligible borrowers of the Company.The RBI issued Resolution Framework for COVID-19 related Stress' dated August06 2020 for granting relief to borrowers impacted by COVID-19 by providing the facilityof rescheduling of loans and/or for conversion of outstanding interest into a separatecredit facility. The Company framed and implemented a Policy on Resolution Frameworkfor loans of borrowers affected by COVID-19'
ORDER OF SUPREME COURT OF INDIA ON DECLARING ACCOUNTS ASNON-PERFORMING ASSET (NPA)
The matter of declaring defaulting accounts as NPAs (not declared asNPAs till August 31 2020 as per RBI guidelines) was kept on hold by the Hon'bleSupreme Court of India vide orders dated September 03 2020 and September 28 2020.Accordingly the Company did not classify any account covered under the said orders asNPA. Thereafter the Hon'ble Supreme Court of India in Small Scale IndustrialManufactures Association (Regd.) vs Union of India and others vide a judgement dated March23 2021 ("Judgement") directed that the interim order granted on September 032020 stands vacated. In this regard RBI vide its circular dated April 07 2021 issuedinstructions in accordance to which your Company resumed recognizing overdue accounts asNPA as per regulatory guidelines.
SCHEME FOR GRANT OF EX-GRATIA PAYMENT
To provide relief to the borrowers in difficulty due to COVID-19 theCentral Government on October 23 2020 approved to provide ex-gratia payment ofdifference between compound interest and simple interest by way of relief for the periodfrom March 01 2020 to August 31 2020 to borrowers in specified loan categories. Inaccordance with the above the Company implemented the Policy on Scheme for Grant ofEx-gratia Payment' to extend the benefit to eligible borrowers of the Company.Further in conformity with the judgement the RBI vide its circular dated April 07 2021advised all lending institutions to refund/adjust the interest on interest'charged to all the borrowers during the moratorium period i.e. March 1 2020 to August31 2020. In accordance with the above the Company implemented the Policy onrefund/adjust the Interest on interest' to extend the benefit to all the borrowers ofthe Company.
14. CHANGES IN NATURE OF BUSINESS
There has not been any change in the nature of Business and the companycontinues to do the business as a Non- Banking Finance Company.
15. CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135(1) of the Companies Act 2013 thecompany has a Corporate Social Responsibility Committee comprising of the below members:
|Name ||Designation ||Category |
|Mr. Pawan Dubey ||Chairman ||Independent Director |
|Mr. Sanjiv Syal ||Member ||Independent Director |
|Mr. Yogen Khosla ||Member ||Managing Director |
|Mrs. Anju Khosla ||Member ||Executive Director |
Your company is working with the people who are left by the Banks andlarge NBFCs as for them they are very small. The company provides financial assistance tothese people to earn their livelihood and live their life with financial freedom. Yourcompany is targeting missing middle. The company is also providing training to these poorpeople free of cost and providing them employment in the company. During the year CapitalTrust has implemented wide range of activities by providing training to people at Ruraland semi urban areas in various fields in finance and credit sector free of cost forfinancial literacy and further facilitating employment opportunities to deservingcandidates.
The calculation of the CSR for the year 2020-21 is given hereunder:
Amount (in Rs.)
|Year ||2019-20 ||2018-19 ||2017-18 |
|Net Profit as per ||75938601 ||118660650 ||119977848 |
|Section 198 Average net profit || ||104859033 || |
|Minimum amount of CSR (@2% of profits) || ||2097181 || |
The company has entered into Agreement for Skill Development ofConstruction Workers under CSR Initiative as ongoing project. Under this project 400construction workers were to get trained under still development. Upto March 31 2021 100workers have been trained and balance 300 were under training. The company has paid Rs.5.50 Lakhs upto 31st March and balance Rs. 15.60 Lakhs were spent in the month of April2021. the training of all the 400 construction workers were completed during the month ofApril.
16. RISK MANAGEMENT FRAMEWORK
The Company has a Risk Management Committee which has been entrustedwith the responsibility to assist the Board in overseeing the Company's enterprisewide risk management framework and overseeing that all the risk that we are facing likestrategic financial credit market market liquidity interest rate risk equity pricesecurity IT Legal Regulatory reputational and other risks have been identified andassessed and there is adequate risk management infrastructure in place capable ofaddressing those risks. The Committee also has in place a mechanism to identify assessmonitor and mitigate various risks to key business objectives. Major risks identified bythe businesses and functions are systematically addressed through mitigating actions on acontinuing basis. The various measures to overcome principal risks and uncertainties arethoroughly studied and placed before the board and Audit Committee. The Company'smanagement systems organizational structures processes standards code of conduct andbehavior together manage associated risks.
The Company has introduced several improvements to IntegratedEnterprise Risk Management Internal Controls Management and Assurance Frameworks andprocesses to drive a common integrated view of risks optimal risk mitigation responsesand efficient management of internal control and assurance activities.
The main objects of the Risk Management Policy adopted by the companyare to ensure that all the current and future material risk exposures of the company areidentified assessed quantified appropriately mitigated minimized and managed i.e toensure adequate systems for risk management and assure business growth with financialstability.
17. CORPORATE GOVERNANCE
The Company is in compliance with the Corporate Governance requirementof Companies Act 2013 also those set out by SEBI. The Company has also adhered to theGuidelines on Corporate Governance adopted in accordance with Chapter XI - CorporateGovernance of RBI Master Directions. The Company has also implemented several bestcorporate governance practices as prevalent globally. The report on Corporate Governanceas stipulated under Listing Regulations forms an integral part of this Report. The companyhas also adopted various Social and Environmental policies and the same is placed on thewebsite of the company www.capitaltrust.in.
A certificate from statutory auditors M/s Singhi & Co. CharteredAccountants confirming compliance with the condition of Corporate Governance asstipulated under the listing Regulation also form part of the Annual Report.
18. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Companyduring the financial year with related parties were in the ordinary course of business andon an arm's length basis. During the year the Company had not entered into any contract /arrangement / transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactions.
All Related Party Transactions are placed before the Audit Committeeand also the Board for approval. During the Financial Year under review your Company hadnot entered into any arrangements which constitutes Related Party Transactions coveredwithin the purview of Section 188(1) of the Act. Accordingly requirement of disclosure ofRelated Party Transactions in terms of Section 134(3)(h) of the Act is provided in FormAOC-2 is not applicable to the Company.
Further as required by RBI Master Directions Policy ontransactions with Related Parties' can be accessed on the website of the Company atwww.capitaltrust.in
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The provisions of Section 186(4) of the Companies Act 2013 requiringdisclosure in the financial statements of the full particulars of the loans giveninvestment made or guarantee given or security provided and the purpose for which the loanor guarantee or security is proposed to be utilised by the recipient of the loan orguarantee or security is not applicable to us.
20. PUBLIC DEPOSITS
Being a Non Deposit taking Non-Banking Financial Company your Companyhas not accepted any deposits from the public under section 73 of the Companies Act 2013and the Companies (Acceptance of Deposits) Rules 2014 during the year under review.
21. ANNUAL RETURN
The Annual Return in Form MGT-7 as per provisions of Section 92(3) and134(3) (a) of Companies Act 2013 and rules thereto is available on website of thecompany at www.capitaltrust.in.
22. NUMBER OF MEETINGS OF THE BOARD
The Board met 5 (five) times during the financial year 2020-21 viz. onJune 20 2020 August 12 2020 September 14 2020 November 09 2020 and February 082021.
The maximum interval between any two meetings did not exceed 120days.The details of these meetings are given in Corporate Governance Report which formspart of Directors' Report.
23. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 Your Directorsstate that:
i. in the preparation of the annual accounts for the year ended March31 2021 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;
ii. the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2021and of the profit of the Company for the year ended on that date;
iii. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. the Directors have prepared the annual accounts on a 'goingconcern' basis;
v. the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and
vi. the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
24. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCETO THE FINANCIAL STATEMENTS
The Company has adequate internal controls and processes in place withrespect to its operations which provide reasonable assurance regarding the reliability ofthe preparation of financial statements and financial reporting as also functioning ofother operations. These controls and processes are driven through various policies andprocedures. During the year such controls were tested and no reportable material weaknessin the design or operations were observed.
25. DIRECTORS & KEY MANAGERIAL PERSONNEL
A) RETIRE BY ROTATION
On 29th June 2021 Mrs. Anju Khosla (DIN-03496484) has resigned fromthe directorship of the company. So there is no director who is liable to retire byrotation. On 29th June 2021 Mr. Vahin Khosla was appointed as Executive Director of theCompany with effect from 1st July 2021. His appointment shall be upto the date of ensuingAnnual General Meeting unless his appointment is approved by members. In case Mr. VahinKhosla is appointed as executive director by the shareholders then he shall be liable toretire by rotation every year.
b) APPOINTMENT/ RESIGNATION
During the year Mr. Abhinav Sharma Independent Director and Col.Vijay Kumar (Retd) Independent Director resigned from the board due to personal reasons.Their resignation was accepted by Board from February 01 2021 and February 08 2021respectively.
The company has appointed Mr. Pawan Dubey and Mr. Govind Saboo asIndependent Directors of the company with effect from February 08 2021.
Brief profile of the new directors is given hereunder:
Mr. Pawan Dubey
Mr. Pawan Dubey is a practising Advocate and Fellow Company Secretaryhaving 13 years of experience. He has practiced before the Hon'ble Supreme court ofIndia Hon'ble Delhi High Court National Company Law Tribunal (NCLT) NationalCompany Law Appellate Tribunal (NCLAT) District Consumer Forums State CommissionNational Commission and various other District Courts of Delhi. He is a member of SSBworking support group of ICSI.He was member of Corporate Law Committee Study SessionCommittee and Training & Educational Facilities & Library Committee of NIRC ofICSI.
Mr. Govind Saboo
Mr. Govind Saboo is rank holder Chartered accountant with more than 16years of experience in Finance Investment Capital Budgeting and Compliance. Presently heis a Practising Chartered Accountant under firm M/s Govind Saboo & Co. He has beenassociated with many NBFCs in Advising them in their initial growth phase on capitalallocation governance corporate finance & investor communication. He was alsofounding team member of IndiaNivesh Growth & Special Situation Fund a Venture capitalfund investing at early growth stage of the company.
26. BOARD'S INDEPENDENCE
Based on the confirmation/disclosures received from the Directors andon evaluation of the relationships disclosed the following Non-Executive Directors areIndependent in terms of Section 149(6) of the Companies Act 2013 and the requirements ofListing Regulations :-
1. Mr. Nikhel Kochhar (DIN 01021382)
2. Mr. Sanjiv Syal (DIN 00271256)
3. Ms. Suman Kukrety (DIN 08730773)
4. Mr. Pawan Dubey (DIN 01767875)
5. Mr. Govind Saboo (DIN 06724172)
Declaration by Independent Directors:
Independent Directors have submitted the declaration of Independenceas required pursuant to Section 149(7) of the Act stating that they meet the criteria ofIndependence as provided in section 149(6) of the Companies Act 2013 and are notdisqualified from continuing as Independent Directors.
27. POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND REMUNERATIONPOLICY
The appointment of the directors of the company is as per the Policyframed for the Selection and Appointment of Directors. The policy is in compliance withthe provisions of the Companies Act 2013 and SEBI Listing (Obligations and DisclosureRequirements) Regulations. The directors are appointed on the recommendation of theNomination and Remuneration Committee. The Policy is available on the website of theCompany at www.capitaltrust.in
28. NOMINATION AND REMUNERATION POLICY
The Company pursuant to the provisions of Section 178 of the CompaniesAct 2013 has formulated and adopted a nomination and remuneration policy which isdisclosed on our website.
29. ANNUAL EVALUATION OF BOARD MEMBERS
The Company has devised a Policy for performance evaluation ofIndependent Directors Board Committees and other individual Directors which includecriteria for performance evaluation of the non-executive directors and executivedirectors.
Pursuant to the provisions of the Companies Act 2013 and the corporategovernance requirements as prescribed by Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") the Board is required to carry out an annual performance evaluation ofits own performance the directors individually as well as the evaluation of the AuditCommittee Nomination and Remuneration Committee.
The executive Directors are evaluated on the basis of
Organizational goals Persistence Continuous Decency improvementHumility Integrity Setting a vision for Managing company's work execution
External Enhancing potability Understanding of and Building strongcommunication and commitment to the organisation relationship building company
The Independent Directors are evaluated on the basis of:
Structure of the Board - Competency Experience and Qualifications ofdirectors Diversity in Board under various parameters Appointment Process
Meetings of the Board - Regularity of meetings and adequacydiscussions and recording of dissent if any.
Recording of minutes dissemination of information
Functions of the Board - Role and responsibilities of the Board
Strategy and performance evaluation
Management of Conflict of interest
Stakeholder value and responsibility
Corporate culture and values
Facilitation of independent directors
Evaluation of performance of the management and feedback
Independence of the management from the Board
Access of the management to the Board and Board access to themanagement
The company has also formulated familiarisation of IndependentDirectors. The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company www.capitaltrust.in.
A statement on formal evaluation of the Board is mentioned in theCorporate Governance Report which is provided separately in this Annual Report.
Information on Directors Appointment /Re-appointment
A brief resume of the Director proposed for theappointment/re-appointment at the ensuing Annual General Meeting the nature of his/herexperience in specific functional areas and name of Companies in which he holdDirectorship and Membership of committees of the Board are provided in the Notice of theAnnual General Meeting of the company.
30. COMMITTEES OF THE BOARD
In accordance with the Companies Act 2013 and Listing Regulations theCompany has following Committees in place:
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Nomination and Remuneration Committee
Risk Management Committee
Details of the said Committees along with their charters compositionand meetings held during the financial year are provided in the "Report on CorporateGovernance" as a part of this Annual Report.
31. EMPLOYEE STOCK OPTION SCHEME
Capital Employee Welfare Trust under Capital Trust Employee StockOption Scheme 2016 holds 143915 shares. The trust has not granted any shares to employeesyet. There has not been any further allotment of shares to the Trust.
32. VIGIL MECHANISM
The company has adopted Vigil Mechanism policy with a view to provide amechanism for directors and employees of the Company to report to the appropriateauthorities concerns about unethical behaviour actual or suspected fraud or violation ofthe Company's code of conduct policy and provides safeguards against victimization ofemployees who avail the mechanism and also provide for direct access to the Chairman ofthe Audit Committee. The provisions of this policy are in line with the provisions of theSection 177(9) and (10) of the Companies Act 2013 and Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015. The policy isavailable on the website of the company www.capitaltrust.in.
33. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013 READ WITH RULES
The Company is in compliance with the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and has a prevention of sexualharassment policy in place. The Directors further state that during the year under reviewthere was no case filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The policy on Sexual Harassment ofWomen at Workplace is available on the website of the company www.capitaltrust.in.
34. AUDITORS AND AUDITORS' REPORT
a) Statutory Auditors
The Statutory Auditors of the Company M/s Singhi & Co. CharteredAccountants (Firm Registration No. 302049E) were appointed as the statutory auditor ofthe from the conclusion of 31st Annual General Meeting held on 10th August 2017 to holdoffice till the conclusion of Thirty Sixth Annual General Meeting in the year 2021-22 onsuch remunerations as may be mutually agreed between the Board of Directors of the Companyand the Auditors.
b) Secretarial Audit
Section 204 of the Companies Act 2013 inter-alia requires every listedcompany to annex with its Board's report a Secretarial Audit Report given by aCompany Secretary in practice in the prescribed form.
The Board has appointed M/s Shashank Sharma and Associates firm ofPractising Company Secretaries to conduct Secretarial Audit for the financial year2020-21. The Secretarial Audit Report for the financial year ended March 31 2021 formspart of this Report. The Report does not contain any qualification reservation or adverseremark.
c) Internal Auditor
The Company had appointed SGR Accountants as Internal Auditor. TheInternal Auditor has submitted reports on quarterly basis which is placed before the auditcommittee of company.
35. EXPLANATIONS ON COMMENTS BY THE BOARD ON ANY QUALIFICATIONRESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE
(i) Statutory Auditor's report
There are no disqualifications reservations adverse remarks ordisclaimers in the auditor's report.
However there were some comments in the audit report. Explanation tothose comments are given hereunder:
|Auditors' comment ||Our reply |
|According to the information and explanations given to us and based on our examination of the records of the Company Company has paid managerial remuneration to the Managing Director and Executive Director of the Company aggregating Rs. 244.55 Lakhs for the financial year which exceeds the prescribed limits under Section 197 read with Schedule V to the Act by Rs. 113.10 Lakhs. As per the provisions of the Act the excess remuneration is subject to approval of the shareholders which the Company proposes to obtain in the forthcoming Annual General Meeting. ||The company has paid the remuneration to the Managing Director and Executive Director as per the limit approved by the members in the general meeting. |
| ||However during the current year due to Covid situations prevailing in the country and due to uncertainty the company has made an additional provisions in addition to ECL provisions in the month of March 2021. The extra provision have resulted in current year losses. The company is seeking the approval of the shareholders for ratification of remuneration paid/remuneration payable for the remaining period of existing appointment commencing to Managing Director and |
| ||Executive Director of the Company. |
|According to the records of the Company the ||The company has been regular in paying the statutory dues. There are certain employees where their Mobile Nos UAN no. And Adhar are not matched. For those employees the amount could not be deposited with the authorities. We have already written to statutory authorities for the same. |
|Company is generally regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax goods and service tax sales tax service tax duty of customs duty of excise value added tax cess and other material statutory dues where deducted/ accrued in the books with the appropriate authorities. There was no undisputed outstanding statutory dues as at the year end for a period of more than six months from the date they became payable except || |
|Provident Fund Rs. 4.08 Lakhs Employees' || |
|State insurance Rs. 0.70 Lakhs and || |
|Professional Tax Rs. 0.71 Lakhs. || |
(ii) Secretarial Auditor's Report
The Secretarial Audit Report does not contain any qualificationreservation or adverse remark made by Secretarial Auditor.
(iii) Internal Auditors' Report
The Internal Audit Reports does not contain any qualificationreservation or adverse remark made by Internal Auditor.
36. DETAILS OF FRAUDS REPORTED BY THE STATUTORY AUDITORS
During the year under review the Statutory Auditors have mentionedthat no fraud by the Company has been noticed or reported during the year. However theCompany has discovered instances of embezzlement of cash aggregating Rs. 22.81 Lakhs bysome employees against which Company has recovered Rs. 10.95 Lakhs and Rs. 11.95 Lakhs hasbeen written off in the statement of profit and loss.
37. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
There are no amounts due and outstanding to be credited to InvestorEducation and Protection Fund as at 31st March 2021.
38. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING IN COMPANY'SSECURITIES
Your Company has formulated Code of Conduct for Prevention of InsiderTrading in Company's Securities (Code') in accordance with SEBI(Prohibition of Insider Trading) Regulations 2015 as amended. The objective of this Codeis to protect the interest of Shareholders at large to prevent misuse of any pricesensitive information and to prevent any insider trading activity by way of dealing insecurities of the Company by its Designated Persons. Ms. Tanya Sethi Company Secretaryand Compliance Officer of the Company is authorized to act as Compliance Officer under theCode.
39. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
Conservation of Energy/ Technology Absorption
As the Company is not engaged in the manufacturing activity theprescribed information regarding compliance of rules relating to conservation of Energyand Technology absorption pursuant to Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 (3) of the Companies (Accounts)Rules 2014 is not provided.
Foreign Exchange Earnings and Outgo
The Foreign exchange earnings for the FY 2020-21 were Nil.
Foreign Exchange Inflow: Nil Foreign Exchange Outflow: Nil
40. EMPLOYEE REMUNERATION
A. The statement containing particulars of employees as required underSection 197 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given below:
Details Disclosure by the Company
1. The ratio of the remuneration of each Whole Managing Director :101:1 time director to the median remuneration of the Executive Director : 60:1 employeesof the company for the financial year
2. The percentage increase in remuneration of each ManagingDirector : Nil director Chief Financial Officer Chief Executive Director : Nil ExecutiveOfficer Company Secretary or Chief Financial Officer : Nil Manager if any in thefinancial year Company Secretary: Nil
3. The percentage increase in the median Nil remuneration ofemployees in the financial year;
4. The number of permanent employees on the 2031 rolls of Company
5. Average percentile increase already made in the There has notbeen no salaries of employees other than the managerial increase in remuneration ofpersonnel in the last financial year and its employees during the year. comparison withthe percentile increase in the managerial remuneration and justification thereof and pointout if there are any exceptional circumstances for increase in the managerial remuneration
6. Affirmation that the remuneration is as per the Yes remunerationpolicy of the company
b. In accordance with the provisions of Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the names andparticulars of the top ten employees in terms of remuneration drawn are set out below:
a. if employed throughout the financial year was in receipt ofremuneration for that year which in the aggregate was not less than One Crore Two lakhrupees :
|Particulars ||Details |
|1. Name and Designation ||Mr. Yogen KhoslaManaging Director |
|2. Remuneration received ||Rs. 17294081 Including long term benefits |
|3. Nature of Employment ||Permanent |
|4. Qualifications ||Mr. Yogen Khosla is a finance veteran having more than 20 years of experience in Rural Finance industry. He holds a Bachelor's degree in Commerce from Loyala College Chennai and has studied at the Ealing College in London. He has ensured evolution of Capital Trust from a brick-and-mortar traditional NBFC into India's first Rural-Doorstep Fintech company. He has led the company to top 100 MSME company declared by India SME Forum and fastest 1000 growing companies in Asia by FT-Asia. |
|5. Date of Commencement of Employment ||01-04-2003 |
|6. Age ||58 |
|7. Last Employment ||Associated with the company since inception |
|8. Percentage of Equity Shares Held ||36.91% |
b. if employed for a part of the financial year was in receipt ofremuneration for any part of that year pro rata rate which in the aggregate was notless than Eight Lakhs Fifty thousand rupees per month;
c. if employed throughout the financial year or part thereof was inreceipt of remuneration in that Year which in the aggregate or as the case may be at arate which in the aggregate is in excess of that drawn by the managing director orwhole-time director or manager and holds by himself or along with his spouse and dependentchildren not less than two percent of the equity shares of the company. : NIL
41. GRIEVANCE REDRESSAL
Your Company has adopted a well-structured customer grievance redressalmechanism and provides customers a reliable and easily accessible interface for timely andfair resolution of enquires & complaints. The helpline Number is printed on eachdocument shared with the customers and a person is dedicated to address the customergrievances. The helpline number is available in each branch with the contact person andthe contact details of the Officials of the Reserve Bank of India for escalation ofgrievances if company is unable to redress the complaints. Grievance Redressal Mechanismis also available on the website of Capital Trust to facilitate easy access.
42. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THEREGULATIONS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'SOPERATION IN FUTURE
There have been no significant and material orders passed by theRegulators or Courts or Tribunals impacting the going concern status and company'soperations in future.
43. ADDITIONAL DISCLOSURES UNDER COMPANIES (ACCOUNTS) RULES 2014
a. The details of application made or any proceeding pending under theInsolvency and Bankruptcy Code 2016 (31 of 2016) during the year along with their statusas at the end of the Financial Year:
During the Financial Year under review the Company has made neitherany application nor any proceeding is pending under the Insolvency and Bankruptcy Code2016 (31 of 2016) therefore it is not applicable to the Company.
b. The details of difference between amount of the valuation done atthe time of one-time settlement and the valuation done while taking loan from the Banks orFinancial Institutions along with the reasons thereof.
During the Financial Year under review it is not applicable to theCompany.
44. DIVIDEND DISTRIBUTION POLICY
(i) Scope and Purpose
a. Capital Trust Limited ("the Company") equityshares are listed on the BSE Limited and the National Stock Exchange of India Limited. b.This Dividend Distribution Policy ("the Policy") defines conditions to beconsidered by the Board for recommending / paying a dividend to the shareholders of theCompany.
The Board of Directors will recommend any interim / annual dividendbased on this Policy applicable laws as well as any specific financial or marketconditions prevailing at the time.
c. Subject to the factors mentioned in para (i) (b) above the Companyhas a consistent dividend policy for "distribution of dividend out of profits and theBoard may recommend the rate".
d. The Policy set out the broad criteria to be considered fordetermining the proposed dividend to appropriately reward shareholders through dividendswhile supporting the future growth of the Company.
(ii) Dividend Policy
a. Dividend Distribution Philosophy
i. The Company believes in long term value creation for itsshareholders while maintaining the desired liquidity and leverage ratios and protectingthe interest of all the stakeholders.
Accordingly the focus will continue to be on sustainable returns interms of dividend in consonance with the dynamics of business environment.
b. The circumstances under which shareholders may not expectdividend
i. The Company shall comply with relevant statutory requirements thatare applicable to the Company in declaring dividend or retained earnings. Generally theBoard shall determine dividend for a particular period after taking into considerationfinancial performance of the Company advice of executive management and other parametersdescribed in the Policy.
c. The financial parameters that shall be considered while declaringdividend
i. As in the past subject to provisions of applicable law theCompany's dividend pay-out will be determined based on available financial resourcesinvestment requirements and taking into account optimal shareholder return. ii. Based onabove and subject to factors mentioned in para 2.4 below the Company will endeavour tomaintain steady level of dividend.
d. The internal / external factors that shall be considered fordeclaration ofdividend
i. When recommending / determining the dividend the company willconsider amongst other matters:
1. actual results for the year and the outlook for businessoperations
2. providing for anticipated capital expenditures or acquisitions tofurther enhance shareholder value or meet strategic objectives 3. setting aside cash tomeet debt repayments 4. changes in cost and availability of external financing 5. level ofdividends paid historically 6. retaining earnings to provide for contingencies orunforeseeable events
7. the overall economic environment including taxation
8. changes in government policy industry rulings and regulatoryprovisions e. Policy on utilization of retained earning i. The utilization ofretained earnings will include:
1. Inorganic / organic growth
2. Diversification opportunities / capital expenditure
3. Fund based requirement of company its subsidiaries joint venturesand/or other investee companies
4. General corporate purposes including contingencies
5. Investments in the new/existing business
6. Any other permitted use under the Companies Act 2013 andapplicablelaws f. Provisions with regard to various classes of shares
i. The provisions contained in this policy shall apply to all classesof shares of the Company.
It may be noted that currently the Company has only one class ofshares namely equity shares.
(iii) Review and Disclosure
a. This policy will be reviewed and amended as and when required bythe Board and/or under applicable laws. Any revisions in the Policy will be communicatedto shareholders in a timely manner.
a. In the event of any conflict between the Act or the SEBI Regulationsor other statutory enactments ("the Regulations") and the provisions of thispolicy the Regulations shall prevail over this policy. Any subsequent amendment /modification in the Regulations in this regard shall automatically apply to this policy.
a. The Policy does not constitute a commitment regarding futuredividends of the Company but only represents a general guidance regarding paymentofdividend.
b. The statement of the policy does not in any way restrict right ofthe board to use its discretion in the recommendation of the dividend to be distributedconsidering various factors mentioned in the policy. Further subject to the provisions ofapplicable laws the board reserves the right to depart from the policy as and whencircumstances sowarrant.
45. REGISTER E-MAIL ADDRESS
To contribute towards a greener environment the Company again proposesto send documents like general meeting notices/other notices annual report auditedfinancial statements boards' report auditors' report or any other document tomembers in electronic form at the e-mail address provided by them and/or available to theCompany by the Depositories. Members who have not yet registered their e-mail address(including those who wishes to change their already registered e-mail address) may get thesame registered/updated either with his / her depository participants or by writing to theCompany / RTA.
The Board of Directors acknowledge and place on record theirappreciation for the guidance co-operation and encouragement extended to the Company bythe Government of India Ministry of Corporate Affairs Reserve Bank of India Securitiesand Exchange Board of India National Stock Exchange of India LimitedBombay StockExchange Limited and other concerned Government departments/agencies at the Central andState level as well as various domestic financial institutions/banks agencies etc. YourDirectors also convey their gratitude to the shareholders various variousBanks/Multilateral agencies/financial Institutions/ credit rating agencies for thecontinued trust and for the confidence reposed by them in CTL.
The Company is also thankful to the Statutory Auditors and SecretarialAuditor for their constructive suggestions and co-operation.We would also like to place onrecord our appreciation for the untiring efforts and contributions made by the employeestowards the growth of the Company.