Capital Trade Links Ltd Directors Report.


The Members,

Capital Trade Links Limited.

Your Directors delightfully present the 35th Annual Report on the business and operation of the Company together with the Audited Financial Accounts for the year ended 31st March, 2020.


(Rs. in Lacs)

Sl. Particulars No. F.Y. ended 31.03.2020 F.Y. ended 31.03.2019
I Total Revenue from operations 479.02 474.15
II Other Income 3.66 1.24
III Total Revenue 482.68 475.38
IV Operational Expenses 336.08 257.08
V Depreciation and amortization expense 2.90 2.90
VI Total Expenses 338.98 259.98
VII Profit before tax (III-VI) 143.70 215.40
VIII Tax & Adjustment 49.09 52.46
IX Profit After Tax (VII-VIII) 94.61 162.94


For the year ended March 2020, your Company had earned a total income of Rs. 482.68 lakhs as compared to Rs. 475.38 lakhs in the previous year. However the Net Profit of the Company has decreased to Rs. 94.61 lakhs against the Net Profit of previous year for Rs. 162.94 lakhs.


The Board of Directors of your Company has not recommended Dividend for the year 20019-20 to the shareholders due to conservation of profits and continued investment in the business.


As per section 45 IC of Reserve Bank of India Act, 1934, the Company has transferred Rs. 18.92 Lakhs in reserve fund i.e aggregating of 20% of its net profit.


The COVID-19 pandemic has caused a huge disruption creating an unprecedented impact on the financial well-being of nations, corporations and individuals. A detailed discussion on impact of COVID-19 on the NBFC sector and operations of the Company is covered in the Management Discussion and Analysis.


The Reserve Bank of India, issued guidelines on 27th March 2020 permitting all commercial banks, co-operative banks, All India Financial Institutions, and NBFCs to give moratorium to customers in respect of installments falling due between 01st March 2020 to 31st August 2020. Accordingly, the Company started offering moratorium to its customers basis a Board approved policy.


Your Company is one of the growing NBFCs in the country with presence in North India and offers a wide range of financial services to many sectors. Your company is a non-deposit accepting NonBanking Financial Company registered with Reserve Bank of India and obtained certificate of registration no. B-14.02516 dated 19.11.2001.

The Company is principally engaged in the business of advancing loans and financing. The Company offers credit facilities to individuals and business clients in low & medium range. The Company offers various products and services which includes personal loan and secured loan.

The Directors are quite hopeful to achieve new milestones of achievement in the years to come.


Capital Trade Links Limited aims to be the financial institution for the unbanked population in the near future. With the focus on client satisfaction, we plan to encourage self-sufficiency and entrepreneurship in the various clients that we serve.


There is no change in the nature of business of the Company during the year under review. The company portfolio comprises business loans, loans against property and fulfills working capital requirement, among others, of its individual, partnership firms, entrepreneurs, body corporate/business clients and other legal entities.

The Company has proper procedures for the identification of borrower, due diligence, verification & assessment of borrowers income to ensure timely repayment.

The money is advanced for both personal and commercial purpose. Instead of borrowing funds from bank, the Company has been generating funds from market financial resources. The company has established its own standards and norms for evaluating different needs of its clients and always provides suitable payment option considering no harm to its customers as well as recoverable easily.

CTL has entered into very small size and very short period loan through Fintech Companies. In this year, your company has engaged with Fintech Companies and using their platform for disbursing

such very small loan. Fintech Companies is providing the Marketing services and creating visibility of Short Term personal loan product, in order to attract qualifying customers, desirous of obtaining loans.


The Company is into providing following products and services to potential clients


During Financial Year 2019-20, there was change in the capital structure of the Company. As on 31st March 2019, the paid up share capital of the Company was Rs. 509.8 lakhs comprising of 509.8 lakhs equity shares of Re. 1/- each. Further Company has issued 1,00,00,000 equity warrants convertible in equity shares on August 30th 2019 and further resolution passed by board members for the allotment of 1,00,00,000 equity warrants at the meeting held on 23rd October 2019(on the receipt of 25% consideration from all the warrant holders), out of which 29,20,000 equity warrants has been converted and allotted in equity shares on 15th November, 2019 on receipt of balance 75% consideration. Further 70,80,000 equity warrants are still outstanding for conversion in Equity Shares. So Share capital of company as on 31st March, 2020 is 539 lakhs. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.


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. MDA report also contains the details of the risk management framework of the company

including the development and implementation of risk management policy and the key risks faced by the company.


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 since the company is 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 criterias as mentioned above and hence are not required to comply with the Corporate Governance provisions as envisaged under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. However, your Company has formed various committees in order to keep the checks and balances on the business operations of the Company.


The company is a Non-Deposit Accepting Non-Banking Finance Company (NBFC-ND). The company does not hold or accept deposits as on the date of balance sheet.

Investment and Credit Company (NBFC-ICC)

During the year, RBI vide notification dated 22 February, 2019 harmonized different categories of non-banking financial companies (NBFCs) viz. Asset Finance Companies (AFC), Loan Companies (LCs) and Investment Companies (ICs) into a new category called NBFC Investment and Credit Company (NBFC-ICC). Accordingly, the company being Loan Company falls in the category of Investment and Credit Company (NBFC-ICC).


The Company continues to have a conservative provisioning policy which is significantly more stringent than the RBI norms. It fulfills 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.


During the year Five Board Meetings were held and the intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The dates on which the Board Meetings were held are 6th May, 2019, 28th May, 2019, 30th July, 2019, 23rd October, 2019,23rd January, 2020.


In accordance with the Companies Act, 2013 and Listing Regulations, the Company has following Committees in place:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Risk Management Committee

• Independent Directors 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



Appointment of Ms. Vanisha Arora as an Additional Director

Ms. Vanisha Arora (DIN: 08641753) was appointed as an Additional Director of the company w.e.f 19.12.2019 and she will hold office till AGM.

Resignation of Ms. lagrati Sethi from the post of Director

Ms. Jagrati Sethi (DIN: 07670252) has been resigned from the post of Director w.e.f 20.09.2019.

Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Act read with the rules made there under, the following employees were/are the whole time key managerial personnel of the company during FY 19-20:

1. Mr. Santosh Gupta, Chief Financial Officer (from 30/05/2018 upto 01/04/2020)

2. Mr. Gaurav Joshi, Company Secretary (from 01.05. 2018 upto 01.05.2019)

3. Ms. Vanshita Sharma( from 28.05.2019 upto 25.01.2020)

4. Mr. Arya Jadon (Appointed w.e.f. 20/04/2020 )

5. Mr. Rajan Anand (Appointed w.e.f 27.06.2020)


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 NonExecutive Directors are Independent in terms of Section 149(6) of the Companies Act, 2013 and the requirements of Listing Regulations :-

Mr. Amar Nath Mr. Neeraj Kumar Bajaj Mr. Abhay Kumar Ms. Vanisha Arora

All the independent directors (IDs) have submitted their declaration independence, as required pursuant to section 149(7) of the Act, confirming that they meet the criteria of independence as provided in section 149(6) of the Act. In the opinion of the board, the IDs fulfill the conditions specified in the Act and the rules made there under for appointment as IDs and confirm that they are independent of the management.


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.


Pursuant to the provisions of the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its performance, the Directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration Committees for the Financial Year 2019-20. The evaluation was conducted on the basis of a structured questionnaire which comprises performance criteria such as performance of duties and obligations, independence of judgement, level of engagement and participation, attendance of directors, their contribution in enhancing the Boards overall effectiveness, etc. The Board has expressed their satisfaction with the evaluation process. The following are some of the broad issues that are considered in performance evaluation:

Criteria for evaluation of Board and its Committees:

• Setting up of performance objectives and performance against them •Boards contribution to the growth of the Company

• Composition of the Board and its Committees is appropriate with the right mix of knowledge and skill sufficient to maximize performance in the light of future strategy

•Boards ability to respond to crisis

•Board communication with the management team

•Flow of quality information to the Board

Criteria for evaluation of Independent Directors

•Demonstrates willingness to devote time and effort to understand the Company and its business •Demonstrates knowledge of the sector in which the Company operates

• Quality and value of their contributions at board meetings

• Contribution to development of strategy and risk management policy •Effective and proactive follow up on their areas of concern

Criteria for evaluation of Non-Independent Directors

•Knowledge of industry issues and exhibition of diligence in leading the organization

•Level of attendance at the Board and Committee meetings where he/she is a member

•Effectiveness in working with the Board of Directors to achieve the desired results

•Providing direction and support to the Board regarding its fiduciary obligations and governance


•Providing well-balanced information and clear recommendations to the Board as it establishes new policies.

The independent directors met on 20th January, 2020 without the presence of other directors or members of Management. All the independent directors were present at the meeting. In the meeting, the independent directors reviewed performance of non-independent directors, the Board as a whole and Chairman. They assessed the quality, quantity and timeliness of flow of information between the Company management and the Board.


The Company, being a non-banking finance Company registered with the Reserve Bank of India and engaged in the business of giving loans, advancing of monies, and other kind of financings such as E-rickshaw financing etc. 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.


Your company have write off of certain loans of Rs.112.44 Lakh & also made provisions of Rs. 48.55 Lakh to represent true and fair view of the financial results for the period under review. The Covid-19 pandemic has resulted in a significant decrease the economic activities across the country, on account of lockdown that started on 24th March 2020. The lockdown also affected the Companys business operations in the last week of March 2020. Further, accordance with the RBI guidelines relating to Covid-19 Regulatory Package dated 27 March 2020, the Company offered EMI moratorium to its customers based on requests.

Estimates and associated assumptions applied in preparing these financial results, especially for determining the impairment allowance for the Companys financial assets (Loans), are based on historical experience and other emerging/forward looking factors on account of the pandemic. The Company believes that the factors considered are reasonable under the current circumstances. The

Company has used early indicators of moratorium and delayed payment metrics observed along with an estimation of potential stress on probability of default and exposure at default due to Covid-19 situation in developing the estimates and assumptions to assess the impairment loss allowance on Loans.

Given the dynamic nature of the pandemic situation, these estimates are subject uncertainty and may be affected by the severity and duration of the pandemic. In the event the impacts are more severe or prolonged than anticipated, this will have a corresponding impact on the carrying value of financial assets, the financial position and performance of the Company.


The information pursuant to Section 134(3)(m) of the Act, read with Companies (Accounts) Rules, 2014 is as follows:

a. The Company has no activity involving conservation of energy or technology absorption.

b. The Company does not have any Foreign Exchange Earnings.

c. The Company does not have any Foreign Exchange outgo

Details related to this is given as “Annexure I” to this report.


The disclosure with respect to remuneration as required under section 197 of the Act read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached and forms part of this report.


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 Directors Report.


In accordance with section 136 of the Act, the report and accounts are being sent to the members and others entitled thereto. During the year under review, there were no employees drawing remuneration of Rs. 1,02,00,000/- p.a. or Rs. 8,50,000/- 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.


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 your company understands its accountabilities towards the society or the environment and as a result it took parts in various such activities & initiatives.


No Foreign currency expenditure was incurred during FY 2019-20. The Company did not have any foreign exchange earnings.


The Company has documented its internal financial controls considering the essential components of various critical processes, physical and operational which include its design, implementation and maintenance along with periodical internal review of operational effectiveness and sustenance. This ensures orderly and efficient conduct of its business, including adherence to Companys policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The internal financial controls with reference to the financial statements were adequate and operating effectively.


All the related party transactions were entered in ordinary course of business on an arms length basis. Hence, no disclosure in Form AOC-2 is necessary and the same does not form part of this report. For details of the transactions with related party entered in ordinary course of business on an arms length basis refer to the Note 29 to the financial statements. The company has in place a policy on related party transactions as approved by the board and the same is available on the website of the company (weblink: on-Related-Party- Transactions.pdf).

There are no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company save and except the payment of sitting fees and commission paid to independent directors.


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. The Code of Conduct to regulate, monitor and report Insider trading is uploaded on the Companys website:


The Company has established a Whistle Blower Policy and Vigil Mechanism for Directors and employees to report to the appropriate authorities concerns about unethical behavior, actual or suspected, fraud or violation of the Companys 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 Whistle Blower Policy/Vigil Mechanism is uploaded on the Companys website:


There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and companys operations in future.


Risk Management committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continual basis.


In order to prevent Sexual Harassment of Women at Workplace a new Act “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013” has been notified on 9th December, 2013. Under the said Act every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

The company has in place a policy for prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressed) Act, 2013 (POSH Act). The company has complied with the provisions relating to constitution of internal complaints committee (ICC) under the POSH Act. The Sexual Harassment Policy is uploaded on the Companys website:


The financial statements of the Company for the year ended 31stMarch, 2020 have been disclosed as per Schedule III to the Companies Act, 2013.


The Company does not have any subsidiary Company.


The Company has electronic connectivity with both depositories namely Central Depository Services (India) Limited and National Securities Depository Limited. As on March 31, 2020, 92.79% of the Companys paid-up share capital representing 5,00,16,37 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 Companys shares on either of Depositories.


M/s A.C. Gupta & Associates, Chartered Accountants, was appointed by the Company as the Auditors in the Annual General Meeting held on 30th September, 2014 for a period of five years in terms of the provisions of Section 139(2) of the Companies Act, 2013 read with Rules made thereunder.

Thereafter M/s A.C. Gupta & Associates, Chartered Accountants Re-appointed as the Statutory Auditor of the Company in the Annual General Meeting held on 30th August, 2019 for a period of five years, to hold office until the conclusion of AGM to be held in year 2024.


The Notes on accounts and observations of the Auditors in their Report on the Accounts of the Company are self-explanatory. There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Reports that may call for any explanation from the Directors.


Maintenance of cost records and requirements of cost audit as prescribed under the provisions of section 148(1) of the Act is not applicable for the business activities carried out by the company.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Atiuttam Singh & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the FY 2019-20. The Secretarial Audit Report is attached and forms part of this report. There were followings observations as mentioned below of the Secretarial Auditors in their Audit Report that may call for any explanation from the Directors.

The company has failed to allot securities within a period of fifteen days from the date of passing of special resolution under Regulation 170 of SEBI (ICDR) Regulation, 2018.

Explanation: The company has failed to allot securities within a period of fifteen days from the date of passing of special resolution because the payment towards the subscriptions from few parties/investors was not credited in our bank account.


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 FY 2019-20 is attached to the Balance Sheet.

No equity shares were issued with differential rights as to dividend, voting or otherwise.

No equity shares (including sweat equity shares) were issued to employees of your company, under any scheme.

The company has not resorted to any buy back of its equity shares during the year under review.

There was no fraud reported by the Auditors of the Company under the Section 143(12) of Act to the Audit Committee.

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings, Annual General Meetings and Dividend.

Disclosure regarding details relating to deposits covered under Chapter V of the Act is not applicable since our company is a Non-Banking Financial Company regulated by Reserve Bank of India.


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 organizations growth possible.

Finally, the Directors thank you for your continued trust and support.


Sd/- Sd/-
Place: Uttar Pradesh Vinay Kumar Chawla Krishan Kumar
Dated: 29/07/2020 Whole Time Director Director