2. STATE OF COMPANY'S AFFAIRS

The Company is registered with the Reserve Bank of India
("RBI") as a Non-Banking Financial Company ("NBFC")
not accepting public deposits. It holds a Certificate of
Registration dated March 24, 1998, issued by the RBI under
Section 45-IA of the Reserve Bank of India Act, 1934 ("RBI
Act"). The Company is primarily engaged in providing

financial services to the Retail and Small and Medium
Enterprises (SME) sectors.

The Company is also registered with the RBI as an
Authorised Dealer and holds an Authorised Dealer
Category-II License, permitting it to undertake specified
foreign exchange services.

In addition, the Company has initiated the process of
obtaining a Corporate Agency Licence from the Insurance
Regulatory and Development Authority of India (IRDAI),
which will enable it to undertake the distribution of
insurance products as a corporate agent. The application
has been made pursuant to the approval of the Board
of Directors at its meeting held on August 13, 2025, and
subsequent approval of the shareholders on September
25, 2025.

This initiative is aimed at further strengthening the
Company's position in the financial services sector by
enabling it to directly distribute insurance products
to its customers. Upon receipt of the requisite licence,
the Company intends to broaden its service offerings,
enhance customer engagement, and create additional
revenue streams through commission-based income. It is
also expected to facilitate cross-selling opportunities and
provide greater flexibility in catering to diverse customer
needs.

During the period under review, on standalone basis,
the Company's total income was INR 22,966.81 Lakhs as
compared to INR 20,614.04 Lakhs during the previous
financial year and the Company has earned a Profit before
tax of INR 4,540.67 Lakhs as compared to the Profit before
tax of INR 1,288.30 Lakhs during the previous financial
year.

On consolidated basis, the Company's total income was
INR 53,284.24 Lakhs as compared to INR 55,022.44 Lakhs
during the previous financial year and the Company has
incurred a Profit before Tax from Continued Operations
of INR 3700.99 Lakhs as compared to the Loss before
Tax from Continued Operations of INR (1190.51) Lakhs
incurred during the previous financial year.

The Financial Statements, both on Standalone and
Consolidated basis forms part of this Annual Report.

RESERVES

Under Section 45-IC (1) of Reserve Bank of India ("RBI")
Act, 1934, non-banking financial companies ("NBFCs")
are required to transfer a sum not less than 20% of its net
profit every year to reserve fund before declaration of any

dividend. Accordingly, your Company has transferred a
sum of INR 807.17 Lakhs to Special Reserve Account for
the financial year ended on March 31,2026

The amounts proposed to be transferred to the other
reserves, viz. general reserve, statutory reserve, ESOP
reserve are mentioned in financial statements.

4. CAPITAL ADEQUACY

As on March 31, 2026, the Capital to Risk Assets Ratio
("CRAR") of your Company was 40.99% (Tier-I: 40.76%, Tier-
II: 0.23%) of the aggregate risk weighted assets on balance
sheet which is well above the minimum requirement of
15% as prescribed by RBI.

5. SHARE CAPITAL

During the period under review, the Company allotted
equity shares to eligible employees upon the exercise of
vested stock options granted under the CIFL Employee
Stock Option Plan, 2018.

As on March 31,2026, the capital structure of the Company
stands as follows:

These equity shares rank pari-passu with the existing
equity shares of the Company in all respects.

During the year under review, your Company has not
issued any equity shares with differential rights or Sweat
equity shares.

7. CHANGE IN NATURE OF BUSINESS

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

8. LISTING OF EQUITY SHARES

During the period under review, the Equity Shares of the
Company were listed on the National Stock Exchange of
India Limited ("NSE"), with effect from April 17, 2025.

As a result, the Company's Equity Shares are now listed
and actively traded on both the BSE Limited ("BSE") and
the NSE, enhancing market accessibility and shareholder
participation.

The Annual Listing fees, as prescribed have been paid to
both the Stock Exchanges up to March 31,2027.

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

> Holding Company

Capital India Corp Private Limited, holding 72.59% of the
paid-up share capital of the Company, continues to be the
holding company and promoter entity of your Company.

> Subsidiary Company

As on March 31, 2026, the Company has the following
subsidiaries:

*Step-down Subsidiary through Rapipay Fintech Private
Limited

During the year under review, the Company divested
its entire equity stake in its material subsidiary, People
Home Finance Limited (Formerly known as Capital India
Home Loans Limited) for a consideration of INR 266.53
crore, resulting in a gain of INR 97.92 crore in its financial
statements. Consequently, CIHL ceased to be a subsidiary
of the Company with effect from August 11,2025.

This strategic divestment aligns with the Company's
objective of strengthening its focus on retail lending,
optimising capital allocation, and streamlining operations.

The proceeds will be reinvested into core business
initiatives to drive growth, strengthen capital utilisation,
and enhance overall financial performance.

The Board believes that this move will enable the Company
to sharpen its strategic focus and create long-term value
for its stakeholders.

> Joint Venture / Associate Company

The Company does not have any associate or joint venture
during the period under review.

Notes:

• As required under Rule 8 (1) of the Companies
(Accounts) Rules, 2014, the Board's Report has been
prepared on Standalone Financial Statements basis.
A report on the performance and financial position
of each of the Company's Subsidiary as per Section
129(3) of the Companies Act, 2013 ("Act"), read
with the Companies (Accounts) Rules, 2014, in the
prescribed form AOC-1 is attached as Annexure I to
the Board's Report.

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

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

• The Annual Report of the Company, containing
Financial Statements, will be placed on the website
of the Company at https://capitalindia.com under
the "Investors"tab.

10. DIVIDEND AND DIVIDEND DISTRIBUTION
POLICY

Pursuant to the provisions of regulation 43A of the
SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015 and in accordance with the Reserve Bank
of India (Non-Banking Financial Companies - Prudential
Norms on Declaration of Dividends) Directions, 2025, the
Company has adopted a Dividend Distribution Policy,
which outlines the key parameters and circumstances to
be considered by the Board of Directors while determining
the declaration of dividend and/or the retention of profits.
This Policy ensures a balanced approach to rewarding
shareholders while supporting the Company's long-term
growth objectives.

The Dividend Distribution Policy is available on the
Company's website at https://capitalindia.com under the
"Investors" tab.

In accordance with the aforesaid policy, the eligibility
criteria prescribed under the aforesaid RBI Directions, the
provisions of Section 123 of the Companies Act, 2013, the
Companies (Declaration and Payment of Dividend) Rules,
2014 and Regulation 43 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, and
after considering the operational profitability and overall
financial position of the Company during the financial year
2025-26, the Board has not recommended any dividend
for the financial year 2025-26.

11. INTERNAL FINANCIAL CONTROL SYSTEM

Internal Financial Controls laid down by the Company
is a systematic set of controls and procedures to ensure
orderly and efficient conduct of its business including
adherence to the Company's policies, safeguarding of
its assets, prevention and detection of frauds and errors,
accuracy and completeness of the accounting records
and timely preparation of reliable financial information.
Internal financial controls not only require the system to
be designed effectively but also to be tested for operating
effectiveness periodically.

The Board is of the opinion that internal financial controls
with reference to the financial statements are adequate
and operating effectively. The internal financial controls
are commensurate with the size, scale, and complexity of
operations.

Internal Control Systems and their adequacy are discussed
in more detail in Management Discussion and Analysis.

12. DIRECTORS AND KEY MANAGERIAL
PERSONNEL

The composition of the Board is governed by the relevant
provisions of the Act and the rules made thereunder,
the Listing Regulations, the Articles of Association of the
Company, and all other applicable laws. It is structured to

comply with, and reflect, the best practices of corporate
governance prevailing from time to time.

i. Board of Directors

The Company aims for an appropriate mix of Executive,
Non-Executive and Independent Directors to maintain the
effectiveness of the Board and separate its functions of
governance and management. As on March 31,2026, the
Board of the Company consists of the following 7 (Seven)
Directors:

ii. Fit and Proper Criteria

Based on the declarations received from the Directors of
the Company as of March 31, 2026, and as recorded by
the Board, none of the Directors were disqualified from
holding office under Section 164(2) of the Act.

All Directors comply with the Fit and Proper Criteria
prescribed under the Reserve Bank of India (Non-Banking
Financial Companies - Governance) Directions, 2025, as
amended from time to time, and have submitted their
respective declarations in this regard.

Further, none of the Directors are disqualified under any
provisions of Section 164(2) of the Act. All Directors have
made the necessary disclosures as required under Section
184 and other applicable provisions of the Act.

Details including the brief resumes and other relevant
information of the Directors proposed to be appointed
or re-appointed at the forthcoming AGM, as stipulated
under the Secretarial Standard-2 issued by the Institute
of Company Secretaries of India and Regulation 36 of the
Listing Regulations, are provided separately in the Notice
convening the AGM.

iii. Changes in Directors

During the period under review, the following changes
took place in the directorships of the Company:

a. Mr. Surender Rana (DIN: 10315624) was appointed
as an Additional Director in the category of Whole¬
time Director and designated him as the Executive
Vice Chairman of the Company with effect from
November 18, 2025. Subsequently, the members
of the Company, by way of postal ballot through
remote e-voting on February 12, 2026, approved his
appointment as Whole-time Director, designated
as the Executive Vice Chairman of the Company, for
a term of 3 (three) consecutive years commencing
from November 18, 2025.

Except for the change mentioned above, there were no
other changes in the composition of the Board of Directors
of the Company during the period under review.

iv. Declaration of Independence

The Company has received necessary declarations
from all its Independent Directors confirming that they
meet the criteria of independence as prescribed under
Section 149(6) of the Companies Act, 2013 ("the Act") and
Regulation 16 of the SEBI Listing Regulations. Further,
in compliance with Rule 6(1) & (2) of the Companies
(Appointment and Qualification of Directors) Rules, 2014,
all Independent Directors have submitted declarations
regarding their online registration with the Indian Institute
of Corporate Affairs (IICA) for inclusion or renewal of their
names in the databank of Independent Directors.

The Board is of the opinion that the Independent Directors
of the Company possess the requisite qualifications,
experience, and expertise, uphold the highest standards
of integrity, and maintain independence from the
Management of the Company.

During the period under review, the Independent
Directors of the Company had no pecuniary relationship or
transactions with the Company, other than the sitting fees
and reimbursement of expenses incurred for attending
the meetings of Board and its Committees.

v. Statement regarding the opinion of the Board
with regard to integrity, expertise and experience
(including proficiency) of the Independent Directors
appointed during the year

With respect to the integrity, expertise and experience
(including proficiency) of the Independent Director(s)
during the FY 2025-26, the Board of Directors have taken
on record the declarations and confirmations submitted
by the Independent Director(s). The Board is of the opinion
that all the Independent Directors are persons of integrity,

possessing the relevant expertise and experience and their
continued association as Directors 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 as determined by the Board of
the Company.

vii. Retirement by Rotation

Pursuant to Section 152 of the Companies Act, 2013,
unless the Articles of Association provide otherwise, not
less than two-thirds of the total number of directors of a
public company (excluding Independent Directors) shall
be liable to retire by rotation, and out of such directors,
one-third shall retire at every Annual General Meeting. In
accordance with the aforesaid provisions of the Act and
the Articles of Association of the Company, Mr. Keshav
Porwal, Managing Director (DIN: 06706341), is liable to
retire by rotation at the ensuing AGM and, being eligible,
has offered himself for re-appointment.

viii Key Managerial Personnel (KMP)

As on the date of this Report, the Company has the
following KMPs in accordance with the provisions of the
Act read with the rules made thereunder:

Mr. Keshav Porwal : Managing Director

Mr. Surender Rana : Executive Vice Chairman

Mr. Pinank Jayant Shah : Chief Executive Officer

Mr. Vikas Srivastava : Chief Financial Officer

Mr. Sulabh Kaushal : Chief Compliance Officer

& Company Secretary
During the period under review:

- Mr. Surender Rana was appointed as Executive Vice
Chairman, designated as Key Managerial Personnel
of the Company with effect from November 18, 2025.

ix. Board Meetings

During the period under review, Six (6) Board meetings
were convened. Details regarding the composition of
the Board, the meetings held during the year, and the
attendance of each Director are provided in the Corporate
Governance Report, which forms an integral part of
this Annual Report. The intervals between consecutive
meetings were within the limits prescribed under the
Companies Act, 2013, and the applicable rules and Listing
Regulations.

x. Committees of the Board

a. Statutory Committees

In accordance with the applicable provisions of the
Act, the Listing Regulations, and the RBI master
directions and guidelines, the Board has constituted
the following Statutory Committees:

i. Audit Committee

ii. Nomination & Remuneration Committee

iii. Stakeholders Relationship Committee

iv. Corporate Social Responsibility Committee

v. Risk Management Committee

vi. Investment Committee

vii. Asset-Liability Committee

viii. IT Strategy Committee

ix. Write-off & Settlement Committee

x. Review Committee

xi. Identification Committee

b. Non-Statutory Committees

The Company has also constituted the following
Non-Statutory Committees to oversee its day-to-day
operations:

i. Credit Committee

ii. Credit Committee of Board

iii. Management Committee

iv. Securities Issuance Committee

c. Other Committees

The following other non-Board Committees have
been constituted in accordance with applicable
regulatory requirements:

i. IT Steering Committee

ii. Information Security Committee

iii. Product Evaluation Committee

iv. Special Committee of Executives

xi Separate Meeting of Independent Directors

In compliance with the provisions of Schedule IV to the
Act read with Regulation 25 of the Listing Regulations, the
Independent Directors convened a meeting on March 30,
2026, during FY 2025-26. This meeting was held without
the presence of Non-Independent Directors or members
of the management team and inter alia reviewed the
following:

a) The performance of Non-Independent Directors and
the Board as a whole;

b) The performance of the Chairman of the Board,
taking into account the views of Executive and Non¬
Executive Directors; and

c) The quality, quantity and timeliness of flow of
information between the Company's management
and the Board that is necessary for the Board to
effectively and reasonably perform their duties.

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

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

Further as per the requirements of Reserve Bank of
India (Non-Banking Financial Companies - Governance)
Directions, 2025, the Board has adopted a Policy on
Diversity of the Board of Directors and a Policy on
Compensation of Directors, Executives and other
Employees.

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

a) the level and composition of remuneration is
reasonable and sufficient to attract, retain and
motivate Directors of the quality required to run the
Company successfully;

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

c) remuneration to Directors, Key Management
Personnel and senior management involves a
balance between fixed and incentive pay reflecting
short and long-term performance objectives
appropriate to the working of the Company and its
goals.

NRC develops the competency requirements of the
Board based on the industry and strategy of the
Company, conducts a gap analysis and recommends the
reconstitution of the Board, as and when required. It also
recommends to the Board the appointment of Directors
having good personal and professional reputation and
conducts reference checks and due diligence, before
recommending them to the Board. Besides the above,
NRC ensures that the new Directors are familiarized with
the operations of the Company and endeavors to provide
relevant training to the Directors.

During the year under review, the Policy on Compensation
of Directors, Executives and Other Employees, have been
revised in line with the updated Reserve Bank of India
Master Directions notified on November 28, 2025 and
extant laws framed by the Securities and Exchange Board
of India.

The updated Policy on Compensation of Directors,
Executives and other Employees is available on the
website of the Company at URL https://capitalindia.com/
wp-content/uploads/2025/11/Policy-on-Compensation-
of-Directors-Executives-and-Other-Employees.pdf.

The Company has also formulated a Fit and Proper Criteria
Policy for inter-alia determining the qualification, technical
expertise, positive attributes, integrity and independence
of the Directors. The Company has received declarations
from all the Directors of the Company that they meet the
criteria laid down in the Fit and Proper Criteria Policy and
the applicable provisions of the Master Directions issued
by the RBI in this regard.

In addition, the Company has formulated policy on
Succession Planning for Directors and Key Managerial
Personnel to ensure continuity and smooth functioning
of the Company.

14. REMUNERATION OF THE DIRECTORS AND
EMPLOYEES

The disclosure required pursuant to Section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014
(including amendments thereto), forms part of this report
as Annexure II.

The disclosure required pursuant to Section 197(12) of
the Act, read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, with respect to information of
employees of the Company will be provided upon request
by a Member. In terms of the provisions of Section 136(1)
of the Act, the Annual Report is being sent to all the
Members of the Company whose email address(es) are
registered with the Company/ Depository Participants via
electronic mode, excluding the aforesaid Annexure which
shall be made available for inspection by the Members via
electronic mode. If any Member is interested in obtaining
a copy thereof, the Member may write to the Company
at its Registered Office in this regard or send an email to
secretarial@capitalindia.com.

15. PREVENTION OF SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE

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

Status of Complaints under the POSH Act during the
Financial Year 2025-26 is detailed below:

16. PERFORMANCE EVALUATION OF THE
DIRECTORS, BOARD AND ITS COMMITTEES

The Nomination & Remuneration Committee ("NRC")
has devised a policy for the performance evaluation of
the Independent Directors, Board, its Committees and
the other Directors and has laid down the performance
evaluation and assessment criteria/parameters. The
Independent Directors in terms of Schedule IV to the Act
and the provisions of the Listing Regulations, at its separate
meeting, evaluated the performance of the Chairman,
Non-Independent Directors, the Board as a whole and
the flow of information between the management and
the Board.

NRC has carried out the performance evaluation of each of
the Directors, without the presence of the Director being
evaluated and the Board carried out a formal evaluation
of its own performance and the Board Committees. The
Board of Directors has expressed their satisfaction with
the evaluation process.

The criteria/parameters laid down for the evaluation of
performance of the Independent Directors is provided
in the Corporate Governance report, forming part of this
Annual Report.

17. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT

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

18. RBI GUIDELINES

The Reserve Bank of India ("RBI"), vide the Reserve Bank of
India (Non-Banking Financial Companies - Registration,
Exemptions and Framework for Scale Based Regulation)
Directions, 2025 dated November 28, 2025, had introduced
a comprehensive regulatory framework for Non-Banking
Financial Companies ("NBFCs"), superseding the Master
Direction - Reserve Bank of India (Non-Banking Financial
Company - Scale Based Regulation) Directions, 2023.

The Company has complied with the requirements
stipulated under these Directions and has taken proactive
steps to align itself with the revised regulatory framework.
It has ensured timely implementation of the prescribed
policies, systems and processes, demonstrating its
continued focus on strong governance standards, effective
risk management and sustainable business growth.

Further, the Company remains complaint with all
applicable RBI Directions, circulars, regulations, guidelines
and other regulatory requirements as prescribed by RBI
from time to time.

19. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for
ensuring compliance with the provisions of Section 134(3)

(c) read with Section 134(5) of the Act in preparation of the
Financial Statements for the financial year ended on March
31,2026 and state that:

a. in the preparation of the Annual Financial Statements
for the financial year ended March 31, 2026, the
applicable accounting standards had been followed
along with proper explanation relating to material
departures, if any;

b. the Directors have selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of
the company as at March 31,2026 and of the profit &
loss of the company for the financial year ended on
March 31, 2026;

c. the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of Companies Act,
2013 for safeguarding the assets of the company
and for preventing and detecting fraud and other
irregularities;

d. the Directors have prepared the Annual Financial
Statements on a going concern basis;

e. the Directors have laid down internal financial
controls to be followed by the Company and that
such internal financial controls are adequate and
were operating effectively; and

f. the Directors have devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems were adequate and operating
effectively.

Based on the framework of internal financial controls and
compliance systems established and maintained by the
Company, work performed by the internal, statutory and
secretarial auditors and external consultants, including
audit of internal financial controls over financial reporting

by the statutory auditors, and the reviews performed
by management and the relevant Board Committees,
including the Audit Committee, the Board is of the opinion
that the Company's internal financial controls were
adequate and effective during the period under review.

20. PUBLIC DEPOSITS

The Company did not accept any public deposits during
the period under review. Accordingly, the disclosures
required under the Act, the rules framed thereunder, and
the applicable provisions of the RBI's Master Directions on
NBFC relating to public deposits are not applicable to the
Company.

21. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

The Company, being an NBFC registered with the RBI and
engaged in the business of giving loans in the ordinary
course of its business, is exempted from complying with
the requirements to disclose in the financial statement
the full particulars of the loans given, investment made,
guarantee given, or security provided.

During the year under review, details of the investments
made by the Company are provided in Note no. 7 to the
financial statements forming part of this Annual Report.

22. AUDITORS

a) STATUTORY AUDITORS

In compliance with the relevant provisions of the Act
read with the rules made thereunder and the circular
no. DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated
April 27, 2021 issued by the Reserve Bank of India
and the related FAQs issued thereafter and based
on the recommendation of the Board of Directors,
the members in their 30th AGM appointed V. Sankar
Aiyar & Co., Chartered Accountants (Firm Registration
no. 109208W) as Statutory Auditors of the Company
for a period of 3 (three) consecutive years, to hold the
office of the Statutory Auditors from the conclusion
of the 30th AGM until the conclusion of the 33rd
AGM.

V. Sankar Aiyar & Co. has conducted the Statutory
Audit for the period ended on March 31, 2026. The
audit report submitted by the Statutory Auditors
on the Financial Statements of the Company forms
part of this Annual Report. There have been no
qualifications, reservations or adverse remarks or
disclaimers given by the Statutory Auditors in their
report.

b) SECRETARIAL AUDITORS

In terms of the provisions of Section 204 of the
Act read with the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014
and Regulation 24A of the Listing Regulations, the
Board had appointed Arun Gupta & Associates,
Company Secretaries, as the Secretarial Auditors of
the Company to undertake the Secretarial Audit for a
term of five (5) consecutive years commencing from
April 01,2025 to March 31,2030.

The Secretarial Auditors have submitted their
report in Form MR-3, forms part of this report as
Annexure III. There are no qualifications, reservations
or adverse remarks or disclaimers in the Secretarial
Audit Report.

Further, pursuant to Regulation 24A of the Listing
Regulations, every listed company shall annex
with its annual report the Secretarial Audit Report
of its material subsidiaries incorporated in India.
In compliance with the said requirement, the
Secretarial Audit Report(s) of Rapipay Fintech Private
Limited, the material subsidiary of the Company, for
the financial year 2025-26 forms part of this Annual
Report as Annexure IIIA.

c) INTERNAL AUDIT

The Company has established an independent
Internal Audit function that provides assurance to
the Audit Committee, the Board of Directors and
the Senior Management regarding the adequacy
and effectiveness of the Company's internal
control framework, risk management practices and
governance processes. The Internal Audit function
periodically evaluates the design and operating
effectiveness of internal controls and recommends
measures for continuous improvement.

Further, in compliance with the applicable guidelines
issued by the Reserve Bank of India (RBI), the
Company has adopted and implemented an Internal
Audit Policy, which governs the scope, methodology
and reporting framework of the internal audit
function.

23. COST RECORDS

The provisions of Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules, 2014, are not
applicable to the Company for the period under review.

24. ANNUAL RETURN

Pursuant to the provisions of Section 92(3) and Section
134 of the Act read with Rule 12(1) of the Companies
(Management and Administration) Rules, 2014, the
Annual Return of the Company as on March 31, 2026 in
Form MGT-7 is available on the website of the Company
at https://capitalindia.com/wp-content/uploads/2026/08/
Annual-Return-2025-26.pdf

25. CORPORATE GOVERNANCE REPORT

It continues to be the Company's commitment to uphold
high standards of corporate governance through fair and
transparent practices. The Company has established robust
systems and processes to ensure effective compliance
with all applicable statutory and regulatory requirements.
It remains conscious of its fiduciary responsibilities and is
dedicated to safeguarding the interests of its stakeholders
while contributing positively to society at large.

The report on Corporate Governance in accordance
with Regulation 34 read with Schedule V to the Listing
Regulations and Master Directions is presented in a
separate section, forming part of this Annual Report.

A certificate from Divya Rani & Associates, Company
Secretaries confirming compliance to the conditions
of Corporate Governance as stipulated under Para E of
Schedule V to the Listing Regulations is enclosed to the
Corporate Governance Report.

26. BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORTING

A report on Business Responsibility & Sustainability
Reporting ("BRSR") of your Company for the financial
year 2025-26, in accordance with Regulation 34(2)(f) of
the Listing Regulations forms part of this Annual Report.

27. RELATED PARTY TRANSACTIONS

All Related Party Transactions entered into by the Company
during the financial year under review were in the ordinary
course of business and on an arm's length basis and were
in compliance with the provisions of the Companies Act,
2013 ("the Act"), the rules made thereunder and the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("Listing Regulations").

During the year under review, the Company did not enter
into any material related party transaction as per the limit
specified under Section 188 of the Act or Regulation 23
of the Listing Regulations read with the Company's Policy
on Related Party Transactions. Accordingly, the disclosure
of particulars of contracts or arrangements with related
parties in Form AOC-2, as prescribed under Section
134(3)(h) of the Act read with Rule 8(2) of the Companies
(Accounts) Rules, 2014, is not applicable to the Company
for the financial year under review.

The details of Related Party Transactions entered into
during the year, pursuant to the applicable Accounting
Standards, are disclosed in Note No. 43 to the Financial
Statements forming part of this Annual Report.

Pursuant to the provisions of Section 188 of the Act, read
with the rules framed thereunder, and Regulation 23 of
the Listing Regulations, the Company has adopted a Policy
on Related Party Transactions for identification, review,
approval and monitoring of related party transactions.
Consequent to the revisions introduced by SEBI in the
criteria for determination of material related party
transactions, effective December 19, 2025, the Policy was
suitably amended to incorporate the revised thresholds
and other applicable regulatory changes.

The Policy on Related Party Transactions is available on the
website of the Company and can be accessed at: https://
capitalindia.com/wp-content/uploads/2026/05/Policy-
on-Related-Party-Transactions-1.pdf.

28. CODE OF CONDUCT

The Board of Directors of the Company has adopted a
Code of Conduct applicable to the Directors and Senior
Management Personnel, which is accessible on the
Company's website at https://capitalindia.com/wp-
content/uploads/2025/07/Code-of-Conduct-for-Board-
of-Directors-and-Senior-Management-Personnel.pdf.

The Code of Conduct outlines the principles of ethical
and professional behaviour to be adhered to by Directors
and designated employees in the performance of their
roles. It emphasizes, among other things, integrity in the
workplace, compliance with ethical business standards,
and fair and transparent dealings with all stakeholders.

The Company has received confirmations from all
members of the Board and Senior Management Personnel
affirming their compliance with the Code of Conduct for
the financial year under review.

29. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company remains committed to promoting ethical
conduct across all its business operations. In line with the
provisions of Section 177(9) and (10) of the Companies
Act, 2013, read with the rules framed thereunder, the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, and the SEBI (Prohibition of Insider Trading)
Regulations, 2015 ("PIT Regulations"), the Company has
in place a robust Vigil Mechanism, to be known as Vigil
Mechanism/Whistle Blower Policy. This mechanism
enables Directors and employees to report instances of
unethical conduct, actual or suspected fraud, or violations
of the Company's Code of Conduct.

The policy is designed to provide adequate safeguards
against victimisation of whistle-blowers and ensures
direct access to the Chairman of the Audit Committee in
appropriate or exceptional cases.

The Vigil Mechanism / Whistle Blower Policy provides a
formal channel for Directors and employees to approach
the Vigilance and Ethics Officer or, in exceptional
circumstances, the Chairman of the Audit Committee,

thereby fostering a culture of transparency, accountability,
and ethical governance.

The objective of the policy is to encourage responsible
and secure whistle-blowing and to protect employees
who raise concerns regarding serious irregularities within
the Company.

During the financial year under review, no complaints
relating to unethical or improper practices were received
by the Company.

30. PREVENTION OF INSIDER TRADING

In accordance with the Securities and Exchange Board
of India (Prohibition of Insider Trading) Regulations,
as amended from time to time ("PIT Regulations"), the
Company has adopted and implemented:

(i) a Prohibition of Insider Trading Code to regulate
dealing in the securities of the Company by
designated persons in compliance with the
regulations; and

(ii) a Code for Fair Disclosure of Unpublished Price
Sensitive Information. The Board is responsible
for the implementation of this Code. The Chief
Compliance Officer & Company Secretary of 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 at https://www.capitalindia.com.

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

Your Company is in the business of Non-Banking Financial
Services and is not involved in any manufacturing activity.
The information as applicable and required to be provided
under Section 134(3)(m) of the Act read with Rule 8(3) of
the Companies (Accounts) Rules, 2014, is given hereunder:

a) CONSERVATION OF ENERGY

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

(ii) Steps taken by the Company for utilising
alternate sources of energy - though the
operations of the Company are not energy
intensive, the Company shall explore alternative
sources 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 for the
business has been absorbed.

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

(iii) In case of imported technology (imported
during the last three years reckoned from the
beginning of the financial year) -

(a) the details of technology imported - Not
Applicable

(b) the year of import - Not Applicable

(c) whether the technology has been fully
absorbed - Not Applicable

(d) if not fully absorbed, areas where
absorption has not taken place, and the
reasons thereof - Not Applicable

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

c) FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company is into the business of foreign exchange
and the earnings and outgo in foreign currencies are
as under: (INR In Lakhs)

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

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

33. MATERIAL CHANGES AND COMMITMENTS,
IF ANY

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

However during the financial year 2025-26, pursuant to
the approval of the Board of Directors at its meeting held
on October 16, 2024, the Company has divested its entire
shareholding of 99.82% in People Home Finance Limited

(Formerly known as Capital India Home Loans Limited) by
way of sale to Weaver Services Private Limited.

Consequently, upon completion of the transaction on
August 11,2025, People Home Finance Limited (Formerly
known as Capital India Home Loans Limited) ceased to be
a subsidiary of the Company with effect from the said date.
Accordingly, CIHL is no longer a subsidiary of Capital India
Finance Limited from August 11,2025.

34. CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of Section 135 of the
Act read with applicable rules thereunder, the Company
has constituted a Corporate Social Responsibility ("CSR")
Committee. The Board of Directors has formulated and
adopted a CSR Policy, which outlines the objectives, focus
areas, governance structure, implementation strategy, and
the monitoring and reporting framework for CSR activities.

Details regarding the composition of the CSR Committee
and other relevant information are provided in the
Corporate Governance Report, which forms part of
this Annual Report. The CSR Policy is available on the
Company's website at https://capitalindia.com/wp-
content/uploads/2024/1 1/Policy-on-Corporate-Social-
Responsibility-280423.pdf under the "Investors" section.
A brief outline of the CSR Policy along with the Annual
Report on CSR activities for the financial year 2025-26, in
the format prescribed under the Companies (Corporate
Social Responsibility Policy) Rules, 2014, is appended as
Annexure IV to this Report.

Further, the Chief Financial Officer has certified that the
CSR funds disbursed during the financial year under
review have been utilised for the purposes and in the
manner approved by the Board.

35. CREDIT RATING

The Company continues to hold credit ratings from
Infomerics Valuation and Rating Limited (formerly known
as Infomerics Valuation and Rating Private Limited) and
Acuite Ratings and Research Limited in respect of various
financial facilities availed from time to time. The details
of the ratings outstanding as on March 31, 2026 are as
follows:

36. CONSOLIDATED FINANCIAL STATEMENTS

The Company has prepared its Audited Consolidated
Financial Statements in compliance with the provisions
of Section 129(3) of the Companies Act, 2013 ("the Act"),
read with the applicable Indian Accounting Standards
("Ind AS") notified under Section 133 of the Act and
the requirements of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, as amended from
time to time. In accordance with these requirements, the
Audited Consolidated Financial Statements, reflecting
the consolidation of the accounts of the Company with
its subsidiaries, form part of this Annual Report.

Further, pursuant to the provisions of Section 129 of
the Act read with Rule 6 of the Companies (Accounts)
Rules, 2014 and other applicable provisions, the financial
statements of the subsidiaries of Rapipay Fintech Private
Limited ("RFPL"), namely NYE Investech Private Limited
(Formerly known as Kaunts Wealth Private Limited) and
Rapipay Payments Private Limited (Formerly known as NYE
Insurance Broking Private Limited, for the financial year
ended March 31, 2026, have not been consolidated by
the RFPL. These financial statements have, instead, been
consolidated at the level of the holding company, Capital
India Finance Limited (CIFL), in its consolidated financial
statements for the financial year ended March 31,2026.

The Annual Report, including the Balance Sheet, Statement
of Profit and Loss, other financial statements and the notes
thereto, is available on the Company's website at https://
www.capitalindia.com.

37. RISK MANAGEMENT FRAMEWORK

Pursuant to the RBI Regulations and SEBI Listing
Regulations, the Company has constituted a Risk
Management Committee ("RMC") and has also adopted a
Risk Management Policy which provides for identification
of key events/risks impacting the business objectives of
the Company and attempts to develop risk policies and
strategies to ensure timely evaluation, reporting and
monitoring of key business risks. Details regarding the
composition of the RMC and other relevant information
are provided in the Corporate Governance Report, which
forms part of this Annual Report.

The Risk Management Committee, constituted by the
Board, has established and implemented a comprehensive
risk management framework to identify, assess, monitor
and mitigate various risks, including credit risk. The
framework outlines processes for loan origination and
approval, post-disbursement monitoring, and ongoing
portfolio management, with the objective of maintaining
a high-quality loan portfolio while optimizing returns.

The risk management framework is periodically reviewed
and strengthened to align with evolving business needs,
regulatory requirements, and changes in the external
environment.

Further details on the Company's risk management
framework are provided in the Management Discussion
and Analysis Report forming part of this Annual Report.

38. FRAUD MONITORING AND REPORTING

During the year under review, no instances of fraud were
reported to the Special Committee for Monitoring and
Follow-up of Cases of Fraud (FMC), the Audit Committee
of the Board, the Reserve Bank of India (RBI), or the
Statutory Auditors. Further, no fraud involving employees,
management personnel, or persons having a significant
role in the Company's internal control system over
financial reporting came to the notice of the Company.

The Company continues to maintain a robust and evolving
fraud prevention and detection framework designed to
safeguard its operations and assets. Key elements of
this framework include enhanced front-end validations,
automated fraud de-duplication controls, advanced
early warning systems, and analytics-driven monitoring
mechanisms.

Further, there was no fraud reported by the Statutory
Auditors of the Company, under Section 143(12) of the Act
and the rules made thereunder to the Audit Committee or
Board during the period under review.

39. HUMAN RESOURCE-INITIATIVES

Driven by Purpose. Built Around People

We continue to uphold a strong people-first culture by
focusing on nurturing talent, fostering engagement,
and building a robust, future-ready workforce. This
commitment was further validated through our
certification as a Great Place to Work® (GPTW) in FY
2025-26.

As part of the GPTW assessment, over 350 employees
participated in the survey, with an over 66% response rate.
We secured an outstanding Trust Index© score of 95, one
of the highest scores achieved by a first-time participant,
reflecting strong employee confidence across key
dimensions such as trust, leadership, workplace culture,
and collaboration.

Beyond external recognition, we remain committed
to continuously listening to our employees. Through
regular leadership branch visits and monthly HR Connect
sessions, we gather real-time feedback and insights on
employee experience, organizational values, leadership
effectiveness, and workplace engagement. These
initiatives help us strengthen our culture and ensure that
employee voices remain at the center of our decision¬
making.

In parallel, the Company adopted a strategic talent¬
building approach by combining young, high-potential
leaders with experienced professionals. This balanced
leadership mix is helping create a strong succession
pipeline, ensuring that the organization is well-positioned
to support its long-term growth ambitions and expansion
plans.

Talent development continued to be a top priority,
with targeted training programs across frontline sales,
credit, operations, IT, and other functions, designed
to enhance skills and performance. The Company also
maintained a strong focus on continuous improvement
by benchmarking its practices against industry standards
and best-in-class processes across customer acquisition,
credit delivery, collections, and workforce structures
within NBFCs serving similar customer segments.

We foster a culture built on openness, respect, meritocracy,
and trust, encouraging active employee participation and
engagement at every level. Over the years, the Company
has remained committed to supporting career progression
through structured development opportunities,
promoting both vertical growth and cross-functional
mobility to help employees realize their full potential.

Recognizing that people are at the heart of our success, we
continue to celebrate contributions that create meaningful
impact. Through our performance-based recognition
and rewards programs, we honour individuals and teams
who consistently demonstrate excellence, innovation,
and commitment to business objectives. These curated
and aspirational rewards reinforce a culture of high
performance while motivating employees to achieve
greater milestones.

Key employee engagement initiatives included:

• Health and well-being initiatives, such as
organizing a health check-up camp, emphasizing
preventive healthcare and overall wellness.
Ensuring a healthy workforce remains integral to the
Company's employee care agenda.

• Soulful Start Mornings, beginning the day with a
morning prayer to instil mindfulness, gratitude, and

foster a connected, positive, and purpose-driven
work culture.

• Dil Se Ghar Tak, As part of our people-first philosophy,
we continued our signature initiative dedicated to
recognizing the unwavering encouragement and
support provided by employees' families. This effort
extends our appreciation beyond the workplace,
acknowledging the often-unseen role that families
play in enabling individual and organizational
success.

During the year, leadership teams visited and
recognized the families of nearly 20 employees,
celebrating the trust, resilience, and support that
underpin the achievements of our high-performing
colleagues. These visits led to several heartfelt
and emotional interactions, with family members
sharing inspiring stories of sacrifice, encouragement,
and pride. The initiative strengthened the bond
between the Company and employees' families,
while reinforcing our belief that professional success
is often a shared journey, made possible by the
steadfast support of loved ones.

• Learning & Development Initiatives: Weekly
Process and Product Training sessions are conducted
across key functions such as Sales, Operations, and
Credit to ensure that both new hires and existing
employees remain aligned with organizational
standards and business objectives. These programs
cover a wide range of topics, including sales
techniques, customer engagement and handling,
underwriting guidelines, asset quality management,
insurance products, compliance requirements, and
process updates.

These continuous learning initiatives aim to
strengthen employee capabilities, promote
consistency in execution, and equip teams with
the knowledge, skills, and confidence required to
deliver superior customer experiences, manage
risks effectively, and drive sustainable business
performance. During the last financial year, 149
training programs covering product, process, and
mandatory compliance topics were delivered.

• HR Induction Programme: Keeping in mind the
rapid onboarding of employees and the importance
of familiarizing them early with the Company's
culture, values, policies, and overall ecosystem, the
HR Induction Programme was comprehensively
revamped during the year. To enhance coverage
and ensure the timely integration of new hires, 2 -3
induction batches were conducted every month. As a
result, structured induction training was successfully

delivered to more than 350 employees during the
year, enabling them to better understand the
organization, align with its values and expectations,
and transition smoothly into their roles.

Furthermore, the monthly HR Connect initiative served as
a vital platform for direct interaction with employees across
different locations, fostering a deeper understanding of
collective concerns and enabling the prompt delivery of
appropriate solutions.

Regular employee Town Hall meetings promote
transparency, inclusiveness, and open communication
across the organization, keeping employees informed and
engaged with the Company's strategic direction.

As the Company continues its journey toward becoming
a leading NBFC in India, it remains steadfast in nurturing a
people-centric, customer-centric, and compliance-centric
culture as the foundation for sustainable growth.

As on March 31,2026, the Company's workforce stood at
894 employees.

40. STATEMENT ON COMPLIANCES OF APPLICABLE
SECRETARIAL STANDARDS

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

41. EMPLOYEE STOCK OPTIONS SCHEME

With a view to motivating, incentivize, and retain talent,
your Company has instituted two Employee Stock Option
Schemes, namely:

(a) CIFL Employee Stock Option Plan - 2018; and

(b) CIFL Employee Stock Option Plan - 2023
(collectively referred to as the "CIFL ESOP Plans").

These Plans are designed to align employee interests with
long-term shareholder value creation and to recognize the
contributions of employees to the Company's growth and
success.

The Nomination & Remuneration Policy oversees the
implementation and administration of the CIFL ESOP
Plans. The relevant disclosures pursuant to the Securities
and Exchange Board of India (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 ("SEBI
SBEBSE Regulations"), as on March 31,2026, are available
on the website of the Company at www.capitalindia.com.

A certificate from the Secretarial Auditor confirming
that the CIFL ESOP Plans have been implemented in
accordance with the SEBI SBEBSE Regulations will be
presented before the members at the ensuing Annual

General Meeting (AGM). A copy of the certificate will also
be available for inspection at the Registered Office and
Corporate Office of the Company during business hours.

42. WEBSITE

The Company's website www.capitalindia.com provides
information about the businesses carried out by the
Company. It is the primary source of information to all
the stakeholders of the Company and the general public
at large. It also contains the Financial Results, Annual
Reports, CSR details, various Policies adopted by the
Board and other general information about the Company
and such other disclosures as required under various
applicable regulations. In accordance with the Liquidity
Risk Management Framework for Non-Banking Financial
Companies, the Company on a quarterly basis provided a
public disclosure on liquidity risk on its website.

43. OTHER DISCLOSURES

Your Directors states that no disclosure or reporting is
required in respect of the following 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 shares;

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

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

e) The Company has transferred an amount of INR
1,53,014/- (Indian Rupees One Lakh Fifty-Three
Thousand Fourteen only) towards unpaid dividend
to the Investor Education and Protection Fund (IEPF)
in accordance with the provisions of Section 125 of
the Act;

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

g) No application has been made or any proceeding is
pending under the Insolvency and Bankruptcy Code,
2016 during the year;

h) During the year under review, there was no
instance of one-time settlement with Banks or
Financial Institutions. Accordingly, the disclosure
requirements prescribed under rule 8(5)(xii) of
Companies (Accounts) Rules, 2014, related to reasons
of difference in the valuation at the time of one¬
time settlement and valuation done while taking
loan from the Banks or Financial Institutions are not
applicable; and

i) During the year under review, the Company has
complied with the applicable provisions of Maternity
Benefits Act, 1961.

44. CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate
to Management Discussion and Analysis, describing
the Company objective, projections, estimates and
expectations may constitute forward looking statement
within the meaning of applicable laws and regulations.

45. ACKNOWLEDGEMENTS

Your Directors would gratefully like to place their
appreciation for the assistance and co-operation
received from the Company's bankers during the period
under review. The Directors also acknowledge, with
appreciation, the support and co-operation rendered by
various Government Agencies and Departments. Your

Directors would also wish to place on record their deep
sense of appreciation for the continued support from all
the investors and other stakeholders of the Company.

By order and on behalf of the Board
Capital India Finance Limited

Vinod Somani Keshav Porwal

Non-Executive (Chairman Independent) Managing Director
DIN: 00327231 DIN: 06706341

Date: May 20, 2026
Place: Mumbai