Capri Global Capital Directors Report, Capri Global Reports by Directors

Capri Global Capital

BSE: 531595|NSE: CGCL|ISIN: INE180C01026|SECTOR: Finance - General
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Directors Report Year End : Mar '17    Mar 16

Dear Members,

The Directors have pleasure in presenting the Twenty Third Annual Report together with the audited financial statements for the financial year ended March 31, 2017.


The summary of the Company’s financial performance, both on a standalone and consolidated basis, for the Financial Year (“FY”) 2016-17 as compared to the previous FY2015-16 is given below:

(Rs. in lacs)








Total Revenue





Less: Operating Expenses & Provisions





Profit before Interest, Depreciation & Taxes (PBIDT)





Less: Depreciation





Less: Interest & Finance Charges





Profit Before Tax





Less: Provisions for taxation





Profit After Tax (PAT)





Add: Balance brought forward from previous year





Balance available for appropriations






General Reserve





Statutory Reserve





Dividend on Equity Shares





Tax on Dividend





Balance Carried to Balance Sheet






During the year under review, the total revenue of the Company was Rs.23,167.53 lacs as compared to Rs.18,655.19 lacs during the previous year an increase of 24.19%, while the PAT was Rs.5,778.49 lacs as compared to Rs.4,120.49 lacs of the previous year, an increase by 40.24%, due to better control over the NPAs and negligible write-offs during the year.

During the year under review, your Company has grown both the business verticals with greater emphasis on the MSME business. The loan book grew from Rs.1,11,058.48 lacs of the previous year to Rs.1,81,659.64 lacs, an increase by 63.57%. Accordingly the loan portfolio of MSME business has grown by 60.33% to Rs.1,21,379.55 lacs (previous year Rs.75,704.70 lacs) and the construction finance business loan portfolio has grown by 70.50% to Rs.60,280.09 lacs (previous year Rs.35,353.78 lacs).

The gross revenue on consolidated basis has grown by 23.81 % to Rs.23,508.72 lacs from Rs.19,059.15 lacs of previous year, and the consolidated PAT increased by 33.16% to Rs.5,812.23 lacs from Rs.4,364.97 lacs of previous year.


The Directors of your Company are pleased to recommend a dividend of Rs.0.30 per Equity Share (Rs.2/- paid up per share) for the financial year ended on March 31, 2017. The dividend on Equity Shares, if approved by the shareholders at the 23rd 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 7, 2017. As per Companies (Accounting Standards) Amendment Rules, 2016, dividend and tax thereon will be recognised as liability on approval of shareholders at the ensuing Annual General Meeting (AGM).


The Company proposes to transfer Rs.450 lacs (previous year Rs.310 lacs) to General Reserve and Rs.1,160 lacs (previous year Rs.850 lacs) to Statutory Reserve created pursuant to section 45-IC of the Reserve Bank of India Act, 1934.


Total Assets of the Company stood at Rs.1, 94,464.77 lacs as compared to Rs.1, 30,388.41 lacs during the last year, showing an increase of 49.14%.


Your Company’s Capital Adequacy Ratio (CAR), as of March 31, 2017, stood at 52.97% 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%, providing much needed headroom for fund raising for business operations of the Company.


Pursuant to the Master Direction DNBR. PD. 008/03.10.119/2016 -17 dated September 1, 2016 issued by the Reserve Bank of India (RBI) for making a general provision at 0.35 % on the outstanding Standard Assets, 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 is available for adjustment against specific Provision on Sub-standard Assets and NPAs.


During the year under review, the Company raised funds for its working capital and business requirements from various banks and had sanctioned facilities of Rs.85,500 lacs as compared to Rs.48,500 lacs during the last year.

The total amount of bank loan outstanding as on March 31, 2017 was Rs.60,285.80 lacs as against Rs.14,116.44 lacs on March 31, 2016.


During the year under review, the Company raised Rs.7,500 lacs through issue of three (3) tranches of Secured Redeemable No-Convertible Debentures (NCDs) on Private Placement basis. The NCDs are listed on the BSE Limited. The Company also raised Rs.5,000 lacs through issue of Commercial Paper (CP).


During the year, Credit Analysis and Research Ltd. (“CARE”) has accorded a rating of ‘CARE A ’ [Single-A Plus] for the issue of Non-convertible Debentures and ‘CARE A1 [A One plus] for the issue of Commercial Paper. Further, CARE has also accorded a rating of ‘CARE A ’ [Single A Plus] with respect to the Bank facilities availed by the Company.


The Management Discussion and Analysis report 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 (Listing Regulations), is provided as a separate section forming part of the Annual Report.


As on March 31, 2017, the Company has the following subsidiaries:

1. Capri Global Housing Finance Limited;

2. Capri Global Resources Private Limited;

3. Capri Global Asset Reconstruction Private Limited*

*Incorporated on February 22,2017 as a wholly owned subsidiary of the Company.


During the year under review Capri Global Housing Finance Limited (‘HFC’) started the business of financing affordable housing and made a humble beginning by disbursing loan amounting to Rs.696.98 lacs. The HFC has earned a Profit After Tax of Rs.85.34 lacs as compared to Rs.244.58 lacs of the previous year. Decrease in profit is attributable to increase in operational expenses of the HFC necessitated by the launch of the housing finance business.

Capri Global Resources Private Limited (CGRPL) has incurred a loss of Rs.51.59 lacs during the year as compared to the losses of Rs.0.11 lacs in the previous year. CGRPL has invested its capital in developing the business plans and for registration of the ‘Capri India Real Estate Investment Fund’ with Securities & Exchange Board of India (SEBI).

Capri Global Assets Reconstruction Private Limited was incorporated on February 22, 2017 and is yet to commence business operations.

As required under rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statement of the subsidiaries is appended as Annexure - I to the Consolidated Financial statement.

All the subsidiaries are wholly owned by the Company. The Company does not have any overseas subsidiary.


During the year under review, the Company has infused capital in its following subsidiaries by subscribing to their equity shares:

Name of subsidiary company

Amount of capital subscribed ( lacs)

Capri Global Resources Private Limited


Capri Global Asset Reconstruction


Private Limited


There are no material subsidiaries of the Company as at March 31, 2017. However, the Board of Directors of the Company has framed a Policy for determining Material Subsidiaries and the same is available at Policy on Material Subsidiaries 1.pdf


The Board of Directors of the Company, to the best of their knowledge and belief, confirms that:

a) in the preparation of the annual accounts, the applicable accounting standards have 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 March 31, 2017 and of the profit 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 the 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 operating effectively;

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


The Company has put in place adequate internal controls with reference to financial statements, commensurate with the size, scale and complexity of operations. The design and effectiveness of key controls were tested and no material weaknesses were observed.


The Report on Corporate Governance for the year under review is forming part of the Annual Report. The certificate from the Secretarial Auditor of the Company confirming compliance with the conditions of Corporate Governance is annexed to the Report on Corporate Governance.


The Board of Directors has approved the Related Party Transactions (“RPT”) Policy, which is also available on the Company’s website at Policy on Related Party Transactions 1.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are followed for all transactions between the Company and Related Parties.

All RPT that were entered into during the FY2016-17 were on an arm’s length basis and were in the ordinary course of business. There were no materially significant RPT made by the Company with Promoters, Directors, KMP or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPT as required under the provisions of section 134(3)(h) of the Companies Act, 2013 (‘Act’) in Form AOC-2 is not applicable. The Directors draw attention of the Members to Note No. 26 to the Financial Statements which sets out details of related party transactions.


In accordance with the requirements of the provisions of section 135 of the Act, the Company has constituted a Corporate Social Responsibility (''CSR'') Committee. The composition and terms of reference of the CSR Committee is provided in the Report on Corporate Governance.

The Company has also formulated a CSR Policy which is available on the website of the Company at http://www.cgcl. Policy Website.pdf.

As part of its CSR initiatives, the Company has undertaken multiple programmes covering areas of education, livelihood development, healthcare and sanitation during the year. The projects undertaken during the year are in accordance with Schedule VII of the Act and the CSR Policy of the Company. The Annual Report on CSR activities is annexed herewith marked as Annexure I to this report.


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 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 on the development in the business environment and the risk mitigation initiatives are provided to Board at its meetings.

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


During the year under review, Mr. Bhagwati Prasad resigned as Independent Director on the Board of the Company with effect from August 1, 2016, due to his appointment as the Chairman of the Gujarat State Human Rights Commission.

The Board, places on record its appreciation for the services rendered by Mr. Bhagwati Prasad during his tenure as an Independent Director of the Company.

Mr. Desh Raj Dogra was appointed as an Additional Director -Independent of the Company with effect from May 10, 2017. Pursuant to the sub-section (1) of section 161 of the Act, he holds the office of Additional Director upto the ensuing Annual General Meeting. The Company has received a notice in writing under section 160 of the Act from a member proposing his candidature for the office of Director. The Board recommends approval of his appointment as an Independent Director of the Company.

In accordance with section 152 of the Act and the Articles of Association of the Company Mr. Rajesh Sharma, Director will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.

As at March 31, 2017, the Company had four Independent Directors including one Woman Director.

The Company has familiarised the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details of the familiarization programme are available on the website of the Company at http://www.cgcl. Programme for Independent Directors.pdf.

All Independent Directors have given declarations that they meet the criteria of independence as provided under section 149 (6) of the Act and regulation 16(1)(b) of the Listing Regulations. Further, all the Directors meet the Fit and Proper criteria as per the policy of the Company and as stipulated by RBI pursuant to the revised regulatory framework notified during the year. The terms and conditions of appointment of Independent Director is also available on the website of the Company at https://www. of Appointment for Independent Directors.pdf.

The Directors of the Company have affirmed compliance with the Code of Conduct of the Company.

Additional information and brief profile, as stipulated under regulation 36(3) of the Listing Regulations and clause 1.2.5 of the Secretarial Standard on General Meetings (“SS-2”) with respect to the director seeking re-appointment, is annexed to the Notice of the AGM. Further, the business items relating to the re-appointment of Director(s) have been included in the Notice of the AGM.


As at March 31, 2017, the Company had the following KMPs:

1) Mr. Sunil Kapoor - Executive Director

2) Mr. Harish Agrawal - Company Secretary


The Board of Directors of the Company has, on the recommendation of the Nomination and 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.


The Members are informed that 4,00,000 Stock Options granted to Mr. Sunil Kapoor, Executive Director of the Company in the year 2015 have lapsed due to non-fulfillment of the conditions of vesting during the year.

During the year under review, the Nomination and Remuneration Committee at its meeting held on December 12, 2016 had decided to grant 250,000 stock options to one of the senior management employee, which would get vested over a period of five years starting from completion of third year of his service at Rs.62 per share.

The applicable disclosure as stipulated under the SEBI guidelines as on March 31, 2017 with regard to Employees Stock Options scheme are put up on the website of the Company at link: Details 2016 17.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.


Statutory Auditor

Pursuant to the provisions of section 139 of the Act and the rules framed there under, the Members at their Twenty First Annual General Meeting (AGM) held on July 18, 2015 had appointed M/s. Karnavat & Co, Chartered Accountants as Statutory Auditors of the Company from the conclusion of Twenty First AGM till the conclusion of the Twenty Sixth AGM, subject to ratification of their appointment at every AGM.

M/s. Karnavat & Co., Chartered Accountants, Mumbai has expressed their intention not to be re-appointed as Statutory Auditors of the Company with effect from the conclusion of Twenty Third Annual General Meeting, due to pre-occupation.

Considering the intentions of existing Statutory Auditors, the Board of Directors at its meeting held on May 13, 2017, has recommended appointment of M/s. Deloitte Haskins and Sells LLP, Chartered Accountants, as the Statutory Auditors of the Company to hold office from the conclusion of the Twenty Third AGM till the conclusion of Twenty Eigth 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 Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. 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 Act.

Explanation: The Company has been making sincere efforts to appoint Chief Financial Officer (''CFO'') as per defined KRA. The Company has adequate resources and qualified personnel with more than 21 years of experience looking after accounts, finance, taxation and treasury operations of the Company.

DISCLOSURES Board Meetings

Five meetings of the Board were held during the year, the details of which are disclosed in the Report on Corporate Governance forming part of the Annual Report of the Company.

Audit Committee

The Company has constituted an Audit Committee comprising of Independent Directors. The composition, terms of reference and details of meeting held during the year are disclosed in the Report on Corporate Governance. Five meetings of the Audit Committee were held during the year.

Stakeholders Relationship Committee

The Committee met four times during the year. The composition, terms of reference and details of meeting held during the year are disclosed in the Report on Corporate Governance

Nomination and Remuneration Committee

The Nomination and Remuneration Committee recommends to the Board the suitability of candidates for appointment as Director/Managing Director and Key Managerial Personnel and the remuneration packages payable to them. The Nomination and Remuneration Committee met four times during the year. The composition, terms of reference and details of meeting held during the year are disclosed in the Report on Corporate Governance.

Vigil Mechanism/Whistle Blower Policy

The Company has formulated and established a Vigil Mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, and to enable Directors and Employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct. The details of the same are explained in the Report on Corporate Governance. The whistle Blower Policy may be accessed on the Company’s website at images/Downloads/Whistle Blower Policy Website 1.pdf.

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

Company being a non-banking finance company , the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to the rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.

There were no foreign exchange earnings during the year (previous year ''Nil); the foreign exchange outgo by the Company during the year was Rs.46.85 lacs (previous year Rs.26.27 lacs) towards Directors’ sitting fees and travelling expenses.

Extract of Annual Return as prescribed under Section 92(3) of the Act and Rules Made thereunder

The extract of Annual Return in MGT-9 as required under section 92(3) of the Act and prescribed in rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure-III to this Report.

Particulars of Loans Given, Investments Made, Guarantees Given or Security Provided by the Company

Company being a non-banking finance company, provisions of section 186 of the Act relating to loans, investments and guarantees given or securities provided are not applicable to the Company.

Particulars of Employees

The information required pursuant to the provisions of section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure IV of this Report. In terms of first proviso to section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees’ particulars as required pursuant to provisions of rule 5(2) and rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

The Board of Directors affirm that the remuneration paid to employees of the Company is as per the Remuneration Policy of the Company and none of the employees listed in the said Annexure/information is related to any Director of the Company.

Significant and Material Orders Passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. Further, no penalties have been levied by the RBI/any other Regulators during the year under review.

Reserve Bank of India Directions

The Company is categorised as a non deposit taking systemically important non-banking finance company (NBFC-NDSI). Accordingly during the year the Company has not accepted any deposits from the public and there were no deposits which become due for repayment or renewal. The Company has complied with the ‘Master Direction-Non-Banking Financial Company-Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions 2016’, amended from time to time.

Registered as Corporate Agents

During the year under review, the Company got itself registered with the Insurance Regulatory and Development Authority of India as a Corporate Agents (Composite) vide Certificate of Registration no. CA0438 dated November 7, 2016 for a period of three years.

Sub-division of Share Capital

During the year under review, the Company had sub-divided the face value of its equity shares from Rs.10/- to Rs.2/- per share with an objective to improve liquidity and increase in the shareholders base. The sub-divided shares were credited in the demat accounts of the shareholders on November 25, 2016. Post sub-division, the shareholders base of the Company has increased from 3,105 (September 2016) to 4189 as at March 31, 2017.

Dematerialisation of Equity Shares

Equity Shares of the Company are compulsorily tradable in electronic form. As on March 31, 2017, 99.95% of the Equity Shares are held in electronic form and only 91410 Equity Shares out of 17, 51, 34,805 Equity Shares were held in physical form. In view of the numerous advantages offered by the Depository System, the Members holding shares in physical form are advised to avail of the facility of dematerialisation.

Material Changes and Commitments

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report.

Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Workplace

The Company has in place a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Work Place. Appropriate reporting mechanisms are in place for ensuring protection against Sexual Harassment and the right to work with dignity. During the year under review, the Company has not received any complaints in this regard.


The Directors express their sincere gratitude to the Reserve Bank of India, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, Insurance Regulatory and Development Authority of India, other government and regulatory authorities, lenders, financial institutions and the Company’s bankers for the ongoing support extended by them.

The Directors also place on record their sincere appreciation for the continued support extended by all the stakeholders and trust reposed by them in your Company. The Directors sincerely appreciate the commitment displayed by the employees of the Company and its subsidiaries across all levels, resulting in successful performance during the year.

Place : Mumbai For and on behalf of the Board

Date : May 13, 2017 Quintin E. Primo-III

Non-executive Chairman

DIN: 06600839

Source : Dion Global Solutions Limited
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