Your Directors have pleasure in presenting the 27th Annual Report of theCompany along with the audited financial statements for the year ended 31stMarch 2021.
The table below gives the standalone and consolidated financial highlights of theCompany for the year ended 31 st March 2021 as compared to the previous year.
(Rs in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Total Income ||693.98 ||168.24 ||1617.42 ||811.23 |
|Total Expenditure ||1047.36 ||614.40 ||1903.61 ||1682.88 |
|Profit / (Loss) but before Exceptional Items and Tax ||(353.38) ||(446.16) ||(286.19) ||(871.65) |
|Exceptional Items ||- ||- ||- ||- |
|Total tax Expenses ||(5.40) ||(13.43) ||(5.40) ||(13.43) |
|Profit/(Loss) for the Year ||(347.98) ||(432.73) ||(280.79) ||(858.22) |
|Other Comprehensive Income ||(3.75) ||(0.28) ||(6.07) ||(7.95) |
|Total Comprehensive Income ||(351.73) ||(433.01) ||(286.86) ||(866.17) |
|Appropriations: || || || || |
|Reserves u/s.45 IC of RBI Act ||341.40 ||341.40 ||341.40 ||341.40 |
During the year ended 31st March 2021 your Company earned revenue of Rs.693.98 Lakhs as compared to Rs. 168.24 Lakhs in the previous year. The operations haverecorded a loss of Rs. 347.97 Lakhs as compared to a loss of Rs. 432.73 Lakhs in theprevious year.
During the year ended 31st March 2021 your Company earned consolidatedrevenue of Rs. 1617.42 Lakhs as compared to Rs. 811.23 Lakhs in the previous year. Theconsolidated operations have recorded a loss of Rs. 280.79 Lakhs as compared to a loss ofRs. 858.22 Lakhs in the previous year.
Detailed information on operational and financial performance of the Company for thefinancial year is given in the Management Discussion and Analysis which is set outseparately with the Directors' Report.
Due to inadequacy of profits and in order to consolidate the financial position of theCompany your Directors have not recommended any dividend for the year.
The Consolidated Financial Statements of the Company are prepared in accordance withSection 129 of the Companies Act 2013 read with relevant Accounting Standards issued bythe Institute of Chartered Accountants of India and forms part of this Annual Report.Pursuant to Section 136 of the Companies Act 2013 the standalone financial statements ofthe Company and the consolidated financial statements along with the relevant documentsform part of the Annual Report and separate audited accounts in respect of thesubsidiaries are available on the website of the Company www.transwarranty.com.
State of Company's affairs and operations
The Company has been in the personal and consumer lending business on digital platform.The business activity is very encouraging and there is huge potential to scale up thebusiness. However due to COVID-19 pandemic company consciously scaled down the level ofoperations in order to preserve the capital of the company. It gradually resumed lendingoperations during second half of the year.
The company has taken necessary steps to upgrade the technology platform and has put inplace the systems to cater to higher scale of operations. Further company has strengthenedits position in financial advisory services.
Share Capital Structure:
The issued subscribed and paid-up Equity Share Capital as on 31st March2021 was Rs. 24.46 Crores comprising of 24460568 Equity Shares of the face value ofRs. 10 each fully paid-up.
There is no change in the Authorised Issued Subscribed and Paid Up Share Capital ofthe Company during the year.
Further the Company has not issued any convertible securities or shares withdifferential voting rights.
The details stock options granted and vested during the year are provided in the Notesto Accounts in the financial statements.
Vertex Securities Limited (VSL) Vertex Commodities And Finpro Private Limited (VCFPL)and Transwarranty Capital Market Services Private Limited (TCMSPL) are the subsidiaries ofthe Company.
VSL and VCFPL are engaged in the following businesses:
1. Stock and currency broking services to retail HNI and institutional clients.
2. Commodity broking services through Vertex Commodities And Finpro Private Limited(VCFPL) to retail HNI and corporate clients.
3. Merchant banking.
4. Corporate Agency for Insurance
Vertex Securities Limited (VSL) is a member of: -
1. National Stock Exchange of India Limited (NSE)
2. Bombay Stock Exchange Limited (BSE)
3. National Securities Depository Ltd. (NSDL) (for depository services)
4. SEBI registration as a Merchant Banker
5. Association of Mutual Funds of India(AMFI) registered Mutual Fund Advisor.
Vertex Commodities And Finpro Private Limited (VCFPL)is a member of following commodityexchanges: -
1. Multi Commodity Exchange of India (MCX)
2. National Commodity and Derivative Exchange (NCDEX)
3. Indian Commodity Exchange of India Ltd. (ICEX)
During the year ended 31st March 2021 the subsidiary company VertexSecurities Limited earned revenue of Rs. 832.17 Lakhs as compared to Rs. 551.52 Lakhs inthe previous year. The operations have recorded a profit of`40.56 Lakhs as compared to aloss of Rs. 340.87 Lakhs in the previous year.
The subsidiary company Vertex Commodities And Finpro Private Limited had total revenueof Rs. 100.01 lakhs and net profit of Rs. 26.84 lakhs for the year ended 31stMarch 2021 as against the total revenue of Rs. 111.30 lakhs and net loss of Rs. 84.40lakhs respectively in the previous year.
The subsidiary company Transwarranty Capital Market Services Pvt. Ltd recorded a lossof `0.22 lakhs for the year ended 31st March 2021 as against loss of Rs. 0.22lakhs in the previous year.
The Consolidated Financial Statements presented by the Company include the financialresults of its subsidiary companies.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining the salient features of the financial statements of the Company's subsidiariesin Form AOC 1 is attached to the financial statements of the Company.
Directors and Key Managerial Personnel:
I. Appointment of Directors:
Appointment of Mr. Shishir Vasant Dalal as an Independent Director
The Board vide its resolution dated 30th September 2020 and based on therecommendation of Nomination Remuneration and Compensation Committee had appointed Mr.Shishir Vasant Dalal as an Additional Independent Director of the Company for a period offive years subject to the approval of the shareholders of the Company.
Accordingly resolutions seeking approval of the members for the aforementionedappointment forms part of notice convening the 27th AGM.
Necessary details regarding their re-appointment as required under the Act and theListing Regulations are given in the notice of AGM.
II. Retirement by Rotation:
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Appointment and Qualification 2014 Mr. Kumar Nair (DIN 00320541) retires byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment and your Board has recommended his re-appointment.
Pursuant to Regulation 36(3) of the SEBI (Listing Obligations & DisclosureRequirements) 2015 ["Listing Regulations"] brief resume of the Directorsproposed for appointment/re-appointment has been given in the statement annexed to theNotice convening the Annual General Meeting.
Management Discussion and Analysis:
A detailed review on the operations and performance of the Company and its business isgiven in the Management Discussion and Analysis which forms part of this report as
Corporate Governance Report:
Your Company is committed to maintain the highest standards of ethics and governanceresulting in enhanced transparency for the benefit of all stakeholders. The Company hascomplied with the requirements and disclosures that have to be made in terms of therequirements of Corporate Governance specified in SEBI Listing Regulations.
The Report on Corporate Governance as stipulated under Regulation 27 of the ListingRegulations 2015 forms part of this report as Annexure B. A certificate confirmingcompliance of the Corporate Governance requirements by the Company is attached to theReport on Corporate Governance.
Code of conduct for Directors & Senior Management
The Board has adopted a Code of Conduct for Directors & Senior Management inaccordance with the provisions of the Companies Act 2013 and Regulation 17(5) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Code alsoincorporates the duties of Independent Directors. All the Board Members and SeniorManagement
Personnel have confirmed compliance with the Code. A declaration to that effect signedby the Managing Director forms part of the Corporate Governance Report. A copy of the Codehas been put on the Company's website.
The Audit Committee is constituted with two Independent Directors and one ExecutiveDirector comprising of Mr. Sudharsanan Nair as the Chairman Mr. Kumar Nair and Mrs.Nirmala Parab as other Committee Members.
More details regarding the Audit Committee including composition attendance at themeetings and brief terms of reference are given in the annexed Corporate GovernanceReport'.
At the 25th Annual General Meeting of the Company held in the year 2019 theShareholders had approved the appointment of S.S.Khan & Co. Chartered Accountants(Firm Registration No.133324W) as the Statutory Auditors of the Company for a period offive years from the conclusion of the 25th AGM till the conclusion of the 30thAGM. in terms of the applicable provisions of Section 139(1) of the Companies Act 2013read with the Companies (Audit and Auditors) Rules 2014.
The Auditors' Report on the Financial Statements (Standalone and Consolidated) of theCompany for the year under review "with an unmodified opinion" as given by theStatutory Auditors is disclosed in the Financial Statements forming part of this AnnualReport. The Auditors' Report is clean and there are no qualifications in their Report.Also no frauds in terms of the provisions of Section 143(12) of the Act have beenreported by the Statutory Auditors in their report for the year under review.
The Notes to the Financial Statements (Standalone and Consolidated) areself-explanatory and do not call for any further comments.
Directors' Responsibility Statement:
In terms of Section 134 (5) of the Companies Act 2013 your Directors state that:
1. In preparation of annual accounts for the year ended 31st March 2021the applicable accounting standards have been followed along with proper explanationsrelating to material departures if any;
2. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2020 and profit of theCompany for the year ended on that date;
3. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
4. They have prepared the annual accounts on a going concern basis;
5. They have laid down proper internal financial controls to be followed by the Companyand they were adequate and operating effectively and
6. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.
During the financial year under report the Company has not accepted deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
Particulars of Loans Guarantees and Investments:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
Familiarization Programme for Directors:
At the time of appointment of a Director a formal letter of appointment is given tothe Director. The Director is also explained in detail the role functions duties andresponsibilities expected from him/her and also compliance required from him/her under theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. Further the Managing Director also holds oneto one discussion with the newly appointed Director to familiarize him/her with theCompany's operations.
The Board of Directors has complete access to the information within the Company.Presentations are regularly made to the Board of Directors and various Committees of theBoard. The details of the Company's familiarization programme for Independent Directorscan be accessed at (http://www.transwarranty.com/Investors).
Annual evaluation of the Board its Committees and individual directors
The Board of Directors has carried out an annual evaluation of its own performance ofboard committees and of individual directors pursuant to the provisions of the CompaniesAct 2013 and the SEBI Listing Regulations.
The evaluation was done on various parameters like vision and strategy Boardparticipation quality of contribution to Board discussions and decisions disclosure ofinterest strategic insights or inputs regarding future growth of the Company and itsperformance ability to challenge views in a constructive manner knowledge acquired withregard to the Company's business/ activities leadership skills marketing and corporatecommunications etc.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The Board reviewed the performance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc.
In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole was evaluated taking into account theviews of executive directors and non-executive directors. The same was discussed in theboard meeting that followed the meeting of the independent directors at which theperformance of the board its committees and individual directors was also discussed.Performance evaluation of independent directors was done by the entire board excludingthe independent directors being evaluated.
The Board of Directors of the Company has constituted various Committees in compliancewith the provisions of the Companies Act 2013 and SEBI Listing Regulations such as AuditCommittee Nomination Remuneration and Compensation Committee and Stakeholders'Relationship Committee.
All decisions pertaining to the constitution of the Committees appointment of membersand fixing of terms of reference/ role of the Committees are taken by the Board ofDirectors.
Details of the role and composition of these Committees including the number ofmeetings held during the financial year and attendance at meetings are provided in theCorporate Governance Report which forms a part of the Annual Report.
Meetings of the Board and Committees
The Board met 9 (nine) times during the financial year. The details regarding themeetings of the Board of Directors Committees of the Board and meeting of IndependentDirectors are provided in the Report on Corporate Governance which forms part of theAnnual Report.
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 acopy of the Annual Return of the Company for the financial year ended 31stMarch 2021 is uploaded on the website of the Company and can be accessed atwww.transwarranty. com.
The Company has Risk Management Systems in place including identification of elementsof risk if any which in the opinion of the Board may threaten the existence of theCompany. After identifying the risk and assessing the level of impact controls are put inplace to mitigate the risk by the concerned executives/the Board to control the exposureof the risk and balance the impact of risk on a continuous basis.
Nomination & Remuneration Policy
The Board on the recommendation of Nomination Remuneration and CompensationCommittee has adopted a policy for selection appointment and remuneration of DirectorsKey Managerial Personnel and Senior Management. The said policy is available on ourwebsite at www.transwarranty.com.
The salient features of this Policy are provided in the Corporate Governance Report.
Disclosure as per Sexual Harassment of Women at Workplace (Prevention Prohibition AndRedressal) Act 2013
The Company has zero tolerance for sexual harassment at work place and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provision of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the rules framed there under.
The Company has constituted an Internal Complaints Committee as per Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
Your Directors state that during the year under review there were no cases filedpursuant to the above Act.
Whistle Blower Policy/Vigil Mechanism:
The Company has Whistle Blower Policy encompassing vigil mechanism to report genuineconcerns and grievances. The policy provides adequate safeguards against victimisation ofpersons who use the Whistle Blower mechanism. It provides appropriate avenues to theemployees to bring to the attention of the management any issue which is perceived to bein violation or in conflict with the fundamental business of the Company. The employeesare encouraged to voice their concerns by way of whistle blower policy and have been givenaccess to the Audit Committee. The policy is available on the website of the Company atwww. transwarranty.com
Employees' Stock Option Plan 2019 (ESOP 2019):
Disclosures in terms of Guidance note on accounting for employee share basedpayments' issued by ICAI and diluted EPS in accordance with Indian Accounting Standard(Ind AS) 33 - Earnings Per Share are provided in the Notes of Standalone FinancialStatements in this Annual Report.
Disclosures as per the Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations 2014 and disclosure pursuant to the Rule 12(9) of Companies (ShareCapital and Debenture) Rules 2014 are provided as Annexure C to the Board's Reportand are also available on Company's website at https://www.transwarranty.com
A certificate from S.S.Khan & Statutory Auditors of the Company confirming thatESOP 2019 has been implemented in accordance with the SEBI SBEB Regulations and that therespective resolutions passed by the Company in General Meetings would be placed in theensuing Annual General Meeting for inspection by the members.
During the year under review no options were granted vested or exercised under the Employees'Stock Option Plan 2008 and hence the disclosure required under Section 62(1)(b) of theCompanies Act 2013 read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014 and Regulation 14 of the SBEB Regulations is not required to be furnished.Accordingly your Company is also not required to obtain certificate from in respect ofimplementation of the ESOP 2008 for the financial year 2020-21.
The Company has not issued any sweat equity shares or equity shares with differentialrights during the year ended 31st March 2021.
Internal control system
The Company has put in place an adequate system of internal control commensurate withits size and nature of business. These systems provide a reasonable assurance in respectof providing financial and operational information complying with applicable statutessafeguarding of assets of the Company and ensuring compliance with corporate policies.
The Company's Board & Audit Committee reviews adherence to internal controlsystems internal audit reports and legal compliances. The Audit Committee reviews allquarterly and yearly financial results of the Company and recommends the same to Board forits approval.
Insider Trading Regulations
Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations2015 as amended from time to time the Company has adopted a Code of Conduct forPrevention of Insider Trading and Policy on Disclosure of Material Events/ Informationwhich is applicable to all Directors and the Designated Employees of the Company. The Codelays down the guidelines which advices on the procedures to be followed and disclosuresto be made while dealing in shares of the Company and indicate theCo.CharteredAccountants consequences of non-compliance. A copy of the Code has been puton the Company's website.
Declaration by Independent Directors:
The Independent Directors of the Company have furnished necessary declarations to theCompany under Section 149(7) of the Companies Act 2013 confirmingthat they meet thecriteria of independence as prescribed for independent directors under Section 149(6) ofthe Act and Regulation 16(b) of the SEBI Listing Regulations.
In the opinion of the Board all the Independent Directors possess the integrityexpertise and experience including the proficiency required to be Company fulfil theconditions of independence as specified in the Act and the SEBI Listing Regulations andare independent of the management and have also complied with the Code for IndependentDirectors as prescribed in Schedule IV of the Act.
During the year under review a meeting of Independent Directors was held on 11thFebruary 2021.
Related Party Transactions:
All related party transactions that were entered into during the year were on arm'slength basis and in the ordinary course of business. The Audit Committee has approved therelated party transactions and subsequently the same were approved by the Board ofDirectors from time to time and the same are disclosed in the Financial Statements of theCompany for the year under review.
Further pursuant to the provisions of the Act and the SEBI Listing Regulations theBoard of Directors has on recommendation of its Audit Committee adopted a Policy onRelated Party Transactions and the said policy is available on the website of the Companyi.e. https://www. transwarranty.com.
The disclosures on the Related Party Transactions in Form AOC-2 is provided as AnnexureD to the Board's Report.
Your Directors draw attention of the members to Note 39 to the financial statementwhich sets out related party disclosures.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethere under the Company has appointed Mr. Yogesh M. Sharma a Company Secretary inPractice to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report for the year under review issued by Mr. Yogesh Sharma isannexed to this Report as Annexure E. With reference to the qualification regardingdelay in submission of replated party transactions for the half year ended 30.09.2021 theBoard noted that the said delay was due to the Pandemic situation and shut down of officesand transportation due to lockdown. Further the Company had requested National StockExchange of India Limited (NSE) and BSE Ltd for waiver of fine levied by both theexchanges. The request for waiver of fine has been approved by NSE vide letter dated 20thMay 2021 and BSE IndependentDirectorsofthe vide their email dated 25th June2021.
Also with regard to the qualification that the Board of Directors of the Companyshould comprise of minimum six directors w.e.f. 01.04.2020 (only NSE requirement) theBoard noted that the delay in appointment from 30.09.2020 was due to the pandemicsituation and inability to meet prospective candidates due to lockdown. Further NSE hadprovided waiver for the fine levied vide its letter dated 13 th April 2021 onthe Company's request for waiver of fine
Further in terms of the provisions of the Circular No. CIR/ CFD/CMD1/27/2019 dated 8thFebruary 2019 issued by Securities and Exchange Board of India the Company has obtainedthe Annual Secretarial Compliance Report for the financial year ended 31st March 2021thereby confirming compliance of the applicable SEBI Regulations and circulars /guidelines issued thereunder on behalf of the Company.
Energy Conservation and Technology Absorption
The Company ensures optimized and efficient consumption of energy in all theoffices/branches of the Company. With the implementation of its digital initiatives thecompany has also substantially reduced its paper consumption.
The Company has always leveraged technological innovations to improve its operationalefficiency and satisfy and retain our customer base.
Foreign Exchange Earnings and outgo:
Earnings: Nil Outgo - Nil
Maintenance of Cost Records:
The provisions of Section 148 of the Act are not applicable to the Company.Accordingly there is no requirement of maintenance of cost records as specified underSection 148(1) of the Act.
Material Changes and Commitments
There has been no change in the nature of business during the year. There have been nomaterial changes and commitments affecting the financial position of the Company whichhave occurred between the end of the financial year of the Company to which the financialstatements relate and the date of this Report.
Particulars of Employees and related disclosure:
There are no employees drawing a monthly or yearly remuneration in excess of the limitsspecified under Section 197 of the Companies Act 2013 read with Rules 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 includingany amendments thereof.
The information containing particulars of employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended from time to time isattached herewith as Annexure F.
Significant and material concern status
No significant or material regulators or Courts or tribunals which impact the goingconcern status and Company's operations in future.
General Shareholder Information
General Shareholder Information is given in the Report on Corporate Governance formingpart of this Annual Report.
Secretarial standards of ICSI
The Company has complied with the requirements prescribed under the SecretarialStandards on Meetings of the Board of Directors (SS1) and General Meetings(SS2).
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 instalments falling due between 1stMarch 2020 to 31st May 2020 and further till 31st August 2020.Accordingly the Company started offering moratorium to its customers basis a Boardapproved policy.
The Company continues to be in compliance with the RBI Directions.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. Issue of equity shares with differential right as to dividend voting or otherwise
b. Provisions related to Corporate Social Responsibility are not applicable to theCompany
c. No fraud was reported by auditors of the Company during the year under review.
d. There were no delays or defaults in payment of interest/ principle of any of itsdebt securities orders impacting going
Yourwere Directorspassed wishbyto the express their grateful appreciation for theco-operation and continued support received from customers shareholders investorsparent company collaborators vendors financialinstitutions banks regulatoryauthorities and the society at large during the year.
Your Directors recognize and appreciate the efforts and hard work of all the employeesof the Company and their continued contribution to its progress.
|For and on behalf of the Board of Directors Kumar Nair |
|Place: Mumbai |
|(DIN 00320541) |
|Chairman Date: 12th August 2021 |