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Capri Global Capital

BSE: 531595|NSE: CGCL|ISIN: INE180C01026|SECTOR: Finance - General
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Directors Report Year End : Mar '16    Mar 15


Dear Members,

Your Directors have pleasure in presenting the Twenty Second Annual
Report and the audited statement of accounts of the Company for the
year ended March 31, 2016.

FINANCIAL RESULTS

Rs, in Lacs

Standalone Consolidated

Particulars 2015-16 2014-15 2015-16 2014-15

Total Revenue 18,655.19 19,216.08 19,059.15 20,607.96

Total Expenses 13,111.05 5,269.61 13,147.65 5,315.26

Profit before
Depreciation &
Tax (PBDT) 5,544.14 13,946.47 5,911.50 15,292.70

Less: Depreciation 332.16 358.78 347.64 383.10

Profit Before Tax 5,211.98 13,587.69 5,563.86 14,909.59

Less: Provisions
for taxation 1,091.49 5,069.36 1,198.89 5,385.94

Profit After Tax (PAT) 4,120.49 8,518.33 4,364.97 9,523.65

Add: Balance brought
forward from previous
year 39,231.08 33,902.48 40,353.10 35,823.15

Balance available
for appropriations 43,351.57 42,420.81 44,718.07 45,346.80

Appropriations

General Reserve 310.00 700.00 310.00 700.00

Statutory Reserve 850.00 1,850.00 900.00 1,850.00

Dividend on Equity Shares 525.40 525.40 525.40 525.40

Tax on Dividend 106.96 106.96 106.96 106.96

Depreciation Charged
off as per Revised
Depreciation Guidelines - 7.36 - 10.81

Balance Carried to
Balance Sheet 41,559.21 39,231.08 42,875.71 42,153.63

RESULTS OF OPERATIONS AND STATE OF AFFAIRS:

During the year under review your company has strategically grown the
MSME and Retail business while adopting a cautious approach towards
lending to the residential real estate sector under the Wholesale
business. This strategic focus has yielded the desired results and the
loan portfolio has moved positively to 68% (Previous Year 47%) in
favour of MSME and Retail business and 32% (Previous Year 53%) for
Wholesale business. Accordingly, the loan portfolio of MSME and Retail
business has grown to Rs, 75,704.70 lacs (Previous Year Rs, 44,592
lacs) and the Wholesale business loan portfolio has come down to Rs,
35,353.78 lacs (Previous Year Rs, 50,571 lacs). Overall the Loan book
of the Company grew by 16.70% to Rs, 1, 11,058.48 lacs from Rs,
95,167.99 lacs of the last year.

During the year under review the Real Estate sector witnessed
significant slowdown and build up of unsold inventory, thereby
affecting the re-payment ability of the real estate developers. Due to
continuing default by few of the borrowers in re-payment of loans, the
management decided to write-off loan to the extent of Rs, 6593.77 lacs
(net of adjustments) during the year. These write- offs considerably
lowered the profitability of the Company during the year. The gross
revenue of the Company was marginally lower at Rs, 18,655.19 lacs as
compared to Rs, 19,216.08 lacs during the previous year, while the
Profit After Tax (PAT) was lower by 51.63% i.e. Rs, 4,120.49 lacs as
compared to Rs, 8,518.33 lacs of the previous year.

The consolidated gross revenue decreased by 7.52% to Rs, 19,059.15 lacs
from Rs, 20,607.96 lacs of previous year, and the consolidated PAT
decreased by 54.17% to Rs, 4,364.97 lacs from Rs, 9,523.65 lacs of
previous year.

BANK FINANCE

During the year under review the Company raised funds for its working
capital and business requirements from various banks to the extent of
Rs, 38,500 lacs as compared to Rs, 10,000 lacs sanctioned during the
last year.

The total amount of bank loan outstanding was Rs, 14,116.44 lacs as on
March 31, 2016 as against Rs, 5, 000 lacs on March 31, 2015.

ASSET GROWTH

Total Assets of the Company stood at Rs, 1,30,388.41 lacs as compared
to Rs, 1,13,252.34 lacs during the last year, showing an increase of
15.14%.

CAPITAL ADEQUACY RATIO

Your Company''s total Capital Adequacy Ratio (CAR), as of March 31,
2016, stood at 79.72% of the aggregate risk weighted assets on balance
sheet and risk adjusted value of the off-balance sheet items, which is
well above the regulatory minimum of 15%.


STANDARD ASSET''S PROVISIONING

Pursuant to the Notification No. DNBR (PD) CC.No.002/03.10.001/2014-15
dated November 10, 2014 issued by the RBI for making a general
provision at 0.30% on the outstanding Standard Assets of NBFCs, your
Company has made provision at 0.50% exceeding the statutory
requirements.

Further, the Company has decided to create additional Floating
Provision @ 1.50% of Standard Assets over and above the statutory
requirement, which would be available for adjustment against Provision
on Sub-standard Assets.

DIVIDEND

The Directors of the Company have recommended a dividend of Rs, 1.50/-
per Equity Share for the financial year ended on March 31, 2016. The
dividend on Equity Shares, if approved by the shareholders at the 22ncl
Annual General Meeting, would amount to Rs, 632.36 lacs (inclusive of
dividend distribution tax amount of Rs, 106.96 lacs) and will be paid
to those members whose names appear on the Register of Members of the
Company as on July 16, 2016.

TRANSFER TO RESERVES

The Company transferred an amount of Rs, 310 lacs to the General
Reserves during the year.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis of financial condition,
including the results of operations of the Company for the year under
review as required under regulation 34(2)(e) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is provided as a separate section
forming part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statement of the Company prepared in
accordance with applicable Accounting Standards specified under section
133 of the Companies Act, 2013 read with rule 7 of the Companies
(Accounts) Rules, 2014 is provided in the Annual Report.

SUBSIDIARY COMPANIES

As on March 31, 2016, the Company has the following subsidiaries:

1. Capri Global Housing Finance Private Limited;

2. Capri Global Resources Private Limited.

The following subsidiary companies got merged with the Company during
the year:

1. Capri Global Distribution Company Private Limited;

2. Capri Global Finance Private Limited;

3. Capri Global Investment Advisors Private Limited; and

4. Capri Global Research Private Limited.

The audited financial statements, the Auditors Report thereon and the
Board''s Report for each of the Company''s subsidiaries

for the year ended March 31, 2016 are available on the website of the
Company. If any member is interested in obtaining a copy thereof, such
member may write to the Company Secretary in this regard.

Performance and financial position of each of the Subsidiaries Capri
Global Housing Finance Private Limited received Registration from
National Housing Bank on September 28, 2015 to commence housing finance
business. Company has plans to finance affordable housing sector and
would commence business during the next financial year.

Capri Global Resources Private Limited proposes to carry on the
investment management business during the next financial year.

Both the subsidiaries had deployed their funds in interest and income
bearing securities during the year under review.

A report on the performance and financial position of each of the
subsidiaries as per the Companies Act, 2013 is provided as Annexure -I
to the Consolidated Financial statement and hence not repeated here.

Material Subsidiaries

There are no material subsidiaries of the Company. The Policy for
determining material subsidiaries as approved by the Board may be
accessed on the Company''s website at link:

http://www.cgcl.co.in/images/Downloads/Policy%20on%20Material%20
Subsidiaries_l.pdf.

Merger of subsidiaries with the Company

The Hon''ble High Court of Judicature at Bombay on September 11, 2015
approved the Scheme of Amalgamation of Capri Global Distribution
Company Private Limited, Capri Global Finance Private Limited, Capri
Global Investment Advisors Private Limited and Capri Global Research
Private Limited (''Transferor Companies'') with the Company and their
respective shareholders and creditors (''the Scheme''). The Scheme became
effective on October 19, 2015, upon obtaining all sanctions and
approvals as required under the Scheme. The Appointed Date for the
Merger was April 1, 2015. As the Transferor Companies were wholly owned
subsidiaries of the Company, no shares of the Company were issued and
allotted pursuant to the Scheme. Necessary effects, as a result of the
aforesaid Merger, have been given in the Financial Statements for the
year 2015-16.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of section 134(5) of the Companies Act, 2013, your Board of
Directors states that:

a) in the preparation of the annual financial statements for the year
ended March 31, 2016, the applicable accounting standards have been
followed and there are no material departures from the same;

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 March 31, 2016 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 the Companies Act, 2013 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 proper internal financial controls to
be followed by the Company and that such financial controls are
adequate and are operating effectively;

f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that the systems are adequate
and are operating effectively.

CORPORATE GOVERNANCE

The Company has been observing best governance practices and is
committed to adhere to the Corporate Governance requirements on an
ongoing basis. A separate section on Corporate Governance and a
certificate from the Practicing Company Secretary regarding compliance
of conditions of Corporate Governance, as stipulated under Part E of
Schedule V of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 forms part of this Annual Report.

Further, as required under regulation 17(8) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, a
certificate from the Executive Director and Associate Director - Head
of Finance & Accounts on the financial statements of your Company for
the year ended on March 31, 2016, was placed before the Board at its
meeting held on April 23, 2016.

RELATED PARTY TRANSACTIONS

All contracts /transactions entered by the Company during the year with
related parties were at arm''s length and were in the ordinary course of
business. During the year, the Company has not entered into any
transactions which can be considered material in accordance with the
policy of the Company.

The policy dealing with related party transaction as approved by the
Board can be accessed on the Company''s website at the link:

http://www.cgcl.co.in/images/Downloads/Policy%20on%20Related%20
Party%20Transactions_l.pdf.

Your Directors would like to draw attention of members to Note 27 to
the financial statement which sets out details of related party
transactions.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee (CSR Committee) has
formulated and recommended to the Board, a Corporate Social
Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company, which has been approved by the Board.

The CSR Policy may be accessed on the Company''s website at the link:
http://www.cgcl.co.in/images/Downloads/CSR_Policy_Website.pdf.

As part of its initiatives under Corporate Social Responsibility
(CSR), the Company has undertaken projects in the areas of education,
healthcare & livelihood of the unprivileged, women and
differently—baled. These projects are in accordance with Schedule VII
of the Companies Act, 2013.

The Annual Report on CSR activities is annexed herewith marked as
Annexure -1 to this report.

RISK MANAGEMENT

The Board of Directors of Company has constituted Risk Management
Committee in addition to the Assets Liability Management Committee
(ALCO) which is entrusted with the responsibility to assist the Board
in identification and mitigation of risks associated with the business
of the Company. The details of the functioning of the Risk Management
Committee and ALCO are provided in the report on Corporate Governance
forming part of this Annual Report. The Company follows a proactive
risk management policy, aimed at protecting its assets and employees
while at the same time ensuring growth and continuity of its business.
Regular updates are made available to Board at the Board Meeting and in
special cases on ad-hoc basis.

A detailed discussion on the identified risks and mitigation strategies
is contained in the Management Discussion and Analysis forming part of
the Annual Report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal controls commensurate with
the size, scale and complexity of its operations. To maintain its
objectivity and independence, the Internal Auditors report to the
Chairman of the Audit Committee of the Board. Internal Auditors monitor
and evaluate the efficacy and adequacy of internal control system in
the Company, its compliance with operating systems, accounting
procedures and policies at all locations of the Company and its
subsidiaries.

Based on the report of Internal Auditors, process owners undertake
corrective action in their respective areas and thereby strengthen the
controls. Significant audit observations and corrective actions thereon
are presented to the Audit Committee of the Board.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of section 152 of the Companies Act,
2013 and the Articles of Association of the Company Mr. Quintin E.
Primo III, retires by rotation at the ensuing Annual General Meeting
and offers him-self for re- appointment.


During the year under review, the members approved the re- appointment
of Mr. Rajesh Sharma as a Non-executive Director who is liable to
retire by rotation. The members have also appointed Mr. Sunil Kapoor as
Executive Director of the Company for a term of one year which expired
on January 23, 2016 and the Board has re-appointed him for another
period of three years starting from January 24,2016, which is proposed
to be approved by the members at the ensuing Annual General Meeting.

Declaration by Independent Director(s)

The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
Independence prescribed both under the Companies Act, 2013 and
regulation 16(l)(b) of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015.

Formal Annual Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and regulation
16(10) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Board has carried out an annual performance
evaluation of Independent Directors, Board, Committees and other
individual Directors, process of evaluation was followed as per the
Policy laid down in this regard. The manner in which the evaluation has
been carried out has been explained in the Report on Corporate
Governance.

Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection of Directors, determining
Directors independence and payment of remuneration to Directors, Key
Managerial Personnel and other employees.

The Nomination and Remuneration Policy is stated in the Report on
Corporate Governance.

Familiarization Programmes

On appointment, the concerned Director is issued a Letter of
Appointment setting out in detail, the terms of appointment, duties,
responsibilities and expected time commitments. The details of
programmes for familiarization of Independent Directors with the
Company, their roles, rights, responsibilities in the Company and
related matters are put up on the website of the Company at link:
http://MW.cgcl.coJn/images/Downloads/femiliarisation%20Programme%20
foi%20lndependenF/o20Directors.pdf,

EMPLOYEES STOCK OPTION PLAN

The Nomination and Remuneration Committee of the Board of Directors of
the Company inter-alia administers and monitors the Employees Stock
Options Scheme in accordance with the applicable SEBI guidelines.

During the year under review 400,000 options were granted to Mr. Sunil
Kapoor, Executive Director of the Company at the exercise price of Rs,
200/- per option. The options would be vested over a period of 5 years
starting from October 15, 2016 and vesting would be linked with
attainment of return on equity.

No Stock Options were vested and exercised during the year by the
employees.

There were no changes to the Employees Stock Options Scheme 2009 during
the year.

The applicable disclosure as stipulated under the SEBI guidelines as on
March 31, 2016 with regard to Employees Stock Options Scheme are put up
on the website of the Company at link:
http://www.cgcl.co.in/images/Downloads/ES0S%20Details-2015-16.pdf.

The Company has received a certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
guidelines and the resolution passed by the members. The certificate
would be placed at the Annual General Meeting for inspection by
members.

AUDITORS AND AUDITORS'' REPORT Statutory Auditor

Pursuant to the provisions of section 139ofthe Act and the rules framed
there under, M/s. Karnavat & Co, Chartered Accountants, were appointed
as statutory auditors of the Company from the conclusion of the twenty
first annual general meeting (AGM) of the Company held on July 18, 2015
till the conclusion of the twenty sixth AGM, subject to ratification of
their appointment at every AGM.

The Notes on financial statements referred to in the Auditors Report
are self -explanatory and do not call for any further comments. The
Auditors'' Report does not contain any qualification, reservation or
adverse remark.

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 PRS Associates,
Company Secretaries in Practice to undertake the Secretarial Audit of
the Company. The Secretarial Audit Report is annexed herewith marked as
Annexure - II to this Report.

The following qualification was observed by the Secretarial Auditor in
their Report to which the Board has shared the following explanations:

Qualification: The Company has not appointed Chief Financial Officer
(''CFO'') as required under section 203(1) of the Companies Act, 2013.

Explanation: Company has made sincere efforts to appoint Chief
Financial Officer (CFO) as per defined KRA. Few of the candidates were
interviewed, from which one of the candidate was selected. He had
accepted the offer, but he was not able to join Company due to personal
reasons. The Company has adequate resources and qualified personnel
with more than 20 years of experience looking after accounts, finance,
taxation & treasury operations of the Company.

DISCLOSURES Audit Committee

The Audit Committee comprises of Independent Directors namely Mr. Beni
Prasad Rauka (Chairman), Ms. Bhagyam Ramani, Mr. Mukesh Kacker and Mr.
T. R. Bajalia as members. The Audit Committee played an important role
during the year. It coordinated with the Statutory Auditors, Internal
Auditors and other key personnel of the Company and has rendered
guidance in the areas of internal audit & control, finance and
accounts. All the recommendations made by the Audit Committee were
accepted by the Board. Four meetings of the Audit Committee were held
during the year.

Stakeholders Relationship Committee

The Committee has met four times during the year. With the compulsory
dematerialization of the Company''s shares and electronic mode of
transfers, postal dispatches which led to usual complaints, have been
minimized. At the year end 99.94% of the total shares were
dematerialized with no unresolved pending investor grievances.

Nomination & Remuneration Committee

The Nomination and Remuneration Committee recommends to the Board the
suitability of candidates for appointment as Key Managerial Personnel,
Directors and the remuneration packages payable to them and other
employees. The Nomination and Remuneration Committee met twice during
the year.

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism named Whistle Blower Policy (WBP) to
deal with instance of fraud and mismanagement, if any, the details of
the WBP is explained in the report of Corporate Governance. The WBP may
be accessed on the Company''s website at the link:
http://www.cgcl.co.in/images/Downloads/Whistle%20Blower%20Policy-
website_l.pdf.

Meetings of Board

Four meetings of the Board of Directors were held during the year, the
details of which are provided in report on Corporate Governance. The
intervening gap between the meetings was within the period prescribed
under the Companies Act, 2013.

Particulars of Loans, Investments, Guarantees

Not applicable being a Non-Banking Finance Company.

Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo

The provisions of section 134(3)(m) of the Companies Act, 2013,
relating to conservation of energy and technology absorption are not
applicable to the Company. However, the Company has been continuously
and extensively using technology in its operations.

There were no foreign exchange earnings during the year. There was
foreign exchange outgo of Rs, 26.27 lacs during the year.

Extract of Annual Return

The details forming part of the extract of the Annual Return as
prescribed in Companies (Management and Administration) Rules, 2014 in
form MGT- 9 is annexed herewith marked as Annexure - III to this
Report.

Particulars of Employees

Disclosures pertaining to remuneration and other details 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 are provided in the Annual Report and is marked as Annexure
- IV to this Report.

The statement containing particulars of employees as required under
section 197(12) of the Companies Act, 2013, read with rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, is provided in a separate annexure forming part of this Report.
Further, the report and the accounts are being sent to the members
excluding the aforesaid annexure. In terms of section 136 of the
Companies Act, 2013, the said annexure is open for inspection at the
Registered Office of the Company. Any shareholder interested in
obtaining a copy of the same may write to the Company Secretary.

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

Reserve Bank of India Directions

Your Company is categorized as a non deposit taking systematically
important (ND-SI) non-banking finance company (NBFC). Accordingly
during the year your Company has not accepted any deposits from the
public and there were no deposits which become due for repayment or
renewal. Your Company has complied with the directives issued by the
Reserve Bank of India under the Non Banking Financial Companies
(Reserve Bank of India) Directions, 2007 and Non-Banking Financial
Companies - Corporate Governance (Reserve Bank) Directions, 2015, as
amended from time to time.


Increase in Share Capital

Pursuant to merger of four of the subsidiaries with the Company,
Authorized Share Capital of the subsidiary companies of Rs,
17,00,00,000/- (Rupees Seventeen Crores only) was combined with the
Company. After combination the Authorized Share Capital of the Company
is Rs, 72,00,00,000/- (Rupees Seventy Two Crores only) divided into
7,20,00,000 Equity Shares of Rs, 10/- each.

During the year under review, the Company has not issued and equity
shares either with or without differential voting rights nor has issued
any sweat equity. As on March 31, 2016, none of the Directors of the
Company hold any convertible instruments of the Company.

Disclosure under Sexual Harassment of Women

Company has Sexual Harassment Policy in place and available on
Company''s intranet portal. During the year under review there were no
complaints from any of the employee.

ACKNOWLEDGEMENTS

The Board of Directors wish to place on record their deep and sincere
gratitude for the continued co-operation and support extended by the
customers, bankers, business associates, consultants, advisors,
shareholders, investors and the employees of the Company and
subsidiaries.

The Board of Directors would also like to place on record their sincere
appreciation for the co-operation received from the Reserve Bank of
India, Securities and Exchange Board of India, NSE & BSE, Ministry of
Corporate Affairs and all other regulatory bodies.

For and on behalf of the Board

Mr. Sunil Kapoor Mr. Rajesh Sharma

Place: Gangtok, Sikkim Executive Director Director

Dated: April 23, 2016

DIN: 01436404 DIN: 00020037

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