DIRECTOR'S REPORT Dear Members, Your directors have pleasure in presenting the 30th Annual Report of your company together with the Audited Statement of Accounts of the Company for the year ended March 31st 2015. OPERATIONS: For the year ended March 2015, your Company earned a total income of Rs. 183.76 lacs as compared to Rs.433.01 lacs in the previous year. The net profit of the Company is increased to Rs. 20.83 lacs against the net profit of previous year for Rs. 4.75 lacs. Your Company is considering various other avenues to increase the income in near future. DIVIDEND & TRANSFER TO RESERVES: 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. INCREASE IN BORROWING POWERS: The Company has decided to increase its limit on the borrowing powers of the Board of Directors to meets its business needs. A detailed notice and explanatory statement pursuant to this is explained in the attached notice of Annual General Meeting. SHARE CAPITAL: During FY2015, there were no changes in the capital structure of the Company. As on 31st March 2015, the paid up capital of the Company was Rs. 4,99,80,000/- comprising of 49980000 equity shares of Re. 1/- each. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. DIRECTORS and KMP's: Mr. Neeraj Garg, Mrs. Renu Garg, Mr. Neeraj Kumar Bajaj, Mr. Amar Nath and Mr. Mayank Khanna are directors on the Board. Mr. Neeraj Kumar Bajaj & Mrs. Renu Garg was appointed as an Additional Director of the Company on 12th February, 2015 for a term of five consecutive years. It is proposed to confirm appointment of Mr. Neeraj Bajaj by the members for a term of 5 years, at the ensuing Annual General Meeting. Further, Mrs. Renu Garg has resigned as Whole Time Director of the Company w.e.f 11.08.2015 and shall continue to act as Non-Executive Director on the Board and whose appointment is proposed to be confirmed by the members at ensuing Annual General Meeting. Mr. Mayank Khanna, Independent Director on the Board, upon the recommendation of the Nomination & Remuneration committee and subsequent approval of the Board is appointed as a Whole Time Director of the company as per the terms as explained in notice attached with this report. According to Companies Act, 2013 at least two-thirds of the total directors excluding Independent Directors shall be liable to retire by rotation. Mr. Neeraj Garg, Director retires from the Board by rotation this year and being eligible to offer himself for re-appointment. Required resolution for this purpose is being proposed in the notice of the ensuing Annual General Meeting for the approval of the members. The Key Managerial Person of the Company includes: 1.Mr. Yashwant Saini, Chief Financial Officer who is appointed w.e.f 12.02.2015 2.Ms. Anshika Garg, Company Secretary of the Company was appointed w.e.f 15.12.2014 Further, we would also like to thank our Directors Mr. Krishan Kumar and Mr. Girdhari Lal Mangal, and Ms. Mani Ahuja, Company Secretary for their support to the organization and they deserve much of the credit for the organization's success. DECLARATION BY INDEPENDENT DIRECTORS 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. MEETING OF BOARD OF DIRECTORS There were seven meetings of the Board held during the year, details of which are given in the annexed 'Corporate Governance Report'. COMMITTEES OF THE BOARD: During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees and also formed a Corporate Social Responsibility Committee. There are currently four Committees of the Board, as follows: Audit Committee Nomination and Remuneration Committee Stakeholders' Relationship Committee Risk Management Committee Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", a part of this Annual Report. Implications as per applicable acts The Board has adopted various policies in context to applicable Regulations i.e. •Interest Gradation and Risk Policy •Whistle Blower Policy •Code of Conduct for prevention of Insider Trading Company is adopting new set of Memorandum and Articles of Association in accordance with the new Company law and rules framed there under. All other changes as required by the Act have been in place and we re-affirm our commitment to the highest level of Corporate Governance. EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2015 As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as "Annexure II". 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. 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. FOREIGN CURRENCY: No Foreign currency expenditure was incurred during FY2015. The Company did not have any foreign exchange earnings. FIXED DEPOSIT: The Company has not accepted deposits falling within the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of the Deposits) Rules, 1975 during the year under review. ADEQUACY OF INTERNAL CONTROLS: 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. 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. 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. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 134(5) of the Act, the directors hereby confirm that: a)in the preparation of the annual accounts for financial year ended March 31, 2015, the applicable accounting standards have been followed and there are no 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 March 31, 2015 and of the profit of the Company for the year ended on that date; 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 for financial year ended March 31, 2015 on a 'going concern' basis; e)they have laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and f)they have devised proper systems to ensure compliance with the provision of all applicable laws and that such systems were adequate and operating effectively. 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. BOARD INDEPENDENCE: Our definition of 'Independence' of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following NonExecutive Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act,2013:- Mr. Amar Nath Mr. Neeraj Bajaj Mr. Mayank Khanna (upto 11.08.2015) 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 The Company adopted its Whistle Blower Policy on 12th February 2015, more specifically required as per NBFC guidelines, even when the same was non-mandatory as per clause 49 of the Listing Agreement. The Whistle Blower Policy/Vigil mechanism provides a mechanism for the director/employee to report violations, without fear of victimization of any unethical behavior, suspected or actual fraud, violation of the Code of Conduct etc. which are detrimental to the organization's interest. The mechanism protects whistle blower from any kind of discrimination, harassment, victimization or any other unfair employment practice. RISK MANAGEMENT The Board of Directors, at its meeting held on 22nd December 2014, 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 31st March 2015 have been disclosed as per Schedule III to the Companies Act, 2013. SUBSIDIARIES COMPANIES: The Company does not have any subsidiary Company. SECRETARIAL AUDIT REPORT: The Board of Directors of the Company has 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". MANAGEMENT DISCUSSION AND ANALYSIS: The Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is annexed to this report. CORPORATE GOVERNANCE: The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 is also published elsewhere in this Annual Report. CFO CERTIFICATION: Certificate from Mr. Yashwant Saini, Chief Financial Officer pursuant to provisions of Clause 49(V) of the Listing Agreement, for the year under review was placed before the Board of Directors of the Company at its board meeting held on 27/05/2015. A copy of the certificate on the financial statements for the financial year ended March 31, 2015 is a part of Corporate Governance Report. DEPOSITORY SYSTEM: The Company has electronic connectivity with both depositories namely Central Depository Services (India) Limited and National Securities Depository Limited. As on March 31, 2015, 88.33 % of the Company's paid-up share capital representing 44149377 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. DISCLOSURES: 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 FY2015 is attached to the Balance Sheet. ACKNOWLEDGEMENT: Your Directors wish to place on record their appreciation for the support and co-operation, which the Company continues to receive from its associates and bankers. The Directors are also thankful to the shareholders for their unstinted support to the Company. By Order and on behalf of the board For CAPITAL TRADE LINKS LIMITED Sd/-Neeraj Garg Chairman Place: Delhi Dated: 11/08/2015 |