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Capital India Finance Ltd.

BSE: 530879 Sector: Financials
NSE: N.A. ISIN Code: INE345H01016
BSE 00:00 | 30 Sep 103.55 1.50
(1.47%)
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106.95

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NSE 05:30 | 01 Jan Capital India Finance Ltd
OPEN 106.95
PREVIOUS CLOSE 102.05
VOLUME 360
52-Week high 160.70
52-Week low 92.60
P/E 70.44
Mkt Cap.(Rs cr) 805
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 106.95
CLOSE 102.05
VOLUME 360
52-Week high 160.70
52-Week low 92.60
P/E 70.44
Mkt Cap.(Rs cr) 805
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Capital India Finance Ltd. (CAPITALINDIA) - Director Report

Company director report

To

The Members

CAPITAL INDIA FINANCE LIMITED ("the Company")

Your Board of Directors ("Board") take pride in presenting their 27th AnnualReport together with the Audited Financial Statements (both on standalone and consolidatedbasis) ("Financial Statements") for the Financial Year ended on March 31 2021("FY 2020-21" or "period under review"). The summarised consolidatedand standalone financial performance of your Company is as follows:

1. FINANCIAL HIGHLIGHTS

(INR in Lakhs)

Particulars Consolidated Standalone
Year ended March 31 2021 Year ended March 31 2020 Year ended March 31 2021 Year ended March 31 2020
Total Income 57950.65 17927.24 35459.64 10524.04
Less: Total Expenditure 56475.21 15492.99 32533.71 6399.65
Profit before tax 1475.44 2434.25 2925.93 4124.39
Less: Tax Expense 866.95 1170.52 880.34 1048.18
Profit for the year (Owners of the Company) 960.35 1723.09 2045.59 3038.26
Other Comprehensive Income 27.44 11.59 20.02 7.08
Total Comprehensive Income for the year (Owners of the Company) 987.80 1734.68 2065.60 3045.34
Add: Balance brought forward from previous year 1228.77 493.55 3082.86 1020.09
Less: Appropriations:
Transfer to Special Reserve under Section 45-IC of the RBI Act 1934 409.12 607.65 409.12 607.65
Dividend on equity shares 71.93 310.94 71.93 310.94
Tax on Dividend 5.80 63.98 5.80 63.98
Other Deductions during the year 90.32 16.89 - -
Surplus in the Statement of Profit and (Loss) 1639.39 1228.77 4661.61 3082.86

2. STATE OF COMPANY'S AFFAIRS

The Company is registered as a Non-Banking Financial Company not accepting publicdeposits holding Certificate of Registration from the Reserve Bank of India dated August13 2017 under Section 45-IA of the Reserve Bank of India Act 1934 ("RBI Act").

During the Financial year 2020-21 the Company has been granted Authorised DealerCategory - II License to carry out foreign exchange services by Reserve Bank of India.

During the period under review on standalone basis the Company's total income was Rs.35459.64 Lakhs as compared to Rs.10524.04 Lakhs during the previous financial year andthe Company has earned a Profit Before Tax of Rs. 2925.93 Lakhs as compared to Rs.4124.39 Lakhs during the previous financial year.

The Financial Statements both on Standalone and Consolidated basis forms part of thisAnnual Report.

3. RESERVES

For the financial year ended March 31 2021 an amount of Rs. 409.12 Lakhs wastransferred to Special Reserve in terms of Section 45-IC of the RBI Act.

The Company has done a provision reversal of Rs. (34.07) Lakhs for Employee StockOptions and reversal of Rs. (101.53) Lakhs for Expected Credit Losses ('ECL') during theperiod under review. Total provisions for ECL of the Company as at the end of FY 2020-21is Rs. 1632.18 Lakhs. Except as mentioned above no amount was transferred to any reserveby the Company during the period under review.

4. SHARE CAPITAL

During the period under review there was no change in the capital structure of theCompany. Accordingly as at March 31 2021 the Capital structure stand as follows:

• The authorised share capital of the Company was Rs. 21400 Lakhs divided into214000000 (Twenty-one crore forty lakhs) equity shares of INR 10/- (Indian Rupees Tenonly) each and

• Paid up share capital of the Company was Rs. 7773.43 Lakhs divided into77734260 (Seven crore seventy-seven lakhs thirty-four thousand two hundred sixty)equity shares of INR 10/- (Indian Rupees Ten only) each.

5. NON-CONVERTIBLE DEBENTURES

During the period under review the Company has issued and allotted the followingNon-Convertible Debentures ("NCDs") through private placement:

S. No. Name of Debenture Holder No. of NCDs allotted* Face Value (in Rs.) Amount (Rs.in Crores) Date of Issue
1 Bank of India 500 1000000 50.00 June 24 2020
2 Punjab National Bank 250 1000000 25.00 July 30 2020
3 State Bank of India 300 1000000 30.00 November 06 2020
4 Punjab National Bank 100 1000000 10.00 December 312020

*All the above NCDs are listed on BSE Limited.

6. CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business activity of the Company during theperiod under review.

7. AMENDMENT IN MEMORANDUM AND ARTICLE OF ASSOCIATION OF THE COMPANY

Subsequent to the closure of financial year till the date of this report the Companyhad issued Postal Ballot Notice dated May 26 2021 seeking approval of the Shareholdersby way of Special Resolution on the following items:

i. Amendment in the object clause of its Memorandum of Association by incorporatingsub-clause 3 under Clause III A:

3. To act as money changers brokers dealers agents buyers and sellers of all inforeign exchange in the form of currencies travellers cheques bonds notes instrumentspapers subject to approval of Reserve Bank of India to take positions hold and trade onthe movements of foreign currencies on behalf of customers or otherwise to hold operateand transact in foreign currencies and/or exchange by maintaining foreign currency bankaccounts or otherwise and to Issue or act as agents for travellers cheques credit cardsphone cards and all Instruments in any currency subject to all rules regulations andapprovals as may be necessary and to undertake the business of money transfer within Indiaand cross border money remittance within India and cross border or foreign currencyprepaid cards with multicurrency and INR wallets with all its variations or extensionswhich are in existence or which may come into existence within India and outside and as aprincipal or as an agent for any other person carrying on such business subject to termsand conditions mentioned in the permission / license as may be required to be obtainedfrom Reserve Bank of India or from any other authority.

ii. Amendment in the Article of Association by deleting the following Clause 139:

Unless decided by the Board to the contrary depending upon the circumstances of thecase a Managing Director shall not while he continues to hold that office be subject toretirement by rotation in accordance with the Article 124 hereof. If he ceases to holdthe office of director he shall ipso-facto and forthwith ceases to hold the office ofManaging Director.

8. DETAILS OF HOLDING SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANY(IES)

During the period under review the Company has the following subsidiaries:

S. No. Name of Subsidiary Percentage of Shareholding
1. Capital India Home Loans Limited 99.96%
2. Capital India Asset Management Private Limited 100%
3. Capital India Wealth Management Private Limited 100%
4. CIFL Holdings Private Limited 100%
5. CIFL Investment Adviser Private Limited 100%
6. Rapipay Fintech Holding Private Limited* 100%
7. Rapipay Fintech Private Limited 55.60%

*During the period under review Rapipay Fintech Holding Private Limited ceased to beour subsidiary company since Rapipay Fintech Holding Private Limited has been amalgamatedin Rapipay Fintech Private Limited pursuant to order dated March 1 2021 of Hon'ble NCLTCourt-II Delhi. The Company does not have any associate or holding company or jointventure.

Note:

• As required under Rule 8 (1) of the Companies (Accounts) Rules 2014 theBoard's Report has been prepared on Standalone Financial Statements basis. A report on theperformance and financial position of each of the Company's Subsidiaries as per Section129(3) of the Act read with the Companies (Accounts) Rules 2014 in the prescribed formAOC-1 is attached as Annexure I to the Board's Report.

• As required under Regulations 16(1)(c) and 46 of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015(hereinafter referred to as "Listing Regulations") the Board has approved andadopted the Policy for determining Material Subsidiaries. The Policy is available on theCompany's website at https://capitalindia.com. Also details of the Material Subsidiaryare given in the Corporate Governance Report which is annexed to and forms an integralpart of this Board's Report.

• The standalone audited financial statements of each of the subsidiaries areavailable on the website of the Company at https:// capitalindia.com under the"Investors" tab. Members interested in obtaining a copy of financial statementsof the subsidiaries may write to the Company Secretary at secretarial@capitalindia.com.

• The Annual Report of the Company containing therein its Financial Statementswould be placed on the website of the Company at https://capitalindia.com("Website") under the "Investors" tab.

9. DIVIDEND DISTRIBUTION POLICY

Your Company has adopted the Dividend Distribution Policy which sets out the parametersand circumstances to be considered by the Board in determining the distribution ofdividend to its shareholders and / or retaining profits earned by the Company. The saidPolicy is available on the website of the Company at https://capitalindia.com under the"Investors" tab.

10. DIVIDEND

In line with the Dividend Distribution Policy of the Company your Directors arepleased to recommend a final dividend of Re. 0.10/- (Rupee Ten Paisa only) per equityshare for the FY 2020-21 payable to shareholders whose names appear in the Register ofMember as on the Record Date i.e. Friday September 17 2021. The final dividend on77734260 (Seven Crores Seventy-Seven Lakhs Thirty Four Thousand Two Hundred and Sixty)equity shares if approved by the members of the Company at the ensuing Annual GeneralMeeting would entail an outflow of Rs. 7773426/- (Rupees Seventy-Seven Lakhs SeventyThree Thousand Four Hundred Twenty Six only).

11. INTERNAL CONTROL SYSTEM AND INTERNAL FINANCIAL CONTROLS

The Company has in place an adequate Internal Financial Control System with referenceto the financial statements and Internal Control System commensurate with the size scaleand complexity of its operations.

The Directors have laid down Internal Financial Control procedures to be followed bythe Company which ensures the compliance with various policies practices and statuteskeeping in view the organization's pace of growth and increasing complexity of operationsfor orderly and efficient conduct of its business.

The Audit Committee of the Board is vested with the powers to evaluate the adequacy andeffectiveness of the Internal Financial Control system of the Company thereby ensuringthat:

1. Systems have been established to ensure that all the transactions are executed inaccordance with the management's general and specific authorisation.

2. Systems and procedures exist to ensure that all the transactions are recorded so asto permit preparation of Financial Statements in conformity with the Generally AcceptedAccounting Principles (GAAP) or any other criteria applicable to such Statements and tomaintain accountability for effective and timely preparation of reliable financialinformation.

3. Access to assets is permitted only with the management's general and specificauthorisation. No assets of the Company are allowed to be used for personal purposesexcept in accordance with the terms of employment or except as specifically permitted.

4. The existing assets of the Company are verified /checked at reasonable intervals andappropriate action is taken with respect to differences if any.

5. Appropriate systems are in place for prevention and detection of frauds and errorsand for ensuring adherence to the Company's various policies as listed on the Website ofthe Company and otherwise disseminated internally.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the Board is governed by the relevant provisions of the CompaniesAct 2013 and rules made thereunder the Listing Regulations the Articles of Associationof the Company and all other applicable laws and is in accordance with the best practicesin corporate governance from time to time.

i. Board of Directors

The Company aims for an appropriate mix of Executive Non-Executive and IndependentDirector to maintain the independence of Board and separate its functions of governanceand management. As on March 31 2021 the Board of the Company consists of following 7(Seven) directors:

Sr. No Name DIN Designation Details
1. Dr. Harsh Kumar Bhanwala 06417704 Executive Chairman Appointed as an Additional Director in the capacity of Executive Chairman by the Board w.e.f. August 06 2020 and the same was approved by the shareholders in their Annual General Meeting held on September 28 2020.
2. Mr. Vinod Somani 00327231 Independent Director Appointed as an Additional Director in the capacity of Non - Executive Independent Director by the Board w.e.f. December 20 2017 and the same was approved by the shareholders in their Annual General Meeting held on June 2 2018.
3. Mr. Yogendra Pal Singh 08347484 Independent Director Appointed as an Additional Director in the capacity of Non - Executive Independent Director by the Board w.e.f. February 13 2019 and the same was approved by the shareholders in their Annual General Meeting held on September 27 2019
4. Mr. Malay Mukherjee 02272425 Independent Director Appointed as an Additional Director in the capacity of Non - Executive Independent Director by the Board w.e.f. July 31 2020 and the same was approved by the shareholders in their Annual General Meeting held on September 28 2020
5. Mr. Keshav Porwal 06706341 Managing Director Appointed as an Additional Director in the capacity of Managing Director by the Board w.e.f. November 27 2017 and the same was approved by the shareholders in their Annual General Meeting held on June 2 2018.
6. Mr. Vineet Kumar Saxena 07710277 Non Executive Director Appointed as an Additional Director of the Company in the capacity of Non - Executive Director by the Board w.e.f. November 27 2017 and the same was approved by the shareholders in their Annual General Meeting held on June 2 2018.
7. Mrs. Rachna Dikshit 08759332 Independent Woman Director Appointed as an Additional Director in the capacity of Woman Non - Executive Independent Director by the Board w.e.f. September 30 2020.

ii Fit and Proper Criteria

On the basis of declaration received from the Directors of the Company as on March 312021 and taken on record by the Board of Directors none of the Director is disqualifiedas on March 31 2021 from being appointed as a Director in terms of Section 164 (2) of theAct.

All the Directors of the Company duly meet the Fit and Proper Criteria of Director asper the requirements of Guidelines on Corporate Governance issued by the Reserve Bank ofIndia and has given their declaration in this regard.

iii. Changes in Directors and Key managerial Personnel

During the year under review and subsequent to the closure of financial year thecomposition of the Board of Directors and Key Managerial Personnel underwent the followingchanges:

• Mrs. Rachna Dikshit (DIN: 08759332) was appointed as an Additional Director inthe capacity of Woman Independent Director by the Board w.e.f. September 30 2020;

• Ms. Shraddha Suresh Kamat (DIN: 07555355) resigned from the position of WomanNon-Executive Non-Independent Director of the Company with effect from September 30 2020due to her personal reasons.;

• Mr. Amit Sahai Kulshreshtha (DIN: 07869849) resigned from the position ofExecutive Director & Chief Executive Officer of the Company with effect from February15 2021 due to his personal reasons.;

• Mr. Vineet Kumar Saxena resigned from the position of Non-Executive Director ofthe Company with effect from April 1 2021 due to his personal reasons. Thereafter Mr.Vineet Kumar Saxena was appointed as Chief Executive Officer of the Company with effectfrom May 26 2021; and

• Mr. Subhash Chander Kalia (DIN: 00075644) was appointed as an AdditionalDirector in the capacity of Independent Director by the Board w.e.f. May 26 2021.

iv. Declaration of Independence

The Company has received necessary declarations from all the Independent Directors ofthe Company confirming that they meet the criteria of Independence as prescribed underSection 149(6) of the Act and Regulation 25 (8) read with Regulation 16 of ListingRegulations. The Company has also received from them declaration of compliance of Rule 6(1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules 2014regarding online registration with the Indian Institute of Corporate Affairs forinclusion/ renewal of name in the databank of Independent Directors.

During the period under review the Independent Directors of the Company had nopecuniary relationship or transactions with the Company other than the sitting feescommission and reimbursement of expenses incurred by them for the purpose of attending themeetings of Board and Committee(s) of the Board of the Company.

v. Statement regarding opinion of the Board with regard to integrity expertise andexperience (including the proficiency) of the Independent Directors appointed during theyear

With regard to integrity expertise and experience (including the proficiency) of theIndependent Directors appointed during the Financial Year 2020- 21 the Board of Directorshave taken on record the declarations and confirmations submitted by the IndependentDirectors and is of the opinion that all the Independent Directors are persons ofintegrity and possess relevant expertise and experience and their continued association asDirectors will be of immense benefit and in the best interest of the Company.

vi. Directors and Officers (D&O) Liability Insurance

Your Company has an Insurance for its Directors/Officers for such quantum and risks asdetermined by the Company.

vii. Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 and rules made thereunderand the Articles of Association of the Company Dr. Harsh Kumar Bhanwala ExecutiveChairman of the Company is liable to retire by rotation at the ensuing Annual GeneralMeeting and has offered his candidature for re-appointment as a Director of the Company.

viii. Key Managerial Personnel

As on the date of this Report the Company has the following KMPs in accordance withthe provisions of the Companies Act 2013 and rules made thereunder:

Dr. Harsh Kumar Bhanwala Executive Chairman
Mr. Keshav Porwal : Managing Director
Mr. Vineet Kumar Saxena Chief Executive Officer
Mr. Neeraj Toshniwal Chief Financial Officer
Mr. Rachit Malhotra Company Secretary & Compliance Officer

During the period under review and upto the date of this report Mr. Amit SahaiKulshreshtha Executive Director & Chief Executive Officer of the Company resignedwith effect from February 15 2021 and Mr. Vineet Kumar Saxena was appointed as the ChiefExecutive Officer of the Company with effect from May 26 2021. No other change occurredin the Key Managerial Personnel ("KMP") of the Company.

ix. Board Meetings

During the period under review 4 (Four) Board meetings were held the details ofcomposition of the Board and its meetings held during the year under review and theattendance of the Directors at those meetings is provided in the Corporate GovernanceReport which forms part of this Annual Report. The intervening gap between the meetingswere within the period prescribed under the Companies Act 2013 and rules made thereunder.

x. Committees of the Board

The following are the Committees constituted by the Board:

i. Audit Committee;

ii. Nomination & Remuneration Committee;

iii. Stakeholder Relationship Committee;

iv. Investment Committee;

v. Risk Management Committee;

vi. Asset-Liability Committee;

vii. Management Committee;

viii. Credit Committee;

ix. Securities Issuance Committee;

x. IT Strategy Committee; and

xi. Corporate Social Responsibility Committee

xi. Composition of the Committees:

The following was the composition of the Committees as on March 31 2021:

Sl. No. Committee meeting Composition
1 Audit Committee Mr. Vinod Somani (Chairman)
Mr. Yogendra Pal Singh (Member)
Mrs. Rachna Dikshit (Member)
Mr. Vineet Kumar Saxena (Member)
2 Nomination & Remuneration Committee Mr. Vinod Somani (Chairman)
Mr. Yogendra Pal Singh (Member)
Mr. Vineet Kumar Saxena (Member)
3 Stakeholders Relationship Committee Mr. Vinod Somani (Chairman)
Mr. Yogendra Pal Singh (Member)
Mr. Malay Mukherjee (Member)
Mr. Vineet Kumar Saxena (Member)
4 Investment Committee Dr. Harsh Kumar Bhanwala (Chairman)
Mr. Keshav Porwal (Member)
Mr. Vineet Kumar Saxena (Member)
5 Risk Management Committee Dr. Harsh Kumar Bhanwala (Chairman)
Mrs. Rachna Dikshit (Member)
Mr. Achal Kumar Gupta (Member)
Mr. Keshav Porwal (Member)
6 Asset-Liability Committee Dr. Harsh Kumar Bhanwala (Chairman)
Mr. Vinod Somani (Member)
Mr. Keshav Porwal (Member)
Mr. Neeraj Toshniwal (Member)
Mr. Chetan Bafna (Member)
7 Management Committee Dr. Harsh Kumar Bhanwala (Chairman)
Mr. Keshav Porwal (Member)
Mr. Vineet Kumar Saxena (Member)
8 Credit Committee Mr. Vinod Somani (Chairman)
Mr. Keshav Porwal (Member)
Mr. Vineet Kumar Saxena (Member)
9 Securities Issuance Committee Mr. Vinod Somani (Chairman)
Mr. Keshav Porwal (Member)
Mr. Vineet Kumar Saxena (Member)
10 IT Strategy Committee Mr. Yogendra Pal Singh (Chairman)
Mr. Vineet Kumar Saxena (Member)
Mrs. Rekha Kashyap (Member)
Mr. Manish Gupta (Member)
11 Corporate Social Responsibility Committee Mr. Yogendra Pal Singh (Chairman)
Mr. Keshav Porwal (Member)
Mr. Malay Mukherjee (Member)

xii. Board and Committee Meetings

Details of meetings of Board and Committees are as below:

S. No Board of Directors / Committee No. of meetings Date of Meetings
1. Board of Directors (Board) 4 June 01 2020
July 31 2020
November 11 2020
February 11 2021
2 Audit Committee (AC) 4 June 01 2020
July 31 2020
November 11 2020
February 11 2021
3 Stakeholder Relationship Committee (SRC) 1 February 11 2021
4 Nomination & Remuneration Committee (NRC) 4 June 01 2020
July 31 2020
November 11 2020
February 11 2021
5 Risk Management Committee (RMC) 4 May 25 2020
July 28 2020
November 04 2020
January 20 2021
6 Asset-Liability Committee (ALCO) 4 June 01 2020
July 31 2020
November 6 2020
February 11 2021
7 Investment Committee (IC) 6 June 01 2020
July 30 2020
September 15 2020
November 06 2020
February 11 2021
February 15 2021
8 IT Strategy Committee (IT) 2 May 11 2020
November 06 2020
9 Securities Issuance Committee (SIC) Nil Nil
10 Management Committee (MC) 9 July 1 2020
August 14 2020
September 15 2020
September 30 2020
October 14 2020
November 07 2020
January 29 2021
March 18 2021
March 24 2021
11 Credit Committee (CC) Nil Nil
12 Corporate Social Responsibility Committee 1 June 01 2020

xiii. Attendance of Directors/Members at the Board and Committee meetings

As per clause 9 of the Secretarial Standard-I on Meetings of the Board of Directorsissued by the Institute of Company Secretaries of India the attendance ofDirectors/Members at the Board and Committee meetings held during the period under reviewis provided as under:

Name of Director/ Member Board AC NRC SRC RMC IC CSR MC IT ALCO
Dr. Harsh Kumar Bhanwala 2/2 - - - - - - - - 4/4
Mr. Vinod Somani 4/4 4/4 4/4 1/1 - - - - - 4/4
Mr. Yogendra Pal Singh 4/4 4/4 4/4 1/1 - - 1/1 - 2/2 -
Mr. Malay Mukherjee 2/2 - - - - - - - - -
Mrs. Rachna Dikshit 2/2 1/1 - - 1/1 - - - - -
Mr. Keshav Porwal 4/4 - - - 4/4 6/6 1/1 9/9 - 4/4
Mr. Vineet Kumar Saxena 4/4 4/4 4/4 1/1 - 5/6 - 9/9 2/2 -
Mr. Amit Sahai Kulshreshtha* 3/4 - - - 3/3 4/6 1/1 0/9 2/2 3/4
Ms. Shraddha Suresh Kamat** 2/2 - - - - - - - -
Mr. Achal Kumar Gupta - - - - 4/4 - - - - -
Mr. Manish Gupta - - - - - - - - 2/2 -
Mr. Neeraj Toshniwal - - - - - - - - - 1/1
Mr. Chetan Bafna - - - - - - - - - 1/1

*Resigned from the position of Executive Director and Chief Executive Officer w.e.f.February 15 2021 **Resigned from the position of Woman Non-Executive Director w.e.f.September 30 2020 xiv. Separate Meeting of Independent Directors

In accordance with the provisions of Schedule IV to the Act and Regulation 25(3) of theListing Regulations during the Financial Year 2020-21 the Independent Directors met onceon July 20 2020 to discuss relevant items including the agenda items as prescribed underthe applicable laws.

The meeting was attended by the Independent Directors of the Company eligible to attendthe same.

13. POLICIES GOVERNING THE APPOINTMENT AND REMUNERATION OF THE DIRECTORS AND EMPLOYEES

The Nomination & Remuneration Committee ("NRC") has been constituted toundertake the functions in accordance with the provisions of Section 178 of the Act andRegulation 19 of the Listing Regulations as amended from time to time.

In accordance with the provisions of Section 178 of the Companies Act 2013 and theListing Regulations the Board has adopted a Policy on Diversity of the Board of Directorsand a Policy on Remuneration of the Directors Key Managerial Personnel and otheremployees.

The purpose of this Policy is to establish and govern the procedure as applicable interalia in respect to the following:

a) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors Executives and Other Employees of the quality required torun the Company successfully;

b) relationship of remuneration to performance is clear and meets appropriateperformance benchmarks;

c) remuneration to Directors Executives and Other Employees involves a balance betweenfixed and variable pay reflecting short and long-term performance objectives appropriateto the working of the Company and its goals; and

d) to enable the Company to provide a well-balanced and performance-relatedcompensation package taking into account shareholder interests industry standards andrelevant Indian corporate regulations.

NRC develops the competency requirements of the Board based on the industry andstrategy of the Company conducts a gap analysis and recommends the reconstitution of theBoard as and when required. It also recommends to the Board the appointment of Directorshaving good personal and professional reputation and conducts reference checks and duediligence before recommending them to the Board. Besides the above NRC ensures that thenew Directors are familiarized with the operations of the Company and endeavors to providerelevant training to the Directors.

The detailed Policy on Remuneration of the Directors Key Managerial Personnel andother employees is available on the website of the Company at URLhttps://capitalindia.com.

The Company has also formulated a Fit and Proper Criteria Policy for inter aliadetermining the qualification technical expertise positive attributes integrity andindependence of the directors. The Company has received declarations from all theDirectors of the Company that they are meeting the criteria laid down in the Fit andProper Criteria Policy and the applicable provisions of the Master Direction - Non-BankingFinancial Company - Systemically Important Non-Deposit taking Company and Deposit takingCompany (Reserve Bank) Directions 2016 ("Master Directions") issued by theReserve Bank of India in this regard.

14. REMUNERATION OF THE DIRECTORS KEY MANAGERIAL PERSONNEL & EMPLOYEES

Disclosure with respect to the ratio of remuneration of each of the Director andemployee of the Company as required under the provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is forming part of this report as Annexure II.

A statement containing the details of the Remuneration of Directors KMPs and Employeesas required under Section 197(12) of the Companies Act 2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is formingpart of this Annual Report. However as per the provisions of Section 136 of the CompaniesAct 2013 the report and financial statements are being sent to the Members and othersentitled thereto after excluding the disclosure on particulars of employees. Thedisclosure is available for inspection by the Members on the website and at the RegisteredOffice of your Company during business hours on all working days of the Company up to thedate of the ensuing AGM. Any Member interested in obtaining a copy thereof may write anemail to secretarial@capitalindia.com

15. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

As required under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 the Company has a Policy on Prevention of sexual harassment ofwomen at workplace and matters connected therewith and has also complied with theprovisions relating to the constitution of Internal Complaint Committee ("ICC").It is our constant endeavor to ensure that we provide harassment free safe and secureworking environment to all employees especially women.

During the period under review there was no case of sexual harassment reported to theCompany.

16. POLICY ON PERFORMANCE EVALUATION OF THE DIRECTORS BOARD AND ITS COMMITTEES

NRC has devised a policy for the performance evaluation of the Independent DirectorsBoard its committees and the other individual Directors and has laid down the performanceevaluation and assessment criteria/parameters. The Independent Directors in terms ofSchedule IV to the Companies Act 2013 and the provisions of the Listing Regulations atits separate meeting evaluated the performance of the Chairman Non-Independent Directorsand the Board as a whole and the flow of information between the management and the Board.

NRC carried out the evaluation of performance of each of the Directors without thepresence of the Director being evaluated and the Board carried out a formal evaluation ofits own performance and the Board Committees. The Board of Directors had expressed theirsatisfaction with the evaluation process.

The criteria/parameters laid down for the evaluation of performance of the IndependentDirectors is provided in the Corporate Governance report forming part of this AnnualReport.

17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of the Listing Regulations the Management Discussionand Analysis Report is forming a part of this Annual Report.

18. DIRECTORS RESPONSIBILITY STATEMENT

The Board acknowledges the responsibility for ensuring compliance with the provisionsof Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in preparation ofthe Financial Statements for the financial year ended on March 31 2021 and state:

a. that in the preparation of Annual Accounts for the Financial Year ended as at March31 2021 the applicable Accounting Standards have been followed along with the properexplanation relating to the material departures.

b. that the Directors have selected such Accounting Policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the Financial Yearended as at March 31 2021 and of the profit and loss of the Company for the FinancialYear ended on March 31 2021.

c. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud or otherirregularities.

d. that the Directors have prepared the annual accounts on a going concern basis.

e. that the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operati ngeffectively; and

f. that there is a proper system to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring the period under review.

19. PUBLIC DEPOSITS

The Company did not accept any public deposits during the year under review. Thereforethe disclosures as required under the Companies Act 2013 and the rules made thereunderand Master Directions issued by Reserve Bank of India for public deposits are notapplicable on the Company.

20. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Loans guarantees and investments covered under Section 186 of the Companies Act 2013forms part of the Notes to the Financial Statements provided in this Annual Report.

21. AUDITORS

a) STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act 2013 M/s DeloitteHaskins & Sells LLP Chartered Accountants (Firm Regn. No.: 117366W/W100018) wereappointed as the Statutory Auditors of the Company at the 24th Annual GeneralMeeting ("AGM") of the Company for a period from the conclusion of the said 24thAGM till the conclusion of the 29th AGM of the Company. The report submitted bythe Statutory Auditors on the Financial Statements of the Company forms part of thisAnnual Report. There has been no qualifications reservations or adverse remarks ordisclaimer given by the Statutory Auditors in their report.

b) SECRETARIAL AUDITOR

The Board had appointed M/s Arun Gupta & Associates Company Secretaries as theSecretarial Auditors of the Company to undertake the Secretarial Audit for the financialyear 2020-21 in terms of the provisions of Section 204 of the Companies Act 2013 readwith the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andRegulation 24A of Listing Regulations. The Secretarial Auditors have submitted theirreport in the Form MR-3 which forms part of this Annual Report. There are noobservations reservations or adverse remarks in the Secretarial Audit Report.

Pursuant to Regulation 24A of the Listing Regulations every listed company shall annexwith its annual report the Secretarial Audit Report of its material subsidiariesincorporated in India. In compliance with the said requirement the Secretarial AuditReport of Capital India Home Loans Limited a material subsidiary of the Company for thefinancial year 2020-21 forms part of this Annual Report.

c) INTERNAL AUDITOR

The Board had appointed M/s Aneja Associates Chartered Accountants as the InternalAuditors to undertake internal audit of the Company for the financial year 2020-21 interms of the provisions of Section 138 of the Companies Act 2013 and rules madethereunder.

22. COST RECORDS

The provisions of the Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014 are not applicable on the Company for the period underreview.

23. ANNUAL RETURN

Pursuant to Section 134 and Section 92(3) of the Act read with Rule 12 (1) of theCompanies (Management and Administration) Rules 2014 the annual return as on March 312021 will be available on the website of the Company at https://capitalindia.com.

24. CORPORATE GOVERNANCE REPORT

It has always been the Company's endeavor to excel better Corporate Governance throughfair and transparent practices. The Company has put in place efficient and effectivesystem to ensure proper compliance with regulatory provisions. The Company understands andrespects its fiduciary role and responsibility towards its stakeholder and society atlarge.

The report on Corporate Governance in accordance with Regulation 34 read with ScheduleV of the Listing Regulations and Guidelines on Corporate Governance issued by the ReserveBank of India is presented in separate section forming part of this Annual Report.

A certificate from M/s Arun Gupta & Associates Company Secretaries confirmingcompliance to the conditions of Corporate Governance as stipulated under Para E ofSchedule V of the Listing Regulations is enclosed to this Report.

25. RELATED PARTY TRANSACTIONS

During the period under review all contracts / arrangements / transactions enteredinto by the Company with the related parties were on arm's length basis and in theordinary course of business. Also the Company had not entered into any contract /arrangement / transaction with related parties which could be considered material i naccordance with the policy of the Company on materiality of related party transactions.Accordingly the particulars of the transactions as prescribed in Form AOC - 2 of therules prescribed under Chapter IX relating to Accounts of Companies under the CompaniesAct 2013 are not required to be disclosed.

All related party transactions entered are disclosed in Note 35 of Financial Statementsof the Company forming part of this Annual Report.

In terms of section 188 of the Act read with rules framed thereunder and Regulation 23of the Listing Regulations your Company has in place Policy on Related Party Transactionsdealing with Related Party Transaction. The policy is placed on the website of the Companyat URL https://capitalindia.com

26. CODE OF CONDUCT

The Board has approved a Code of Conduct for Board of Directors and Senior ManagementPersonnel which has been placed on the website of the Company at URLhttps://capitalindia.com

The Code of Conduct lays down the standard procedure of business conduct which isexpected to be followed by the Directors and the designated employees in their businessdealings and in particular on matters relating to integrity in workplace in businesspractices and in dealing with stakeholders. All the members of the Board and the SeniorManagement Personnel have confirmed compliance with the Code of Conduct.

27. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company promotes ethical behavior in all its business activities and accordinglypursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 readwith the rules made thereunder and pursuant to the provision of Listing Regulations theCompany has established and implemented a Vigil Mechanism within the Company to be knownas the 'Vigil Mechanism/Whistle Blower Policy' for its Directors and employees to reportinstances of unethical behaviour and actual or suspected fraud or violation of theCompany's Code of Conduct. The aim of the policy is to provide adequate safeguards againstvictimization of the whistle blower who avails the mechanism and provides direct access tothe Chairman of the Audit Committee in appropriate or exceptional cases.

Accordingly the Vigil Mechanism/Whistle Blower Policy has been formulated with a viewto provide a mechanism for the Directors and employees of the Company to approach theVigilance and Ethics Officer or the Chairman of the Audit Committee of the Company.

The purpose of this policy is to provide a framework in order to promote responsibleand secure whistle blowing. It protects employees willing to raise a concern about seriousirregularities within the Company.

During the period under review no complaint of unethical or improper activity wasreported to the Company.

28. COMPLIANCE WITH THE REGULATIONS ISSUED BY THE RESERVE BANK OF INDIA

The Company continues to fulfill all the norms and standards laid down under the MasterDirections and the other applicable regulations issued by the Reserve Bank of India fromtime to time.

29. PREVENTION OF INSIDER TRADING

In accordance with SEBI (Prohibition of Insider Trading) Regulations 2015 the Companyhas formulated and approved

(i) an Insider Trading Code to regulate dealing in the securities of the Company bydesignated persons in compliance with the regulations; and

(ii) a Policy for Fair Disclosure of Unpublished Price Sensitive Information. The Boardis responsible for the implementation of this Code. Mr. Rachit Malhotra Company Secretaryof the Company is Compliance officer for the purposes of Insider Trading Code.

The Code and Policy can be accessed from the website of the Company athttps://capitalindia.com.

30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGO

Your Company is into the business of Non-Banking Financial Services and thus does notinvolve any manufacturing activity. Most of the Information required to be provided underSection 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies(Accounts) Rules 2014 is not applicable. However the information as applicable is givenhereunder:

a) CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy - The operations of your Companyare not energy- intensive. However adequate measures have been initiated for conservationof energy.

(ii) Steps taken by the Company for utilising alternate source of energy - though theoperations of the Company are not energy i ntensive the Company shall explore alternativesource of energy as and when the necessity arises.

(iii) Capital investment on energy conservation equipment - Nil

b) TECHNOLOGY ABSORPTION

(i) Efforts made towards technology absorption - The minimum technology required forthe business has been absorbed.

(ii) Benefits derived like product improvement cost reduction product development orimport substitution - Not Applicable

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) - Not Applicable

(a) the details of technology imported;

(b) the year of import;

(c) whether the technology has been fully absorbed; and

(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof

(e) Expenditure incurred on Research and Development

c) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review there were no earnings and outgo on account of foreignexchange transactions.

31. FRAUD REPORTING

There was no fraud reported by the Statutory Auditors of the Company under Section143(12) of the Companies Act 2013 and rules made thereunder to the Audit Committee orBoard during the period under review.

32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and Company's operations in future.

33. MATERIAL CHANGES AND COMMITMENTS IF ANY

There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year to which these financialstatements relate and the date of this Report.

34. CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions prescribed under Section 135 of the Act your Companyconstituted a CSR Committee. The Board of Directors laid down the CSR Policy covering theobjectives focus areas governance structure and monitoring & reporting frameworkamong others.

Your Company has taken note of the recent amendments brought in the CSR provisionsunder the Act and has taken necessary steps to identify the impact of the amendments onthe Company and work out action plans to ensure compliance during the period under review.Details of composition of CSR Committee and other relevant details have been provided inthe Corporate Governance Report. The CSR Policy is placed on the website of the Company atURL https://capitalindia.com and a brief outline of the policy and the Annual Report onCSR activities is appended in Annexure-III of this report in the format prescribed in theCompanies (Corporate Social Responsibility Policy) Rules 2014.

35. CREDIT RATING

During the period under review the Company has been rated A-'by Acuite Ratings andResearch Limited for raising Long term debt of upto Rs. 500 Crore and Non-ConvertibleDebentures of Rs. 150 Crore.

36. CONSOLIDATED FINANCIAL STATEMENTS

Your Company has prepared the Audited Consolidated Financial Statements in accordancewith Section 129(3) of the Act read with the applicable Indian Accounting Standards andListing Regulations. As required under the Indian Accounting Standards (Ind AS) notifiedunder Section 133 of the Companies Act 2013 and applicable provisions of the ListingRegulations the Audited Consolidated Financial Statements of the Company reflecting theConsolidation of the Accounts of its Subsidiary are included in this Annual Report.

The Annual Report including the Balance Sheet Statement of Profit & Loss otherstatements and notes thereto is available on the Company's website atwww.capitalindia.com.

37. RISK MANAGEMENT

The Risk Management Committee constituted by the Board has framed and implemented aRisk Management framework depicting the process for loan proposal approval loanmanagement post disbursement and day to day monitoring to manage credit risk. It sets outthe standards helpful in achieving a high-quality loan portfolio with optimal returns.

The framework is periodically reviewed and enhanced in response to changes in theexternal environment and business processes.

38. HUMAN RESOURCE-INITIATIVES

During the period under review your Company has strengthened its Management team andCore Leadership team to steer the Company's business conscientiously and diligently.Efforts have been put in to attract the best talent from the industry to build a strongfoundation. Your Company provides an employee friendly environment where employees areempowered and given an opportunity to demonstrate their talent that eventually boosttheir career growth in the Company.

39. LISTING OF SECURITIES

Presently the equity shares and debt securities of the Company are listed on the BSELimited. The applicable Annual Listing Fees has been duly paid to BSE Limited.

40. STATEMENT ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

Your Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards and such systems are adequate and operating effectively.

41. EMPLOYEE STOCK OPTIONS SCHEME

In order to motivate incentivize and reward employees your Company has instituted theEmployee Stock Option Scheme in the name of CIFL Employee Stock Option Plan - 2018("CIFL ESOP Plan"). The Nomination & Remuneration Committee monitors theCIFL ESOP Plan. The CIFL ESOP Plan is in compliance with the Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014 ("SEBI SBEBRegulations") including any amendment thereto. Relevant disclosures pursuant to SEBISBEB Regulations as on March 31 2021 are available on the website of the Company athttps://capitalindia.com.

A certificate with respect to the implementation of CIFL ESOP Plan in compliance withSEBI SBEB Regulations would be presented before the members at the ensuing Annual GeneralMeeting ("AGM") of the Company and a copy of the same shall be available forinspection at the registered office and the corporate office of the Company during theworking hours till the date of AGM and will also be available on the website of thecompany at https://capitalindia.com.

There has been no material change in the CIFL ESOP Plan of the Company during theperiod under review.

42. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report ("BRR") of your Company for the year2020-21 forms part of this Annual Report as required under Regulation 34(2) (f) of theListing Regulations and is appended as "Annexure-IV".

43. OTHER DISCLOSURES

Your Directors states that no disclosure or reporting is required in respect of thefollowing items during the period under review:

a) The Company has not bought back any of its securities;

b) The Company has not issued any bonus share;

c) The Company has not issued any sweat equity shares;

d) The Company has not issued equity shares with differential rights as to dividendvoting or otherwise;

e) The Company is not liable to transfer amount of dividend lying in the unpaiddividend account to Investor Education and Protection Fund (IEPF) pursuant to provisionsof Section 125 of the Companies Act 2013; and

f) There was no revision in the financial statements between the end of the financialyear and the date of this report.

44. CAUTIONARY STATEMENT

Statements in this Report particularly those which relate to Management Discussion andAnalysis describing the Company objective projections estimates and expectations mayconstitute forward looking statement within the meaning of applicable laws andregulations.

45. ACKNOWLEDGEMENTS

Your Directors would gratefully like to place their appreciation for the assistance andco-operation received from the Company's bankers during the period under review. TheDirectors also acknowledge with appreciation the support and co-operation rendered byvarious Government Agencies and Departments. Your Directors would also wish to place onrecord their deep sense of appreciation for the continued support from all the investorsof the Company.

By order and on behalf of the Board

Capital India Finance Limited
Dr. Harsh Kumar Bhanwala Keshav Porwal
Executive Chairman Managing Director
Place: Mumbai Date: May 26 2021 DIN: 06417704 DIN: 06706341

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