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Capital India Finance Ltd.

BSE: 530879 Sector: Financials
NSE: N.A. ISIN Code: INE345H01016
BSE 00:00 | 27 Jul 143.65 2.75
(1.95%)
OPEN

141.20

HIGH

146.90

LOW

138.10

NSE 05:30 | 01 Jan Capital India Finance Ltd
OPEN 141.20
PREVIOUS CLOSE 140.90
VOLUME 4360
52-Week high 177.00
52-Week low 77.00
P/E 54.62
Mkt Cap.(Rs cr) 1,117
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 141.20
CLOSE 140.90
VOLUME 4360
52-Week high 177.00
52-Week low 77.00
P/E 54.62
Mkt Cap.(Rs cr) 1,117
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 inpresenting their 26th Annual Report together with the Audited Financial Statements (bothon standalone and consolidated basis) ("Financial Statements") for theFinancial Year ended on March 31 2020 ("FY 2019-20" or " periodunder review"). The summarised consolidated and standalone financial performanceof your Company is as follows:

1. FINANCIAL HIGHLIGHTS

(Rs. In Lakhs)

Particulars Consolidated Standalone
Year ended 31st March 2020 Year ended 31st March 2019 Year ended 31st March 2020 Year ended 31st March 2019
Total Income 11899.48 5965.19 10524.04 5689.15
Less: Total Expenditure 9465.24 4845.80 6399.65 4097.94
Profit before tax 2434.24 1119.39 4124.39 1591.21
Less: Tax Expense 1048.18 468.41 1086.13 471.13
Profit for the year (Owners of the Company) 1723.08 650.98 3038.26 1120.08
Other Comprehensive Income 11.59 (5.08) 7.08 (5.08)
Total Comprehensive Income for the year (Owners of the Company) 1734.67 645.90 3045.34 1115.00
Add: Balance brought forward from previous year 534.99 135.17 1020.09 151.16
Less: Appropriations:
Transfer to Special Reserve under Section 45-IC of the RBI Act 1934 607.64 203.91 607.65 203.91
Dividend on equity shares 310.94 35.03 310.94 35.03
Tax on Dividend 63.98 7.13 63.98 7.13
Other Additions/Deductions during the year 93.33 - - -
Surplus in the Statement of Profit and Loss 1193.77 534.99 3082.86 1020.09

2. RESERVES

In order to comply with the provisions of Section 45-IC of the ReserveBank of India Act 1934 ("RBI Act 1934") the Company has transferredRs. 607.64 Lakhs to Special Reserve Funds and has also made a provision of Rs.67.83 Lakhsfor Employee Stock Options and Rs. 1338.98 Lakhs for Expected Credit Losses(‘ECL') during the period under review. Total provisions for ECL of the Companyas at the end of FY 2019-20 is Rs. 1733.71 Lakhs.

Except as mentioned above no amount was transferred to any reserve bythe Company during the period under review.

3. SHARE CAPITAL

During the period under review there is no change in the Authorisedand Paid up share Capital of the Company.

As on March 31 2020 the authorised share capital of the Company isRs. 21400 Lakhs divided in to 214000000 (Twenty-one crore forty lakhs) equity sharesof Rs.10/- (Rupees Ten only) each and paid up share capital of the Company is Rs. 7773.43Lakhs divided into 77734260 (Seven crore seventy-seven lakhs thirty-four thousand twohundred sixty) equity shares of Rs.10/- (Rupees Ten only) each.

4. NON-CONVERTIBLE DEBENTURES

During the period under review the Securities Issuance Committee ofthe Board had vide resolution dated January 13 2020 allotted 40 (Forty) Unlisted UnratedRedeemable Non-Convertible Debentures having face value of Rs.100 Lakhs each on privateplacement basis for an aggregate amount of Rs. 4000 Lakhs. Necessary disclosures in thisconnection has been made to BSE Limited the stock exchange where the equity shares of theCompany are listed.

5. INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY

The Company is engaged in the business of finance and investments as aNon-Banking Financial Company without accepting public deposits for which the certificateof registration has been obtained from the Department of NonBanking Supervision ReserveBank of India.

During the period under review on standalone basis the Company'stotal income was Rs.10524.04 Lakhs as compared to Rs.5689.15 Lakhs during the previousfinancial year and the Company has earned a Profit Before Tax of Rs. 4124.39 Lakhs ascompared to Rs. 1591.21 Lakhs during the previous financial year.

The inter-corporate loans and investments made by the Company duringthe period under review were in the ordinary course of business and at arm's length.The Financial Statements are forming part of this Annual Report.

6. CHANGE IN NATURE OF BUSINESS

There was no change in the nature of business activity of the Companyduring the period under review.

7. DETAILS OF HOLDING SUBSIDIARY JOINT VENTURE OR ASSOCIATECOMPANY(IES)

During the period under review the Company does not have anyHolding/Joint Venture/Associate Company and has the following 7 (Seven) subsidiaries:

S.No. Name of Subsidiary Percentage of Shareholding
1 Capital India Home Loans Limited 99.70%
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 Manager Private Limited 100%
6 Rapipay Fintech Holding Private Limited 100%
7 Rapipay Fintech Private Limited 62.8%*

including 26.66% of holding through its Subsidiary Company i.e. RapipayFintech Holding Private Limited Note:

• As required under Rule 8 (1) of the Companies (Accounts) Rules2014 the Board's Report has been prepared on Standalone Financial Statements and aReport on the Performance and Financial Position of each of the subsidiaries as includedin the Consolidated Financial Statements is presented herewith in Form AOC-I as Annexure-I.

• In terms of Regulation 16(1)(c) of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") the Board of Directors adopted a Policy for DeterminingMaterial Subsidiary (" Material Subsidiary Policy") in terms of whichnone of the subsidiaries are material subsidiaries of the Company. Details of the MaterialSubsidiary Policy are given in the Corporate Governance Report which is annexed to andforms an integral part of this Board's Report.

• The standalone audited financial statements of each of thesubsidiaries are available on the website of the Company at https://capitalindia.com underthe "Investors" tab. Members interested in obtaining a copy of the standaloneaudited financial statements of the subsidiaries may write to the Company Secretary at theRegistered Office of the Company.

• In accordance with the third proviso of Section 136 (1) of theCompanies Act 2013 and rules made thereunder the Annual Report of the Companycontaining therein its Financial Statements would be placed on the website of the Companyat https://capitalindia.com ("Website") under the "Investors"tab.

8. DIVIDEND

Your Directors are pleased to recommend a final dividend of Re. 0.10/-(Rupee Ten Paisa only) per equity share for the FY 2019-20 payable to those shareholderswhose names appear in the Register of Member as on the Record Date. 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) towards dividend.

9. INTERNAL CONTROL SYSTEM AND INTERNAL FINANCIAL CONTROLS

The Company has in place an adequate Internal Financial Control Systemwith reference to the financial statements and Internal Control System commensurate withthe size scale and complexity of its operations.

The Directors have laid down Internal Financial Control procedures tobe followed by the Company which ensures the compliance with various policies practicesand statutes keeping in view the organization's pace of growth and increasingcomplexity of operations for orderly and efficient conduct of its business.

The Audit Committee of the Board is vested with the powers to evaluatethe adequacy and effectiveness of the Internal Financial Control system of the Companythereby ensuring that:

1. Systems have been established to ensure that all the transactionsare executed in accordance with the management's general and specific authorisation.

2. Systems and procedures exist to ensure that all the transactions arerecorded so as to permit preparation of Financial Statements in conformity with theGenerally Accepted Accounting Principles (GAAP) or any other criteria applicable to suchStatements and to maintain accountability for effective and the timely preparation ofreliable financial information.

3. Access to assets is permitted only with the management'sgeneral and specific authorisation. No assets of the Company are allowed to be used forpersonal purposes except in accordance with the terms of employment or except asspecifically permitted.

4. The existing assets of the Company are verified /checked atreasonable intervals and appropriate action is taken with respect to differences if any.

5. Appropriate systems are in place for prevention and detection offrauds and errors and for ensuring adherence to the Company's various policies aslisted on the Website and otherwise disseminated internally.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the Board is governed by the relevant provisions ofthe Companies Act 2013 and rules made thereunder the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the Articles ofAssociation of the Company and all other applicable laws and is in accordance with thebest practices in corporate governance from time to time.

i. Board of Directors

The Company aims for an appropriate mix of Executive Non-Executive andIndependent Director to maintain the independence of Board and separate its functions ofgovernance and management. As on March 31 2020 the Board of the Company consists offollowing 6 (Six) directors:

Sr. No Name DIN Designation Details
1. 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 as an Independent Director by the shareholders in their Annual General Meeting held on June 2 2018.
2. 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 as an Independent Director by the shareholders in their Annual General Meeting held on September 30 2019
3. 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 as Managing Director by the shareholders in their Annual General Meeting held on June 2 2018.
4. Mr. Amit Sahai Kulshreshtha 07869849 Executive Director & CEO Appointed as an Additional Director in the capacity of Executive Director & CEO by the Board w.e.f. November 27 2017 and as an Executive Director & CEO by the shareholders in their Annual General Meeting held on June 2 2018.
5. 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 as Non - Executive Director by the shareholders in their Annual General Meeting held on June 2 2018.
6. Ms. Shraddha Suresh Kamat 07555355 Non Executive Director Appointed as an Additional Director of the Company in the capacity of Women Non - Executive Director by the Board w.e.f. November 27 2017 and as Women Non - Executive Director by the shareholders in their Annual General Meeting held on June 2 2018.

Further none of the Directors of your Company are disqualified underthe provisions of Section 164 of the Companies Act 2013 and rules made thereunder.

ii. Fit and Proper Criteria

All the Directors of the Company duly meet the fit and proper criteriastipulated by the Reserve Bank of India.

iii. Directorships ceased during the year

Mrs. Promila Bhardwaj resigned from the position of IndependentDirector with effect from April 1 2019 due to her personal reasons. Mr. Subodh Kumarresigned from the position of Non-Executive Director with effect from August 31 2019 dueto his personal reasons.

iv. Declaration of Independence:

All the Independent Directors of the Company have submitted thedeclaration of their independence in conformity of Section 149(7) of the Companies Act2013 and rules made thereunder stating that they meet the criteria of independence asprovided in Section 149(6) of the Act and are not disqualified from continuing asIndependent Directors.

During the period under review the Independent Directors of theCompany had no pecuniary relationship or transactions with the Company other than thesitting fees commission and reimbursement of expenses incurred by them for the purpose ofattending the meetings of the Company.

v. Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 and rulesmade thereunder and the Articles of Association of the Company Mr. Vineet Kumar SaxenaNon-Executive Director of the Company is liable to retire by rotation at the ensuingAnnual General Meeting and has offered his candidature for re-appointment as aNon-Executive Director of the Company at the ensuing Annual General Meeting.

vi. Key Managerial Personnel

As on March 31 2020 the Company has the following KMPs in accordancewith the provisions of the Companies Act 2013 and rules made thereunder:

Mr. Keshav Porwal - Managing Director
Mr. Amit Sahai Kulshreshtha - Executive Director & Chief Executive Officer
Mr. Neeraj Toshniwal - Chief Financial Officer
Mr. Rachit Malhotra - Company Secretary & Compliance Officer

During the period under review there was no change in the KeyManagerial Personnel ("KMP") of the Company.

vii. Board Meetings

During the period under review 4 (Four) Board meetings were held andthe intervening gap between the meetings were within the period prescribed under theCompanies Act 2013 and rules made thereunder.

viii. 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; and

x) IT Strategy Committee.

xi) Corporate Social Responsibility Committee

ix. Composition of the Committees:

The following was the composition of the Committees during the periodunder review:

Sl.No. Committee meeting Composition
1 Audit Committee Mr. Vinod Somani (Chairman)
Mr. Yogendra Pal Singh (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. Vineet Kumar Saxena (Member)
4 Investment Committee Mr. Vineet Kumar Saxena (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)
5 Risk Management Committee Mr. Achal Kumar Gupta (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)
6 Asset-Liability Committee Mr. Vinod Somani (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)
7 Management Committee Mr. Keshav Porwal (Chairman)
Mr. Amit Sahai Kulshreshtha (Member)
Mr. Vineet Kumar Saxena (Member)
8 Credit Committee Mr. Vinod Somani (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)
Mr. Vineet Kumar Saxena (Member)
9 Securities Issuance Committee Mr. Vinod Somani (Member)
Mr. Amit Sahai Kulshreshtha (Member)
Mr. Vineet Kumar Saxena (Member)
10 IT Strategy Committee Mr. Yogendra Pal Singh (Chairman)
Mr. Amit Sahai Kulshreshtha (Member)
Mr. Vineet Kumar Saxena (Member)
Mr. Manish Gupta (Member)
11 Corporate Social Responsibility Committee Mr. Yogendra Pal Singh (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)

x. 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) May 10 2019
August 14 2019
4 November 12 2019
February 14 2020
2 Audit Committee (AC) May 10 2019
August 14 2019
4 November 12 2019
February 14 2020
3 Stakeholder Relationship Committee (SRC) 1 November 12 2019
4 Nomination & Remuneration Committee May 10 2019
(NRC) May 20 2019
5 August 14 2019
November 12 2019
February 14 2020
5 Risk Management Committee (RMC) May 10 2019
3 August 20 2019
November 21 2019
6 Asset-Liability Committee (ALCO) May 10 2019
August 14 2019
4 November 12 2019
February 14 2020
7 Investment Committee (IC) April 15 2019
August 14 2019
September 16 2019
7 November 12 2019
November 27 2019
January 11 2020
February 26 2020
8 IT Strategy Committee (IT) August 14 2019
2 November 12 2019
9 Securities Issuance Committee (SIC) Nil Nil
May 3 2019
July 16 2019
September 4 2019
10 Management Committee (MC) 14 November 12 2019
December 5 2019
January 27 2020
March 9 2020
11 Credit Committee (CC) Nil Nil
12 Corporate Social Responsibility Committee 1 September 27 2019

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

As per clause 9 of the Secretarial Standard-I on Meetings of the Boardof Directors issued 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 SIC MC IT ALCO
Mr.Vinod Somani 4/4 4/4 5/5 1/1 - - - - - 4/4
Mr. Yogendra Pal Singh 4/4 4/4 5/5 1/1 - - - - 2/2 -
Mr. Keshav Porwal 4/4 - - - 3/3 7/7 - 6/7 - 4/4
Mr. Amit Sahai Kulshreshtha 4/4 - - - 3/3 7/7 - 7/7 2/2 4/4
Mr. Vineet Kumar Saxena 4/4 4/4 5/5 1/1 - 7/7 - 7/7 2/2 -
Ms. Shraddha Suresh Kamat 2/4 - - - - - - - - -
Mr. Subodh Kumar* 1/2 - - - - - - - - -
Mr. Achal Kumar Gupta - - 3/3 - - - -
Mr. Manish Gupta - - - - - - - - 2/2 -

*Resigned from the position of Non-Executive Director w.e.f. August 312019

xii. Separate Meeting of Independent Directors

In accordance with the provisions of Schedule IV to the Act andRegulation 25(3) of the SEBI (LODR) 2015 separate meeting of Independent Directors of theCompany was held on February 5 2020 to discuss relevant items including the agenda itemsas prescribed under the applicable laws. The meeting was attended by all the IndependentDirectors of the Company.

10 POLICIES GOVERNING THE APPOINTMENT AND REMUNERATION OF THE DIRECTORSAND EMPLOYEES

The Nomination & Remuneration Committee develops the competencyrequirements of the Board based on the industry and strategy of the Company conducts agap analysis and recommends the reconstitution of the Board as and when required. It alsorecommends to the Board the appointment of Directors having good personal andprofessional reputation and conducts reference checks and due diligence beforerecommending them to the Board. Besides the above the Nomination & RemunerationCommittee ensures that the new Directors are familiarized with the operations of theCompany and endeavors to provide relevant training to the Directors.

In accordance with the provisions of Section 178 of the Companies Act2013 and the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has adopted a Policy on diversity of the Boardof Directors and a Policy on remuneration of the directors key managerial personnel andother employees. The Policy on Diversity of the Board of Directors have been framed toencourage diversity of thought experience knowledge perspective age and gender in theBoard. The Policy on remuneration of the directors key managerial personnel and otheremployees is aligned to the philosophy on the commitment of fostering a culture ofleadership with trust.

The Policy on remuneration of the directors key managerial personneland other employees aims:

(a) that the level and composition of remuneration is reasonable andsufficient to attract retain and motivate Directors Executives and Other Employees ofthe quality required to run the Company successfully;

(b) that relationship of remuneration to performance is clear and meetsappropriate performance benchmarks;

(c) that remuneration to Directors Executives and Other Employeesinvolves a balance between fixed and variable pay reflecting short and long-termperformance objectives appropriate to the working of the Company and its goals; and

(d) to enable the Company to provide a well-balanced andperformance-related compensation package taking into account shareholder interestsindustry standards and relevant Indian corporate regulations. The detailed policy onremuneration of the directors key managerial personnel and other employees is availableon the Website of the Company at URL https://capitalindia.com

The Company has also formulated a Fit and Proper Criteria policy forinter alia determining the qualification technical expertise positive attributesintegrity and independence of the directors. The Company has received declarations fromall the Directors of the Company that they are meeting the criteria laid down in the Fitand Proper Criteria Policy and the applicable provisions of the Master Direction -Non-Banking Financial Company - Systemically Important Non-Deposit taking Company andDeposit taking Company (Reserve Bank) Directions 2016 ("Master Directions")issued by the Reserve Bank of India in this regard.

11 REMUNERATION OF THE EMPLOYEES

Disclosure with respect to the ratio of remuneration of each of theDirector and employees of the Company as required under the provisions of Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is forming part of this report as AnnexureII.

The statement containing names of top ten employees in terms ofremuneration drawn and the particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in a separate annexure onthe website of the Company which forms part of this report. In terms of Section 136 of theCompanies Act 2013 the said annexure is open for inspection at the Registered Office andCorporate Office of the Company.

12 PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has framed a Policy on Prevention of Sexual Harassment atWorkplace in accordance with the applicable laws for all employees of the Company to interalia ensure that the women employees are not subject to any form of sexual harassment andto constitute the Internal Complaints Committee to redress the complaints if any. Yourcompany is fully committed to protect the rights of any women of any age whetheremployed or not who alleges to have been subjected to any act of sexual harassment withinthe Company's premises. Your Company provides a safe and healthy work environment.

During the period under review there were no cases of sexualharassment reported to the Company.

13 POLICY ON PERFORMANCE EVALUATION OF THE DIRECTORS BOARD AND ITSCOMMITTEES

The Nomination & Remuneration Committee has devised a policy forthe performance evaluation of the Independent Directors Board its Committees and theother individual Directors and has laid down the performance evaluation and assessmentcriteria/parameters. The Independent Directors in terms of Schedule IV to the CompaniesAct 2013 and the provisions of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 at its separate meetingevaluated the performance of the Chairman Non-Independent Directors and the Board as awhole.

The Nomination & Remuneration Committee carried out the evaluationof every Director's performance and the Board carried out a formal evaluation of itsown performance Board Committees and the performance of each of the Directors withoutthe presence of the Director being evaluated. The criteria/parameters laid down for theevaluation of performance of the Independent Directors is provided in the CorporateGovernance report forming part of this Annual Report.

14 MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the ManagementDiscussion and Analysis Report is enclosed as a part of this Annual Report.

15 DIRECTORS RESPONSIBILITY STATEMENT

The Board acknowledges the responsibility for ensuring compliance withthe provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 inpreparation of the Financial Statements for the financial year ended on March 31 2020 andstate:

a. that in the preparation of Annual Accounts for the Financial Yearended as at March 31 2020 the applicable Accounting Standards have been followed alongwith the proper explanation relating to the material departures.

b. that the Directors have selected such Accounting Policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theFinancial Year ended as at March 31 2020 and of the profit and loss of the Company forthe Financial Year ended on March 31 2020.

c. that the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud or other irregularities.

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

e. that the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

f. there is a proper system to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory and secretarial auditors and external consultants including audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant Board Committees including the Audit Committeethe Board is of the opinion that the Company's internal financial controls wereadequate and effective during the period under review.

16 PUBLIC DEPOSITS

The Company did not accept any public deposits during the year underreview. Therefore the disclosures as required under the Companies Act 2013 and the rulesmade thereunder and Master Directions are not applicable on the Company.

17 PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

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

18 AUDITORS

a) STATUTORY AUDITORS:

Pursuant to the provisions of Section 139 of the Companies Act 2013M/s Deloitte Haskins & Sells LLP Chartered Accountants (Firm Regn. No.:117366W/W100018) were appointed as the Statutory Auditors of the Company at the 24thAnnual General Meeting ("AGM") of the Company for a period from theconclusion of the said 24th AGM till the conclusion of the 29th AGM of the Company.

The report submitted by the Statutory Auditors on the FinancialStatements of the Company forms part of this Annual Report. There has been noqualifications reservations or adverse remarks or disclaimer given by the StatutoryAuditors in their report.

b) SECRETARIAL AUDITORS

The Board had appointed M/s Naveen Garg & Associates CompanySecretaries as the Secretarial Auditors of the Company to undertake the Secretarial Auditfor the financial year 2019-20 in terms of the provisions of Section 204 of the CompaniesAct 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

The Secretarial Auditors have submitted their report in the Form MR-3which forms part of this Annual Report. There are no observations reservations or adverseremarks in the Secretarial Audit Report.

c) INTERNAL AUDITORS

The Board had appointed M/s Aneja Associates Chartered Accountants asthe Internal Auditors to undertake internal audit of the Company for the financial year2019-20 in terms of the provisions of Section 138 of the Companies Act 2013 and rulesmade thereunder.

19 COST RECORDS

The provisions of the Section 148 of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2014 are not applicable on the Company for theperiod under review.

20 EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in formMGT-9 is annexed herewith as "Annexure III".

The extract of annual return of the Company has been placed on thewebsite of the Company and can be accessed at the Website of the Company at URLhttps://capitalindia.com.

21 CORPORATE GOVERNANCE REPORT

It has always been the Company's endeavor to excel through betterCorporate Governance and fair and transparent practices. The Company has put in placeefficient and effective system to ensure proper compliance with regulatory provisions. TheCompany understands and respects its fiduciary role and responsibility towards itsstakeholder and society at large.

The report on Corporate Governance under regulation 34 read withSchedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 for the financial year 2019-20 is appended tothis Annual Report.

In accordance with the Non-Banking Financial Companies - CorporateGovernance (Reserve Bank) Directions 2015 issued by Reserve Bank of India the Companyhas adopted the Internal Guidelines on Corporate Governance.

22 RELATED PARTY TRANSACTIONS

During the period under review the transactions entered into withrelated parties were placed before the Audit Committee of the Board for its considerationand noting. The Audit Committee of the Board noted that such transactions were in theordinary course of business and at arm's length. None of the transaction with relatedparty(ies) comes within the ambit of Section 188 of the Companies Act 2013. Accordinglythe particulars of the transactions as prescribed in Form AOC - 2 of the rules prescribedunder Chapter IX relating to Accounts of Companies under the Companies Act 2013 are notrequired to be disclosed as they are not applicable.

All related party transactions entered are disclosed in Note 36 ofFinancial Statements of the Company forming part of this Annual Report.

In terms of section 188 of the Act read with rules framed thereunderand Regulation 23 of the Listing Regulations your Company has in place Policy on RelatedParty Transactions dealing with Related Party Transaction. The policy is placed on thewebsite of the Company at URL https://capitalindia.com.

23 CODE OF CONDUCT

The Board has approved a Code of Conduct which is applicable to themembers of the Board and all the employees in the course of day to day operations of theCompany. The Code of Conduct has been placed on the website of the Company at URLhttps://capitalindia.com.

The Code of Conduct lays down the standard procedure of businessconduct which is expected to be followed by the Directors and the designated employees intheir business dealings and in particular on matters relating to integrity in workplacein business practices and in dealing with stakeholders. All the members of the Board andthe Senior Management Personnel have confirmed compliance with the Code of Conduct.

24 VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) & (10) of theCompanies Act 2013 read with the rules made thereunder and pursuant to the provision ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has established a Vigil Mechanism to be known as the ‘VigilMechanism Policy' for its Directors and employees to report instances ofunethical behaviour and actual or suspected fraud or violation of the Company's Codeof Conduct. The aim of the policy is to provide adequate safeguards against victimisationof the whistle blower who avails the mechanism and provides direct access to the Chairmanof the Audit Committee in appropriate or exceptional cases.

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

The purpose of this policy is to provide a framework in order topromote responsible and secure whistle blowing. It protects employees willing to raise aconcern about serious irregularities within the Company.

During the period under review no such complaint of unethical orimproper activity has been received by the Company.

25 COMPLIANCE WITH THE REGULATIONS ISSUED BY THE RESERVE BANK OF INDIA

The Company continues to fulfill all the norms and standards laid downunder the Master Directions and the other applicable regulations issued by the ReserveBank of India from time to time.

26 PREVENTION OF INSIDER TRADING

The Company has adopted a revised policy on insider trading with effectfrom February 14 2020 namely the Prohibition of Insider Trading Code ("Code")witha view to regulate the trading in securities by the designated persons of the Company. TheCode requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company shares by the designated persons while in possession ofunpublished price sensitive information in relation to the Company and during the periodwhen the trading window is closed. The Board is responsible for the implementation of theCode.

The Code can be accessed from the website of the Company at URLhttps://capitalindia.com/.

27 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS/ OUTGO

a) CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy - The operations ofyour Company are not energyintensive. However adequate measures have been initiated forconservation of energy.

(ii) Steps taken by the Company for utilising alternate source ofenergy - though the operations of the Company are not energy intensive the Company shallexplore alternative source 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 technologyrequired for the business has been absorbed.

(ii) Benefits derived like product improvement cost reduction productdevelopment or import substitution - Not Applicable

(iii) In case of imported technology (imported during the last threeyears reckoned from 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 placeand the reasons thereof

(iv) Expenditure incurred on Research and Development - Not Applicable

c) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review there were no earnings and outgo onaccount of foreign exchange transactions.

28 FRAUD REPORTING

There was no fraud reported by the Statutory Auditors of the Companyunder Section 143(12) of the Companies Act 2013 and rules made thereunder to the Boardduring the period under review.

29 DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS INFUTURE

There have been no significant and material orders passed by theRegulators or Courts or Tribunals impacting the going concern status and Company'soperations in future.

Further no penalties have been levied by the Reserve Bank of India /any other Regulators during the period under review.

30 MATERIAL CHANGES AND COMMITMENTS IF ANY

There were no material changes and commitments affecting the financialposition of the Company which occurred between the end of the financial year to whichthese financial statements relate and the date of this Report.

31 CORPORATE SOCIAL RESPONSIBILITY

During the period under review pursuant to the provisions of Section135 and Schedule VII to the Companies Act 2013 and rules made thereunder the Companyhas constituted the Corporate Social Responsibility Committee and also approved theCorporate Social Responsibility Policy ("CSR Policy") on August 14 2019.

The Company has settled a registered trust namely "AtulyaFoundation" to inter alia undertake the CSR activities permissible under ScheduleVII to the Companies Act 2013.

The Company has contributed Rs.15.00 Lakhs in Atulya Foundation toundertake the CSR activities on the behalf of the Company during the financial year2019-20.

The CSR Policy is placed on the website of the Company at URLhttps://capitalindia.com and a brief outline of the policy and CSR initiatives undertakenby the Company during the year as set out in Annexure-IV of this report in theformat prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014.

32 CREDIT RATING

During the period under review the Company has been rated‘A-‘by Acuite Ratings and Research Limited for raising Long term debt of uptoRs. 500 Crore.

33 CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements for the financial yearended on March 31 2020 are provided in this Annual Report which have been prepared inaccordance with the relevant Accounting Standards issued by the Institute of CharteredAccountants of India.

The Annual Report including the Balance Sheet Statement of Profit& Loss other statements and notes thereto is available on the Company's websiteat URL www.capitalindia.com.

34 RISK MANAGEMENT

The Risk Management Committee constituted by the Board has framed andimplemented a Risk Management framework depicting the process for loan proposal approvalloan management post disbursement and day to day monitoring to manage credit risk. It setsout the standards helpful in achieving a high-quality loan portfolio with optimal returns.

The framework is regularly reviewed and enhanced in response to changesin the external environment and business processes.

35 HUMAN RESOURCE-INITIATIVES

During the period under review your Company has strengthened itsManagement team and Core Leadership team to steer the Company's businessconscientiously and diligently. Efforts have been put in to attract the best talent fromthe industry to build a strong foundation.

Your Company provides an employee friendly environment where employeesare empowered and given an opportunity to demonstrate their talent that eventually boosttheir career growth in the Company.

36 LISTING OF SECURITIES

Presently the equity shares of the Company are listed on the BSELimited Mumbai. The listing fee for the Financial Year 2019-20 has been duly paid.

37 STATEMENT ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS

Your Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards and such systems are adequate andoperating effectively.

38 EMPLOYEE STOCK OPTIONS SCHEME

In order to motivate incentivize and reward employees your Companyhas instituted the Employee Stock Option Scheme in the name of CIFL Employee Stock OptionPlan - 2018 ("CIFL ESOP Plan"). The Nomination & RemunerationCommittee monitors the CIFL ESOP Plan. The CIFL ESOP Plan is in compliance with theSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014("SEBI SBEB Regulations"). Relevant disclosures pursuant to SEBI SBEBRegulations as on March 31 2020 are available on the Website of the Company at URLhttps://capitalindia.com.A certificate from M/s Deloitte Haskins & Sells LLPChartered Accountants (Statutory Auditors of the Company) with respect to theimplementation of CIFL ESOP Plan would be placed before the members at the ensuing AnnualGeneral Meeting ("AGM") of the Company and a copy of the same shall beavailable for inspection at the registered office and the corporate office of the Companyduring the working hours.

There has been no material change in the CIFL ESOP Plan of the Companyduring the period under review.

39 BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report ("BRR") of yourCompany for the year 2019-20 forms part of this Annual Report as required under Regulation34(2) (f) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and is appended as "Annexure-V".

40 GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theperiod 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 asto dividend voting or otherwise;

e) The Company is not liable to transfer amount of dividend lying inthe unpaid dividend account to Investor

Education and Protection Fund (IEPF) pursuant to provisions of Section125 of the Companies Act 2013; and

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

41 MEASURES TAKEN BY THE COMPANY FOR NOVEL CORONAVIRUS DISEASE("COVID-19")

In January 2020 the World Health Organization ("WHO")declared the outbreak of a new coronavirus disease in Hubei Province China to be a PublicHealth Emergency of International Concern. Given the magnitude and the extent of itsspread the WHO declared it a Pandemic. Apart from human suffering it also caused majoreconomic disruptions. WHO and public health authorities around the world are takingactions to contain the COVID-19 outbreak. In order to deal with this public healthsituation the corporate sector are playing a key role in implementing the strategicpolicy decision of social distancing which is most crucial for reducing the rate andextent of the disease transmission at community level.

Your Company has taken the following measures to contribute towards thecontainment of the spread of the disease:

1. The Company adopted the wok from home policy from March 18 2020well in advance of the spread of the disease in and around the offices and/or branches ofthe Company so as to maintain the safety of the employees and other people;

2. The Company has duly filed the web-form ‘Company Affirmation ofReadiness towards COVID-19' deployed by the Ministry of Corporate Affairs on March23 2020; and

3. The Company has pursuant to the Reserve Bank of India circular videno.: RBI/2019-20/186DORNo.BP. BC.47/21.04.048/2019-20 dated March 27 2020 on COVID-19 -Regulatory Package (COVID Regulatory Package) has formulated a Policy on Moratorium ofInstalments under COVID-19 RBI Regulatory Package that is applicable to all term loanaccounts of the Company where in payments are falling due between March 1 2020 to May 312020.

42 ACKNOWLEDGEMENTS

Your Directors would gratefully like to place their appreciation forthe assistance and co-operation received from the Company's bankers during the periodunder review. The Directors also acknowledge with appreciation the support andco-operation rendered by various Government Agencies and Departments. Your Directors wouldalso wish to place on record their deep sense of appreciation for the continued supportfrom all the investors of the Company.

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