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DIRECTOR'S REPORT

Capital India Finance Ltd.

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Market Cap. (₹) 1282.62 Cr. P/BV 4.35 Book Value (₹) 37.97
52 Week High/Low (₹) 227/60 FV/ML 10/1 P/E(X) 460.89
Bookclosure 19/12/2018 EPS (₹) 0.36 Div Yield (%) 0.61
Year End :2018-03 

DIRECTOR REPORT'S

To,

The Members,

CAPITAL INDIA FINANCE LIMITED

(FORMERLY KNOWN AS BHILWARA TEX-FIN LIMITED)

Your directors have pleasure in presenting their 24th Annual Report together with the Audited Financial Statements (both Standalone and Consolidated) for the Financial Year ended on March 31, 2018 ("FY 2017-18" or "period under review"). The summarised Consolidated and Standalone financial performance of your Company is as follows:

1. FINANCIAL RESULTS
 (Amount in Rs.)

Particulars

Consolidated*

Standalone

 

Year ended
31st March, 2018

Year ended
31st March, 2017

Year ended
31st March, 2018

Year ended
1st March, 2017

Total Income

26,04,60,113

NA

25,70,90,477

8,78,21,461

Total Expenditure

21,61,13,566

NA

21,06,34,455

8,33,67,339

Profit before tax

4,43,46,547

NA

4,64,56,022

44,54,122

Provision for tax (including Deferred Tax)

164,59,174

NA

1,69,69,426

21,02,197

Profit after tax

2,78,87,373

NA

2,94,86,596

23,51,925

Add: Profit and Loss account balance brought forward from previous year

26,46,488

NA

26,46,488

7,64,948

Transfer to Special Reserve under Section 45- IC of the RBI Act, 1934

58,97,319

NA

58,97,319

4,70,385

Surplus carried to Balance Sheet

2,46,36,542

NA

2,62,35,765

26,46,488

* The Company did not have any subsidiaries as on year ended March 31, 2017 and therefore, the consolidated figures are given for the Financial Year ended on March 31, 2018 in which the Company has 5 subsidiaries.

2. RESERVES

In order to comply with the provisions of Reserve Bank of India Act, 1934, the Company has transferred Rs. 58,97,319/-(Rupees Fifty Eight Lakhs Ninety Seven Thousand Three Hundred and Nineteen only) to Special Reserve Funds under Section 45-IC of the RBI Act, 1934 and has also made provision of Rs. 10,41,140/-(Rupees Ten Lakhs Forty One Thousand and One Hundred Forty Only) for Standard Assets during the year under review. Total provisions for Standard Assets of the Company at the Financial Year ended March 31, 2018 is Rs. 41,57,750/- (Rupees Forty One Lakhs Fifty Seven Thousand Seven Hundred and Fifty only). Except as mentioned above, no amount was transferred to any reserve by the Company during the year under review.

3. SHARE CAPITAL

During the year under review, the Company had increased its authorised share capital to Rs. 2,14,00,00,000/- (Rupees Two Hundred Fourteen Crores only) from Rs. 4,00,00,000/- (Rupees Four Crores only). The increased share capital was approved by the shareholders through e-voting and postal ballot on January 27, 2018.

Consequently, the paid-up share capital and authorised share capital of the Company stands at Rs. 3,50,27,000/- (Rupees Three Crores Fifty Lacs and Twenty Seven Thousand only) and Rs. 2,14,00,00,000/- (Rupees Two Hundred Fourteen Crores only) respectively.

4. INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY

Your directors intend to strengthen its core business operations in order to make the Company more profitable in the upcoming year. During the period under review, the name of the Company was changed from Bhilwara Tex - Fin Limited to Capital India Finance Limited. Further, your Company's entire Management and Control was changed during the year as Sainik Mining and Allied Services Limited, erstwhile promoters of the Company had divested their stake in favour of Capital India Corp LLP by adhering to the procedure laid down under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, RBI Master Directions for NBFCs and all other applicable laws.

During the year under review, the Company was engaged into the business of financing and doing investments as Non -Banking Financial Company without accepting public deposit for which the Certificate of Registration was obtained from the Department of Non-Banking Supervision, Reserve Bank of India. The Company had provided / taken inter-corporate loans and investments in ordinary course of business at Arm's Length Price (ALP), which forms part of the Financial Statements enclosed with this Annual Report.

On standalone basis, the Company's total income during FY 2017-18 was Rs. 25,70,90,477/-(Rupees Twenty Five Crores Seventy Lakhs Ninety Thousand Four Hundred and Seventy Seven only) as compared to Rs. 8,78,21,461/- (Rupees Eight Crores Seventy Eight Lakhs Twenty One Thousand Four Hundred and Sixty One only) in FY 2016-17 and the Company has earned a Profit Before Tax (PBT) of Rs. 4,64,56,022/-(Rupees Four Crores Sixty Four Lakhs Fifty Six Thousand and Twenty Two only) in FY 2017-18 as compared to Rs. 44,54,122 /-(Rupees Forty Four Lakhs Fifty Four Thousand One Hundred and Twenty Two only) in FY 2016-17. Further, the Company did not have any subsidiaries in the FY 2016-17 but during the period under review, the Company had incorporated 5 wholly owned subsidiary companies with an aim to further expand its business activities. The Financial Statements forming part of this Annual Report also includes the Consolidated Financial Statements for the FY 2017-18.

5. CHANGE IN NATURE OF BUSINESS, IF ANY

There was no change in the nature of business activity of the Company during the period under review. The Company has however, formed 5 wholly owned subsidiaries with an aim to expand its business activities in financial services, details of which are given below in Para 6.

6. HOLDING & SUBSIDIARY COMPANY
 i) Holding Company

Your Company does not have any holding company
 ii) Subsidiary Companu

Your Company has following 5 subsidiaries:

S.NO

Company's name

Shareholding

1

Capital India Home Loans Limited

100%

2

Capital India Asset Management Private Limited

100%

3

Capital India Wealth Management Private Limited

100%

4

CIFL Holdings Private Limited

100%

5

CIFL Investment Manager Private Limited

100%

Note:

As required under Rule 8 (1) of the Companies (Accounts) Rules, 2014, the Board's Report has been prepared on Standalone Financial Statements and a Report on Performance and Financial Position of each of the subsidiaries, as included in the Consolidated Financial Statements, is presented herewith in Form AOC-I as Annexure-I.

• In accordance with third proviso of Section 136 (1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statements would be placed on the website of the Company at http://capitalindia.com under the "Investors" tab.

7. DIVIDEND

Your Directors recommend a final dividend of Rs. 1/- per equity share for the Financial Year 2017-18. The final dividend on the 35,02,700 equity shares, if approved by the members of the Company at the ensuing Annual General Meeting, would entail an outflow of Rs. 35,02,700/- (Thirty Five Lakhs Two Thousand and Seven Hundred Only) towards dividend and Rs. 7,13,069/- (Rupees Seven Lakh Thirteen Thousand and Sixty Nine only) towards dividend distribution tax @20.36%, resulting in a total outflow of Rs. 42,15,769/- (Rupees Forty Two Lakhs Fifteen Thousand Seven Hundred and Sixty Nine only).

8. INTERNAL CONTROL SYSTEM AND INTERNAL FINANCIAL CONTROLS

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

The Directors had laid down Internal Financial Controls Procedures to be followed by the Company which ensure 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 Internal Financial Control System of the Company, thereby ensuring that:-

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

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

3. Access to assets is permitted only in accordance with management's general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with 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 and otherwise disseminated internally.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
i. Board of Directors

As on March 31, 2018, the Board of Directors consists of following 9 directors:

Sr. No

Name

DIN

Designation

Details

1.

Mr. Vinod Kumar Somani

00327231

Independent Director

He was appointed as an Additional Director in the capacity of Non - Executive Independent Director of the Company w.e.f. December 20, 2017, subject to approval of the shareholders at the ensuing Annual General Meeting of the Company.

2.

Mr. Achal Kumar Gupta

02192183

Independent Director

He was appointed as an Additional Director in the capacity of Non - Executive Independent Director of the Company w.e.f. December 20, 2017, subject to approval of the shareholders at the ensuing Annual General Meeting of the Company.

3.

Ms. Promila Bhardwaj

06428534

Independent Director

She was appointed as an Additional Director in the capacity of Non - Executive Independent Director of the Company w.e.f. December 20, 2017, subject to approval of the shareholders at the ensuing Annual General Meeting of the Company.

4.

Mr. Keshav Porwal

06706341

Managing Director

He was appointed as an Additional Director of the Company and subsequently designated as the Managing Director of the Company we.f. November 27, 2017 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

5.

Mr. Amit Sahai Kulshreshtha

07869849

Executive Director and CEO

He was appointed as an Additional Director of the Company and subsequently designated as the Chief Executive Officer of the Company we.f. November 27, 2017 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

6.

Mr. Vineet Kumar Saxena

07710277

Non- Executive Director

He was appointed as an Additional Director of the Company in the capacity of Non -Executive Director of the Company w.e.f. November 27, 2017 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

7.

Mr. Rahul Rameshkumar Jain

07541089

Non- Executive Director

He was appointed as Non-Executive Director on the Board of the Company w.e.f. January 27, 2017. His appointment was duly approved by the shareholders as Independent Director of the Company through postal ballot dated August 10, 2017 and later on his designation was changed to Non- Executive director of the Company w.e.f. November 27, 2017. He is eligible to retire by rotation at the ensuing Annual General Meeting of the Company and has tendered his unwillingness to be re-appointed as director of the Company and therefore will retire at the ensuing Annual General Meeting of the Company.

8.

Ms. Shraddha Kamat Suresh

07555355

Non- Executive Director

She has been appointed as an Additional Director of the Company in the capacity of Women Non - Executive Director of the Company w.e.f. November 27, 2017 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

9.

Mr. Subodh Kumar

07781250

Non- Executive Director

He was appointed as an Additional Director of the Company in the capacity of Non -Executive Director of the Company w.e.f. November 27, 2017 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

ii. Ceased directorships during the year:

Mr. Satish Kumar Sharma, Director of the Company had tendered his resignation from the Board w.e.f. November 27, 2017 due to change in management of the Company.

Mr. Samai Singh and Ms. Seema Kumari, being the Independent Directors of the Company had also tendered their resignation from the Board w.e.f. November 27, 2017 due to change in management of the Company.

iii. Declaration of Independence:

Pursuant to the provisions of Section 149 of the Act, Mr. Achal Kumar Gupta, Mr. Vinod Kumar Somani and Ms. Promila Bhardwaj were appointed as Independent Director(s) of the Company. They have submitted a declaration that each of them meets the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect their status as Independent Director during the year. Further, none of the directors of your Company are disqualified under the provisions of Section 16(2)(a) & (b) of the Companies Act, 2013. During the year under review, the Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company. As required under regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the information on the particulars of the Directors proposed for appointment / re-appointment has been given in the Notice of the Annual General Meeting.

iv. Retirement by Rotation of the Directors

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Rahul Rameshkumar Jain, Non-Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and has tendered his unwillingness to be re-appointed as the director of the Company and therefore shall retire at the ensuing Annual General Meeting. The matter has been placed for noting by members at the ensuing Annual General Meeting, details of which are given in the Notice of Annual General Meeting.

v. Change in Key Managerial Personnel

During the period under review, Mr. Himmat Singh Bedla, Chief Executive Officer, Mr. Sukomal Bhuniya,

Chief Financial Officer of the company had resigned w.e.f November 27, 2017. Ms. Archana Aggarwal,

Company Secretary of the Company had resigned w.e.f. January 11, 2018.

Mr. Keshav Porwal was appointed and designated as Managing Director w.e.f. November 27, 2017.

Mr. Amit Sahai Kulshreshtha was appointed and designated as Chief Executive Officer w.e.f. November 27, 2017.

Mr. Neeraj Toshniwal was appointed and designated as Chief Financial Officer w.e.f January 11, 2018. Mr. Rachit Malhotra was appointed and designated as the Company Secretary & Compliance

Officer of the Company w.e.f January 11, 2018.

As on March 31, 2018, the Company had following Key Managerial Personnel (KMPs) as per provisions of the Companies Act, 2013 and the Rules framed thereunder:-

Mr. Keshav Porwal - Managing Director

Mr. Amit Sahai Kulshreshtha - Chief Executive Officer

Mr. Neeraj Toshniwal - Chief Financial Officer

Mr. Rachit Malhotra - Company Secretary vi. Board Meetings

During the financial year 2017-18, eleven (11) board meetings were held and the intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

vii. Committees of the Board

The following are 9 Committees constituted by the Board:

i) Audit Committee;

ii) Stakeholder Relationship Committee;

iii) Nomination and Remuneration Committee;

iv) Management Committee;

v) Risk Management Committee;

vi) Credit Committee;

vii) Asset-Liability Committee;

viii) Investment Committee; and

ix) Right Issue Committee.

viii. The Composition of Board and Committees were as is under:

S.NO

Committee meeting

Composition

1

Audit Committee

Mr. Vinod Kumar Somani (Chairman)
Mr. Achal Kumar Gupta (Member)
Mr. Vineet Kumar Saxena (Member)

2

Nomination and Remuneration Committee

Mr. Achal Kumar Gupta (Chairman)
Mr. Vinod Kumar Somani (Member)
Mr. Vineet Kumar Saxena (Member)

3

Stakeholders Relationship Committee

Mr. Vinod Kumar Somani (Chairman)
Mr. Achal Kumar Gupta (Member)
Mr. Vineet Kumar Saxena (Member)

4

Investment Committee

Mr. Achal Kumar Gupta (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)

5

Risk Management Committee

Mr. Achal Kumar Gupta (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)

6

Asset-Liability Committee

Mr. Vinod Kumar Somani (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)

7

Management Committee

Mr. Keshav Porwal (Chairman)
Mr. Amit Sahai Kulshreshtha (Member)
Mr. Vineet Kumar Saxena (Member)

8

Credit Committee

Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)
Mr. Vineet Kumar Saxena (Member)

9

Right Issue Committee

Mr. Vinod Kumar Somani (Chairman)
Mr. Keshav Porwal (Member)
Mr. Amit Sahai Kulshreshtha (Member)

ix. Board and Committee Meetings

Details of meetings of Board and various committees along with dates are as below:

S. No

Board / Committee

No. of meetings

Date of Meetings

1

Board Meeting (BM)

11

17 April 2017

29 May 2017

03 June 2017

03 July 2017

10 August 2017

30 August 2017

13 November 2017

27 November 2017

20 December 2017

11 January 2018

14 February 2018

2

Audit Committee (AC)

4

29 May 2017

10 August 2017

13 November 2017

14 February 2018

3

Stakeholder Relationship Committee (SRC)

6

07 April 2017

17 April 2017

31 May 2017

22 July 2017

02 August 2017

02 September 2017

4

Nomination and Remuneration Committee (NRC)

4

29 May 2017

10 August 2017

13 November 2017

27 November 2017

Note: No meeting held for Risk Management Committee; Credit Committee; Asset-Liability Committee; Investment Committee; and Right Issue Committee during FY 2017-18.

x. Attendance of directors/members at board and committee meetings

As per Standard 9 of the Secretarial Standard on Meetings of the Board of Directors ('SS-1') issued by the Institute of Company Secretaries of India ('ICSI'), the attendance of Directors at Board and Committee meetings held during the Financial Year 2017-18 is provided as under:

Name of Director

Board Meeting

Audit Committee Meeting

Stakeholders Relationship Committee

Nomination and Remuneration Committee

Mr. Vinod Kumar Somani

3

1

-

-

Mr. Achal Kumar Gupta

3

1

-

-

Ms. Promila Bhardwaj

3

NA

NA

NA

Mr. KeshavPorwal

4

NA

NA

NA

Mr. Amit Sahai Kulshreshtha

4

NA

NA

NA

Mr. Vineet Kumar Saxena

4

1

-

-

Mr. Rahul Rameshkumar Jain

7

3

6

3

Ms. Shraddha Kamat Suresh

1

NA

NA

NA

Mr. Subodh Kumar

3

NA

NA

NA

Mr. Satish Kumar Sharma

8

3

6

NA

Mr. Samai Singh

8

NA

NA

4

Ms. Seema Kumari

8

3

6

4

10 COMPANY'S POLICY ON DIRECTORS' APPOINTMENT, REMUNERATION AND EVALUATION

The Board had formulated an Evaluation Policy (the Policy) for evaluating the performance of the Board, Managing Director, Executive Directors, Independent Directors, Non-executive Directors and its Committees. Since the management had undergone a change, performance evaluation of the directors could not be done for the period under review and the same is proposed to be done during the year 2018-19.

The Policy safeguards the interest of the Company and to ensure compliance of applicable provisions of the Act (defined hereinafter) and the Listing Regulations (defined hereinafter) (as amended or re-enacted from time to time) relating to the evaluation of performance of the Directors, the Board and its Committees on an annual basis;

The evaluation framework for assessing the performance of Directors comprises of the following key areas:

• Expertise;

• Objectivity and Independence;

• Concern for stakeholders;

• Concern for working of the internal controls;

• Understanding of the Company's business;

• Leadership initiatives in terms of new ideas, planning for the Company and undertaking additional responsibilities;

• Team work attributes;

• Safeguarding confidential information;

• Rendering independent and unbiased opinions;

• Understanding and commitment to duties and responsibilities;

• Understanding the company and its unique requirements

• Willingness to devote the time needed for effective contribution to Company;

• Participation in discussions in effective and constructive manner;

The evaluation involves self-evaluation by the Board members and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of directors and senior management and to fix their remuneration. The Nomination and Remuneration Policy can be viewed here http://capitalindia.com.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) and have been appended as Annexure - II to this report. Further, details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of Rules are available at the registered office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any shareholder on request.

11 SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has framed a Policy on Prevention of Sexual Harassment at Workplace in accordance with the applicable laws for all employees of the Company to inter alia ensure that the employees are not subject to any form of sexual harassment and to constitute the Internal Complaints Committee. Your company is fully committed to protect the rights of any women, of any age, whether employed or not, who alleges to have been subjected to any act of sexual harassment within the Company's premises. Your Company provides a safe and healthy work environment.

The Policy was approved and made effective by the Board from its meeting dated May 03, 2018. However, there were no cases reported otherwise, during the year ended on March 31, 2018 of sexual harassment.

12 MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under regulation 34 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed as a part of this report.

13 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 Companies Act, 2013 in the preparation of the Financial Statements for the Financial Year ended on March 31, 2018 and state:

a. That in the preparation of Annual Accounts for the Financial Year ended as at March 31, 2018, the applicable Accounting Standards have been followed along with 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, 2018 and of the profit and loss of the Company for the Financial Year ended on March 31, 2018.

c. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Act 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 are operating effectively; and

f. There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are 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 Financial Year 2017-18.

14 PUBLIC DEPOSITS

The Company did not accept any public deposits during the year under review. Therefore, the disclosures as required under the Companies Act, 2013 and the Rules framed thereunder, and RBI Directions are not applicable.

15 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the Financial Statements provided in this report.

16 AUDITORS REPORT AND SECRETARIAL AUDIT REPORT

The Board of Directors had appointed M/s Divyank Khullar & Associates, Chartered Accountants,

(Firm Regn. No. : 025755N), for the FY 2017-18 to carry out the statutory audit for the period under review. The Statutory Auditors submitted their Report on the Financial Statements (both standalone and consolidated), which forms part of this Annual Report.

The Board of Directors had appointed M/s Naveen Garg & Associates, Company Secretaries in

Practice, for the FY 2017-18 in terms of provisions of section 204 of the Companies Act 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the purpose of carrying out the secretarial audit of the Company. The Secretarial Auditors submitted their Report in Form MR-3, which forms part of this Annual Report.

Further, the Statutory Auditors' report and Secretarial Auditors' report do not contain any qualifications, reservations or adverse remarks.

17 AUDITORS

a) STATUTORY AUDITORS:

M/s Divyank Khullar & Associates, Chartered Accountants, (Firm Regn. No.:- 025755N), Statutory Auditors of the Company tendered resignation on May 2, 2018. Basis this, pursuant to provisions of Section 139 (8), the Board at the meeting held on May 03,2018 appointed , M/s. Deloitte Haskins & Sells, LLP (Firm Regn. No.:- 117366W/W100018) as the Statutory Auditors of the Company to fill the casual vacancy caused due to resignation of M/s Divyank Khullar & Associates, Chartered Accountants. The members, at the ensuing Annual General Meeting proposed to be held on June 02, 2018 shall consider approving the appointment of M/s. Deloitte Haskins & Sells, LLP as Statutory Auditor to hold office till ensuing Annual General Meeting.

Further, M/s. Deloitte Haskins & Sells, LLP (Firm Regn. No.:- 117366W/W100018) have offered themselves for appointment as Statutory Auditors to hold office from the date of conclusion of the 24th AGM of the Company till the date of conclusion of 29th Annual General Meeting. The Company has obtained a written consent from M/s. Deloitte Haskins & Sells, LLP (Firm Regn. No.: 117366W/ W100018) for their appointment. A certificate from them has been received to the effect that their appointment as Statutory Auditors of the Company, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013. The Auditors have subjected themselves for the peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate issued by the "Peer Review Board" of ICAI.

b) SECRETARIAL AUDITOR

The Board of Directors at their meeting held on May 03, 2018 re-appointed M/s. Naveen Garg & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2018-19 in terms of provisions of section 204 of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

c) INTERNAL AUDITOR

The Board of Directors has, at its meeting held on 3 May 2018 appointed M/s. Aneja Associates, Chartered Accountants, as the Internal Auditor to undertake Internal Audit of the Company for Financial Year 2018-19 in terms of provisions of section 138 of the Companies Act, 2013.

18 EXTRACT OF ANNUAL RETURN

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

19 CORPORATE GOVERNANCE REPORT

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. The Company is having a paid up equity share capital not exceeding Rs. 10 Crore and net worth not exceeding Rs. 25 Crore, and hence, as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), Corporate Governance Requirements provided under Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of the Listing Regulations are not applicable to your Company.

20 RELATED PARTY TRANSACTIONS

During the year under review, the main business of the Company was financing & investment and granting loans. All related party transactions entered into with related parties were placed before the Audit Committee for their approval in the meeting of Board and Audit Committee dated May 03, 2018. The Audit Committee decided that such transactions are in the ordinary course of business and are on arm's length basis. None of the transactions with related parties fall under the scope of section 188(1) of the Companies Act, 2013. Even though the provisions of Companies Act, 2013 read with rules made thereunder regarding related party transactions are not attracted to such transactions as these are in ordinary course of business and on an arm's length basis, some transactions were material related party transaction by virtue of the Listing Regulations and hence, the Board and Audit Committee ratified them.

All related party transactions so entered are disclosed in Note no. 29 of Financial Statements of the Company as attached herewith. Information on all transactions with related party pursuant to section 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are also annexed in Form AOC-2 and the same forms part of this report.

The Policy relating to related party transactions duly approved by the Board of Directors of the Company has been placed on the Company's website http://capitalindia.com.

21 CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the members of the Board and all employees in the course of day to day business operations of the Company. The Code has been placed on the Company's website http://capitalindia.com.

The Code 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 work place, in business practices and in dealing with stakeholders. All the Board members and the Senior Management personnel have confirmed compliance with the Code.

22 VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 read with the rules made thereunder and pursuant to the provision of SEBI (Listing Obligations and Disclosure Requirements), 2015, the Company has established a Vigil Mechanism to be known as the Vigil Mechanism Policy' for its Directors and Employees, to report instances of unethical behaviour, 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 Whistle Blower who avails the mechanism and also provides direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases.

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

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

During the Financial Year 2017-18, no such complaint of unethical or improper activity has been received by the Company

23 PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the trading window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.

The Code can be viewed here http://capitalindia.com/ .

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

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 source of energy - though the operations of the Company are not energy intensive, the Company shall explore alternative source of energy, as and when the necessity arises.

(iii) Capital investment on energy conservation equipment - Nil

b) TECHNOLOGY ABSORPTION

(i) Efforts made towards technology absorption - The minimum 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) - Not Applicable

(a) the details of technology imported;

(b) the year of import;

(c) whether the technology been fully absorbed; and

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof (iv) Expenditure incurred on Research and Development - Not Applicable

c) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, there were following foreign exchange transactions:

1. Earnings: Nil

2. Outgo: Rs. 20,44,853.04/-

25 FRAUD REPORTING

There was no fraud reported by the Auditors of the Company under Section 143( 12) of the Companies Act, 2013 to the Board of Directors during the year under review.

26 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. It is to be noted that pursuant to the approval of appropriate authorities, Sainik Mining and Allied Services Limited, erstwhile promoters of the Company had divested their stake in favour of Capital India Corp LLP as a result of which there was a change in management and control of the Company by following the procedures laid down under the applicable laws.

27 MATERIAL CHANGES AND COMMITMENTS, IF ANY

There are material changes and commitments affecting the financial position of the Company which, inter-alia includes the following:

1. Company has changed the name of the Company from Bhilwara Tex-Fin Limited to Capital India Finance Limited, the same has been approved by the shareholders through Postal Ballot on January 27, 2017. Company has received the fresh Certificate of Incorporation from the Registrar of Companies, NCT of Delhi & Haryana for the same.

2. Company has shifted its registered office from 129, Transport Centre, New Rohtak Road, Punjabi Bagh, New Delhi -110035 to 2nd Floor, DLF Centre, Sansad Marg, New Delhi -110001 on December 20, 2017.

3. Company had undergone change of management, which had been duly approved by the appropriate stakeholders and authorities which includes the approval of Reserve Bank of India and Securities Exchange Board of India.

4. Company had during the year under review proposed an issue of securities on Rights basis but the same was withdrawn on April 25, 2018.

5. Company has incorporated five wholly owned subsidiaries namely:

a. Capital India Home Loans Limited

b. Capital India Wealth Management Private Limited

c. Capital India Asset Management Private Limited

d. CIFL Holdings Private Limited

e. CIFL Investment Manager Private Limited

28 CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review, provision of section 135 and Schedule VII of the Companies Act, 2013 pertaining to Corporate Social Responsibility are not applicable to our Company. Hence, details of expenditures on CSR activities are not required to be furnished.

29 CREDIT RATING

There was no credit rating obtained from any agency during the period under review.

30 CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements are provided in this annual report which have been prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI).

31 RISK MANAGEMENT

The Risk Management Committee constituted by the Board of Directors of the Company 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.

32 HUMAN RESOURCE-INITIATIVES

During the year under review, your Company has strengthened its Management team and Core Leadership team to steer the Company's business conscientiously and diligently. Efforts has been put in to attract the best Talent from Industry to build a strong foundation.

Your Company provides an employee friendly environment where employees are empowered and given an opportunity to demonstrate their talent, that eventually boost their career growth in the Company.

33 LISTING OF SECURITIES

Presently, the Securities of the Company are listed on BSE Limited, Mumbai. The listing fee for the Financial Year 2018-19 has been paid.

34 COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS

Your Company has complied with the applicable provisions of the Secretarial Standards -1 (SS-1) on Meetings of the Board of Directors issued by The Institute of Company Secretaries of India (ICSI).

35 GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. There was no issuance of any shares/options to the employees under the Employees Stock Option Scheme (ESOS) or Employees Stock Purchase Scheme (ESPS);

3. Issue of sweat equity shares;

4. There was no revision in the Financial Statements;

5. There was no change in the nature of business.

It is hereby intimated that your Company had initiated the procedure for issuance of Equity Shares of Rs. 525 crores to the existing shareholders on right issue basis. The proposed issue was withdrawn on April 25, 2018.

36 ACKNOWLEDGEMENTS

Your directors would gratefully like to place their appreciation for the assistance and co- operation received from the Company's bankers during the year 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
(Formerly known as Bhilwara Tex-Fin Limited)

 

Sd/-
Keshav Porwal
Managing Director
DIN - 06706341

Sd/-
Amit Sahai Kulshreshtha
Director & CEO
DIN - 07869849

Place: New Delhi
Date: May 03, 2018

 

Annexure-I Form AOC-I

Statement containing salient features of the Financial Statement of Subsidiaries / Associate Companies / Joint Ventures

(Pursuant to first proviso to Sub-Section (3) of Section 129 of Companies Act. 2013 read with Rule 5 of Companies (Accounts) Rules. 20141

SR. No.

Name of subsidiary companies

Capital India Home Loans Limited

Capital India Wealth Management Private Limited

Capital India Asset Management Private Limited

CIFL Holdings Private Limited

CIFL Investment Manager Private Limited

1

The date since when subsidiary was acquired

11 August 2017

29 August 2017

12 September 2017

18 September 2017

14 September 2017

2.

Reporting year for the subsidiary

31 March 2018

31 March 2018

31 March 2018

31 March 2018

31 March 2018

3.

Reporting currency and exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

Not Applicable

Not Applicable

Not Applicable

Not Applicable

Not Applicable

4.

Share Capital

150,000,000

100,000

100,000

100,000

100,000

5.

Reserves & surplus

(1,471,308)

(31,985)

(32,010)

(31,960)

(31,960)

6.

Total Assets

152,662,557

99,950

99,925

99,975

99,975

7.

Total Liabilities

4,133,865

31,935

31,935

31,935

31,935

8.

Investments

-

-

-

-

-

9.

Turnover

3,369,636

-

-

-

-

10.

Profit before tax

(1,981,560)

(31,985)

(32,010)

(31,960)

(31,960)

11.

Provision for tax

(510,252)

-

-

-

-

12.

Profit after tax

(1,471,308)

(31,985)

(32,010)

(31,960)

(31,960)

13.

Proposed dividend

0%

0%

0%

0%

0%

14.

% of shareholding

100%

100%

100%

100%

100%

 

Sr. No.

Name of subsidiary companies

Net Assets (i.e. Total Assets Less Total Liabilities

Share in profit & loss

As a % of Consolidated Assets

Amount

% of profit or loss

Amount

 

Parent

 

 

 

 

 

Capital India Finance Limited

31.69%

6,90,18,874

105.73%

2,94,86,596

 

Subsidiaries

 

 

 

 

 

Indian:

 

 

 

 

1.

Capital India Home Loans Limited

68.19%

14,85,28,692

-5.28%

(14,71,308)

2.

Capital India Wealth Management Private Limited

0.03%

68,015

-0.11%

(31,985)

3.

Capital India Asset Management Private Limited

0.03%

67,990

-0.11%

(32,010)

4

CIFL Holdings Private Limited

0.03%

68,040

-0.11%

(31,960)

5

CIFL Investment Manager Private Limited

0.03%

68,040

-0.11%

(31,960)

 

Foreign:

 

 

 

 

 

None

 

 

 

 

 

Minority interest in all subsidiaries

NA

-

NA

-

 

Associates (Investments as per the Equity method)

NA

-

NA

-

 

Joint Ventures (as per proportionate consolidation / investment as per the Equity method)

NA

 

NA

 

Notes:

1. Name of the Subsidiaries which are yet to commence operations:-

a. Capital India Home Loans Limited

b. Capital India Wealth Management Private Limited

c. Capital India Asset Management Private Limited

d. CIFL Holdings Private Limited

e. CIFL Investment Manager Private Limited

2. Names of subsidiaries which have been liquidated or sold during the year: NIL

Part B: Statement Pursuant to Section 129(3) of the Companies Act. 2013 related to Associate Companies and Joint Ventures:

The Company has no Associate or Joint Venture Company.

For and on behalf of Board of Directors
Capital India Finance Limited (Formerly known as Bhilwara Tex-Fin Limited)

 

 

Sd/-
Keshav Porwal
Managing Director

DIN - 06706341

Sd/-
Amit Sahai Kulshreshtha
Director & CEO

DIN - 07869849

Sd/-
Neeraj Toshniwal CFO

PAN - ACCPT2249N

Sd/-
Rachit Malhotra
Company Secretary

M. No. - A39894

       

Annexure- II

Particulars of employees for the year ended March 31, 2018 as required under Section 197 of the Companies Act, 2013 read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014:

The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

Name of the Director

Ratio to the median

Amit Sahai Kulshreshtha

10:1

Keshav Porwal

10:1

The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name of Dircctor/CS/CFO

% increase

Nil

Nil

The percentage increase in the median remuneration of employees in the financial year;

There was no increase in the remuneration of employees during the Financial year 2016-17

The number of permanent employees on the rolls of Company;

32

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

There was no increase in the remuneration of employees during the Financial year 2016-17

Affirmation that the remuneration is as per the remuneration policy of the company.

Yes; the remuneration is as per the remuneration policy of the company.

B. Particulars of employees for the year ended March 31, 2018 as required under Section 197 of the Companies Act, 2013 read with rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014

In terms of the provisions of Section 136(1) of the Companies Act, 2013 read with the said rules, the Directors' Report is being sent to all the shareholders of the Company excluding the annexure on the names and other particulars of employees, required in accordance with Rule 5.2 of said rules, which is available for inspection by the members, subject to their specific written request, in advance, to the Company Secretary. The inspection is to be carried out at the Company's Registered Office or at its Corporate Office, during business hours on working days of the Company up to date of ensuing Annual General Meeting. 

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