Dear Members,
The Directors of the Company have the pleasure in presenting 30th Annual Report together with the Annual Audited Consolidated and Standalone Financial Statements for the Financial Year ended March 31, 2024.
FINANCIAL PERFORMANCE I. Financial Highlights
The summary of the Company's Financial Performance, both on consolidated and standalone basis, for the Financial Year 2023-24 as compared to the previous Financial Year 2022-23 is given below:
(Rs. In Million)
OPERATIONAL PERFORMANCE/STATE OF AFFAIRS
I. Standalone Financial Performance
The total revenue of the Company stood at Rs. 17,831.89 Million for the year ended March 31, 2024 as against Rs. 11,498.98 Million in the previous year. The Company reported a Net Profit of Rs. 1980.59 Million for the year ended March 31, 2024, as compared to the Net Profit of Rs. 1,415.37 Million in the previous year due to growth in business coupled with better operational controls. The AUM has grown by (50%) and stood at Rs. 114,443 Million as against Rs. 76,548 Million in the previous year. The Company has further strengthened its retail business vertical and MSME AUM has grown by (15%) to Rs. 50,174 Million having (~31,814) customers (previous year Rs. 43,580 Million having ~27,164 customers) with the average ticket size at Rs. 1.9 Million. Construction Finance business AUM stood at Rs. 26,213 Million with 246 customers (previous year Rs. 18,301 Million with 196 customers) due to cautious approach of the management towards wholesale lending in construction finance.
The Company along with its wholly-owned subsidiary company viz. Capri Global Housing Finance Limited and Capri Loans Car Platform Private Limited, had presence over 9 States during the year, as compared to over 6 states in the previous year.
The Company had continued with strategy of going granular and focused on sourcing small ticket size loans in all its verticals, spread over wider geographical area resulting into de-risking the loan portfolio, better control over delinquencies and better risk spread in the medium to longer term.
During the year under review, the Company forayed into the car loan distribution segment in alliance with the top 9 banks namely Bank of Baroda, HDFC Bank, Union Bank of India, State Bank of India, Bank of India, Punjab & Sind Bank, Yes Bank, HDB Financial Services and Indian Overseas Bank.The company achieved a volumes of Rs. 95,000 Million by the end of March 2024 against the volumes of Rs. 56,939 Million by the end of previous year ended of March 2023.
The Company expanded product offerings through co-lending tie-ups for MSME and Affordable Housing loans, and announced its foray into Gold Loans. The Net NPA (Net of Total ECL Provision) was at 1.18% and the Gross NPA of the Company is 2.16% as of March 31, 2024.
II. Consolidated Financial Performance
The Consolidated Gross Income of the Company for the Financial Year ended March 31, 2024, is Rs. 23,141.97 Million vis- a-vis Rs. 14,659.01 Million in the previous year, thereby registering a growth of 57.97%. Consolidated Net Profit for the Financial Year ended March 31, 2024, is Rs. 2,794.06 Million as compared to Rs. 2,046.54 Million in the previous year, registering (an increase of 36.53%). The Gross NPA stood at 1.92% and Net NPA (Net of Total ECL Provision) was at 1.10% as of March 31, 2024.
During the year under review, swift operationalisation of new branches and corresponding increase in human capital was effective in ensuring performance acceleration in terms of growth in AUM, share of certain segments and customer relationships.
IT has been a major game changer in the performance delivery. The Company made important strides in data analytics, artificial intelligence, and machine learning technologies driven by a dedicated team of experienced tech professionals.
DIVIDEND
In terms of the provisions of Regulation 43A of the (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Company has adopted Dividend Distribution Policy to determine the distribution of dividends in accordance with the applicable provisions. The policy is available on the website of the Company at https://www.capriloans. in/ corporate-governance/.
With consistent dividend as a healthy sign of our sustained growth, our firm belief in percolating the benefits of our business progress for widespread socioeconomic welfare facilitates the equitable sharing of our economic value generated. Attaining steady operational performance and a harmonised market environment in continuation of the historical trends helped us to reaffirm the realisation of competent numbers for FY 2024. Hence, the Directors have recommended final dividend of Fifteen paise (Rs. 0.15) per Equity Share (Face value of Rs. 1/- each) for the Financial Year 2023-24 (previous year Rs. 0.50 per Equity Share of Face Value of Rs. 2/- each). The final dividend on Equity Shares, if approved by the Members in the upcoming Annual General Meeting, would involve a total outgo of Rs. 123.74 Million for the Financial Year 2023-24 as against Rs. 103.08 Million for the previous year and will be paid to those Members, whose names appear on the Register of Members/beneficial holders' list maintained by the depositories as on the record date.
The Company has not paid any Interim Dividend during the financial year under review.
The dividend recommended is in accordance with the Company's Dividend Distribution Policy and in compliance with the framework prescribed in RBI guidelines on Declaration of Dividend by NBFCs. The said policy is available on the website of the Company and can be accessed at https:// www.capriloans.in/ corporate-governance/.
In terms of Ind AS 10, events after the reporting period as notified by the Ministry of Corporate Affairs, the proposed dividend of Rs. 123.74 Million is not recognised as liability as on March 31, 2024.
Pursuant to the Finance Act, 2020, dividend is taxable in the hands of the shareholders with effective from 01 April 2020 and tax will been deducted at source on the Dividend at prevailing tax rates inclusive of applicable surcharge and cess based on information received by the Registrar and Transfer Agent ("RTA") and the Company from the Depositories.
TRANSFER TO RESERVES
As required under Section 45IC of the Reserve Bank of India Act, 1934, 20% of the profits are required to be transferred to a Special Reserve Account. Accordingly, the Company has transferred Rs. 396.12 (Rs. 283.07) Million to Statutory Reserve Account. No amount is proposed to be transferred to General Reserve.
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The information on the affairs of the Company has been given as part of the Management Discussion and Analysis section of the Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
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 the financial statements relate and the date of the Board's Report.
ECL AND OTHER UPDATES
The Company has updated the Expected Credit Loss ("ECL") model with the latest set of data at periodic intervals for the financial year ended March 31, 2024, to capture the significant changes in economic and market drivers, customer behaviours and government actions to reduce the risk of uncertainty due to judgements and estimations considering economic outlook data as per government agencies around the growth parameters. The Company also continues to undertake risk assessment of its credit exposures in addition to the model determined ECL provision, to reflect deterioration in the macroeconomic outlook and uncertainty in credit evaluations. The Company held provisions (expected credit loss on financial assets) aggregating to Rs. 2,566.83 Million as on March 31, 2024 and Rs. 1,794.47 Million as on March 31, 2023.
The Company's net Non-Performing Assets ("NPA"), net Stage-3 assets ratio stood at 1.1% as at March 31, 2024 as against 1.2% as at March 31, 2023.
CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business and operations of the Company during the year under review.
SUBSIDIARY ENTITIES
As on March 31, 2024, your Company has two wholly-owned subsidiaries namely Capri Global Housing Finance Limited ("CGHFL") and Capri Loans Car Platform Private Limited ("CLCPPL"). During the year under review, CLCPPL was incorporated as a wholly owned subsidiary of the Company on October 16, 2023. There has been no material change in the nature of the business in any of the subsidiary.
During the year under review, the Company made a significant strategic investment of Rs. 2,000 Million in its material subsidiary, CGHFL. This investment was made through a Rights issue on September 12, 2023, reflecting our commitment to strengthening the subsidiary's capital base and supporting its growth objectives. This infusion of capital is anticipated to enhance CGHFL's financial stability, enabling it to expand its housing finance operations and better serve its customers, thereby contributing to the overall growth and profitability of the Group.
The Company has adopted a policy on determination of material subsidiaries in line with Listing Regulations. The policy aims to determine the Material Subsidiaries and Material Unlisted Subsidiaries of the Company and to provide the governance framework for such subsidiaries. Further, In accordance with Section 129(3) of the Act and Regulation 34 of SEBI Listing Regulations, the consolidated financial statements of the Company and its subsidiary companies has been prepared and forms part of this Annual Report. A statement containing salient features of the financial statements of the subsidiaries is stated in the prescribed Form AOC-1 as Annexure A, attached to the Consolidated Financial Statements of the Company.
In accordance with the provisions of Section 136 of the Act, the annual financial statements and related documents of the subsidiary companies are placed on the website of the Company at https://www.capriloans. in/. Members may download the annual financial statements and detailed information on subsidiary companies from the Company's website and are also available for inspection during business hours at the registered office of your Company. Any Member who is interested in obtaining a copy of the audited financial statements of your Company's subsidiaries may write to the Company Secretary at the Registered Office of your Company.
Financial Performance & position of Subsidiaries
Capri Global Housing Finance Limited: CGHFL is registered Housing Finance Company licensed by National Housing Bank is a wholly owned subsidiary of your Company and it primarily serves the housing loan needs of middle and lower- income families, classified as affordable housing.
CGHFL has shown an impressive growth of 57.90% in its AUM in the Financial Year 2023-24 and has increased its reach to 32,024 customers from 24,335 customers in previous year. Total Income increased by 50.52% to Rs. 4,871.90 Million as against Rs. 3,236.72 Million in the Financial Year 2022-23. Profit after tax registered a growth of 15.56% at Rs. 716.99 Million in the Financial Year 2023-24 as against Rs. 620.47 Million in the Financial Year 2022-23.
Capri Loans Car Platform Private Limited: CLCPPL is engaged in the business of car loan origination for leading commercial banks for fee consideration. CLCPPL commenced its business operations in Q3 FY 2024 and position as the top corporate distributor for new car loans in the country. CLCPPL is present across 788 locations in 34 States and UTs. CLCPPL currently partners with SBI, HDFC Bank, Yes Bank, Bank of Baroda, Bank of India, Indian Bank, IOB, Punjab and Sind Bank, Union Bank of India, and HDB Financial Services.
CLCPPL has shown an impressive growth in the Financial Year 2023-24. Total Income booked for FY 2024 is Rs. 551.4 Million. Profit after tax registered at Rs. 99.69 Million in the Financial Year 2023-24.
In terms of the provisions of Regulation 24(1) of the Listing Regulations, during FY 2024, appointment of one of the Independent Directors of the Company on the Board of unlisted material subsidiary was applicable. The Company is in compliance with the applicable requirements of the Listing Regulations for its Subsidiary Companies during FY 2024.
AMENDMENT TO MEMORANDUM OF ASSOCIATION:
Alteration of Main Object Clause: In order to ensure that the Company remains proactive in its ongoing activities and seizes emerging opportunities aligned with our new vision, we have undertaken several strategic partnerships and initiatives to venture into new products and services. As part of this strategy, the Company proposes to expand its business operations by entering into the supplemental activity of soliciting and procuring insurance business. By becoming a Corporate Agent, we aim to provide specialized insurance solutions across life insurance, health insurance, and general insurance within our operational geographies. We are pleased to inform that the Company has also received a certificate from the Insurance Regulatory and Development Authority of India (IRDA) on December 07, 2023, authorizing us to operate as a Corporate Agent.
The Board of Directors, subject to the approval of the shareholders, have approved an amendment and insertion after clause III. A. 1 (f) of the Company's objectives as follows: 1(g):"To solicit, procure and carry on the business of selling, distribution, advertising, marketing of all kinds of insurance products/ services including life insurance, health insurance, general insurance on behalf of various Insurance companies as a Corporate Agent or as otherwise permitted; register/ obtain license, rights, permissions from Insurance Regulatory and Development Authority of India or such other regulatory, statutory or government authorities as may be applicable from time to time and undertake any activities as are incidental or ancillary thereto." This strategic move will not only diversify our service offerings but also enhance our value proposition to our customers by providing comprehensive insurance solutions.
Alteration of Capital Clause: In addition to expanding our business activities into the insurance sector, the Company also focused on strengthening its financial foundation to support future growth and strategic initiatives. To this end, the Board of Directors have approved a proposal to amend the Company's authorized share capital. This amendment is aimed at providing the Company with the flexibility to raise additional capital as needed to fund new projects, expand operations, and pursue emerging opportunities.
The Board of Directors have subject to approval of the shareholders of the Company, approved the amendment.
The specific changes are outlined below in detail under caption Share Capital.
This increase in authorized share capital will empower the Company to issue new shares in the future, providing a robust platform for capital infusion and enabling us to leverage growth opportunities more effectively. The Board of Directors believes this amendment is in the best interest of the Company and its shareholders, positioning us for sustained success and enhanced shareholder value.
UNCLAIMED DIVIDEND AND UNCLAIMED SHARES
In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act") read with the Rule 5(8) of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company furnished a statement / information through Form IEPF 2 to the Ministry of Corporate Affairs, of the unclaimed dividends amounting to Rs. 204,684 as on the year ended March 31, 2023. During the year, Unclaimed Dividend for the Financial Year 2015-16 amounting to Rs. 33,744 was transferred to Investor Education and Protection Fund on September 29, 2023.
The details of the resultant benefits arising out of shares already transferred to the IEPF, year-wise amounts of unclaimed / un-encashed dividends lying in the unpaid dividend accounts up to the year, and the corresponding shares, which are liable to be transferred, are provided in Corporate governance report and are also available on our website, at https://www.capriloans.in/unclaimed-shares-unclaimed-dividends/. Details of shares / dividend transferred to IEPF can also be obtained by accessing https://www.capriloans.in/unclaimed-shares-unclaimed-dividends/. and on website specified by the Ministry of Corporate Affairs http://www.iepf.gov. in/IEPF/services.html.
Your Company, in its various communications to the shareholders from time to time, requests them to claim the unpaid/unclaimed amount of dividend and shares due for transfer to IEPF established by the Central Government. Further, in compliance with IEPF Rules including statutory modification(s) thereof, the Company publishes notices in newspapers and sends specific letters to all shareholders whose shares are due to be transferred to IEPF, to enable them to claim their rightful dues. Currently, IEPF is holding 1,56,320 Equity Shares of the Company, at the end of the year under review.
CREDIT RATING
Your Company is rated by Credit Analysis and Research Ltd. ("CARE") and Infomerics Valuation and Rating Private Limited on its various debt instruments. A detailed status of the Credit Ratings on various facilities including Term Loans, Non-Convertible Debentures and Commercial Papers forms part of the Report on Corporate Governance Report of this Annual Report.
RESOURCE MOBILISATION
The Company has strengthened its relationships with banks / financial institution and got fresh sanctions of Rs. 56,250 Million during the financial year under review. As of March 31, 2024, borrowings from Public sector, private sector banks and financial institutions in term loans / CC limits were Rs. 104,069 Million as against Rs. 75,113 Million in FY 2022-23. Pursuant to SEBI Circular SEBI/HO/DDHS/DDHS - RACPOD1/P/CIR/2023/172 dated October 19, 2023, one time explanation for not achieving 25 % of incremental borrowing during FY24 by way of issue of Non-Convertible Debentures as Large corporate is un-favorable market conditions for the Corporate Bond Market for Companies not having credit rating AA+ & above. During the FY 2023-24, the Company has redeemed NCD's amounting to Rs. 2,865 Million. The gearing of Company as of March 31, 2024 is 2.76 times.
CAPITAL ADEQUACY RATIO
As on March 31, 2024, the Company's Capital Adequacy Ratio (CAR), stood at 26.62% 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 requirement (minimum of 15%), providing much needed headroom for fund raising for business operations of the Company.
DEPOSITS
During the year under review, the Company has neither invited nor accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies (Acceptance of Deposits) Rules, 2014.
SHARE CAPITAL
Authorised Capital:
During the year, the Company increased the Authorized share capital from Rs. 720,000,000/- (Rupees Seventy Two Crore Only) divided into 360,000,000 Equity Shares of face value of Rs. 2/- each to Rs. 2,000,000,000/- (Rupees Two Hundred Crore only) divided into 2,000,000,000 Equity Shares of face value of Rs. 1/- each vide passing ordinary resolution in Extra Ordinary General Meeting of the members of the Company held on February 22, 2024.
Issued and Paid-up Capital
The Issued and paid-up Equity Share Capital of the Company as on March 31, 2024 is Rs. 824,939,972/- (divided into 824,939,972 Equity Shares of Rs. 1/- each). During the year under review: The Board of Directors at its meeting held on January 27, 2024, & shareholders vide their meeting dated February 22, 2024 approved the sub-division of the One Equity Share of face value Rs. 2/- each into Two Equity Shares of face value of Rs. 1/- each. The Company fixed March 5, 2024, as the record date for the purpose of determining the members eligible for the allotment of sub division of Equity Shares.
The Company allotted 412,469,986 (Forty One Crore Twenty Four Lakhs Sixty Nine Thousand Nine Hundred Eighty Six Only) bonus Equity Shares face value of Rs. 1/- (Rupee one only) each fully paid up, in ratio of 1:1, i.e., One Bonus share of face value of Rs. 1/- each fully paid up for every one existing share of face value of Rs. 1/- each. Thereby, the Equity Share of the Company increased from Rs. 412,469,986 (Rupees Forty One Crore Twenty Four Lakhs Sixty Nine Thousand Nine Hundred and Eighty Six only) to Rs. 824,939,972/- (Rupees Eighty Two Crore Forty Nine Lakhs Thirty Nine Thousand Nine Hundred and Seventy Two only). The Company fixed March 5, 2024, as the record date for the purpose of determining the members eligible for the allotment of bonus Equity Shares. All the aforementioned shares issued shall rank pari-passu in all respect and carry the same rights as the exiting Equity Shares of the Company.
EMPLOYEES' STOCK OPTION SCHEME
There has been no change in the ESOP Scheme during the year under review. The ESOP Scheme are in compliance with the Employee Stock Option Scheme 2009 and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBSE Regulations"). The Scheme was framed with a view to reward employees for their contribution in successful operation of the Company with wealth creation opportunities, encouraging high-growth performance and reinforcing employee pride.
The scheme is robust with an objective to place greater prominence on superior individual performance thereby recognising high performing talent while keeping them accountable for business delivery. It has been ensured that the scheme fulfils its motive of wealth creation for employees to fulfill their financial goals and at the same time gives them the sense of ownership.
During the year under review, the Nomination and Remuneration Committee of the Board has granted 1,10,000 stock options to the eligible employees under the Employee Stock Option Scheme 2009. The Company on October 23, 2023 has issued and allotted 82,149 (Eighty-Two Thousand One Hundred & Forty Nine) Equity Shares of Rs. 2/- each on exercise of Stock Options granted to the employees of the Company.
The disclosures as required under Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, is attached to this Report as Annexure I hereto and is also available on website of the Company at https://www.capriloans.in/ investor-information/.
A certificate from the M/s. Sandeep P Parekh & Co, Practising Company Secretary, confirming compliance with the aforesaid provisions and in accordance with the resolution(s) passed by the Members would be placed before the shareholders at the ensuing Annual General Meeting ("AGM"). A copy of the same will also be available for inspection through electronic mode on website of Company www.capriloans.in.
RBI GUIDELINES
Your Company is registered as a Non-Deposit taking Systemically Important Non-Banking Finance Company (NBFC-ND-SI) with RBI. Accordingly, during the year, the Company has not accepted any deposits from the public and therefore, there is no deposits which become due for repayment or renewal. The Company has always endeavoured to maintain the highest standards of compliance and culture within the organisation and shall continue to do so going ahead. The Company continues to comply with all the applicable laws, regulations, guidelines etc. prescribed by the Reserve Bank of India ("RBI"), from time to time. The Company continues to be in compliance with the norms pertaining to capital adequacy, non-performing assets etc. Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation. The Company has complied with the ‘Master Direction – Reserve Bank of India (Non-Banking Financial Company–Scale Based Regulation) Directions, 2023', amended from time to time and all other applicable Directions/regulations/ circulars of RBI during the Financial Year 2023-24.
Chief Compliance Officer
In compliance with the Reserve Bank of India (RBI) circular no. DoS.CO.PPG./SEC.01/11.01.005/2022-23 dated April 11, 2022, which mandates the appointment of a Chief Compliance Officer (CCO) for Non-Banking Financial Companies in the Upper Layer (NBFC-UL) and Middle Layer (NBFC-ML), the Board of Directors has taken decisive steps to ensure adherence to this regulatory requirement. Accordingly, the Board has appointed a Chief Compliance Officer to oversee and manage the compliance functions as applicable to the Company.
This appointment underscores our commitment to maintaining robust governance and compliance frameworks, thereby enhancing the integrity and sustainability of our operations. The Board believes that the establishment of a dedicated compliance function will significantly contribute to the Company's ability to navigate the complex regulatory landscape and uphold its reputation for transparency and accountability.
Compliance Risk Assessment Framework and Compliance Testing Program ("CRAFT")
Your Company is in process to implement Compliance Risk Assessment Framework and Compliance Testing program pursuant to RBI circular dated April 11, 2022.
Business Continuity Policy
In order to have robust frame work & process for Business continuity, your Company has implemented Business Continuity Policy ("BCP") which inter-alia includes identification, monitoring, reporting, responding and managing the risks including mitigating risks of a significant / prolonged business disruption in order to protect the interests of the Company's customers, employees and stakeholders.
Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.
Internal Ombudsman
Your Company has appointed an Internal Ombudsman ("IO") in compliance with the RBI Circular dated November 15, 2021. A Report of number of complaints escalated to IO and status of disposal of such complaints during the period under review is being placed before the Board for its review in compliance with the said RBI circular.
FIXED DEPOSITS
The Company being non-deposit taking NBFC–ND-SI, has not accepted any deposits from the public during the year under review.
BORROWINGS
The Members, at their Annual General Meeting (AGM) held on September 1, 2023, accorded their approval for borrowings, creation of charge on the Company's assets/properties in connection with the borrowings as required under Section 180(1)(c) and 180(1)(a), and granted enabling authority for the conversion of outstanding loans into Equity Shares of the Company pursuant to Section 62(3) of the Companies Act, 2013. This approval empowered the Board of Directors and/ or any Committee thereof to borrow funds for the Company up to an aggregate limit of Rs. 10,000 Crore.
In light of the Company's strategic plans for business expansion and future growth, the Board of Directors has resolved, subject to the approval of the shareholders at the ensuing 30th Annual General Meeting, to increase the overall borrowing limit from Rs. 10,000 Crore to Rs. 15,000 Crore. This enhancement in the borrowing limit will provide the Company with the necessary financial flexibility to pursue new opportunities, invest in key projects, and drive long-term value creation for our stakeholders.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
As of March 31, 2024, the Company has seven Directors including one Woman Director, of which six were Independent Directors of the Company. The composition of the Board is in accordance with Regulation 17 of the SEBI Listing Regulation read with Section 149 of the Act, with an appropriate combination of Non-Executive Directors and Independent Directors. The detailed list of Directors of the Company has been disclosed as part of the Corporate Governance Report. Mr. Subramanian Ranganathan (DIN:00125493) was appointed as an Independent Director of the Company for a first term of five years with effect from October 31, 2023 to October 30, 2028, by the Board based on recommendation of the NRC of the Company. Mr. Ajit Mohan Sharan (DIN:02458844) was re-appointed as an Independent Director of the Company for a second term of five years with effect from April 1, 2024 to March 31, 2029 by the Board based on recommendation of the NRC of the Company. The Members approved the aforesaid appointments by resolutions passed through postal ballot on January 13, 2024.
Mr. L.V. Prabhakar (DIN:08110715) was appointed as an Independent Director of the Company for a first term of fiveyearswitheffectfromJanuary27,2024toJanuary26, 2029, by the Board based on recommendation of the NRC of the Company. Ms. Nupur Mukherjee (DIN: 10061931) and Mr. Shishir Priyadarshi (DIN:03459204) were appointed as an Independent Directors of the Company for a first term of three years with effect from January 27, 2024 to January 26, 2027, by the Board based on recommendation of the NRC of the Company. The Members approved the aforesaid appointments by resolutions passed through Extraordinary General Meeting held through Video Conferencing / Other Audio-Visual Means ("VC" / "OAVM") Facility on February 22, 2024.
Mr. Beni Prasad Rauka (DIN:00295213), Mr. Mukesh Kacker (DIN:01569098) and
Ms. Bhagyam Ramani (DIN:00107097) Independent Directors of the Company, who were appointed for a second term of five years, from April 1, 2019 to March 31, 2024, have ceased to be the Independent Directors of the Company with effect from close of business hours on March 31, 2024, pursuant to completion of the term. The Board appreciated the contributions made by Mr. Beni Prasad Rauka, Mr. Mukesh Kacker and Ms. Bhagyam Ramani in guiding and supporting the Management during their tenure as the Independent Directors of the Company over last ten years.
Mr. L.V. Prabhakar, Independent Director of the Company, was appointed as the Chairman of the Company, effective from April 29, 2024. Mr. Prabhakar brings a wealth of experience and leadership to this role, and we are confident that under his chairmanship, the Company will continue to achieve new heights of success and excellence. His extensive expertise and strategic vision will be invaluable as we navigate the future and strive to fulfil our long-term objectives. The terms and conditions of appointment of Independent Directors are available on the website of the Company at https://capriloans.in/ leadership-team/. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise (including proficiency, as applicable) and hold highest standards of integrity.
Section 152 of the Act provides that unless the Articles of Association provide for retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the Independent Directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation, of which one-third are liable to retire by rotation. Accordingly, Mr. Rajesh Sharma (DIN: 00020037), Managing Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Your Board of Directors recommend his appointment. The brief details of the Director proposed to be re-appointed as required under Secretarial Standard-2 issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI Listing Regulations is provided in the Notice convening Annual General Meeting of the Company.
All the Directors of the Company have confirmed that they are not disqualified to act as Director in terms of Section 164 of the Act.
Declaration of Independence by Independent Directors & adherence to the Company's Code of Conduct for Independent Directors
All Independent Directors have submitted the declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation
25(8) of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his/her ability to discharge his/ her duties with an objective independent judgment and without any external influence.
Fit and Proper Criteria & Code of Conduct
All the Directors meet the fit and proper criteria stipulated by RBI. Further, all the Independent Directors have affirmed that they have adhered and complied with the Company's Code of Conduct for Independent Directors which is framed in accordance with Schedule IV of the Act.
Key Managerial Personnel ("KMPs")
As on March 31, 2024, the Company had the following KMPs:
• Mr. Rajesh Sharma - Managing Director
• Mr. Partha Chakraborti – Chief Financial Officer
• Mr. Yashesh Bhatt – Company Secretary
Mr. Rajesh Sharma was appointed as Managing Director of the Company with effect from July 4, 2018, for a term of five years, which expired on July 4, 2023. Based on the recommendation of the Nomination and Remuneration Committee and with the approval of the shareholders at the AGM held on September 26, 2022, Mr. Rajesh Sharma has been reappointed as Managing Director for another term of five years, effective from July 4, 2023, to July 3, 2028. The Board is confident that his leadership will continue to drive the Company towards achieving its strategic goals and delivering sustained value to all stakeholders.
During the process of identifying a suitable candidate for the position of Chief Financial Officer (CFO), Mr. Rajesh Sharma, Managing Director of the Company, was given an additional charge of CFO on an interim basis for the tenure of One year starting from April 23, 2022 and re-appointed for further interim tenure of One year effective from May 22, 2023. Following a thorough and multi-layered search process, involving extensive interactions with the Nomination and Remuneration Committee (NRC), the Board, and its members, your Company appointed Mr. Partha Chakraborti as CFO effective from October 31, 2023. Consequently, Mr. Rajesh Sharma tendered his resignation as CFO on October 31, 2023.
The Board sincerely appreciates Mr. Sharma's invaluable contributions during his tenure as CFO. His leadership and financial acumen were pivotal in maintaining the Company's financial stability and integrity during this transitional period.
Mr. Partha Chakraborti is a seasoned professional with a proven track record of leading financial operations for large and growing organizations. His expertise encompasses devising financial strategies, managing financial risks, ensuring regulatory compliance, optimizing capital allocation, and providing financial insights that drive organizational success. Before joining our Company, Mr. Chakraborti held various leadership positions across different industries, where he successfully implemented multiple strategic plans to establish robust enterprise finance management frameworks.
Senior Managerial Personnel:
The brief details of the Senior Managerial Personnels as on March 31, 2024 and changes thereto are provided in the Corporate Governance Report, forming part of this Annual Report.
Policy On Directors' Appointment And Remuneration/Compensation For Directors, Senior Management Personnel, Key Managerial Personnel And Other Employees
In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act") read with Section 178 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), your Company has adopted Nomination and Remuneration Policy which, inter-alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team. Further, the Company has in place the orderly succession plan for the appointments at the Board and Senior Management level.
The said policy is available on the website of the Company and can be accessed at https:// www.capriloans.in/ corporate-governance/.
Performance Evaluation of the Board
The Companies Act, 2013 ("the Act") and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson. TheCompanyhasformulatedaprocessforperformance evaluation of the Independent Directors, the Board, its Committees and other individual Directors.
An annual performance evaluation exercise was carried in compliance with the applicable provisions of the Act, Listing Regulations, the Company's Code of Independent Directors and the criteria and methodology of performance evaluation approved by the NRC as under:
The questionnaires for performance evaluation are comprehensive and in alignment with the guidance note on Board evaluation issued by the SEBI, vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated January 05, 2017 and are in line with the criteria and methodology of performance evaluation approved by the NRC.
Outcome and results of the performance evaluation
The Directors of the Company as on March 31, 2024 had participated in the evaluation process. The Directors have expressed satisfaction with the criteria for evaluation of performance of Board, its Committees and individual Directors, assessed through series of questions. The results of evaluation were encouraging showing high level of engagement of Board and its Committees performing its role with effective oversight and providing guidance to Management.
The results of the evaluation were shared with the Board, Chairman of respective committees and individual Directors.
Based on the results of the evaluation, the Board has agreed on an action plan to further improve the effectiveness and functioning of the Board.
The suggestions from previous evaluations were implemented by the Company during FY 2024.
Familiarisation Programme for Directors
The Company has adopted a structured programme for orientation of all Directors including the Independent Directors so as to familiarise them with the Company– its operations, business, industry, environment in which it functions, Indian and global macro-economic front and the regulatory regime applicable to it.
The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take well-informed and timely decisions and contribute significantly to the Company.
The Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement. The terms of reference of all the Committees with updations, if any, is shared with all the Board Members on quarterly basis.
Managing Director and Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.
Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior
Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. During the year under review, the Company migrated to a new secure Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materials to all the Directors. The Board portal also contains Annual Reports, Code of Conduct for Directors, terms of appointment, committee charters and other policies for ease of access. This enables greater transparency to the Board processes. Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the Company has during the year conducted familiarization programme through briefings at Board/ Committee meetings for all its Directors including Independent Directors.
Details of familiarization programs imparted to the Independent Directors during the financial year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the weblink: https:// www.capriloans.in/ corporate-governance/. and is also provided in the Corporate Governance Report forming part of this Annual Report.
Board Diversity and Inclusion
The Board sets the tone for diversity and inclusion across the Group and believes it is important to have an appropriate balance of skills, knowledge, experience, and diversity on the Board and at senior management level to ensure good decision-making. It recognises the need to create conditions that foster talent and encourage all colleagues to achieve their full potential. A diverse Board with a range of views enhances decision-making which is beneficial to the Company's long-term success and in the interests of Capri's stakeholders.
The Board Diversity Policy adopted by the Board sets out its approach to diversity. The Policy can be accessed at https://www.capriloans.in/ corporate-governance/. Additional Details on the Board Diversity and the key attributes of the Board Members are explicated in the Corporate Governance Report forming part of this Annual Report.
Meetings
During the year, four board meetings were held during the year on May 22, 2023; August 5, 2023; October 31, 2023 and January 27, 2024. Brief details about the Board Meetings and Committee Meetings are given in report on Corporate Governance forming part of this Report.
During the year under review, (1) one Extraordinary General Meeting ("EGM") of the Members was held. Detailed information on the Meetings of the Board, its Committees, Postal Ballot and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.
A calendar of all the meetings is prepared and circulated in advance to the Directors.
Constitution of various Committees
Your Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.The Board of Directors of the Company has constituted various Committees including the following: I. Audit Committee II. Nomination and Remuneration Committee III. Corporate Social Responsibility Committee IV. Stakeholders' Relationship Committee V. Risk Management Committee VI. IT Strategy Committee VII. Asset Liability Management Committee An all-embracing update on the Board, its committees, their composition, terms and reference, meetings held during FY 2024 and the attendance of each member are uploaded on Company's website at https://www.capriloans.in/ and are stated in brief in the Corporate Governance Report attached to and forming part of this Report.
BOARD POLICIES
The Board of Directors have approved and adopted all the policies as required under the Act and Securities and Exchange Board of India (SEBI) regulations and RBI Directions. All the policies are uploaded on Company's website at https://www.capriloans.in/.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that: a) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departure; b) they have selected appropriate accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; d) they have prepared the annual accounts on a going concern basis; e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
AUDITORS
A. Statutory Auditors
Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunder and RBI requirements, the Members at their 27th Annual General Meeting had appointed M/s. M.M. Nissim & Co. LLP, Chartered Accountants (Firm Registration no. 107122W/ W100672), as the Statutory Auditors of the Company for a term of three years, i.e. from the conclusion of the 27th Annual General Meeting until the conclusion of the 30th Annual General Meeting of the Company. Thus, the tenure of M/s. M.M. Nissim & Co. LLP, Chartered Accountants would end at the conclusion of the ensuing AGM.
In light of the aforesaid, the Board of Directors of the Company has recommended the appointment of M/s. MSKA & Associates, Chartered Accountants, Mumbai as the Statutory Auditors of the Company for a period of three continuous years in accordance with the guidelines stipulated by RBI, to hold office from the conclusion of the forthcoming AGM i.e. 30th AGM till the conclusion of the 33rd AGM, subject to the approval of the Members at the ensuing AGM of the Company.
M/s. MSKA & Associates, Chartered Accountants, have confirmed that their appointment, if made, will comply with the eligibility criteria in terms of Section 141(3) of the Act and RBI regulations. Further, the Statutory Auditors have confirmed that they have subjected themselves to Peer Review process by the Institute of Chartered Accountants of India ("ICAI") and hold valid certificate issued by the Peer Review Board of ICAI.
Further, M/s. M.M. Nissim & Co. LLP, Chartered Accountants, conducted the statutory audit for the FY 2023-24. There are no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditors in their Audit Report for the FY 2023-24. The notes to the accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.
Adoption of Policy for appointment of Statutory Auditors
In compliance with the Reserve Bank of India Guidelines dated April 27, 2021, the Company has in place a Policy for appointment of Statutory Auditors of the Company.
B. SECRETARIAL AUDIT
Pursuant to Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, the Company had appointed M/s. Sandeep P Parekh & Co., Practicing Company Secretary for conducting Secretarial Audit for FY 2024. The Secretarial Audit Report for the financial year ended March 31, 2024, is appended to this Report as Annexure II (A) confirming compliance by the Company of the applicable SEBI regulations and circulars/ guidelines issued thereunder. There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors, in their Audit Report for the FY 2023-24.
In terms of Regulation 24A of the Listing Regulations, the Secretarial Audit Report of material subsidiary of the Company i.e Capri Global Housing Finance Limited for the financial year ended March 31, 2024, was carried out pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report of Capri Global Housing Finance Limited submitted by M/s. Sandeep P Parekh & Co., Practicing Company Secretaries LLP, does not contain any qualification, reservation or adverse remark or disclaimer is annexed to this Report as Annexure II (B).
Annual Secretarial Compliance Report with additional confirmations on compliances
In compliance with Regulation 24A of SEBI Listing Regulations, your Company has undertaken an audit for FY 2024 for all the applicable compliances as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Circulars/Guidelines issued thereunder.
The Annual Secretarial Compliance Report ("ASCR") issued by Secretaries, Secretarial Auditor for FY 2024 with additional confirmations on compliances by the Company with respect to Insider Trading Regulations, Related party Transactions, updation of Policies, disclosure of material events to Stock Exchanges etc. as per revised ASCR format prescribed by BSE and NSE, has been filed with the Stock Exchanges.
C. Maintenance Of Cost Records
The maintenance of cost records, for the services rendered by the Company, is not required pursuant to Section 148(1) of the Act read with
Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 and hence such accounts and records were not required to be maintained by 01-50 the Company.
D. Internal Auditors
Mr. Zoheb Sheikh was appointed as the Internal Auditor of the Company to conduct the Internal Audit on the basis of detailed Internal Audit Plan. The Company has an independent in-house team to manage the group's internal audit activity and that functionally reports to the Audit & Risk Management Committee
E. Reporting of Frauds By Auditors 51-159
During the year under review, neither the Statutory Auditors nor the Secretarial Auditor of the Company have reported any instance of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act and therefore, no detail is required to be disclosed under Section 134(3) (ca) of the Act.
Further, during the financial year ending on March 31, 2024, the management detected four incidents of fraud at the Company's branches. Two cases from the North region were declared as frauds in December 2023 and reported to 160-370 the RBI for Fraud Monitoring Returns within the same month. The other two cases from the West region were identified during the Executive Management Committee meeting in March 2024 and reported to the RBI for Fraud Monitoring Returns in April 2024.
Upon investigation, it was found that there was no internal staff involvement in any of these four reported cases. Instead, customers exploited internal process gaps to commit fraud. Following these investigations, precautionary actions have been implemented to prevent recurrence of such incidents. Different methods were used in each case, including forged property documents, loans availed on third-party property, multiple financing on the same property, and loans availed on government-owned land. Adequate preventive measures have been taken to avoid such future incidents.
For further details on these incidents and related matters, please refer to Note No. 55 of the Standalone Financial Statements included in this Annual Report. The Company is reinforcing its commitment to trust, integrity, and transparency through enhanced measures for compliance, risk management, and governance.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors state that proper systems have been devised to ensure compliance with the applicable laws. Pursuant to the provisions of Section 118 of the Act,
2013 during FY 2024, the Company has adhered with the applicable provisions of the Secretarial Standards ("SS-1" and "SS-2") relating to ‘Meetings of the Board of Directors' and ‘General Meetings' issued by the Institute of Company Secretaries of India ("ICSI") and notified by MCA.
INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY
Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records.
The systems, Standard Operating Procedures and controls are reviewed by the Management. Your Company's Internal Financial Controls are deployed through Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO"), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("ICFR") issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a quarterly basis and control measures are tested and documented on annual basis. Based on the assessments carried out by the Management during the year, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.
Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.
During the year under review, no material or serious observation has been highlighted for inefficiency or inadequacy of such controls.
Internal Audit Framework
The Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the Company's processes. The internal audit approach verifies compliance with the operational and system related procedures and controls.
Separate meetings between the Head Internal Audit and the Audit Committee, without the presence of Management, were enabled to facilitate free and frank discussion amongst them.
Risk Based Internal Audit ("RBIA") framework
In compliance with RBI circular dated February 03, 2021, theAuditCommitteehasapprovedaRiskBasedInternal Audit ("RBIA") framework, along with appropriate processes and plans for internal audit for FY 2024. The Company has in place the Risk Based Internal Audit Plan underlining the requirements mentioned in the above regulations, thereby approved by the Board. The audit plan is aimed at evaluation of the efficacy and adequacy of internal control systems and compliance thereof, robustness of internal processes, policies and accounting procedures and compliance with laws and regulations. Based on the reports of internal audit, function/process owners undertake corrective action in their respective areas. Significant audit observations are tracked and presented to the Audit Committee, together with the status of the management actions and the progress of the implementation of the recommendations on a regular basis.
Risk Management
Risk management forms an integral part of the Company's business. Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks ensuring its effectiveness in addition to Asset Liability Management Committee (‘ALCO') which monitors and manages the liquidity and interest rate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.
The Risk Management Policy, inter-alia, includes identification of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company.
The Risk management process has been established across the Company and is designed to identify, assess and frame a response to threats that affect the achievement of its objectives. Further, it is embedded across all the major functions and revolves around the goals and objectives of the Company. Your Company has a robust organisational structure for managing and reporting on risks.
This risk management mechanism works at all the levels, which acts as the strategic defence cover of the Company's risk management and is supported by regular review, control, self-assessments and monitoring of key risk indicators. The Risk Management Committee ("RMC") constituted by the Board manages the int egrated risk and reviews periodically the Risk Management Policy and strategy followed by the Company. In compliance with Scale Based Regulations, the Board of Directors have basis recommendation of RMC adopted ICAAP Policy and Framework with the objective of ensuring availability of adequate capital to support all risks in business as also enable effective risk management system in the Company.
The Chief Risk Officer ("CRO") oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset Liability Management Committee and Risk Management Committee Meetings. The CRO along with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaluating risks, major risks as well as the movement within the risk grades, the root cause of risks and their impact, key performance indicators, risk management measures and the steps being taken to mitigate these risks.
The details of the functioning of the Risk Management Committee and frequency of its meetings 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 meeting.
The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this Report.
CYBER SECURITY
Your Company has implemented a robust risk management and governance framework supported by policies, processes, threat intel services, tools, technologies, continuous & periodic cyber assessments to identify the emerging and existing risks that our digital assets are exposed to.
CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act. The CSR Policy of the Company, inter alia, list the activities that can be undertaken or supported by the Company for CSR as envisaged in Schedule VII of the Act, composition and meetings of CSR Committee, criteria for selection of CSR projects, modalities of execution/implementation of CSR activities and the monitoring mechanism of CSR activities/ projects. The CSR Policy of the Company is attached to this Report as Annexure III A. The composition and terms of reference of the CSR Committee are provided in the Report on Corporate Governance.
During the year under review, the Company has spent an additional amount of Rs. 1.796 Million towards CSR activities which shall be qualified for set-off. In terms of Section 135 of the Act, the details of the CSR spent during the year under review is provided in the Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 and attached to this Report as Annexure IIIB
PARTICULARS OF EMPLOYEES AND RELATED INFORMATION
In accordance with the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules, are appended to this Report as Annexure IV.
As per the provisions of Section 136(1) of the Act, the reports and accounts are being sent to the Members of the Company excluding the information regarding employee remuneration as required pursuant to Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The same is available for inspection and any Member interested in obtaining such information may write an email to the Company Secretary at secretarial@ capriglobal.in and the same will be furnished on such request.
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.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Your Company has in place a Policy on Related Party Transactions ("RPT") ("RPT Policy") formulated in line with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations").
The Policy sets out the philosophy and processes to be followed for approval and review of transactions with Related Party and intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions with Related Parties. A detailed landscape of all RPTs specifying the nature, value, and terms and conditions of the transaction is presented to the Audit & Risk Management Committee.
Also, a Standard Operating Procedures has been formulated to identify and monitor all such transactions.
The Policy may be accessed at https://www.capriloans. in/corporate- goverance/.
During FY 2024, all the contracts/arrangements/ transactions entered into by the Company with the related parties were in the ordinary course of business and on an arm's length basis and were in compliance with the provisions of the Act and Listing Regulations. All related party transactions are placed before the Audit Committee for review and approval. All related party transactions as required under Indian Accounting Standards - 24 (Ind AS-24) are reported in Note - 54 of Standalone Financial Statements.
Further, no such transactions had been entered with the company belonging to the promoter/promoter group which holds more than 10% shareholding in the Company as required pursuant to para A of schedule V of the Listing Regulations, 2015.
ANNUAL RETURN
Pursuant to the requirement under Section 92(3) of the Companies Act, 2013, copy of the annual return for financial year ended March 31, 2024, can be accessed on our website at https://www.capriloans.in// investor-information/.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of the provisions of Regulation 34 of the SEBI Listing Regulations, Management Discussion and Analysis Report forms part of this Report.
REPORT ON CORPORATE GOVERNANCE
Good corporate governance underpins the way we conduct business. Your Directors reaffirm their continued commitment to the highest level of corporate governance practices. Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably.Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. In terms of Regulation 34 of the SEBI Listing Regulations, the Report on Corporate Governance for the financial year ended March 31, 2024, along with the certificate from the Secretarial Auditors of the Company confirming the compliance with Regulations of Corporate Governance is annexed to the Report on Corporate Governance.
BUSINESSRESPONSIBILITYANDSUSTAINABILITY REPORT
As per Regulation 34(2)(f) of the SEBI Listing Regulations, the "Business Responsibility and Sustainability Report" is appended as Annexure V and forms part of this Report and can also be accessed on the Company's website at www.capriloans. in. The report describes initiatives undertaken by the Company from an environmental, social and governance perspective. As part of our commitment to upholding ESG priorities, the Board of Directors at Capri have taken steps to strengthen our focus on ESG matters. Additionally, the Board is supported by ESG advisors with extensive expertise in areas such as communities and social performance, requiring collective efforts on various fronts.
Below is the statement by the Managing Director, who is responsible for the Business Responsibility Report. I am delighted to highlight our significant progress in Environmental, Social, and Governance (ESG) practices. Over the past year, we have successfully navigated evolving regulatory requirements, developed and implemented robust new ESG policies, and ensured comprehensive employee training on these initiatives. We are particularly proud of our targeted initiatives that foster an inclusive workplace, ensuring everyone is valued and included. Looking ahead, we are excited to enhance our regulatory compliance, further strengthen our ESG policies as per evolving landscapes, provide ongoing training, and intensify our efforts to promote diversity and inclusion. Our journey towards sustainability continues with unwavering commitment and ambitious targets, setting a positive trajectory for the future.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees, and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Whistle Blower Policy, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.
As per the Whistle Blower Policy implemented by the Company, the Employees, Directors or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud, or violation of the Company's Code(s) of Conduct or Corporate Governance Policies or any improper activity.
The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices.
The Whistle Blower Policy is available on the website of your Company at https://www.capriloans.in/corporate- goverance/.
The Audit Committee is apprised of the vigil mechanism on a periodic basis. During the year, no person was denied access to the Chairperson of the Audit Committee. A quarterly report on the whistle blower complaints is placed before the Audit Committee for its review.
During the year under review, two complaints were received under the Whistle Blower mechanism which was discussed at the Audit Committee meeting and was suitably disposed off.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.
Your Company has in place a comprehensive Policy in accordance with the provisions of POSH Act and Rules made thereunder.
All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination. The Policy may be accessed at https:// www.capriloans.in/corporate- goverance/.
Your Company has adopted zero tolerance for sexual harassment at workplace and has formulated a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Work Place in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") and the Rules framed thereunder for prevention and redressal of complaints of sexual harassment at workplace. Your Company has complied with provisions relating to the constitution of Internal Committee under the POSH Act. During the year under review, no complaints were received by the Committee.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company being engaged in the financial services activities, its operations are not energy intensive nor does it require adoption of specific technology and hence information in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is not applicable to the Company. Nevertheless, the Company is vigilant on the need for conservation of energy.
During the FY 2023-24, the Company's foreign exchange earnings were NIL and outgo was Rs. 12.91 Million as against Rs. 14.39 Million in the previous year.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES
The Company being a Non-Banking Finance Company, the provisions of Section 186 of the Act pertaining to granting of loans to any persons or bodies corporate and giving of guarantees or providing security in connection with loans to any other bodies corporate or persons are not applicable to the Company. As regards investments made by the Company, the details of the same are provided under Notes in the Financial Statements of the Company for the year ended March 31, 2024, forming part of this Annual Report.
SIGNIFICANT AND MATERIAL ORDERS
During FY 2023-24, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations in future. Further, no penalties of material nature have been levied by the RBI or any other regulator during the year under review.
LISTING
Equity Shares of your Company are listed on The National Stock Exchange of India Ltd. and BSE Limited. Your Company has paid required listing fees to Stock Exchanges for FY 2024-25.
The Company has sub divided the face value of Equity Shares of the Company from Rs. 2/- into one Equity share of Rs. 1/- each. Accordingly, the current ISIN was deactivated after completion of necessary formalities and a new ISIN i.e. INE180C01042 was issued for the purpose of crediting the shares with face value of Rs. 1/- each.
MANAGING DIRECTOR (MD) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATE
In terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the certificate, as prescribed in Part B of Schedule II of the Listing Regulations,hasbeenobtainedfromMr.RajeshSharma, Managing Director and Mr. Partha Chakraborti, Chief Financial Officer for the FY 2023-24 with regard to the Financial Statements and other matters. The said Certificate is attached herewith as Annexure VI and forms part of this Report.
DISCLOSURE PERTAINING TO INSOLVENCY & BANKRUPTCY CODE ("IBC")
No application for Bankruptcy under the Insolvency & Bankruptcy Code, 2016 ("IBC") was made against the Company during the financial year under review.
DISCLOSURE OF ONE TIME SETTLEMENT
The Company did not avail any such one time settlement during the Financial Year. Therefore, disclosure of the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable to the Company.
AWARDS AND RECOGNITION
In a bid to keep ensuring its relentless quest for growth and excellence, the Company continues to be committed towards maintaining the highest standards of corporate governance and sustainable practices. As a recognition for our unconventional innovations and focussed drive to achieve best-in-class operations, the Company has been winning a multitude of accolades at various forums while acquiring plaudits as the recipient of numerous prestigious awards for demonstrating its business ethos.
These embellishments to Capri's cognizant candidature deliver a testament to the progress made by the Company and honor its diligent efforts towards delivering value for the welfare of all stakeholders and the society as a whole.
The Company was recognized as a "Great Place To Work" by the Great Place to Work Institute for a third consecutive year.
ETHICS
Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to integrity and transparency in all its dealings and places high emphasis on business ethics. The Board and the Committees of your Company exercise its fiduciary responsibilities in the widest sense of the term and endeavour to enhance long-term shareholder value. The governance framework is anchored by the clearly defined policies, procedures and covering areas such as anti-bribery and anti-corruption, Prevention of Sexual Harassment at Workplace and Whistle Blower Policy.
GENERAL DISCLOSURES
The Directors further state that no disclosure or reporting is required in respect of the following items, as there were no transactions/events related to these items during the financial year under review:
• There was no issue of Equity Shares with differential rights as to dividend, voting or otherwise;
• There was no issue of shares (including Sweat Equity Shares) to the employees of the Company under any scheme, save and except Employee Stock Option schemes referred to in this Report;
• There was no raising of funds/issue of shares through Preferential Allotment, Public Issue, Rights Issue or Qualified Institutional Placement;
• There was no buy back of the Equity Shares during the year under review;
• There were no voting rights which are not directly exercised by the employees in respect of Equity Shares for the subscription/purchase for which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");
• There was no suspension of trading of securities of the Company on account of corporate action or otherwise;
• There was no revision made in the Financial Statements or the Board's Report of the Company;
• The Company being an NBFC, the provisions relating to Chapter V of the Act, i.e., acceptance of deposit, are not applicable. Disclosures as per NBFC regulations have been made in this Annual Report.
ACKNOWLEDGEMENT
At Capri, our business is deftly managed by an adroit set of leaders with global and diverse experience in the sector in order to accomplish the mission. The professionally equipped and technically sound management has set progressive policies and objectives, follows best practices, all with a plausible vision to take the Company ahead to the next level. Having received external reassurance in all our commitments over the years, the Directors take this opportunity to place on record, their sincere appreciation for the Securities and Exchange Board of India, Reserve Bank of India, Insurance and Regulatory Development Authority of India, Ministry of Corporate Affairs, Registrar of Companies and all other Governmental and Regulatory Authorities, bankers, stock exchanges, financial institutions, depositories, analysts, advisors, local communities, customers, vendors, business partners, shareholders, and investors forming part of the Capri family for their sustained support, admirable assistance and endless encouragement extended to the group at all levels.
We would also like to express our earnest regard to all employees for their ardent enthusiasm and interminable efforts directed towards lodging significant and effective contributions to the continued growth of the Company. Our heartiest gratitude is further undertaken to be rendered to all our stakeholders for their unflinching faith in the Company. We look forward for bestowal of your continued support and solidarity in future as we diligently strive to deliver enhanced value for our stakeholders and inscribe on the footprints of nation building for one of the fastest growing economies of the world.Your directors acknowledge the support extended by the for the guidance and support received from them including their officials from time to time.