capfin india ltd Directors report

2.RESULTS OF OPERATIONS & STATE OF COMPANYS AFFAIRS:

During the year under review, your company has incurred a Profit before depreciation and Income Tax of Rs. 21,670.62 (In Hundreds) from its operations. After providing depreciation of Rs. 425.43 (in Hundreds) and provision for income tax of Rs. (3,512.95) (in Hundreds) the companys net profit amounts to Rs. 18,157.67 (In Hundreds) as compared to profit of Rs. 3,696.58 (In Hundreds) earned in previous year. Your Company continues to take effective steps in broad basing its range of activities. The performance of the company during the year under review has been satisfactory.

3.CHANGE IN THE NATURE OF BUSINESS:

There was no Changes in the nature of business of the Company during the current financial year.

4.SHARE CAPITAL:

The Authorized Share Capital of the Company is INR 2,86,47,000/- (Indian Rupees Two Crore Eighty-Six Lakh Forty-Seven Thousand Only). During the year under review, there was no change in the Companys issued, subscribed and paid-up equity share capital. On March 31, 2023, the paid-up capital stood at INR 2,86,47,000/- (Indian Rupees Two Crore Eighty-Six Lakh Forty-Seven Thousand) divided into 28,64,700 (Twenty-Eight Lakh Sixty-Four Thousand and Seven Hundred Only) Equity Shares of INR 10/- (Rupee Ten Only) each.

5.DIVIDEND:

The Board of Directors has not recommended any dividend for the financial year ended on 31st March, 2023. Since, the Board has considered it financially prudent in the long-term interest of the Company to re-invest the profits into the business of the Company to build a strong reserve base and to grow the business of the Company.

6.TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no outstanding unclaimed/unpaid dividend as on 31^st March 2023.

7.TRANSFER TO RESERVES:

Under section 45-IC of Reserve Bank of India Act, 1934, non-banking financial companies (NBFCs) are required to transfer a sum of not less than 20% of its net profit every year to the reserve fund before declaration of any dividend. Accordingly, Capfin India Ltd. (‘the Company or ‘ICML) has transferred a sum of Rs. 18,157.67Thousands to its reserve fund.

8.MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT:

There have been no material changes and commitments, if any, affecting the Financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial statements relate and the date of Report.

9.DEPOSITS:

The Company has not accepted any public deposits during FY 2021 ?22 within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under as per NBFC Guidelines issued by the Reserve Bank of India, the Board of Directors has passed the required resolution confirming that the Company has neither accepted any public deposits and nor does it intend to do so in the coming year 2023?2024

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE U/S 186 OF THE

COMPANIES ACT, 2013:

The particulars of loans, guarantees and investments, wherever required, have been disclosed in the financial statements, which also form part of this report.

11. CORPORATE SOCIAL RESPONSIBILITY:

The Company has not developed and implemented any Corporate Social Responsibility Initiatives as provisions of section 135(1) of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable on the Company.

12. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company is not a manufacturing Company. Therefore, conservation of Energy & Technology Absorption is not applicable. The Company has neither earned nor spent on foreign exchange.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL OF THE COMPANY:

Board of Directors

Key Managerial Personnel

In terms of Section 203 of the Act, the following were designated as director or/and Key Managerial Personnel of your Company by the Board during the year:

Ms. Priyanka Chaudhry- Company Secretary and Compliance Officer* Ms. Rachita Mantry Kabra- Wholetime Director and Chief Financial Officer

Women Director

In terms of the provisions of Section 149 of the Companies Act, 2013, a company shall have at least one-Woman Director on the Board of the Company. The Company has appointed Ms. Rachita Mantry Kabra and Sarita Mantry, as Woman Director on the Board of the Company.

In accordance with provisions of the Act and the Articles of Association of the Company, Ms. Sarita Mantry, (DIN: 01111382), Non-Executive Director retires by rotation at the ensuing AGM and being eligible offers herself for re-appointment.

Independent Director:

In terms of Section 149 of the Act and SEBI Listing Regulations, Mr. Ashok Kumar Mohta and Mr. Sanjay Kukreja, are the Independent Directors of the Company as on date of this report.

All Independent Directors of the Company have given requisite declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act along with Rules framed thereunder, Regulation 16(1)(b) of SEBI Listing Regulations and have complied with the Code of Conduct of the Company as applicable to the Board of directors and Senior Managers. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Company has received confirmation from all the Independent Directors of their registration on the Independent Directors Database maintained by the Indian Institute of Corporate Affairs, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

14. NUMBER OF MEETINGS OF THE BOARD:

During the Financial Year under review, 10 (Ten) Meetings of the Board of Directors were held. The dates on which the said meetings were held:

28^th April, 2022 30^th May, 2022 12^th August, 2022 07^th September, 2022 30^th September, 2022 14^th November, 2022 21^st November, 2022 20^th December, 2022 11^th January, 2023 05^th February, 2023

The intervening gap between the Meetings was within the period prescribed under the SEBI (LODR) Regulations, 2015 and Companies Act, 2013

15. SEPARATE MEETING OF INDEPENDENT DIRECTORS:

Independent Directors of the Company held their Separate meeting under Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Schedule IV of Companies Act, 2013 on Tuesday, 14^th June, 2022 and Friday 23^rd December, 2022 at the registered office of the Company at 1C/13, Basement, New Rohtak Road Delhi North West DL 110005 evaluate their performance.

16. COMMITTEES OF THE BOARD:

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority.

The following Committees constituted by the Board function according to their respective roles and defined scope:

Audit Committee

Nomination and Remuneration Committee Stakeholder Relationship Committee

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms a part of this Annual Report. Further, during the year under review, all recommendations made by the various committees have been accepted by the Board.

17. AUDIT COMMITTEE:

The Audit Committee of the Company is constituted/re-constituted in line with the provisions of Section 177 of the Companies Act, 2013 and other applicable laws. The Audit Committee comprises of majority of the Independent Directors. All the members of the Committee have experience in financial matters. The Audit Committee is constituted in line to monitor and provide effective supervision of the managements financial reporting process, to ensure accurate and timely disclosures, with the highest level of transparency, integrity, and quality of Financial Reporting. The details of the composition of the committee are set out in the following table: -

The Company is having an audit Committee comprising of the following Directors:

The primary objective of the Audit Committee is to monitor and provide an effective supervision of the managements financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. The Audit Committee overseas the work carried out in the financial reporting process by the management, the internal Auditors and the Independent Auditors and notes the processes and safeguards employed by each of them. All possible measures must be taken by the Audit Committee to ensure the objectivity and independence of the independent auditors.

The Board has accepted all recommendations of Audit Committee.

During the year under review 05 (Five) meetings of Audit Committee were convened and held. The dates on which the said meetings were held:

During the year, all recommendations of the audit committee were approved by the Board of Directors.

18. NOMINATION AND REMUNERATION COMMITTEE:

The company is having a Nomination and Remuneration committee comprising of the following directors:

During the Financial Year under review 05 (Five) meetings of the Nomination and Remuneration Committee were convened and held. The dates on which the said meetings were held:

19. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Company is having a Stakeholders Relationship Committee comprising of the following directors:

During the Financial Year under review 05 (Five) meetings of the Stakeholders Remuneration Committee were convened and held. The dates on which the said meetings were held:

20. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Nomination & Remuneration Committee of Directors have approved a Policy for Selection, Appointment, Remuneration and determine Directors Independence of Directors which interalia requires that composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and senior management employees and the Directors appointed shall be of high integrity with relevant expertise and experience so as to have diverse Board and the Policy also lays down the positive attributes/criteria while recommending the candidature for the appointment as Director. Nomination & Remuneration Policy is uploaded on the website of the Company i.e. at www.capfinindia.com.

21. BOARD EVALUATION:

The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provisions of the Act and the SEBI Listing Regulations.

The Board evaluated its performance after seeking inputs from all the Directors on the basis of criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of independent directors, performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the Chairman of the Board, considering the views of Executive and Non-executive Directors in the aforesaid meeting. The Board also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The above evaluations were then discussed in the Board meeting and performance evaluation of Independent directors was done by the entire Board, excluding the Independent Director being evaluated.

22. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

Pursuant to the provisions of Regulation 25(7) and Regulation 46 of the SEBI Listing Regulations, kindly refer to the Companys website www.capfinindia.com for details of the familiarization program for IDs on their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 read with Rule 8(2) of Companies (Accounts) Rules, 2014 in prescribed Form AOC-2 is annexed herewith at Annexure I.

24. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The company does not have any Subsidiary, Joint Venture or Associate Company; hence, provisions of section 129(3) of the Companies Act, 2013 relating to preparation of consolidated financial statements are not applicable.

25. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairperson of the Audit Committee of the Company for redressal. No person has been denied access to the Chairperson of the Audit Committee.

26. DECLARATION OF INDEPENDENCE OFDIRECTORS:

All Independent Directors of the Company have given declaration to the Company under Section 149(7) of the Companies Act, 2013, they meet the criteria of independence as provided in the Sub-section 6 of Section 149 of the Act and also under the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015. In the opinion of the Board, The Independent Directors of the Company possess necessary expertise, integrity and experience.

27. PARTICULARS OF EMPLOYEES U/S 197(12) OF THE COMPANIES ACT, 2013:

The Information & Statement of Particulars of employees pursuant to Section 197 of the Companies Act, 2013 and Rule 5 (1) & 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure II.

28. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED U/S 134(3)(c)

In terms of section 134(5) of the Companies Act, 2013, your directors state that: -

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) 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 and other irregularities;

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

(e) the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively

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

29. AUDITORS & AUDITORS REPORT:

Statutory Auditors

In accordance with the Companies Act 2013, the statutory auditors of the Company, M/s. RAG & Associates, Chartered Accountants, New Delhi, were appointed as statutory auditors of the Company. However, the Board has recommended the appointment of M/s Mehra Goel & Co. (Chartered Accountants, New Delhi (Firm Registration Number:000517N), as the Statutory Auditors of the Company to fill the casual vacancy caused due to the resignation of M/s RAG & Associates, Chartered Accountants, (Firm Registration Number: 008653C), to hold office until the conclusion of this 31^st Annual General Meeting, at such remuneration plus out-of-pocket expenses and applicable taxes etc

Internal Auditor

Pursuant to Section 138 of the Act and Rules made there under rules, Ms. Neha Mantry were appointed as Internal Auditors for the financial year 2022-23.

Secretarial Auditor

Pursuant to Section 204 of the Act and Rules made there under, the Board of Directors of the Company has appointed M/s Deepanshi Jain & Associates (COP No. 14826, Membership Number: 40127) Practicing Company Secretary having its Registered Office at C-7/75, First Floor, Sector-7, Rohini, Delhi- 110085, to conduct Secretarial Audit of the Company for the financial year 2022-23. The Report of the Secretarial Audit is annexed herewith as Annexure -III.

Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.

30. INTERNAL CONTROL SYSTEM & THEIR ADEQUECY:

According to Section 134(5) (e) of the Companies Act, 2013, the Internal Financial Control (IFC) means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to the companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Company has a well-placed, proper and adequate Internal Financial Control System which ensures that all the assets are safeguarded and protected and the transactions are authorized, recorded and reported correctly.

To further strengthen the internal control process, the company has developed the very comprehensive compliance management tool to drill down the responsibility of the compliance from top management to executive.

Based on the results of such assessments carried out by management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Company has adopted a policy on prevention, prohibitions and redressal of sexual harassment at workplace in line with the provision of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

32. CODE OF CONDUCT:

Commitment to ethical professional conduct is a must for every employee, including Board Members and Senior Management Personnel of the Company. The Code is intended to serve as a basis for ethical decision-making in conduct of professional work. The Code of Conduct enjoins that each individual in the organization must know and respect existing laws, accept and provide appropriate professional views, and be upright in his conduct and observe corporate discipline. The duties of Directors including duties as an Independent Director as laid down in the Companies Act, 2013 also forms part of the Code of Conduct. All Board members and Senior Management Personnel affirm compliance with the Code of Conduct annually.

33. MANAGEMENT DISCUSSIONS & ANALYSIS REPORT:

As per SEBI Listing Regulations, Management Discussion and Analysis Report is annexed herewith at Annexure -IV.

34. EXTRACT OF THE ANNUAL RETURN AS PROVIDED UNDER SUB-SECTION (3) OF SECTION 92:

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2022-23 is available on Companys website at www.capfinindia.com.

35. SECRETARIAL STANDARDS:

During the year under review the Company has complied with Secretarial Standards on Board and General Meetings issued by Institute of Company Secretaries of India.

36. CORPORATE GOVERNANCE:

As per Regulation 15(2) of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, compliance with the Corporate Governance provisions as specified in regulation 17 to 27 and clause (b) to (i) [and (t)] of sub-regulation (2) of regulation 46 and Para C, D, and E of Schedule V shall not apply to the company having Paid up Equity Share Capital not exceeding Rs. 10 Crore and Net Worth not exceeding Rs. 25 Crore, as on the last day of the previous financial year. The Company is covered under the exception given under Regulation 15(2) of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, therefore Company is not required to comply with the said provisions.

37. GENERAL:

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

There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation No fraud has been reported by the Auditors to the Audit Committee or the Board. There has been no application made or pending under Insolvency and Bankruptcy Code, 2016 There has been no one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.

38. ACKNOWLEDGEMENT:

The Board of Directors wish to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government and regulatory authorities, stock exchanges, customers, vendors, members during the year under review.

For & on behalf of Capfin India Limited