The Board of Directors hereby submits the report of the business and operations of your Company. The Board has pleasure in presenting the 31st Annual Report of the Company together with the Audited Financial Statements, for the financial year ended March 31st, 2016.
FINANCIAL RESULTS (in Lakh)
Revenue from Operations
Less: Operational and Other Expenses
Profit/(Loss) before Depreciation & Finance Cost
Less: Depreciation & Amortization
Less: Finance Cost
Profit/(Loss) before Tax
Less: Tax and Adjustments
Net Profit after Tax
For the year ended March 2016, your Company earned a total income of Rs. 1827.73 lakhs as compared to Rs. 183.75 lakhs in the previous year. The Net Profit of the Company is increased to Rs. 37.25 lakhs against the Net Profit of previous year for Rs. 20.83 lakhs. Your Company is considering various other avenues to increase the income in near future.
DIVIDEND & TRANSFER TO RESERVES
Keeping in mind the overall performance and the future perspective, Your Directors decided to plough back the profit and therefore dividend is not declared. The credit balance of Profit and Loss account is transferred to reserves in Balance sheet.
During FY2015-2016, there were changes in the capital structure of the Company. As on 31st March 2016, the paid up capital of the Company was Rs. 5,09.8 lakhs comprising of 5,09.8 lakhs equity shares of Re. 1/each. During the year Company had issued 10,00,000 warrants convertible into equity shares. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and Circular/ Notifications/ Directions issued by Reserve Bank of India from time to time, the Management Discussion and Analysis of the financial condition and result of consolidated operations of the Company for the year under review is presented in a separate section forming part of the Annual Report.
We wish to inform the members that in terms of Regulation 15 (2) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Corporate Governance is not applicable to Companies having paid up equity share capital not exceeding Rs. 10 crore and Net Worth not exceeding Rs. 25 crore, as on the last day of the previous financial year. The Company does not fulfill any of the criteria''s as mentioned above and hence are not required to comply with the Corporate Governance provisions envisaged under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
The Company being a Non-Deposit Accepting Non-Banking Finance Company has not accepted any deposits from the public during the year under review and shall not accept any deposits from the public without obtaining prior approval of RBI. During the year under review, the Company has not accepted deposits falling within the provisions of Section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of the Deposits) Rules, 2014.
RBI''S NORMS AND STANDARDS
The Company continues to have a conservative provisioning policy which is significantly more stringent than the RBI norms. It fulfils and often exceeds norms and standards laid down by the RBI relating to the recognition and provisioning of non-performing assets, capital adequacy, statutory liquidity ratio, etc
NUMBER OF MEETINGS OF THE BOARD
The Board met 8 times during the financial year 2015-16 viz., on May 27, 2015, August 11, 2015, September 16, 2015, October 30, 2015, November 14, 2015, December 07, 2015, January 16, 2016, February 15, 2016 and March 03, 2016. The maximum interval between any two meetings did not exceed 120 days.
COMMITTEES OF BOARD
In accordance with the Companies Act, 2013 and Listing Regulations, the Company has following Committees in place:
-Nomination and Remuneration Committee
-Stakeholders Relationship Committee
-Risk Management Committee
Details of the said Committees along with their charters, composition and meetings held during the financial year, are provided separately, as a part of this Annual Report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors at its Meeting held on January 16, 2016 appointed Mr. Shiv Shambhu (DIN 06987882) and Mr. Vinaykumar KuldeepranaArora (DIN 03089351) as Additional Directors who shall act as a Non- Executive Independent Directors, to hold office up to the date of forthcoming Annual General Meeting as per the provisions of section 161 of the Companies Act, 2013.
Pursuant to the recommendation of the Audit Committee, Nomination and Remuneration Committee, Mr. Vinay Kumar Chawla was appointed as Chief Operating Officer of the Company by the Board of Directors with effect from April 1st, 2016. Mr. Vinay Kumar Chawla, the Chief Operating Officer of the Company will ensure business stability in the upcoming years to come.
Also, the Board pursuant to the recommendation of the Nomination and Remuneration Committee, has appointed Mrs. Renu Garg (DIN 07095956) as a Whole Time Director of the Company with effect from May 27, 2016, subject to the approval of the shareholders.
The Company has received a notice in writing from Mr. Shiv Shambhu, Mr. Vinaykumar KuldeepranaArora and Mrs. Renu Garg that they are unable to continue the said directorship due to some personal reasons.
Further, Mrs. Renu Garg has already stepped down from the Board with effect from 10th August, 2016.
The Board places on record its appreciation of the valuable services rendered and the enormous contribution made by Mr. Shiv Shambhu, Mr. Vinaykumar KuldeepranaArora and Mrs. Renu Garg during their respective tenure, to the Company.
c. Retire by Rotation
In accordance with Section 152 and other applicable provisions of Companies Act, 2013, None of the directors are liable to retire by rotation.
Definition of ''Independence'' of Directors is in conformity with Section 149(6) of the Companies Act, 2013 and the requirements of Listing Regulations. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Section 149(6) of the Companies Act, 2013 and the requirements of Listing Regulations :-
1. Mr. Amar Nath (DIN 06524521)
2. Mr. Shiv Shambhu (DIN 06987882)
3. Mr. Neeraj Kumar Bajaj (DIN 06976972)
4. Mr. VinaykumarKuldeepranaArora (DIN 03089351)
The independent directors have submitted the declaration of independence, as required under section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in section 149(6) of the Companies Act, 2013.
The KMPs and other Managerial Personal of the Company includes:
1. Mr. Vinay Kumar Chawla, Chief Operating Officer
2. Mr. Yashwant Saini, Chief Financial Officer(KMP)
3. Mr. Hariom Sharma, Company Secretary(KMP)
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby stated that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT, REMUNERATION AND EVALUATION
Pursuant to the provisions of the Companies Act, 2013 (the Act) and Listing Regulations, Policy on Nomination and Remuneration of Directors, Key Managerial Personnel, Senior Management and other employees had been formulated including criteria for determining qualifications, positive attributes, Independence of a Director and other matters as required under the said Act and Listing Regulations.
The evaluation framework for assessing the performance of Directors comprises of the following key areas:
-Objectivity and Independence;
-Guidance and support in context of life stage of the Company;
-Understanding of the Company''s business;
-Understanding and commitment to duties and responsibilities;
-Willingness to devote the time needed for effective contribution to Company;
-Participation in discussions in effective and constructive manner;
-Responsiveness in approach;
-Ability to encourage and motivate the Management for continued performance and success.
The evaluation involves Self-Evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.
Accordingly, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors and also the necessary evaluation was carried out by Nomination and Remuneration Committee and Independent Director at their respective meetings held for the purpose.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
The Company, being a non-banking finance Company registered with the Reserve Bank of India and engaged in the business of giving loans, is exempt from complying with the provisions of section 186 of the Companies Act, 2013. Accordingly, the disclosures of the loans given as required under the aforesaid section have not been given in this Report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
The Company, being a non-banking finance Company (NBFC), does not have any manufacturing activity. The directors therefore, have nothing to report on ''conservation of energy and technology absorption and is given as Annexure I to this report.
DETAILS OF MANAGERIAL REMUNERATION
Details of Managerial remuneration along with required information is explained along with Annexure II to this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in form MGT 9 is annexed herewith as Annexure II to this Director''s Report.
PARTICULARS OF EMPLOYEES:
During the year under review, there were no employees drawing remuneration of Rs. 60,00,000/- p.a. or Rs. 5,00,000/- p.m. or more. Hence there is no information to be provided in accordance with the provisions of Section 134 of the Companies Act, 2013 read with the Companies (Particulars of employees) Rules, 1975.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the criteria laid down under the Companies Act, 2013 and the Rules made thereunder, Your Company is not required to form a CSR Committee and to spend minimum amount towards the CSR activities But It understand its accountabilities towards its society or the environment and as a result it took parts in various CSR activities & initiatives.
No Foreign currency expenditure was incurred during FY2016. The Company did not have any foreign exchange earnings.
Internal financial controls with reference to the financial statements were adequate and operating effectively. The information about internal controls is set out in Management Discussion & Analysis report which is attached and forms part of this report.
RELATED PARTY TRANSACTIONS
There are no materially significant related party transactions made by the Company with the Promoters, Key Management Personnel or other designated persons which may have potential conflict with interest of the Company at large.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate in securities by the Directors and designated employees of the Company. The Code prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
Your Company has established a ''Whistle Blower Policy and Vigil Mechanism'' for Directors and employees to report to the appropriate authorities concerns about unethical behaviour, actual or suspected, fraud or violation of the Company''s code of conduct policy and provides safeguards against victimization of employees who avail the mechanism and also provide for direct access to the Chairman of the Audit Committee. The said policy has been uploaded on the website of the Company.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE
There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and company''s operations in future.
Although as per the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the formation of Risk Management Committee is not mandatory on the Company but in today''s era it is better to have Risk Management Committee as a preventive measure for handling the uncertain events/risks. The Board of Directors, last year has constituted risk management Committee for the Company which provides for identification, assessment and control of risks which in the opinion of the Board may threaten the existence of the Company. The Management identifies and controls risks through a properly defined framework in terms of the aforesaid policy.
ANNUAL EVALUATION BY THE BOARD:
The evaluation framework for assessing the performance of Directors comprises of the following key areas:
1. Attendance of Board Meetings and Board Committee Meetings
2. Quality of contribution to Board deliberations
3. Strategic perspectives or inputs regarding future growth of Company and its performance
4. Providing perspectives and feedback going beyond information provided by the management
5. Commitment to shareholder and other stakeholder interests
The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. A member of the Board will not participate in the discussion of his / her evaluation.
PRESENTATION OF FINANCIAL STATEMENTS
The financial statements of the Company for the year ended 31stMarch 2016 have been disclosed as per Schedule III to the Companies Act, 2013.
The Company does not have any subsidiary Company.
MATERIAL CHANGES AND COMMITMENTS
During the year under review, the company has entered into the fresh listing agreement with the Stock Exchange in terms of Securities and Exchange Board of India (SEBI) circular dated October 3, 2015 issued in respect of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 with the aim to consolidate and Streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective December 1, 2015. Accordingly, all listed entities were required to enter into the listing agreement within six month from the effective date. The company entered into listing agreement with BSE Limited on 25th February, 2016.
Further, there are no material changes and commitments made by the company between the end of the financial year of the company to which the financial statements relates and the date of the report.
The Company has electronic connectivity with both depositories namely Central Depository Services (India) Limited and National Securities Depository Limited. As on March 31, 2016, 95.83% of the Company''s paid-up share capital representing 48856377 equity shares is in dematerialized form (including promoters shareholding). In view of the numerous advantages offered by the Depository system, Members holding shares in physical mode are requested to avail of the facility of dematerialization of the Company''s shares on either of Depositories.
AUDITORS AND AUDITOR''S OBSERVATIONS:
All observations of Auditors are annexed as Auditors Report and are self-explanatory and therefore do not call for any further comments by Directors in this report.
The Company has received from A.C. Gupta & Associates a written consent for ratification of their appointment from the conclusion of ensuing AGM till the conclusion of the 33rd AGM and a certificate to the effect that their appointment shall be in accordance with the prescribed conditions and that the firm is not disqualified under the Companies Act, 2013.
The Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.
SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made there under, the Company had appointed M/s A. K. Popli & Co., Practicing Company Secretary (Membership No. 3387), to conduct the Secretarial Audit and his Report on Company''s Secretarial Audit in form MR-3 are appended to this Report as Annexure III.
Directors'' responsibility statement as required by section 134(5) of the Companies Act, 2013 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 have been made in this Annual Report.
A Cash Flow Statement for FY2016 is attached to the Balance Sheet.
We are grateful to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, the Stock Exchanges and other regulatory authorities for their valuable guidance and support and wish to express our sincere appreciation for their continued co-operation and assistance. We look forward to their continued support in future.
We wish to thank our bankers, investors, customers and all other business associates for their support and trust reposed in us.
Your Directors express their deep sense of appreciation for all the employees whose commitment, co-operation, active participation, dedication and professionalism has made the organization''s growth possible.
Finally, the Directors thank you for your continued trust and support.
By Order and on behalf of the board
For CAPITAL TRADE LINKS LIMITED
Place: Delhi Neeraj Garg
Dated: 13.08.2016 Chairman