29 Apr 2017 | Livemint.com

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Capital Trust Ltd.

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Capital Trust Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

The commitment of Capital Trust Limited to the highest standards of good corporate governance practices predates SEBI and clause 49 of the listing agreement. Transparency, fairness, disclosure and accountability are central to the working of CTL. The Company maintains the same tradition and commitment.

Given below are the Company's corporate governance policies and practices for FY 2015. As will be seen, the Company's corporate governance practices and disclosures have gone well beyond complying with the statutory and regulatory requirements in accordance with the provisions of clause 49 of the listing agreement.

1) BOARD OF DIRECTORS

In keeping with the commitment of the management for the principle of integrity and transparency in business operations for good corporate governance, the Company's policy is to have an appropriate blend of independent and non -independent directors to maintain the independence of the Board and to separate the Board functions of governance and management.

A) COMPOSITION

The Company has a non-executive chairman. As on March 31, 2015, the Board of the Company consisted of five directors, of whom three were non-executive independent. The Board has no institutional nominee directors. As Table 1 shows, the Company is in compliance with the guidelines.

Note: None of the Directors on the Company's Board is a member on more than 10 Committees and Chairman of more than 5 Committees across all the Companies in which he is a Director. All the Directors have made necessary disclosures regarding committee positions occupied by them in other Companies.

B) NON-EXECUTIVE DIRECTORS' COMPENSATION

Non-executive directors of the Company play a crucial role in the independent functioning of the Board. They bring in an external perspective to decision-making and provide leadership and strategic guidance while maintaining objective judgment. They also oversee corporate governance framework of the Company.

Non-executive directors are paid.sitting fees andreimbursement of expenses for participation in the Board and other meetings of the committee

C) CONDUCT OF BOARD PROCEEDINGS

During the year under review Thirteen Board Meetings were held on 23.04.2014, 05.05.2014, 01.07.2014, 12.08.2014, 17.10.2014, 12.12.2014,

15.12.2014, 31.12.2014, 27.01.2015, 28.01.2015, 24.02.2015, 10.03.2015, 27.03.2015. The gap between any two meetings has been less than four months.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, one-third of the two third of rotational directors of the Company shall retire at every Annual General Meeting. Accordingly, Mr. Vijay Kumar, Director of the Company is liable to retire by rotation in the forthcoming Annual General Meeting.

Review of legal compliance reports

During the year, the Board periodically reviewed legal compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the management.

During the year, the Board periodically reviewed legal compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the management.

2) BOARD COMMITTEES

A) Audit Committee

Constitution and Composition

With a view to comply with various requirements under the Companies Act, 2013 and clause 49 of the listing agreement, the Board of Directors has set up an Audit Committee. The Board reviews the working of the Committee from time to time to bring about greater effectiveness in order to comply with the various requirements under the Companies Act, clause 49 of the listing agreement and NBFC regulations.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, one-third of the two third of rotational directors of the Company shall retire at every Annual General Meeting. Accordingly, Mr. Vijay Kumar, Director of the Company is liable to retire by rotation in the forthcoming Annual General Meeting.

Review of legal compliance reports

During the year, the Board periodically reviewed legal compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the management.

During the year, the Board periodically reviewed legal compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the management.

2) BOARD COMMITTEES

A) Audit Committee

Constitution and Composition

With a view to comply with various requirements under the Companies Act, 2013 and clause 49 of the listing agreement, the Board of Directors has set up an Audit Committee. The Board reviews the working of the Committee from time to time to bring about greater effectiveness in order to comply with the various requirements under the Companies Act, clause 49 of the listing agreement and NBFC regulations.

The terms of reference are extensive and go beyond what is mandated in clause 49 of the listing agreement, the Companies Act and under NBFC regulations.

These broadly include review of financial statements, review of compliances and review of systems and controls The terms of reference are extensive and go beyond what is mandated in clause 49 of the listing agreement, the Companies Act and under NBFC regulations. These broadly include review of financial statements, review of compliances and review of systems and controls.

Composition of the Committee as on March 31, 2015 was as under:

1. S. Mahanti, Chairman

2. Vijay Kumar

3. Hari Baskaran

4. Yogen Khosla

5. Anju Khosla

In compliance with clause 49 of the listing agreement, all the members are non-executive directors and are financially literate and have accounting or related financial management expertise.

B) Nomination & Remuneration Committee

Constitution and Composition

The Remuneration Committee of the Board of Directors has been constituted to recommend/review the remuneration package of the directors. The committee comprising of three non-executive & independent directors.

During the year under review, there were no material pecuniary relationships and transactions of any non-executive independent directors with the Company.

Remuneration Policy

The Nomination and Remuneration (N&R) Committee has adopted a policy which, inter alia, deals with the manner of selection of Board of Directors and CEO & Managing Director and their remuneration.

1. Criteria Of Selection of Non-Executive Directors.

a. The Non-Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

b. In case of appointment of Independent Directors, the N&R Committee shall satisfy itself with regard to the criteria of independence of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively.

c. The N&R Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.

d. The N&R Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director.

a) Qualification, expertise and experience of the Directors in their respective fields;

b) Personal, Professional or business standing;

c) Diversity of the Board.

e. In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.

2. Remuneration

The Non-Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in the Board / Committee. A Non-Executive Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board attended by him, of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

3. Remuneration for the CEO & Managing Director

i. At the time of appointment or re-appointment, the CEO & Managing Director shall be paid such remuneration as may be mutually agreed between the Company (which includes the N&R Committee and the Board of Directors) and the CEO & Managing Director within the overall limits prescribed under the Companies Act, 2013.

ii. The remuneration shall be subject to the approval of the Members of the Company in General Meeting.

iii. The remuneration of the CEO & Managing Director is broadly divided into fixed and variable components.

iv. In determining the remuneration (including the fixed increment and performance bonus) the N&R Committee shall ensure / consider the following:

a) the relationship of remuneration and performance benchmarks is clear;

b) balance between fixed and incentive pay reflecting short and long term performance objectives, appropriate to theworking of the Company and its goals;

c) responsibility required to be shouldered by the CEO & Managing Director, the industry benchmarks and the current trends;

d) the Company's performance vis-a-vis the annual budget achievement and individual performance vis-a-vis the KRAs/ KPIs

C) Stakeholders Relationship Committee (Investor's Grievance Committee):

The Committee comprises of Mr. Yogen Khosla, Mr. S. Mahanti, Mr. Vijay Kumar and Mr. Hari Baskaran, Ms Tanya Sethi, Company Secretary acts as the Secretary to the Committee, which looks into the Shareholders and investors related matters.

Meetings and the attendance during the year:

There were four meetings of the Shareholders Grievances Committee held on 05.05.2014, 12.08.2014, 17.10.2014, 27.01.2015 during the year. The attendance of each member of the Committee is given below:

3) MANAGEMENT

Management discussion and analysis

This is given as a separate chapter in this Annual Report.

4) DISCLOSURE OF MATERIAL TRANSACTIONS

Pursuant to clause 49 of the listing agreement, Senior Management is required to make disclosures to the Board relating to all material, financial and commercial transactions where they had (or were deemed to have had) personal interest that might have been in potential conflict with the interest of the Company.

5) COMMUNICATION TO SHAREHOLDERS

Quarterly, half yearly and annual financial results are published in the Pioneer and Veer Arjun. The Company also sends the half-yearly financial results, along with a detailed write-up, to all shareholders.

The Company has a website www.capital-trust.com  which contains all important public domain information. All financial information are also communicated to the concerned stock exchanges, besides being placed on the Company's website.

The Company also files the following information, statements, reports on websites specified by BSE Limited

• Full version of the Annual Report including the Balance Sheet, Statement of Profit and Loss, Directors' Report and Auditors' Report, Cash Flow Statement and quarterly financial statements

• Corporate Governance Report

• Shareholding pattern

7) COMPLIANCE OF MANDATORY AND NON-MANDATORY

Requirements under clause 49

A) Mandatory

The Company has complied with all the mandatory requirements of clause 49 of the listing agreement.

B) Non-mandatory

The Company has adopted the following non-mandatory requirement:

1) Remuneration committee of the Board of Directors has been set up and the particulars of the Committee are given in the Report itself.

2) Shareholders Right

The quarterly financial results including summary of significant events of relevant months are published in the newspaper and informed to the Stock exchanges and same is hosted in the website of Stock exchange.

3) Training of Board Members

For orientation and to get familiar with the Company business operations, governance procedures and practices, the Director visits the Branches of the Company. Besides, detailed presentations are periodically made to the Board members of the Company, risk profile of the business parameter and their responsibilities as Director.

4) Whistle Blower Policy

The Company has formulated a policy to prohibit managerial personnel from taking adverse action against employees disclosing in good faith alleged wrongful conduct on matters of public concern involving violation of any law, mismanagement or misappropriation of Public funds, substantial and specific danger to public health and safety. The policy also lays down the mechanism for making enquiry in to whistle blower complaint received by the Company. Employees aware of any alleged wrongful conduct to the Audit Committee shall be subject to the disciplinary action. No personnel of the Company have been denied access to the Grievance Redressal Mechanism of the Company.

9) GENERAL SHAREHOLDER INFORMATION

A) Date of Book Closure of Annual General Meeting

The date of Book closure for the purpose of AGM is Sept. 24, 2015 to Sept. 30, 2015.

B) Dematerialization of Shares and Liquidity

The trading in the Company's equity shares is permitted only in Demat form. The Company has entered into an agreement with National Securities Depository Limited (NSDL) and Central Depository Service Limited (CDSL) for maintaining and facilitating transaction in the Company's shares in electronic mode. The ISIN No. allotted to the Company's equity shares is INE707C01018.

The shares of the Company are listed on Bombay Stock Exchange, which provide sufficient liquidity to the investors.

9) Outstanding GDRs

Not Applicable. There were no outstanding GDRs/ADRs/ Warrants or any other Convertible Instruments as on 31.03.2015.

10) Plant locations

The Company is a Non- Banking Finance Company (NBFC) engaged in the business of Financing. Hence there is no plant location. However, the Company has Branchesin Delhi, Uttar Pradesh and Uttrakhand and Punjab.

Address for correspondence

Registered & Corporate Office:

507, Courtyard, DLF Place, Saket, New Delhi-110017

Tel: 011-41627007  Email: info@ capital-trust.com  Web: www.capital-trust.com   

Sd/- Yogen Khosla

CEO & Managing Director

DIN - 00203165

Place : New Delhi

Date : May 9, 2015