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Canopy Finance Ltd.

BSE: 539304 Sector: Financials
NSE: N.A. ISIN Code: INE095R01016
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Canopy Finance Ltd. (CANOPYFINANCE) - Director Report

Company director report

FOR THE FINANCIAL YEAR 2015-16

The Directors have pleasure in presenting their 35th Annual Report on thebusiness and operations of the Company together with the audited financial statements forthe financial year ended March 31st 2016.

1. Financial Performance of the Company

The summarized audited standalone and consolidated financial performance of the Companyis as follows:

(Amount in Rs)

STANDALONE

CONSOLIDATED

Particulars 2015-16 2014-15 2015-16 2014-15
Profit Before Tax & Provision (859273) 546264 (899960) 541809
Less: Provision For Tax - 404795 - 404795
Less: Provision For Standard Asset (124850) - (124850) -
Profit/ Loss After Tax (984123) 141469 (1024810) 137014
Transfer to Statutory NBFC Reserve Fund - 28294 - 28294
Profit/ Loss Brought Forward From Previous Year (602542) (715717) (643257) (766205)
Profit/ Loss Available for Appropriation - 141469 - 137014
Profit/ Loss Carried Forward (1586665) (602542) (1668067) (643257)
Basic/ Diluted Earnings Per Share (0.11) 0.02 (0.11) 0.01

2. Dividend

Due to losses incurred during the financial year 2015-16 directors have notrecommended any dividend.

3. Transfer Of Unclaimed Dividend To Investor Education And Protection Fund

The provisions of Section 125(5) of the Companies Act 2013 do not apply on the companyas no dividend has been declared during the year.

4. Public Deposits

Being a non-deposit taking Company the Company has not accepted any deposits from thepublic within the meaning of the provisions of the Non-Banking Financial CompaniesAcceptance of Public Deposits (Reserve Bank) Directions 1998.

5. Reserves

Due to losses incurred the Directors have not proposed to transfer any amount toReserve during the year.

5. Brief description of the Company's working during the year/State of Company's affair

The Company being a Non Banking Financial Company (NBFC) is currently engaged in thefinancial activities. The business of the Company largely depends on the policies by theReserve Bank of India Ministry of Finance as well as Global volatility in the financialmarket.

Particulars Standalone (Rupees in lacs) Consolidated (Rupees in lacs)
Revenue 56.13 56.13
Expenditure 64.72 65.13
Profit/ Loss before tax (8.59) (9.00)

6. Change in the nature of business if any

The Company has not changed its nature of business during the year.

7. Material Changes and Commitments if any affecting the Financial Position of theCompany

There were some material change and commitment affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report.

During the period under review one postal ballot was conducted through which thefollowing resolutions were passed:

• Change of the existing name of the company from "Kartavya Udyog ViniyogLimited" to "Canopy Finance Limited"

• Shifting of registered Office from "State of West Bengal" to"State of Assam"

• Voluntary delisting of the equity shares of the company from Calcutta StockExchange Ltd-

The Company has changed its name from "Kartavya Udyog Vinyog Limited" to"Canopy Finance Limited" w.e.f. 23rd May 2016. The Registrar of Companies WestBengal has issued new certificate of incorporation recording the new name on 23.05.2016.Further as on 31st March 2016 the entire operating income is generated from interestincome which is in compliance with Reg 45 of SEBI (LODR) Regulation 2015.

Trading Members of the Exchange are hereby informed that effective from September 92015 the equity shares of Company (Scrip Code: 539304) are listed and admitted todealings on the BSE Ltd. in the list of 'DT' Group Securities.

Further the company in the Board Meeting held on 23rd December 2015 hasapproved the proposal for voluntary delisting of the securities of the Company from theCalcutta Stock Exchange Limited.

Further the Company has filed an application with the Regional Director EasternRegion Kolkata for shifting of registered office from "State of West Bengal"to "State of Assam" however the same is under process.

8. Details in respect of adequacy of internal financial controls with referenceto the Financial Statements.

The directors have laid down internal financial controls to be followed by the companyand that such internal financial controls are adequate and were operating effectively.

9. Details of Subsidiary/Joint Ventures/Associate Companies

The Statement in Form AOC-I containing the salient feature of the financial statementof the Company's subsidiaries associates and joint venture companies pursuant to firstproviso to Section 129(3) of the Companies Act 2013 (Act) read with Rule 5 of theCompanies (Accounts) Rules 2014 forms part of the Annual Report. Further in line withSection 129(3) of the Act read with the aforesaid Rules and in accordance with theAccounting Standard 21 (AS-21) Consolidated Financial Statements prepared by the Companyinclude financial information of its subsidiary companies.

The following are the wholly owned subsidiaries of the Company:

a. Dhansubh Exim Pvt. Ltd.

b. Nishdin Vintrade Pvt. Ltd.

c. Bhooteshwar Barter Pvt. Ltd.

d. Brightful Retailers Pvt. Ltd.

Further Gajrup Management Private Limited ceased to be subsidiary of the companyduring the financial year ended March 31 2016:

10. Statutory Auditors

M/s A Saraogi & Associates Chartered Accountants shall be appointed as StatutoryAuditors of the company from the conclusion of this Annual General Meeting till theconclusion of the Annual General Meeting to be held in the year 2021 with remunerationshall be decided as per the Audit Committee.

Further M/s Gora & Co Chartered Accountants shall resign from the post ofStatutory Auditors of the company in the forthcoming Annual General Meeting.

11. Auditors' Report

The observations made by the Auditors are self- explanatory and do not require anyfurther clarification. Further the explanations or comments by the Board on everyqualification reservation or adverse remark or disclaimer made by the auditor in hisreport are annexed.

12. Familiarisation Programme for Independent Directors

In terms of Reg. 25(7) of the SEBI (LODR) Regulations 2015 the Company is required toconduct the Familiarisation Programme for Independent Directors (IDs) to familiarise themabout their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company etc. through variousinitiatives. The details of such familiarization programmes are available on the Company'swebsite www.kartavya.info .

13. Extract of Annual Return

An extract of Annual Return as on the financial year ended on March 31 2016 in FormNo. MGT-9 as required under Section 92(3) of the Companies Act 2013 read with Rule 12(1)of the Companies (Management and Administration) Rules 2014 is set out as an annexure tothe Directors' Report and forms part of this Annual Report.

14. Share Capital

Issue of equity shares with differential rights

The Company has not issued any of its securities with differential rights during theyear under review.

Buy Back of Securities

The company has not bought back any of its securities during the year under review.

Sweat Equity Bonus Shares & Employee Stock Option Plan

The company has neither issued sweat equity or bonus shares nor has provided any stockoption scheme to the employees.

Preferential Issue of Capital

The company has not issued any equity shares of on preferential basis during the year.

15. Conservation of energy Technology absorption and Foreign exchange earnings andOutgo

The provisions of section 134(3)(m) of the Companies Act 2013 regarding the disclosureof particulars of conservation of energy and technology absorption prescribed by the rulesare not applicable to our company. The company does not have any Foreign Exchangetransactions during the financial year.

16. Corporate Social Responsibility (CSR)

As the company does not have net worth of rupees five hundred crore or more orturnover of rupees one thousand crore or more or a net profit of rupees five crore or moreduring any financial year the disclosures as per Rule 9 of Companies (Corporate SocialResponsibility Policy) Rules 2014 is not applicable.

17. Directors:

A) Changes in Directors and Key Managerial Personnel

Pursuant to the Resolution of the Board of Directors passed at its meeting:

i) Mr. Om Prakash Trivedi director of the company has also been appointed as the ChiefFinancial Officer w.e.f 29/05/2015.

ii) Ms. Priya Kedia resigned from the post of Company Secretary of the Company w.e.f03/08/2015.

B) Declaration by an Independent Director(s) and re- appointment

Mr. Raj Kumar Sharma and Mrs. Vinita Agarwal Independent Directors of the Company haveconfirmed that they fulfilled all the conditions of the Independent Directorship as laiddown in sub-section (6) of Section 149 of the Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. the same havebeen noted by the Board.

C) Formal Annual Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulation 2015 the Board has carried out the annualperformance evaluation of its own performance and the Directors individually.

18. Number of meetings of the Board of Directors

Six Meetings of the Board of Directors were held during the financial year 2015-16.These were held on the following dates:

i) 29/05/2015 ii) 26/06/2015 iii) 03/08/2015 iv)06/11/2015 v) 23/12/2015 & vi)11/02/2016.

19. Audit Committee

Composition of the Audit committee is in accordance with the requirements of section177 of the Companies Act 2013 which is stated below:

Name Designation
Raj Kumar Sharma Chairman
Ashish Trivedi Member
Vinita Agarwal Member

20. Order of Court

The company is not subject to any legal proceedings and claims which will have amaterial or adverse effect on the going concern status or company's operations orfinancial conditions.

21. Sexual Harassment Of Women At Work Place

The Company has in place a policy in line with the requirements of The SexualHarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013.Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this Policy. There were nil complaints received during the year underreview.

22. Details of establishment of vigil mechanism for directors and employees

The Company has a Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The details of establishment of such mechanism have been disclosedon the website.

23. Nomination and Remuneration Committee

Composition of the Nomination & Remuneration Committee is in accordance with therequirements of section 178(1) of the Companies Act 2013. The composition is as under:

Name Designation
Raj Kumar Sharma Chairman
Om Prakash Trivedi Member
Vinita Agarwal Member

24. Particulars of Loans Guarantees or Investments

Loans guarantees or investments covered under section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.

25. Particulars of Contracts or Arrangements with Related Parties:

The company has no material individual transactions with its related parties which arecovered under section 188 of the Companies Act 2013 which are not in the ordinary courseof business and not undertaken on an arm's length basis during the financial year 2015-16.

26. Managerial Remuneration:

The Company incurred losses during the year so the Company has not provided anyManagerial Remuneration to the Directors.

27. Secretarial Audit Report

The Secretarial Audit Report has been given by M/s Raghunath Mandal CompanySecretaries and there is no qualification reservation or adverse remark or disclaimermade by the company secretary in the secretarial audit report.

28. Corporate Governance Certificate

The Corporate Governance certificate from the auditor regarding compliance ofconditions of corporate governance as stipulated by SEBI (LODR) Regulations 2015 has beenannexed with the report.

29. Corporate Governance and Management Discussion & Analysis Reports

The Corporate Governance Report and Management Discussion & Analysis Report havebeen annexed with the report.

30. Risk management policy

The company does not have any Risk Management Policy as the element of risk threateningthe Company's existence is very minimal.

31. Operational Review

The Company discloses standalone unaudited financial results on a quarterly basisstandalone audited financial results on an annual basis and consolidated audited financialresults on an annual basis. The Company has complied with all the norms prescribed by theReserve Bank of India (RBI) including the Fair practices Anti Money Laundering and KnowYour Customer (KYC) guidelines.

32. NBFC Company

The Company is engaged in the Business of Non Banking Financial Institution and it hasobtained a certificate of Registration from the Reserve Bank of India. The Company has notaccepted any deposit from the public. The Company has complied with the prudential normsrelating to the Income Recognition Accounting Standards asset classification andprovisioning for bad and doubtful debts as applicable to it in terms of Non BankingFinancial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)Directions - 2007.

33. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that—

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis;

(e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and

(J) the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

34. Acknowledgements

The Directors would like to express their appreciation of the co-operation andassistance received from the shareholders bankers and other business constituents duringthe year under review

For and on behalf of the Board of Directors
Sd/- Sd/-
Ashish Trivedi Om Prakash Trivedi
Managing Director Chief Financial Officer & Director
DIN 00402252 DIN 02658047
Place: Kolkata
Date: 27/05/2016