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Capri Global Capital Directors Report, Capri Global Reports by Directors
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Capri Global Capital
BSE: 531595|NSE: CGCL|ISIN: INE180C01018|SECTOR: Finance - General
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Directors Report Year End : Mar '15    « Mar 14
DEAR MEMBERS,
 
 The Directors have pleasure in presenting the Twenty First Annual
 Report and the audited statement of accounts of your Company for the
 year ended March 31, 2015.
 
 FINANCIAL RESULTS
 
 (Rs. in Lacs)
 
 Particulars                            Standalone         Consolidated
                                  2014-15   2013-14     2014-15  2013-14
 
 Total revenue                 19,216.08  16,617.84  20,607.96 17,113.71
 
 Expenses                       5,269.61   4,105.06   5,315.26  4,219.79
 
 Profit before Depreciation, 
 Tax & exceptional             13,946.47  12,512.79  15,292.70 12,893.92
 Items (PBDT)
 
 Less: Depreciation               358.78     253.42     383.10    271.37
 
 Profit before Tax & 
 exceptional Items             13,587.69  12,259.35 14,909.60 12,622.55
 
 Less: Exceptional Items             -        -             -     304.83
 
 Less: Provisions for 
 taxation                       5,069.36    4,083.34  5,385.95  4,094.83
  
 Profit after Tax (Pat)         8,518.33    8,176.01  9,523.65  8,222.89
 
 Add: Balance brought 
 forward from previous year    33,902.48   28,840.77 35,823.15 30,714.58
 
 balance available for 
  appropriations               42,420.81   37,016.80 45,346.80 38,937.47
 
 Appropriations
 
 General Reserve                  700.00      850.00    700.00    850.00
 
 Statutory Reserve              1,850.00    1,650.00  1,850.00  1,650.00
 
 Dividend on Equity Shares        525.40      525.08    525.40    525.08
 
 Tax on Dividend                  106.96       89.24    106.96     89.24
 
 Depreciation Charged off 
 as per Revised Depreciation        7.36           -     10.81         -
 Guidelines
 
 balance Carried to balance 
 sheet                         39,231.08   33,902.48 42,153.63 35,823.15
  
 RESULTS OF OPERATIONS AND STATE OF AFFAIRS
 
 The highlights of the performance during the year under review are as
 under:
 
 - Total Revenue increased by 15.64% to Rs.19,216.08 lacs (Previous year
 Rs. 16,617.84 lacs).
 
 - PBDT increased by 11.46% to Rs.13,946.47 lacs (Previous year
 Rs.12,512.79 lacs).
 
 - PAT increased by 4.19% to Rs.8,518.33 lacs (Previous year Rs.8,176.01
 lacs).
 
 - Loan book increased by 29.28% to Rs.95,167.99 lacs (Previous year
 Rs.73,616.14 lacs).
 
 The increase in the Total Revenue, PBDT and PAT during the year is
 attributable to larger deployment of funds and recovery of dues during
 the year.
 
 The consolidated Total Revenue increased by 20.42% to Rs.20,607.96 lacs
 from Rs.17,113.71 lacs of previous year and the consolidated PBDT
 increased by 18.60% to Rs.15,292.70 lacs from Rs.12,893.92 lacs of previous
 year. The consolidated PAT increased by 15.82% to Rs.9,523.65 lacs from
 Rs.8,222.89 lacs of previous year. Increased performance of the Company
 on consolidated basis is due to income on sales of investments held by
 the subsidiaries.
 
 The operations during the year were focused on growing the loan book of
 the Company by lending to both - the Corporate and Micro Small & Medium
 Enterprises sectors (MSME). MSME Lending vertical grew the loan book to
 Rs.44,592.37 lacs (Previous year Rs.23,105.44 lacs), while the Wholesale
 Lending vertical maintained a steady pace and achieved a book size of
 Rs.50,571.10 lacs (Previous year Rs.50,510.70 lacs).
 
 ASSET GROWTH
 
 Total Assets of the Company stood at Rs.1,13,252.34 lacs as compared to
 Rs.97,020.70 lacs during the last year, showing an increase of 16.73%.
 
 CAPITAL ADEQUACY RATIO
 
 Your Company''s total Capital Adequacy Ratio (CAR), as of March 31,
 2015, stood at 89.68% 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 ASSETS'' PROVISIONING
 
 Pursuant to the Notification No. DNBS.222/CGM (US)-2011 dated 17th
 January, 2011 issued by the RBI for making a general provision at 0.25%
 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/-
 (15%) per Equity Share for the financial year ended on March 31, 2015.
 The dividend on Equity Shares, if approved by the shareholders at the
 21st 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 11, 2015.
 
 TRANSFER TO RESERVES
 
 The Company transferred an amount of Rs.700 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 Clause 49 of the Listing Agreement, 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, 2015, the Company has the following subsidiaries:
 
 1. Capri Global Housing Finance Private Limited
 
 2. Capri Global Investment Advisors Private Limited
 
 3. Capri Global Distribution Company Private Limited
 
 4. Capri Global Finance Private Limited
 
 5. Capri Global Research Private Limited; and
 
 6. Capri Global Resources 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, 2015 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
 
 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%20
 Material%20Subsidiaries_1.pdf
 
 Merger of Subsidiaries with the Company
 
 The Board of Directors of the Company at its meeting held on December
 17, 2014 has approved the Scheme of Amalgamation (''Scheme'') of Capri
 Global Distribution Company Private Limited, Capri Global Finance
 Private Limited, Capri Global Investment Advisors Private Limited and
 Capri Global Research Private Limited with Company and their respective
 shareholders and creditors under Sections 391 to 394 of the Companies
 Act, 1956.
 
 The Appointed Date for the merger is April 1, 2015. The Scheme has
 already received the Observation Letter from the Bombay Stock Exchange
 Limited & National Stock Exchange of India Limited and the approval of
 RBI. The Company has filed an Application with the Hon''ble Bombay High
 Court and is awaiting further instructions from the Hon''ble Court. The
 Scheme is subject to various regulatory approvals including the Bombay
 High Court.
 
 The merger of four subsidiaries with the Company would result in
 consolidation of resources with the Company and saving on cost of
 compliance and administration.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 In terms of Section 134(5) of the Companies Act, 2013, your Board of
 Directors states that:
 
 a) in preparation of the annual financial statements for the year ended
 March 31, 2015, 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, 2015 and of the profit of the Company
 for the year ended on that date;
 
 c) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of 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 Clause 49 of
 the Listing Agreement forms part of this Annual Report.
 
 Further, as required under Clause 49 of the Listing Agreement, 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, 2015, was placed before the Board at its
 meeting held on May 09, 2015.
 
 RELATED PARTY TRANSACTIONS
 
 All contracts /transactions entered by the Company during the year with
 related parties were on an arm''s length basis 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 may be accessed on the Company''s website at the link:
 http://www.cgcl.co.in/images/Downloads/Policy%20
 on%20Related%20Party%20Transactions_l.pdf.
 
 Your Directors would like to draw attention of members to Note 26 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 underCorporate Social Responsibility
 (CSR), the Company has undertaken projects in the area of education and
 vocational training of the unprivileged, women and differently-abled.
 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 I to this Report.
 
 RISK MANAGEMENT
 
 The Board of Directors of the 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 Meetings 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. Rajesh Sharma,
 retires by rotation at the ensuing Annual General Meeting and offers
 himself for re- appointment.
 
 During the year under review, the members approved the re-appointment
 of Mr. Quintin E. Primo III as a Non- executive Non-independent
 Director who is liable to retire by rotation and appointment of Mr.
 Beni Prasad Rauka, Mr. Bhagwati Prasad, Mr. Mukesh Kacker, Ms. Bhagyam
 Ramani and Mr. T R Bajalia as Independent Directors who are not liable
 to retire by rotation. The members have also appointed Mr. Sunil Kapoor
 as an Executive Director of the Company for a term of one year which
 expired on January 23, 2015 and the Board has re-appointed him for
 another term of one year starting from January 24, 2015, which is
 proposed to be approved by the members at the ensuing Annual General
 Meeting.
 
 During the year under review, Mr. Anand Agarwal was appointed as Chief
 Financial Officer of the Company w.e.f. October 16, 2014 and he
 resigned on December 29, 2014.
 
 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 Clause
 49 of the Listing Agreement.
 
 Formal Annual Performance Evaluation
 
 Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
 the Listing Agreement, 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 Program
 
 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 program
 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://www.cgcl.co.in/images/Downloads/
 Familiarisation%20Programme%20for%20Independent%20 Directors.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, no fresh Options were granted and 21,600
 Stock Options granted earlier were vested and exercised during the year
 by the employees.
 
 The applicable disclosure as stipulated under the SEBI guidelines as on
 March 31, 2015 with regard to Employees Stock Options Scheme are
 provided in Annexure II to this Report.
 
 The Company has received a certificate from the Auditors of the Company
 that the Employees Stock Options 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 Auditors
 
 M/s. Karnavat & Co, Chartered Accountants, Statutory Auditors of the
 Company, holds office till the conclusion of the ensuing Annual General
 Meeting and are eligible for re-appointment.  They have confirmed their
 eligibility to the effect that their re-appointment, if made, would be
 within the prescribed limits under the Companies Act, 2013 and that
 they are not disqualified for re-appointment.
 
 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 Alwyn D''souza & Co, a
 firm of Company Secretaries in Practice to undertake the Secretarial
 Audit of the Company.  The Secretarial Audit Report is annexed herewith
 marked as Annexure III to this Report. The Secretarial Audit Report
 does not contain any qualification, reservations or adverse remark.
 
 Disclosures
 
 Audit Committee
 
 The Audit Committee comprises Independent Directors namely Mr. Beni
 Prasad Rauka (Chairman), Ms. Bhagyam Ramani, Mr. Mukesh Kacker and Mr.
 T R Bajalia as other 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 and control, finance
 and accounts. All the recommendations made by the Audit Committee were
 accepted by the Board.  Six 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 five times 
 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 on 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_1.pdf
 
 Meetings of board
 
 Six 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.15.23 lacs during the year.
 
 Extract of Annual Return
 
 The details forming part of the extract of the Annual Return in form
 MGT 9 is annexed herewith marked as Annexure -IV 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
 VA to this Report.
 
 In terms of the provisions of Section 197(12) of the Companies Act,
 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014, a statement showing
 the names and other particulars of the employees drawing remuneration
 in excess of the limits set out in the said rules are provided in the
 Annual Report and is marked as Annexure VB to this Report.
 
 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, as amended from time to time.
 
 Increase in share Capital
 
 During the year, your Company has allotted 27,408 Equity shares of
 Rs.10/- each fully paid-up to the warrant holders on conversion of
 Warrants of the Company during the 5th Warrant exercise period and has
 allotted 21,600 Equity Shares of Rs.10/- each fully paid-up on exercise
 of Stock Options by the employees of the Company.
 
 During the year under review, the Company has not issued shares with
 differential voting rights nor has issued any sweat equity. As on March
 31, 2015, 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.
 
 Acknowledgments
 
 The Board of Directors wish to place on record their appreciation for
 the support extended by the bankers, business associates, clients,
 consultants, advisors, shareholders, investors and the employees of the
 Company and subsidiaries for their continued co-operation and support.
 
 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, SEBI, NSE & BSE and all other statutory and/or regulatory
 bodies.
 
                                      For and on behalf of the board
 
                                                  Sd/-       Sd/-
 
                                          sunil Kapoor  rajesh sharma
                                    Executive Director       Director
                                          DIN:01436404  DIN: 00020037
 
 Place : Mumbai
 Date: May 09, 2015
 
 
 
Source : Dion Global Solutions Limited
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