Octal Credit Capital Ltd Directors Report.

To The Members Of,

OCTAL CREDIT CAPITAL LIMITED

Your Director have pleasure in presenting the 27th Annual Report of the Company together with Audited Statements of Accounts for the year ended 31st March 2019.

STANDALONE & CONSOLIDATED FINANCIAL STATEMENT:

Particulars

STANDALONE

CONSOLIDATED

For the Year Ended March 31, 2019 For the Year Ended March 31,2018 For the Year Ended March 31, 2019 For the Year Ended March 31,2018
Revenue from Operation 24.03 50.50 24.03 50.50
Other Income 3.05 7.28 3.05 7.28
Total Income 27.08 57.78 27.08 57.78
Total Expenses 29.63 53.74 29.63 53.74
Exceptional Item
Profit/(Loss) Before Tax (2.55) 4.04 (2.55) 4.04
Provision for Taxation
Deferred Tax Asset/(Liability) 0.01 0.04 0.01 0.04
Income Tax For Earlier Year - (0.16) (0.16)
Profit/(Loss) After Tax (2.56) 3.92 (2.56) 3.92
Add: Share of Profit in Associates - 0.60 5.84
Profit/(Loss) For the Period (2.56) 3.92 (1.96) 9.76

CHANGE IN NATURE OF BUSINESS:

There has been no change in nature of business of the company during the F Y. 2018-2019.

MATERIAL CHANGES AND COMMITMENTS:

There has been no material changes and commitments, affecting the Financial Position of the Company, which have occurred between the End of Financial Year of the Company to which the Financial Statements relate and the date of the report.

DIVIDEND:

Due to inadequate profit during the year under review The Board has decided not to recommend any dividend for the year ended 31st March 2019.

TRANSFER TO RESERVE:

The Company has not transferred any amount to statutory reserve under section 45 IC of RBI Act 1934 due to losses in the financial year 2018-2019.

CHANGES IN SHARE CAPITAL:

The paid up Equity Share Capital as on 31st March, 2019 stood at Rs. 5,00,09,000/-. During the year under review, the Company has not issued any shares with differential voting rights, sweat equity shares nor granted any stock options. The company neither came out with rights, bonus, private placement and preferential issue.

OPERATIONS & FUTURE OUTLOOK:

The Company will look to extend to adjacent business spaces without compromising the integrity of the loan book. We believe that the market for this is large and relatively underpenetrated.

Given the potential in the business, we believe that we should be able to more than double revenues during the current financial year and double that again in 2020-21. The next two years are expected to generate sizeable growth, enhancing value for our customers while improving our visibility and profitability.

According to RBI one of the main reasons for tighter regulation is to reduce the systematic risk they pose to the financial system since they borrow heavily from banks. Prima facie it may appear that these reforms will affect the productivity of the NBFCs; however, with time they are more likely to improve NBFCs capacity to endure asset quality shocks and also deal with systemic risks. Moreover, increase in disclosure requirements and corporate governance norms will have a three-fold effect. It will enhance transparency and increase the responsibility of the management and further supplement investor awareness.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has policy for Internal Financial Control System, commensurate with the size, scale and complexity of its operations. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The scope and authority of the Internal Audit (IA) function is defined in the internal financial control policy. The Internal Auditor monitors and evaluates the efficiency and adequacy of Internal Financial control system in the Company, its compliance with operating systems, accounting procedures and policies. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board, the internal audit report on quarterly basis and some are reviewed by the committee. The observation and comments of the Audit Committee are placed before the board.

DIRECTORS & KEY MANAGERIAL PERSON:

Key Managerial Personnel
Mr. Arihant Patni - Whole Time Director
Mr. Shyam Arora - Chief Financial Officer
Miss Sweety Dassani - Company Secretary

 

Non-Executive, Non Independent Directors
Mr. Dilip Kumar Patni
Mr. Kamal Nayan Jain
Mrs. Vandana Patni
Non-Executive, Independent Directors
Mr. Sambhu Nath Jajodia
Mr. Bijay Bagri

Appointment and Resignation:

During the year Mrs. Payal Bhutoria (Sirohia), Company Secretary of the company resigned with effect from 3rd August, 2018 and in place of her Miss Sweety Dassani, an Associate Member of Institute of Company Secretaries of India was appointed as Whole Time Secretary of the Company with effect from 3rd Day of August, 2018.

In accordance with the provisions of the section 152 of Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr . Dilip Kumar Patni (Non-Executive, Non Independent Directors) (DIN 01069986) who retires by rotation and, being eligible, offers herself for reappointment at the ensuing Annual General Meeting of the company.

A brief resume of the Directors proposed to be re-appointed along with additional information is provided in the notice of Annual General Meeting.

MEETINGS OF THE BOARD:

The company has duly complied with section 173 of the Companies Act 2013. During the year under review, 9 (Nine) board meetings were convened and held. The date on which meeting were held are as follows :

20.04.2018, 30.05.2018, 03.08.2018,14.08.2018, 24.09.2018, 04.10.2018,13.11.2018,12.02.2019 and 30.03.2019.

The maximum interval between any two meetings did not exceed 120 days.

FORMAL ANNUAL EVALUATION & INDEPENDENT DIRECTORS ME ETING:

During the year, the Board has carried out the annual evaluation of its own performance as well as the evaluation of the working of its Committees and individual Directors. This exercise was carried out through a structured questionnaire prepared separately for Board, Committee and individual Directors on the basis of the various parameters.

Separate exercise was carried out to evaluate the performance of Whole: Time Director on basis of the parameters such as contribution, independent judgment, effective leadership to the Board, safeguarding of minority shareholders interest etc. Based on set parameters, the performance of the Board, various Board Committees viz. Audi t Committee, Stakeholder s Relationship Committee, Nomination and Remuneration Committee and Independent Directors was carried out and evaluated to be satisfactory.

During the year under review, the Independent Directors of your Company carried out the performance evaluation of Non- Independent Directors and Chairperson at a separate meeting of Independent Director held on 20.09.2017. The Directors were satisfied with the Evaluation Results,

MANAGERIAL REMUNERATION:

The statement containing the disclosure as required in accordance with the provisions of Section 197(12) of the Companies Act 2013 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure I. and forms a part of the Board Report. Further, none of the employees of the Company are in receipt of remuneration exceeding the limit prescribed under rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 so statement pursuant to Section 197(12) of the Companies Act 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not required to be included.

DETAILS OF SUBSIDIARY/JOINT VENTURES / ASSOCIATE COMPANIES:

Your Company has no Subsidiary Company. Details of Associate Companies during the year under review is annexed as Annexure II (i.e. in Form AOC - I) and forms part of the Board Report.

AUDITORS & AUDITORS REPORT:

STATUTORY AUDITOR : Pursuant to section 139(1) of Companies Act 2013 read with applicable rules thereon M/s. Vasudeo & Assoicates have been appointed as Statutory Auditors of the Company for a period of 5 year from the conclusion of 25th Annual General Meeting held in 2017 till the conclusion of the 29th Annual General Meeting to be held in the year 2022, subject to ratification by shareholders in every AGM.. Pursuant to the Companies Amendments Act 2017 w.e.f. 07.05.2018 the proviso to section 139(1) of Companies Act 2013 in regard to the ratification of appointment of Statutory Auditor in every Annual General Meeting has been omitted.

SECRETARIAL AUDITOR: 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 Mrs. Dipika Jain, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure III.

INTERNAL AUDITOR: Pursuant to the provisions of Section 138 of the Companies Act, 2013 and The Companies (Accounts) Rules, 2014 the Company M/s. Amresh Jain & Co., were appointed to undertake the Internal Audit of the Company for 2 years i.e for the F.Y. 2018-19 & 2019-20. There stood no adverse finding & reporting by the Internal Auditor in the Internal Audit Report for the year ended 31st March 2019.

AUDITOR REPORTS There are no qualifications, reservation or adverse remarks made by M/s. VASUDEO & ASSOCIATES , the statutory Auditor, in their report.

Regarding Observation given by Mrs Monika Jain, in their Secretarial Audit Report we are to state that the Company has already requested to its Promoters to dematerialize their entire holding of OCCL.

The statutory Auditor have not reported any incident of fraud to the Audit committee of the company in the year under review.

COMMITTEES:

i) AUDIT COMMITTEE:

The Audit Committee of the Board of Directors oversees the Financial Statements and Financial Reporting before submission to the Board. The Audit Committee is responsible for the recommendation of the appointment, remuneration, performance and oversight of the work of the Internal and Statutory Auditors. It reviews the Reports of the Internal Auditors and Statutory Auditors. The Senior Management Personnel are invited to the meetings of the Audit Committee, along with the Head of Internal Audit. At present, there are three Members of the Audit Committee.

The composition of the Audit Committee is given below:

S.No. Name of Member Category
1 Mr. Sambhu Nath Jajodia Chairman - Independent, Non Executive
2 Mr. Bijay Bagri Independent, Non Executive
3 Mr. Dilip Kumar Patni Non Independent, Non - Executive

ii) NOMINATION AND REMUNERATION COMMITTEE:

The committee s constitution and terms of reference are in compliance with provisions of section 178 of Companies Act 2013 read with Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The functions of this Committee include identification of persons who are qualified to become Directors and who may be appointed as Senior Management, formulation of criteria for determining qualifications, positive attributes, independence, recommendations of their appointments to the Board, evaluation of every Directors performance, formulation of Remuneration Policy to include recommendation of remuneration for Directors, Key Managerial Personnel and Senior Management.

At present, there are Three Members of the Nomination and Remuneration Committee, in which Two are Independent Directors.

The composition of the Nomination And Remuneration Committee is given below:

S.No. Name of Member Category
1 Mr. Sambhu Nath Jajodia Chairman - Independent, Non Executive
2 Mr. Bijay Bagri Independent, Non Executive
3 Mr. Dilip Kumar Patni Non Independent, Non - Executive

iii) STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee is responsible to Consider & Resolve the Grievances of Security holders including complaints related to transfer of shares, non receipt of balance sheet, non receipt of declared dividends, Transfer & transmission of shares, Issue of duplicate shares, Exchange of new design share certificates, Recording dematerialization & rematerialization of shares & related matters.

The composition of the Stakeholders Relationship Committee is given below:

S.No. Name of Member Category
1 Mr. Dilip Kumar Patni Chairman - Non Independent
2 Mr. Kamal Nayan Jain Non Independent
3 Mrs. Vandana Patni Non Independent

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Your Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. The company has adopted a Whistle Blower policy to establish a vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or ethics policy. The said policy is hosted on the website of the company (www.occl.co.in)

RISK MANAGEMENT POLICY:

Pursuant to section 134(n) of Companies Act 2013 and revised clause 49 of Listing Agreement, your company has a robust Risk management framework to identify, evaluate business risk and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the competitive advantage. The framework has different risk models which, help in identifying risk trends, exposure and potential impact analysis at a company level. The said policy is hosted on the website of the company (www.occl.co.in)

CORPORATE SOCIAL RESPONSIBILITY:

The Company had not taken any initiatives on the activities of Corporate Social Responsibilities as the provisions relating to the same are not applicable to the Company.

EXTRACT OF ANNUAL RETURN:

Companies Act, 2013 makes mandatory for every company to prepare an extract in the format prescribed MGT 9. The details forming art of the extract of Annual Return as on 31st March 2019 is annexed herewith as Annexure IV.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE:

There are no significant material orders passed by the Regulators / Courts/Tribunals which would impact the going concern status of the Company and its future operations.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 :

Your Company being the Non Banking Financial Company having the principal business of providing loans, is exempted from the provisions of Section 186 of the Companies Act, 2013 to the extent of providing loans, giving guarantee and providing security in connection with loan. However, the details of investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in notes to the financial statement.

DEPOSITS:

Your company is non deposit taking NBFC registered with RBI, thus the said clause is not applicable and the company does not accept any deposit. The Board of Directors has duly passed a resolution in their meeting giving effect to the aforesaid statement.

CONTRACTS/TRANSACTIONS/ARRANGEMENTS WITH RELATED PARTIES:

All contracts/ arrangements/transactions with related parties entered by the company during the financial year were on an arms length basis and were in the ordinary course of business and the provisions of section 188 of the Companies Act 2013 are not attracted and thus disclosure: about details of contracts or arrangements or transactions with related parties referred to in section 188(1) in Form AOC-2 is not required. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. There are no materially significant related party7 transactions made by the Company with Promoters, Directors, Key Managerial Personnel or their relatives or other designated persons which could have a potential conflict with the interest of tire Company at large. All Related Party

Transactions are periodically placed before the Audit Committee as also the Board for approval. During the year under review the company has not taken any omnibus approval from Audit committee. A Related Party policy has been devised by the board of Directors for determining the materiality of transactions with related parties and dealing with them. Further your directors draw your kind attention of the members to note no 2.27 to the financial statements which sets out related party transactions.

CORPORATE GOVERNANCE REPORT:

As per Regulation 15 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance provisions specified in regulations 17, 18, 19, 20, 21,22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C , D and E of Schedule V shall not apply, in respect of (a) a listed entity having paid up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees twenty five crore, as on the last day of the previous financial year. As our company falls under above mentioned exception hence compliance with Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to us. Therefore Corporate Governance Report for the year ended 31.03.2018 is not prepared.

DISCLOSURES ON POLICY AGAINST SEXUAL AND WORKPLACE HARASSMENT :

The Company believes that it is the responsibility of the organisation to provide an environment to its employee which is free of discrimination, intimidation and abuse and also to protect the integrity and dignity of its employees and also to avoid conflicts and disruptions in the work environment. Further there stood no cases filed during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOES:

Since the Company does not own any manufacturing facility, the requirements pertaining to disclosure of particulars relating to conservation of energy, technology absorption and foreign exchanges earning and outgo, as prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable.

DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors to the best of their knowledge and belief and according to the information and explanation obtained by them, make the following statement in terms of clause (c) of sub-section (3) of section 134 of Companies Act 2013 that - OCTAL CREDIT CAPITAL LIMITED Annual Report 2018-2019

a) In the preparation of the annual accounts for the Financial year ended on 31st March 2019, 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 as at 31st March 2019 and of the Losses of the company for that period;

c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis;

e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

ACKNOWLEDGEMENTS:

Your Directors take the opportunity to thanks the Regulators, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

On Behalf of the Board of Directors
Place: Kolkata D. K. Patni
Date : May 28,2019 Chairman

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

(i) The percentage increase in remuneration of each Director, Chief Financial Officer, Company Secretary during the financial year 2018-2019, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2018-2019 and the comparison of remuneration of each Key Managerial Personnel (KMP)against the performance of the Company are as under:

Name of the Directors / KMPs Designation Remuneration of Director/KMP for financial year 2018-19 (in Rs.) % increase in Remuneration in the Financial Year 2018-19 compared to 2017-18 Ratio of remuneration of each Director to median ** remuneration of employees (in times) Comparison of the Remuneration of the KMP against the performance of the Company
Mr. Arihant Patni Whole Time Director 2,40,000/- 1.53 #
Mrs. Payal Bhutoria Company Secretary (Resigned on 03.08.2018) 40,000/- Not Applicable
Miss Sweety Dassani Company Secretary ( Appointed on 03.08.2018) 1,94,542/- Not Applicable
Mr. Shyam Arora Chief Financial Officer 1,93,680/- 10.35% Not Applicable

** Calculation of median is taken on the figures as at the end of Financial Year.

# Negative EBITDA, hence NA.

(ii) The Median Remuneration of Employees as on March 31, 2019 was Rs. 2,22,741. The percentage increase in the median remuneration of employees was 10.35 during the financial year.

(iii) There were 4 (Four) permanent employees (including Whole Time Director, CFO & Company Secretary) on the rolls of Company as on March 31, 2019;

(iv) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company: The total remuneration of Key Managerial Personnel increased by 44.91%.

(v) Variations in the market capitalization of the Company: The market capitalization as on March 31, 2019 was Rs 5.41 crore (Rs. 6.20 crore as on 31.03.2018).

Price Earnings ratio of the Company : 217 as at March 31, 2019 (155 as at March 31, 2018) Percent increase over/ decrease in the market quotations of the shares of the company as compared to the rate at which the company came out with the last public offer in the year- The company came out with IPO in the year 1996 at the face value and the price of the shares as on 31st March 2019 stands to Rs 10.83/- . Further the Company had not come out with any public offerings during the financial year March 31, 2019.

(vi) Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2018-19 was 7.15 % whereas the average percentage increase made in the salaries of KMP was 10.35%. Further there was no exceptional increase in the salary during the Financial Year ended 31.03.2019 as compared above.

(vii) Key parameters for any variable component of remuneration availed by the directors : Not Applicable

(viii) Ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year : Not Applicable.

(ix) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

Form AOC- I

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of the Companies

(Accounts) Rules, 2014)

Statement containing salient features of the financial statements of subsidiaries/associates companies/joint ventures

Part A: Subsidiaries

Your Company has no Subsidiary Company during the year under review.

Part B: Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies & Joint Ventures:

Name of Associates New View Consultants Private Limited
1. Latest Audited Balance Sheet Date As at 31st March 2019
2. Shares of Associate held by the company as on 31.03.2019 5,58,000
Amount Of Investment in Associates 11,16,000.00
Extend of Holding % 22.74%
3. Description of how there is significant influence Shareholding
4. Reason why the Associate is not consolidated Consolidated
5. Net worth attributable to Shareholding as per latest audited Balance sheet Rs 4.83 Crore
6. Profit/Loss for the year
i. Considered in Consolidation Rs 0.60 Lacs
ii. Not Considered in Consolidation. -

Note: i) Nirmalkunj Projects Private Limited ceased to be an Associate of the Company during the year.

ii) Your Company has no Joint Venture(s) during the year under review .