Annual Report 2018-2019
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Annual Report 2018-2019 Capital Small Finance Bank Limited MIDAS Corporate Park | 3rd Floor | 37 G. T. Road | Jalandhar - 144001 | Punjab | India Phone: +91 181 5051111/2222 | Fax: +91 181 5053333 [email protected] | www.capitalbank.co.in www.facebook.com/capitalbankindia Our Vision Contents Board Committees 02 Our Achievements 03 Financial Highlights 04 Managing Director & CEO’s Communique 05 Directors' Report 07 To provide superior banking service, focused - Annexure I - Details of Remuneration 23 on customers’ needs. - Annexure II - Extract of Annual Return 25 - Annexure III - CSR Activities 32 - Annexure IV - Secretarial Audit Report 37 To contribute to the economic development of Management Discussion & Analysis 39 the area by innovative ideas, technology and Products & Services 43 new products. Independent Auditor's Report 45 Annual Accounts 51 To maintain a long lasting and trustworthy - Balance Sheet relationship with the local community. - Profit & Loss Accounts - Cash Flow Statement Schedules 54 Significant Accounting Policies 59 Notes on Accounts 64 Our Network 87 Board Committees Chairman (Part – Time) Managing Director & Management Committee Credit Sanctioning Committee Chief Executive Officer Madan Gopal Sharma Sarvjit Singh Samra Sarvjit Singh Samra, Chairman Sarvjit Singh Samra, Chairman Harmesh Khanna, Member Dinesh Gupta, Member Rakesh Soni, Member Gurdeep Singh, Member Gurpreet Singh Chugh, Member Chief Operating Officer & Company Secretary Dinesh Gupta, Member Chief Financial Officer Munish Jain Amit Sharma Audit Committee Risk Management Committee Madan Gopal Sharma, Chairman Dinesh Gupta, Chairman Directors Auditors Rakesh Soni, Member Harmesh Khanna, Member Navin Kumar Maini MSKA & Associates Dinesh Gupta, Member Rakesh Soni, Member Gurpreet Singh Chugh, Member Gurpreet Singh Chugh, Member Dinesh Gupta Chartered Accountants Gurdeep Singh Mumbai Harmesh Khanna Securities Committee Special Committee on Frauds Rahul Priyadarshi Dinesh Gupta, Chairman Madan Gopal Sharma, Chairman Rakesh Soni Sham Singh Bains, Member Harmesh Khanna, Member Sham Singh Bains Gurdeep Singh, Member Sarvjit Singh Samra, Member Gurpreet Singh Chug Gurpreet Singh Chugh, Member Navin Kumar Maini, Member Nomination and Remuneration Committee Stakeholders Relationship Committee Rakesh Soni, Chairman Dinesh Gupta, Chairman RTA CDSL Sham Singh Bains, Member Navin Kumar Maini, Member Link Intime India Private Limited Marathon Futurex, Gurpreet Singh Chugh, Member Gurdeep Singh, Member Gurdeep Singh, Member Sham Singh Bains, Member C-101, 1st Floor, 247 Park, A-Wing, 25th Floor, Lal Bahadur Shastri Marg, NM Joshi Marg, Vikhroli (West), Lower Parel (East), Corporate Social Responsibility Committee Mumbai 400083 Mumbai 400013 Sarvjit Singh Samra, Chairman Rakesh Soni, Member NDSL Debenture Trustee Sham Singh Bains, Member Trade World, IDBI Trusteeship Services Ltd. Gurdeep Singh, Member A-Wing, 4th Floor Asian Building, 17- R Kamani Road, Kamala Mills Compound Ballard Estate, Fort, Mumbai, 400001 Lower Parel Mumbai 400013 2 Our Achievements Financial Highlights ` In’Crores Business Year Ended Year Ended Year Ended CAGR Analysis March 31, 2019 March 31, 2018 March 31, 2017 • Pioneer in bringing state-of-the-art banking facilities in rural areas at low cost Deposits 3667.26 2850.52 2378.21 24.18% • 7 Day Branch Banking from day one with extended and uninterrupted banking hours Advances 2608.78 1852.99 1369.60 38.01% • First Small Finance Bank to come into operation Total Business 6276.04 4703.51 3747.81 29.41% Net Worth 250.32 233.58 190.22 14.71% • Promoting Financial Inclusion in the area of operation since inception by providing easy access of banking services to the masses • Extension of banking services to the unbanked rural villages Profitability Year Ended Year Ended Year Ended CAGR Analysis March 31, 2019 March 31, 2018 March 31, 2017 • One-Stop Financial hub in rural and semi urban areas Gross Revenue 377.60 293.87 243.58 24.51% • Contribution towards economic development and employment generation in the area Net Interest Income 135.14 104.52 74.03 35.11% • Surpassed National Targets in Priority Sector, Agriculture and Weaker Section Operating Profit 34.28 32.70 23.23 21.48% Advances Net Profit 19.41 19.02 15.04 13.60% • Average Business per branch of `48.65 crores Ratio Year Ended Year Ended Year Ended Analysis March 31, 2019 March 31, 2018 March 31, 2017 CASA 38.39% 39.99% 39.54% Return on Average Equity 8.03% 8.98% 12.40% (after tax) Return On Average Assets 0.51% 0.64% 0.63% (after tax) Interest Spread 3.96% 3.87% 3.55% Net Interest Margin 3.58% 3.50% 3.08% EPS ( `) 6.82 6.86 6.53 Book Value per share 87.89 82.01 70.49 Capital Adequacy Ratio 17.47% 19.66% 22.95% Gross NPAs 1.30% 1.14% 1.02% Net NPAs 0.93% 0.84% 0.72% 3 4 Managing Director & CEO’s Communique Dear Shareholders It is my venerated privilege to share the state of Being a responsible citizen, the Bank endeavors to affairs, performance and road ahead with the become a partner in growth and contribute to the stakeholders of Capital Small Finance Bank. The economic development of the country. Bank has been witnessing exponential growth since its conversion into a small finance bank on April 24, Looking at the recent developments in the Indian 2016. financial sector conducting ethical, professional and compliance oriented businesses is of prime Capital Small Finance Bank is working with vigor importance for the Bank. Capital Small Finance and enthusiasm to materialize its vision statement; to Bank is built on the pillars of trust and performance, provide superior banking service, focused on and continues to upstage ethical and professional customers’ needs, to contribute to the economic conduct with robust compliance environment to development of the area by innovative ideas, create sustainable economic developments. technology and new products and to maintain a long lasting and trustworthy relationship with the local To sustain growth, countries and corporates need to community. invest in people, foster inclusive growth, and build The Bank is in a phase resilient societies. The Bank envisages to provide “of exponential growth. Capital Small Finance Bank is a socially responsible quality employment opportunities to localities with institution and has built its model around the concept fast track career growth and development. After establishing a of financial inclusion. The Bank is expanding its strong footprint in the outreach with a focus to provide world class I am sincerely thankful to the professional, ethical state of Punjab, the banking to the masses at low cost. The Bank is and timely inputs, advise and guidance provided by providing a safe, efficient and service oriented Bank has now started the regulatory bodies, the Reserve Bank of India, repository of savings to the local community with expansion to the states and Board of Directors of Capital Small Finance of Delhi, Haryana, complete bouquet of financial services to its ever “ Bank. Union Territory of expanding clientele under single roof. In line with the objective for which Small Finance Banks have Chandigarh and been set up, the Bank has customized the Asset and The Bank and its whole team continuously strives Rajasthan. Liability products as per the need of the masses to to set highest standards of corporate governance, help them in their growth endeavors. ethical business practices and maintain highest order of professionalism in providing various financial services. The bank is fulfilling its aim to make The Bank is witnessing exponential growth in every banking experience a delight for its various sphere of business and performance. The branch stakeholders. network has increased from 47 on the eve of conversion to small finance bank to 129 as on March 31, 2019. The total business of the Bank has I extend my gratitude to all the stakeholders for their increased from `2,963 crores as on March 31, confidence and unflinching belief in our ability to 2016 to `6,276 crores as on March 31, 2019. After deliver value. I would like to take this opportunity to establishing a strong footprint in the state of Punjab, reiterate our commitment to work towards meeting the Bank has now started expansion in the states of your high expectations and take your organization to Delhi, Haryana, Union Territory of Chandigarh and the next level of growth. Rajasthan. Lets together build a great institution. The Bank believes that robust economic growth is essential for reducing poverty and boosting shared prosperity. Strengthening contingency planning, fa- Sarvjit Singh Samra cilitating trade, and improving access to finance will Managing Director be crucial to navigate current economic uncertainties and invigorate growth in the economy. 5 6 Directors' Report Since, the conversion into Capital Small Finance • Customer Oriented Solutions Bank Limited on April 24, 2016, the bank has • Retail Centric Deposit Mix Dear Shareholders witnessed exponential growth in every sphere be it • Better Asset Quality geographical expansion or business development. • One-Stop Financial Hub in rural and semi urban The Directors of the Bank have great pleasure in presenting the 20th Annual Report on the business and operations of The Bank has been able to successfully implement areas the Bank along with the audited accounts for the year ended March 31, 2019. its core competencies in its existing and newer • Elated Workforce and Delighted Customers geographies to act as an engine of economic growth Indian Economy 2018-2019 stable GDP growth. Presently, both the fiscal policy and perform as catalyst of financial inclusion. Salient Our Work Ethics Moving Forward and monetary policy measures are directed toward features of our bank are as follows: augmenting growth as inflation is well under control. • Expansion with local focus • Community outreach Further, the repo rate cut by the Reserve Bank of • Pioneer in bringing modern banking facilities to Ease of Doing Business Index India shall augur well for real GDP growth which is • Customer-centric business model India moved up by 23 places in the World Bank’s rural areas at a low cost.