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. Additionally, the Company has
received authorisation to conduct inward cross-border
money transfer activities in India under the Money
Transfer Service Scheme (MTSS), through a tie-up
arrangement with Western Union Financial Services Inc.
(Overseas Principal).

During the period under review, on standalone basis,
the Company's total income was INR 18,445.32 Lakhs as
compared to INR 19,466.34 Lakhs during the previous
financial year and the Company has earned a Profit before
tax of INR 1,288.30 Lakhs as compared to the Profit before
tax of INR 2,744.56 Lakhs during the previous financial year.

On consolidated basis, the Company's total income was
INR 61,870.71 Lakhs as compared to INR 68,800.53 Lakhs
during the previous financial year and the Company
has incurred a Loss before Tax of INR (889.05) Lakhs as
compared to the Profit before Tax of INR 129.29 Lakhs
earned during the previous financial year.

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

RESERVES

For the financial year ended on March 31,2025, an amount
of INR 235.62 Lakhs was transferred to Special Reserve
Account in terms of Section 45-IC of the RBI Act.

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

4. SHARE CAPITAL

During the period under review, the following changes
have been made to the capital structure of the Company:

> Stock Split: Each equity share of the Company having
a face value of INR 10 (Indian Rupees Ten only) was
sub-divided/ split into 5 (five) equity shares having a
face value of INR 2 (Indian Rupees Two only) each.

> Allotment under ESOP: The Company has allotted
equity shares to the employees who exercised their
stock options granted and vested under the CIFL
Employee Stock Option Plan 2018.

As on March 31,2025, the capital structure of the Company
stands as follows:

5. NON-CONVERTIBLE DEBENTURES

During the period under review, the Company has not
issued/allotted any new debentures.

As on March 31,2025, the Company does not have any
outstanding NCDs.

6. CHANGE IN NATURE OF BUSINESS

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

7. CHANGE OF REGISTERED OFFICE OF THE COMPANY

During the period under review, the Company has shifted
its registered office from 2^nd Floor, DLF Centre, Sansad
Marg, New Delhi - 110001 to 701, 7^th Floor, Aggarwal
Corporate Tower, Plot No. 23, District Centre, Rajendra
Place, New Delhi - 110008, effective from July 01,2024.

8. LISTING OF EQUITY SHARES

Subsequent to the closure of the financial year 2024-25,
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 Fee for the Financial Year 2024-25 has
been duly paid to BSE Limited.

9. DETAILS OF HOLDING, SUBSIDIARY, JOINT VENTURE

OR ASSOCIATE COMPANY(IES)

> Holding Company

Capital India Corp Private Limited, holding 72.95% of the
paid-up share capital of the Company, continues to be the
holding and promoter entity of your Company.

> Subsidiary Company

As on March 31, 2025, the Company has the following
subsidiaries:

*Step-down Subsidiary through Rapipay Fintech Private Limited

> 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://www.capitalindia.com/wp-content/
uploads/2025/07/Policy-for-determining-Material-
Subsidiaries.pdf. 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 DISTRIBUTION POLICY

Your 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://www.capitalindia.com/
wp-content/uploads/2025/07/Dividend-Distribution-
Policy.pdf under the “Investors" tab.

11. DIVIDEND

In line with the Dividend Distribution Policy of the
Company, your Directors are pleased to recommend a final
dividend of INR 0.02 (Indian Rupee Two Paisa only) per
equity share having face value of INR 2 (Indian Rupees Two
only) each, for the FY 2024-25, payable to shareholders
of the Company whose names appear in the Register of
Member as on the Record Date i.e. September 19, 2025.

12. INTERNAL CONTROL SYSTEM AND INTERNAL
FINANCIAL CONTROLS

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

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

The Audit Committee of the Board is vested with the
powers to evaluate the adequacy and effectiveness of the
Internal Financial Control system of the Company, thereby
ensuring that:

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

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

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

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

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

13. 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, 2025,
the Board of the Company consists of the following 6 (Six)
directors:

ii. Fit and Proper Criteria

Based on the declarations received from the Directors of
the Company as of March 31,2025, 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 Master Direction - Reserve Bank
of India (Non-Banking Financial Company - Scale Based
Regulation) Directions, 2023 (“Master Directions")
issued by the RBI, and have submitted their respective
declarations in this regard

Further, none of the Directors are disqualified under any
provisions of Section 164 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 Annual General Meeting
("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. The shareholders of the Company through resolution
passed by way of Postal Ballot on June 14, 2024, have
approved the appointment of Ms. Jyuthika Mahendra
Jivani (DIN: 10558392) as an Independent Woman
Director of the Company for a period of 5 (Five)
consecutive years w.e.f. March 20, 2024.

b. General Dalbir Singh Suhag (Retd.) (DIN: 10742056)
was appointed as an Additional Independent
Director of the Company w.e.f. August 13, 2024.
Further, the members at the 30^th AGM held on
September 26, 2024, have approved his appointment
as an Independent Director of the Company, for a
term of 5 (Five) consecutive years commencing from
the said date.

c. Mr. Subhash Chander Kalia (DIN: 00075644) ceased
to be associated as an Independent Director of the
Company w.e.f. February 20, 2025.

Except for the changes highlighted 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 Act and Regulation 16 of the 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 2024-25, 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

In accordance with the provisions of the Act read with the
rules made thereunder and the Articles of Association of
the Company, Mr. Keshav Porwal, Managing Director of
the Company, is liable to retire by rotation at the ensuing
AGM and being eligible has offered his candidature for
re-appointment as a Director of the Company.

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. 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. Rachit Malhotra ceased to be associated
with the Company as Chief Compliance Officer &

Company Secretary w.e.f. June 28, 2024 (close of the
business hours).

- Mr. Sulabh Kaushal was appointed as the Chief
Compliance Officer & Company Secretary of the
Company with effect from August 13, 2024.

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 Act
and the applicable rules.

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. IT Steering Committee

xii. Information Security Committee

xiii. Product Evaluation Committee

xiv. 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. Management Committee

iii. Securities Issuance Committee

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 26, 2025, during FY 2024-25. 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.

14. 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.

In accordance with the provisions of the Act and the Listing
Regulations, 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 which
is reasonable and sufficient to attract, retain and
motivate Directors, Executives and Other Employees of
the quality required to run the Company successfully;

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

c) remuneration to Directors, Executives and Other
Employees involves a balance between fixed
and variable pay reflecting short and long-term
performance objectives appropriate to the working
of the Company and its goals which will address
issues arising out of excessive risk taking caused by
misaligned compensation packages;

d) the compensation levels are supported by the need
to retain earnings of the Company and the needs to
maintain adequate capital based on internal capital
adequacy assessment process; and

e) to enable the Company to provide a well-balanced
and performance- related compensation package,
taking into account shareholder interests, industry
standards and relevant Indian corporate regulations.

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.

The detailed Policy on Compensation of Directors,
Executives and other Employees is available on the
website of the Company at www.capitalindia.com.

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.

15. REMUNERATION OF THE DIRECTORS AND EMPLOYEES

Disclosure with respect to the ratio of remuneration of each
of the Director to the median employee's remuneration as
required under the provisions of Section 197(12) of the Act
read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, forms
part of this report as Annexure II.

Details as required under 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.

16. PREVENTION OF SEXUAL HARASSMENT OF WOMEN
AT WORKPLACE

As required under the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal)
Act, 2013, 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
Complaint Committee ("ICC"). It is our constant endeavor
to ensure that we provide harassment free, safe and secure
working environment to all employees especially women.

During the period under review, there was no case of
sexual harassment reported by the Company.

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

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.

18. 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.

19. DIRECTORS RESPONSIBILITY STATEMENT

The Board 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, 2025 and state:

a. that in the preparation of Annual Accounts for
the Financial Year ended as at March 31, 2025,
the applicable Accounting Standards have been
followed along with the proper explanation relating
to the material departures;

b. that the Directors have selected such Accounting
Policies and applied them consistently and made
judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the
state of affairs of the Company at the Financial Year
ended as at March 31, 2025, and of the profit and
loss of the Company for the Financial Year ended on
March 31,2025;

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

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

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

f. that there is a proper system 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

Loans, guarantees and investments covered under Section
186 of the Act forms part of the Notes to the Financial
Statements provided in 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 30^th 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 30^th AGM until the conclusion of
the 33^rd AGM.

V. Sankar Aiyar & Co. has conducted the Statutory Audit for
the period ended on March 31,2025. The 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 the financial year 2024-25.

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

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 Capital
India Home Loans Limited and Rapipay Fintech Private
Limited, the material subsidiaries of the Company, for the
financial year 2024-25 forms part of this Annual Report.

c) INTERNAL AUDITORS

The Board had appointed KKC & Associates LLP, Chartered
Accountants, as the Internal Auditors to undertake internal
audit of the Company for the financial year 2024-25 in
terms of the provisions of Section 138 of the Act and the
rules made thereunder.

23. COST RECORDS

The provisions of Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules, 2014, are not
applicable on 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 31,2025, will
be available on the website of the Company at https://
www.capitalindia.com.

25. CORPORATE GOVERNANCE REPORT

It has always been the Company's endeavor to excel better
Corporate Governance through fair and transparent
practices. The Company has put in place an efficient
and effective system to ensure proper compliance with
statutory regulatory provisions. The Company understands
and respects its fiduciary role and responsibility towards
its stakeholder and 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 Arun Gupta & 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. RELATED PARTY TRANSACTIONS

During the period under review, the contracts /
arrangements / transactions entered into by the Company
with the related parties were on arm's length basis and
in the ordinary course of business, and wherever not,
the transaction has been duly approved by the Board.
Also, the Company had not entered into any contract /
arrangement / transaction with related parties which could
be considered material in accordance with the policy of
the Company on materiality of related party transactions.
Accordingly, the particulars of the transactions as
prescribed in Form AOC - 2 of the rules prescribed under
Chapter IX relating to Accounts of Companies under the
Act, are not required to be disclosed.

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

In terms of Section 188 of the Act, read with the rules
framed thereunder and Regulation 23 of the Listing
Regulations, your Company has in place a Policy on
Related Party Transactions for dealing with related
party transactions. The policy is placed on the website
of the Company at https://www.capitalindia.com/
wp-content/uploads/2025/02/Policy-On-Related-Party-
Transactions.pdf.

27. CODE OF CONDUCT

The Board has approved a Code of Conduct for Board of
Directors and Senior Management Personnel which has
been placed on the website of the Company at https://
www.capitalindia.com/wp-content/uploads/2025/07/
Code-of-Conduct-for-Board-of-Directors-and-
Senior-Management-Personnel.pdf.

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

28. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company promotes ethical behavior in all its business
activities and accordingly, pursuant to the provisions of
Section 177(9) & (10) of the Act read with the rules made
thereunder and pursuant to the provision of the Listing
Regulations and the Securities and Exchange Board of
India (Prohibition of Insider Trading) Regulations, 2015
(“PIT Regulations"), the Company has established and
implemented a Vigil Mechanism within the Company
to be known as the 'Vigil Mechanism / Whistle Blower
Policy' for its Directors and employees, to report instances

of unethical behaviour and actual or suspected fraud or
violation of the Company's Code of Conduct. The aim
of the policy is to provide adequate safeguards against
victimization of the whistle blower who avails the
mechanism and provides direct access to the Chairman of
the Audit Committee, in appropriate or exceptional cases.
Accordingly, the Vigil Mechanism / Whistle Blower
Policy has been formulated with a view to provide a
mechanism for the Directors and employees of the
Company to approach the Vigilance and Ethics Officer or
the Chairman of the Audit Committee of the Company in
exceptional cases.

The purpose of this policy is to provide a framework to
promote responsible and secure whistle blowing and
protect employees who are willing to raise a concern
about serious irregularities within the Company.

During the period under review, no complaint of unethical
or improper activity was reported to the Company.

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

The Company continues to fulfill the norms and standards
laid down under the Master Directions and the other
applicable regulations issued by the Reserve Bank of India,
from time to time.

30. Capital Adequacy:

As on March 31, 2025, the Capital to Risk Assets Ratio
(“CRAR") of your Company was 36.08% (Tier-I: 35.45%,
Tier-II: 0.63%) which is well above the minimum
requirement of 15% as prescribed by RBI.

31. PREVENTION OF INSIDER TRADING

In accordance with the PIT Regulations, the Company has
formulated and approved:

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

(ii) a Policy 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/wp-content/uploads/2025/07/Prohibition-of-
Insider-Trading-Code.pdf.

32. 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:

33. FRAUD REPORTING

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.

34. 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.

35. MATERIAL CHANGES AND COMMITMENTS, IF ANY

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

36. CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of Section 135 of
the Act, 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://www.capitalindia.com/wp-content/
uploads/2024/11/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, in the format prescribed under
the Companies (Corporate Social Responsibility Policy)
Rules, 2014, is appended as Annexure III to this Report.

37. CREDIT RATING

The Company is enjoying credit ratings from Infomercis
Valuation and Rating Limited and Acuite Ratings and
Research Limited with respect to the financial facilities
availed by the Company from time to time. The outstanding
rating details as on March 31, 2025, are as under:

#The rating Outlook has been placed under "Rating Watch
with Developing Implications” to evaluate the impact of the
announcement made by Company regarding the divestment of
its housing finance subsidiary Capital India Home Loans Limited.

38. CONSOLIDATED FINANCIAL STATEMENTS

Your Company has prepared the Audited Consolidated
Financial Statements in accordance with Section 129(3)
of the Act read with the applicable Indian Accounting
Standards (“Ind AS") and Listing Regulations. As required
under the Ind AS, notified under Section 133 of the Act
and applicable provisions of the Listing Regulations,
the Audited Consolidated Financial Statements of the
Company reflecting the Consolidation of the Accounts
of the Company with its Subsidiaries are included in this
Annual Report.

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

39. RISK MANAGEMENT

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

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

40. HUMAN RESOURCE-INITIATIVES

In FY 2024-25, the Company reaffirmed its commitment
to a 'people-first' philosophy by focusing on nurturing
talent and building a robust, future-ready workforce.
The Company adopted a strategic approach that combined
young, emerging leaders with seasoned professionals to
develop a balanced leadership pipeline aligned with its
long-term growth objectives.

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. These initiatives included
specialized trainings conducted periodically by the
Reserve Bank of India (RBI). The Company also consistently
benchmarked itself against industry best practices in
customer acquisition, credit delivery, collections, and
workforce structures among NBFCs serving similar
customer segments.

The Company fostered a culture rooted in openness,
respect, meritocracy, and trust, encouraging active
employee engagement through various initiatives.
Over the years, it has remained committed to advancing
career progression by implementing initiatives to
support employee growth. Performance-based, curated
aspirational rewards were introduced to reinforce a
high-performance culture and strengthen organizational

loyalty. A regional meeting and R&R (Rewards &
Recognition) event was organized at Nagothane,
Maharashtra, where top-performing employees from
across regions were felicitated for their contributions.
The Company aims to continue advancing its 'people-first'
efforts to build a stronger, future-ready workforce.

Key employee engagement initiatives included:

• Sampark, the flagship employee connect program,
which captured ideas and suggestions from
employees for mutual growth, with the best ideas
being recognized and rewarded.

• 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, an initiative acknowledging the
unwavering encouragement of employees' families,
reaching beyond the workplace to honour the often
unseen support that contributes significantly to
collective success.

• The Company's mentor-mentee program is designed
to provide structured guidance, support, and
development for employees across levels. By pairing
experienced leaders (mentors) with emerging talent
(mentees), the program fosters a culture of continuous
learning, collaboration, and shared growth.

• 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 CEO Townhall meetings, held quarterly, promoted
transparency and inclusiveness, 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 31,2025, the Company's workforce stood at
616 employees.

41. 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.

42. 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 NRC 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,
2025, 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 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.

43. BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORTING

A report on Business Responsibility & Sustainability
Reporting (“BRSR") of your Company for the financial
year 2024-25, in accordance with Regulation 34(2) (f) of
the Listing Regulations forms part of this Annual Report.

44. 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, 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.

45. 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 is not liable to transfer the amount
of dividend lying in the unpaid dividend account
to Investor Education and Protection Fund (IEPF)
pursuant to 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; and

h) During the financial year 2024-25, there was no
instance of one-time settlement with Banks or
Financial Institutions. Therefore, as per rule 8(5)(xii)
of Companies (Accounts) Rules, 2014, 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 reported.

46. 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.

47. 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 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 14, 2025 Place: New Delhi Place: Mumbai